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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANIES
Investment Company Act file number 811-09913
AIM Counselor Series Trust (Invesco Counselor Series Trust)
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 2500 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 11 Greenway Plaza, Suite 2500 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: 8/31
Date of reporting period: 2/28/11
Item 1. Reports to Stockholders.
Invesco Balanced Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: BGRAX § B: BGRBX § C: BGRCX § Y: BGRDX
Nasdaq:
A: BGRAX § B: BGRBX § C: BGRCX § Y: BGRDX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
13 | Financial Statements | |
15 | Notes to Financial Statements | |
22 | Financial Highlights | |
23 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 17.70 | % | ||
Class B Shares | 17.15 | |||
Class C Shares | 17.25 | |||
Class Y Shares | 17.77 | |||
Russell 1000 Value Index▼(Broad Market Index) | 26.30 | |||
Barclays Capital U.S. Government/Credit Index▼(Style-Specific Index) | -1.61 | |||
Lipper Mixed-Asset Target Allocation Growth Funds Index▼(Peer Group Index) | 18.97 | |||
▼ | Lipper Inc. |
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Barclays Capital U.S. Government/Credit Index includes treasuries and agencies that represent the government portion of the index, and includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity and quality requirements to represent the credit interests.
The Lipper Mixed-Asset Target Allocation Growth Funds Index is an unmanaged index considered representative of mixed-asset target allocation growth funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Balanced Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (7/28/97) | 4.70 | % | ||||||
10 | Years | 3.42 | ||||||
5 | Years | 2.15 | ||||||
1 | Year | 8.11 | ||||||
Class B Shares | ||||||||
Inception (7/28/97) | 4.66 | % | ||||||
10 | Years | 3.39 | ||||||
5 | Years | 2.19 | ||||||
1 | Year | 8.44 | ||||||
Class C Shares | ||||||||
Inception (3/28/95) | 6.77 | % | ||||||
10 | Years | 3.23 | ||||||
5 | Years | 2.54 | ||||||
1 | Year | 12.55 | ||||||
Class Y Shares | ||||||||
Inception (7/28/97) | 5.38 | % | ||||||
10 | Years | 4.26 | ||||||
5 | Years | 3.55 | ||||||
1 | Year | 14.61 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Balanced Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Balanced Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (7/28/97) | 4.41 | % | ||||||
10 | Years | 3.21 | ||||||
5 | Years | 1.51 | ||||||
1 | Year | 4.40 | ||||||
Class B Shares | ||||||||
Inception (7/28/97) | 4.37 | % | ||||||
10 | Years | 3.16 | ||||||
5 | Years | 1.57 | ||||||
1 | Year | 4.59 | ||||||
Class C Shares | ||||||||
Inception (3/28/95) | 6.54 | % | ||||||
10 | Years | 3.01 | ||||||
5 | Years | 1.90 | ||||||
1 | Year | 8.61 | ||||||
Class Y Shares | ||||||||
Inception (7/28/97) | 5.09 | % | ||||||
10 | Years | 4.04 | ||||||
5 | Years | 2.92 | ||||||
1 | Year | 10.72 |
of this report for Class A, Class B, Class C, and Class Y shares was 1.08%, 1.83%, 1.83% and 0.83%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Balanced Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett,
Independent Chair, Invesco Funds Board of Trustees
Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor,
Senior Managing Director, Invesco Ltd.
Senior Managing Director, Invesco Ltd.
4 Invesco Balanced Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–66.26% | ||||||||
Air Freight & Logistics–0.33% | ||||||||
FedEx Corp. | 5,883 | $ | 529,588 | |||||
Asset Management & Custody Banks–0.66% | ||||||||
State Street Corp. | 24,017 | 1,074,040 | ||||||
Automobile Manufacturers–0.65% | ||||||||
Ford Motor Co.(b) | 35,055 | 527,578 | ||||||
General Motors Co.(b) | 15,845 | 531,283 | ||||||
1,058,861 | ||||||||
Cable & Satellite–2.30% | ||||||||
Comcast Corp.–Class A | 85,145 | 2,193,335 | ||||||
Time Warner Cable Inc. | 21,456 | 1,548,694 | ||||||
3,742,029 | ||||||||
Communications Equipment–0.61% | ||||||||
Cisco Systems, Inc.(b) | 53,196 | 987,318 | ||||||
Computer Hardware–1.95% | ||||||||
Dell Inc.(b) | 93,636 | 1,482,258 | ||||||
Hewlett-Packard Co. | 38,672 | 1,687,259 | ||||||
3,169,517 | ||||||||
Consumer Electronics–0.79% | ||||||||
Sony Corp.–ADR (Japan) | 34,868 | 1,284,537 | ||||||
Data Processing & Outsourced Services–0.83% | ||||||||
Western Union Co. | 61,222 | 1,346,272 | ||||||
Diversified Banks–1.12% | ||||||||
U.S. Bancorp | 25,903 | 718,290 | ||||||
Wells Fargo & Co. | 34,028 | 1,097,743 | ||||||
1,816,033 | ||||||||
Diversified Chemicals–1.26% | ||||||||
Dow Chemical Co. (The) | 27,018 | 1,003,989 | ||||||
PPG Industries, Inc. | 11,765 | 1,039,791 | ||||||
2,043,780 | ||||||||
Diversified Support Services–0.35% | ||||||||
Cintas Corp. | 20,327 | 571,595 | ||||||
Drug Retail–1.03% | ||||||||
Walgreen Co. | 38,676 | 1,676,218 | ||||||
Electric Utilities–2.53% | ||||||||
American Electric Power Co., Inc. | 59,966 | 2,145,583 | ||||||
Edison International | 17,089 | 634,344 | ||||||
Entergy Corp. | 8,578 | 610,754 | ||||||
FirstEnergy Corp. | 18,877 | 722,989 | ||||||
4,113,670 | ||||||||
Food Distributors–0.68% | ||||||||
Sysco Corp. | 39,500 | 1,097,705 | ||||||
Health Care Distributors–0.47% | ||||||||
Cardinal Health, Inc. | 18,440 | 767,842 | ||||||
Health Care Equipment–0.64% | ||||||||
Covidien PLC (Ireland) | 7,587 | 390,351 | ||||||
Medtronic, Inc. | 16,066 | 641,355 | ||||||
1,031,706 | ||||||||
Home Improvement Retail–0.98% | ||||||||
Home Depot, Inc. (The) | 42,336 | 1,586,330 | ||||||
Household Products–1.44% | ||||||||
Energizer Holdings, Inc.(b) | 3,086 | 206,237 | ||||||
Procter & Gamble Co. (The) | 33,833 | 2,133,171 | ||||||
2,339,408 | ||||||||
Human Resource & Employment Services–0.79% | ||||||||
Manpower Inc. | 11,407 | 724,344 | ||||||
Robert Half International, Inc. | 17,670 | 563,673 | ||||||
1,288,017 | ||||||||
Industrial Conglomerates–4.12% | ||||||||
General Electric Co. | 212,295 | 4,441,211 | ||||||
Tyco International Ltd. | 49,713 | 2,253,988 | ||||||
6,695,199 | ||||||||
Industrial Machinery–1.00% | ||||||||
Dover Corp. | 7,629 | 490,163 | ||||||
Ingersoll-Rand PLC (Ireland) | 24,995 | 1,132,274 | ||||||
1,622,437 | ||||||||
Insurance Brokers–1.90% | ||||||||
Marsh & McLennan Cos., Inc. | 101,633 | 3,093,709 | ||||||
Integrated Oil & Gas–5.76% | ||||||||
ConocoPhillips | 10,810 | 841,775 | ||||||
Exxon Mobil Corp. | 15,473 | 1,323,405 | ||||||
Hess Corp. | 23,406 | 2,037,024 | ||||||
Occidental Petroleum Corp. | 27,670 | 2,821,510 | ||||||
Royal Dutch Shell PLC–ADR (United Kingdom) | 32,332 | 2,335,987 | ||||||
9,359,701 | ||||||||
Integrated Telecommunication Services–0.74% | ||||||||
Verizon Communications Inc. | 32,645 | 1,205,253 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Balanced Fund
Shares | Value | |||||||
Internet Software & Services–2.25% | ||||||||
eBay Inc.(b) | 73,465 | $ | 2,461,445 | |||||
Yahoo! Inc.(b) | 72,266 | 1,185,162 | ||||||
3,646,607 | ||||||||
Investment Banking & Brokerage–2.09% | ||||||||
Charles Schwab Corp. (The) | 89,544 | 1,698,650 | ||||||
Morgan Stanley | 57,262 | 1,699,536 | ||||||
3,398,186 | ||||||||
IT Consulting & Other Services–0.63% | ||||||||
Amdocs Ltd.(b) | 34,251 | 1,022,050 | ||||||
Life & Health Insurance–0.58% | ||||||||
Principal Financial Group, Inc. | 27,511 | 942,527 | ||||||
Managed Health Care–1.36% | ||||||||
UnitedHealth Group Inc. | 51,919 | 2,210,711 | ||||||
Movies & Entertainment–2.77% | ||||||||
Time Warner Inc. | 48,720 | 1,861,104 | ||||||
Viacom Inc.–Class B | 59,008 | 2,635,297 | ||||||
4,496,401 | ||||||||
Office Services & Supplies–0.40% | ||||||||
Avery Dennison Corp. | 16,296 | 650,536 | ||||||
Oil & Gas Equipment & Services–1.63% | ||||||||
Baker Hughes Inc. | 3,533 | 251,020 | ||||||
Cameron International Corp.(b) | 8,679 | 513,189 | ||||||
Schlumberger Ltd. | 20,240 | 1,890,821 | ||||||
2,655,030 | ||||||||
Oil & Gas Exploration & Production–2.80% | ||||||||
Anadarko Petroleum Corp. | 32,323 | 2,644,991 | ||||||
Devon Energy Corp. | 14,297 | 1,307,318 | ||||||
Noble Energy, Inc. | 6,469 | 599,417 | ||||||
4,551,726 | ||||||||
Oil & Gas Storage & Transportation–0.36% | ||||||||
Williams Cos., Inc. (The) | 18,996 | 576,719 | ||||||
Other Diversified Financial Services–5.54% | ||||||||
Bank of America Corp. | 152,949 | 2,185,641 | ||||||
Citigroup Inc.(b) | 304,994 | 1,427,372 | ||||||
JPMorgan Chase & Co. | 115,286 | 5,382,703 | ||||||
8,995,716 | ||||||||
Packaged Foods & Meats–1.61% | ||||||||
Kraft Foods Inc.–Class A | 44,309 | 1,410,798 | ||||||
Unilever N.V.–New York Shares (Netherlands) | 40,037 | 1,210,719 | ||||||
2,621,517 | ||||||||
Personal Products–1.03% | ||||||||
Avon Products, Inc. | 60,157 | 1,672,966 | ||||||
Pharmaceuticals–3.75% | ||||||||
Abbott Laboratories | 14,528 | 698,797 | ||||||
Bristol-Myers Squibb Co. | 58,662 | 1,514,066 | ||||||
Merck & Co., Inc. | 25,476 | 829,753 | ||||||
Pfizer Inc. | 123,468 | 2,375,525 | ||||||
Roche Holding AG–ADR (Switzerland) | 17,727 | 668,017 | ||||||
6,086,158 | ||||||||
Property & Casualty Insurance–0.48% | ||||||||
Chubb Corp. (The) | 12,745 | 773,367 | ||||||
Regional Banks–2.26% | ||||||||
BB&T Corp. | 23,462 | 647,551 | ||||||
Fifth Third Bancorp | 40,745 | 594,877 | ||||||
PNC Financial Services Group, Inc. | 31,559 | 1,947,190 | ||||||
Regions Financial Corp. | 62,284 | 475,850 | ||||||
3,665,468 | ||||||||
Semiconductors–0.63% | ||||||||
Intel Corp. | 47,450 | 1,018,752 | ||||||
Soft Drinks–0.77% | ||||||||
Coca-Cola Co. (The) | 11,473 | 733,354 | ||||||
Coca-Cola Enterprises Inc. | 19,373 | 509,510 | ||||||
1,242,864 | ||||||||
Specialty Chemicals–0.34% | ||||||||
LyondellBasell Industries N.V.–Class A (Netherlands)(b) | 14,618 | 556,653 | ||||||
Systems Software–0.88% | ||||||||
Microsoft Corp. | 53,471 | 1,421,259 | ||||||
Wireless Telecommunication Services–1.17% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 66,338 | 1,898,594 | ||||||
Total Common Stocks & Other Equity Interests (Cost $98,192,815) | 107,604,572 | |||||||
Principal | ||||||||
Amount | ||||||||
Bonds & Notes–15.29% | ||||||||
Advertising–0.07% | ||||||||
WPP Finance (United Kingdom), Sr. Unsec. Gtd. Global Notes, 8.00%, 09/15/14 | $ | 100,000 | 116,377 | |||||
Aerospace & Defense–0.04% | ||||||||
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15 | 70,000 | 67,032 | ||||||
Agricultural Products–0.06% | ||||||||
Corn Products International, Inc., Sr. Unsec. Notes, 6.63%, 04/15/37 | 95,000 | 99,338 | ||||||
Airlines–0.14% | ||||||||
Continental Airlines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 4.75%, 01/12/21 | 115,000 | 114,641 | ||||||
Delta Air Lines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 6.20%, 07/02/18 | 98,829 | 105,315 | ||||||
219,956 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Balanced Fund
Principal | ||||||||
Amount | Value | |||||||
Automobile Manufacturers–0.05% | ||||||||
Daimler Finance North America LLC, Unsec. Gtd. Unsub. Global Notes, 7.30%, 01/15/12 | $ | 85,000 | $ | 89,785 | ||||
Automotive Retail–0.31% | ||||||||
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20 | 225,000 | 236,531 | ||||||
AutoZone, Inc., Sr. Unsec. Global Notes, 6.50%, 01/15/14 | 155,000 | 173,533 | ||||||
O’Reilly Automotive, Inc., Sr. Unsec. Gtd. Notes, 4.88%, 01/14/21 | 90,000 | 89,208 | ||||||
499,272 | ||||||||
Brewers–0.27% | ||||||||
Anheuser-Busch InBev Worldwide, Inc., Sr. Unsec. Gtd. Global Notes, 3.63%, 04/15/15 | 145,000 | 151,208 | ||||||
Sr. Unsec. Gtd. Notes, 7.20%, 01/15/14(c) | 110,000 | 125,781 | ||||||
FBG Financial Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(c) | 150,000 | 159,560 | ||||||
436,549 | ||||||||
Broadcasting–0.17% | ||||||||
COX Communications Inc., Sr. Unsec. Bonds, 8.38%, 03/01/39(c) | 15,000 | 19,494 | ||||||
Sr. Unsec. Notes, 6.75%, 03/15/11 | 250,000 | 250,559 | ||||||
270,053 | ||||||||
Cable & Satellite–0.42% | ||||||||
Comcast Corp., Sr. Unsec. Gtd. Global Notes, 5.70%, 05/15/18 | 200,000 | 219,386 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16 | 180,000 | 198,900 | ||||||
Time Warner Cable, Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 02/14/19 | 80,000 | 100,828 | ||||||
Sr. Unsec. Gtd. Notes, 5.88%, 11/15/40 | 170,000 | 161,077 | ||||||
680,191 | ||||||||
Communications Equipment–0.02% | ||||||||
Juniper Networks, Inc., Sr. Unsec. Notes, 4.60%, 03/15/21 | 40,000 | 39,948 | ||||||
Construction Materials–0.03% | ||||||||
Holcim U.S. Finance Sarl & Cie SCS (Luxembourg), Unsec. Gtd. Unsub. Notes, 6.00%, 12/30/19(c) | 45,000 | 47,237 | ||||||
Consumer Finance–0.33% | ||||||||
American Express Co., Sr. Unsec. Notes, 8.13%, 05/20/19 | 85,000 | 106,126 | ||||||
American Express Credit Corp.–Series C, Sr. Unsec. Medium-Term Global Notes, 7.30%, 08/20/13 | 155,000 | 174,791 | ||||||
Capital One Financial Corp., Sr. Unsec. Notes, 6.75%, 09/15/17 | 220,000 | 254,314 | ||||||
535,231 | ||||||||
Department Stores–0.06% | ||||||||
Macy’s Retail Holdings, Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12 | 100,000 | 103,500 | ||||||
Diversified Banks–2.66% | ||||||||
Abbey National Treasury Services PLC (United Kingdom), Sr. Unsec. Gtd. Medium-Term Euro Notes, 3.88%, 11/10/14(c) | 105,000 | 104,836 | ||||||
Ally Financial, Inc., Gtd. Notes, 2.20%, 12/19/12 | 250,000 | 256,795 | ||||||
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13 | 155,000 | 158,482 | ||||||
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 6.75%, 05/22/19 | 210,000 | 236,900 | ||||||
Unsec. Sub. Global Notes, 5.14%, 10/14/20 | 120,000 | 116,691 | ||||||
Commonwealth Bank of Australia (Australia), Sr. Unsec. Notes, 5.00%, 10/15/19(c) | 140,000 | 144,636 | ||||||
Credit Suisse AG (Switzerland), Sub. Global Notes, 5.40%, 01/14/20 | 45,000 | 45,588 | ||||||
Unsec. Sub. Global Notes, 6.00%, 02/15/18 | 30,000 | 32,085 | ||||||
Groupe BPCE S.A. (France), Sr. Unsec. Notes, 2.38%, 10/04/13(c) | 170,000 | 169,286 | ||||||
HBOS PLC (United Kingdom)–Series G, Unsec. Sub. Medium-Term Notes, 6.75%, 05/21/18(c) | 225,000 | 212,624 | ||||||
HSBC Bank PLC (United Kingdom), Sr. Notes, 4.13%, 08/12/20(c) | 180,000 | 174,794 | ||||||
HSBC Finance Corp., | ||||||||
Sr. Unsec. Global Notes, 6.38%, 10/15/11 | 135,000 | 139,756 | ||||||
6.75%, 05/15/11 | 175,000 | 177,101 | ||||||
Korea Development Bank (South Korea), Sr. Unsec. Global Notes, 4.38%, 08/10/15 | 100,000 | 102,637 | ||||||
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/21/16 | 235,000 | 239,213 | ||||||
National Australia Bank Ltd. (Australia), Sr. Unsec. Bonds, 3.75%, 03/02/15(c) | 140,000 | 145,261 | ||||||
Nordea Bank A.B. (Sweden), Sr. Notes, 4.88%, 01/27/20(c) | 100,000 | 101,974 | ||||||
Rabobank Nederland N.V. (Netherlands), Sr. Unsec. Medium-Term Global Notes, 4.75%, 01/15/20(c) | 205,000 | 210,484 | ||||||
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15 | 180,000 | 185,718 | ||||||
Societe Generale (France), Sr. Unsec. Notes, 2.50%, 01/15/14(c) | 285,000 | 283,676 | ||||||
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 3.85%, 04/27/15(c) | 200,000 | 205,352 | ||||||
U.S. Bancorp., Sr. Unsec. Notes, 2.00%, 06/14/13 | 210,000 | 213,327 | ||||||
U.S. Bank N.A., Sub. Variable Rate Notes, 3.78%, 04/29/20(d) | 250,000 | 255,982 | ||||||
Wells Fargo & Co., Sr. Unsec. Notes, 5.63%, 12/11/17 | 215,000 | 238,175 | ||||||
Westpac Banking Corp. (Australia), Sr. Unsec. Global Notes, 2.10%, 08/02/13 | 175,000 | 177,183 | ||||||
4,328,556 | ||||||||
Diversified Capital Markets–0.07% | ||||||||
UBS AG (Switzerland), Sr. Unsec. Global Notes, 5.88%, 12/20/17 | 100,000 | 110,494 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Balanced Fund
Principal | ||||||||
Amount | Value | |||||||
Diversified Metals & Mining–0.32% | ||||||||
Anglo American Capital PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.38%, 04/08/19(c) | $ | 100,000 | $ | 133,047 | ||||
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17 | 135,000 | 149,639 | ||||||
Rio Tinto Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 9.00%, 05/01/19 | 125,000 | 165,312 | ||||||
Southern Copper Corp., | ||||||||
Sr. Unsec. Global Notes, 5.38%, 04/16/20 | 25,000 | 26,241 | ||||||
6.75%, 04/16/40 | 40,000 | 41,610 | ||||||
515,849 | ||||||||
Drug Retail–0.16% | ||||||||
CVS Caremark Corp., Sec. Global Pass Through Ctfs., 6.04%, 12/10/28 | 246,441 | 258,293 | ||||||
Electric Utilities–0.24% | ||||||||
Electricite de France S.A. (France), Sr. Unsec. Notes, 4.60%, 01/27/20(c) | 50,000 | 51,424 | ||||||
Enel Finance International N.V. (Luxembourg), Sr. Unsec. Gtd. Notes, 5.13%, 10/07/19(c) | 150,000 | 150,880 | ||||||
Iberdola Finance Ireland Ltd. (Ireland), Unsec. Gtd. Notes, 3.80%, 09/11/14(c) | 75,000 | 75,323 | ||||||
Ohio Power Co.–Series M, Sr. Unsec. Notes, 5.38%, 10/01/21 | 100,000 | 107,348 | ||||||
384,975 | ||||||||
Electronic Components–0.03% | ||||||||
Corning, Inc., | ||||||||
Sr. Unsec. Notes, 6.63%, 05/15/19 | 15,000 | 17,348 | ||||||
7.25%, 08/15/36 | 25,000 | 28,501 | ||||||
45,849 | ||||||||
Environmental & Facilities Services–0.10% | ||||||||
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14 | 150,000 | 162,282 | ||||||
Food Retail–0.36% | ||||||||
Delhaize Group S.A. (Belgium), Sr. Unsec. Gtd. Bonds, 5.88%, 02/01/14 | 70,000 | 76,589 | ||||||
Safeway, Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20 | 240,000 | 229,097 | ||||||
Wrigley (Wm.) Jr. Co., Sr. Sec. Gtd. Floating Rate Notes, 1.68%, 06/28/11(c)(d) | 285,000 | 285,290 | ||||||
590,976 | ||||||||
General Merchandise Stores–0.09% | ||||||||
Family Dollar Stores Inc., Sr. Unsec. Notes, 5.00%, 02/01/21 | 150,000 | 148,171 | ||||||
Gold–0.17% | ||||||||
Gold Fields Orogen Holding BVI Ltd. (British Virgin Islands), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20(c) | 290,000 | 277,660 | ||||||
Health Care Equipment–0.20% | ||||||||
Boston Scientific Corp., Sr. Unsec. Notes, 5.45%, 06/15/14 | 180,000 | 192,708 | ||||||
CareFusion Corp., Sr. Unsec. Global Notes, 4.13%, 08/01/12 | 120,000 | 124,614 | ||||||
317,322 | ||||||||
Health Care Services–0.28% | ||||||||
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 5.25%, 06/15/12 | 365,000 | 383,713 | ||||||
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15 | 80,000 | 79,576 | ||||||
463,289 | ||||||||
Home Improvement Retail–0.07% | ||||||||
Home Depot, Inc., Sr. Unsec. Global Notes, 5.88%, 12/16/36 | 105,000 | 106,214 | ||||||
Hotels, Resorts & Cruise Lines–0.13% | ||||||||
Wyndham Worldwide Corp., Sr. Unsec. Notes, 5.63%, 03/01/21 | 205,000 | 205,256 | ||||||
Hypermarkets & Super Centers–0.01% | ||||||||
Wal-Mart Stores, Inc., Sr. Unsec. Global Notes, 6.50%, 08/15/37 | 20,000 | 23,008 | ||||||
Industrial Conglomerates–1.64% | ||||||||
General Electric Capital Corp., Sr. Unsec. Medium-Term Global Notes, 5.88%, 01/14/38 | 55,000 | 55,080 | ||||||
Series G, Sr. Gtd. Medium-Term Global Notes, 2.63%, 12/28/12 | 1,880,000 | 1,944,476 | ||||||
Sr. Unsec. Medium-Term Notes, 6.00%, 08/07/19 | 150,000 | 166,163 | ||||||
General Electric Co., Sr. Unsec. Global Notes, 5.25%, 12/06/17 | 180,000 | 197,833 | ||||||
Koninklijke (Royal) Philips Electronics N.V. (Netherlands), Sr. Unsec. Global Notes, 5.75%, 03/11/18 | 115,000 | 129,489 | ||||||
NBC Universal Media LLC, | ||||||||
Sr. Unsec. Notes, 2.10%, 04/01/14(c) | 85,000 | 84,584 | ||||||
5.95%, 04/01/41(c) | 80,000 | 80,342 | ||||||
2,657,967 | ||||||||
Integrated Oil & Gas–0.07% | ||||||||
Hess Corp., Sr. Unsec. Global Notes, 5.60%, 02/15/41 | 75,000 | 72,688 | ||||||
Shell International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15 | 45,000 | 46,343 | ||||||
119,031 | ||||||||
Integrated Telecommunication Services–0.43% | ||||||||
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31 | 2,000 | 2,543 | ||||||
AT&T, Inc., Sr. Unsec. Global Notes, 6.15%, 09/15/34 | 65,000 | 65,931 | ||||||
Sr. Unsec. Notes, 5.35%, 09/01/40(c) | 33,000 | 30,111 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Balanced Fund
Principal | ||||||||
Amount | Value | |||||||
Integrated Telecommunication Services–(continued) | ||||||||
Deutsche Telekom International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Bonds, 8.75%, 06/15/30 | $ | 60,000 | $ | 78,741 | ||||
NBC Universal Media LLC, Sr. Unsec. Notes, 5.15%, 04/30/20(c) | 40,000 | 41,453 | ||||||
Telecom Italia Capital S.A. (Luxembourg), | ||||||||
Sr. Unsec. Gtd. Global Notes, 7.00%, 06/04/18 | 95,000 | 102,682 | ||||||
7.18%, 06/18/19 | 100,000 | 108,810 | ||||||
Verizon Communications, Inc., | ||||||||
Sr. Unsec. Global Notes, 6.35%, 04/01/19 | 160,000 | 183,767 | ||||||
8.95%, 03/01/39 | 65,000 | 90,554 | ||||||
704,592 | ||||||||
Internet Retail–0.12% | ||||||||
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20 | 185,000 | 188,163 | ||||||
Investment Banking & Brokerage–0.91% | ||||||||
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20 | 205,000 | 208,316 | ||||||
Goldman Sachs Group Inc. (The), Sr. Unsec. Global Notes, 6.15%, 04/01/18 | 380,000 | 415,760 | ||||||
Unsec. Sub. Global Notes, 6.75%, 10/01/37 | 110,000 | 112,585 | ||||||
Jefferies Group, Inc., Sr. Unsec. Notes, 6.88%, 04/15/21 | 160,000 | 172,127 | ||||||
Morgan Stanley, Sr. Unsec. Global Notes, 4.00%, 07/24/15 | 265,000 | 270,256 | ||||||
Sr. Unsec. Notes, 3.45%, 11/02/15 | 310,000 | 305,400 | ||||||
1,484,444 | ||||||||
IT Consulting & Other Services–0.08% | ||||||||
International Business Machines Corp., Sr. Unsec. Global Notes, 7.63%, 10/15/18 | 100,000 | 126,209 | ||||||
Life & Health Insurance–0.25% | ||||||||
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15 | 100,000 | 103,891 | ||||||
Pacific LifeCorp., Sr. Notes, 6.00%, 02/10/20(c) | 75,000 | 79,673 | ||||||
Prudential Financial Inc.–Series D | ||||||||
Sr. Unsec. Disc. Medium-Term Notes, 4.75%, 09/17/15 | 120,000 | 128,788 | ||||||
Sr. Unsec. Medium-Term Notes, 6.63%, 12/01/37 | 80,000 | 89,294 | ||||||
401,646 | ||||||||
Managed Health Care–0.23% | ||||||||
Aetna, Inc., Sr. Unsec. Notes, 3.95%, 09/01/20 | 240,000 | 232,333 | ||||||
WellPoint, Inc., Sr. Unsec. Notes, 4.35%, 08/15/20 | 145,000 | 145,382 | ||||||
377,715 | ||||||||
Movies & Entertainment–0.04% | ||||||||
Time Warner, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16 | 60,000 | 67,349 | ||||||
Multi-Line Insurance–0.30% | ||||||||
AIG SunAmerica Global Financing VI, Sr. Sec. Notes, 6.30%, 05/10/11(c) | 340,000 | 343,910 | ||||||
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20 | 130,000 | 135,844 | ||||||
479,754 | ||||||||
Multi-Utilities–0.03% | ||||||||
Nisource Finance Corp., Sr. Unsec. Gtd. Bonds, 6.80%, 01/15/19 | 45,000 | 51,847 | ||||||
Office REIT’s–0.09% | ||||||||
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 4.50%, 07/15/15 | 135,000 | 139,544 | ||||||
Oil & Gas Exploration & Production–0.09% | ||||||||
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21 | 145,000 | 146,646 | ||||||
Oil & Gas Storage & Transportation–0.11% | ||||||||
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Global Notes, 5.25%, 01/31/20 | 55,000 | 57,111 | ||||||
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19 | 110,000 | 124,858 | ||||||
181,969 | ||||||||
Other Diversified Financial Services–2.04% | ||||||||
Bank of America Corp., Sr. Unsec. Global Notes, 5.75%, 12/01/17 | 250,000 | 266,630 | ||||||
Series L, Sr. Unsec. Medium-Term Global Notes, 5.65%, 05/01/18 | 175,000 | 185,030 | ||||||
Bear Stearns Cos. LLC (The), | ||||||||
Sr. Unsec. Global Notes, 6.40%, 10/02/17 | 110,000 | 124,921 | ||||||
7.25%, 02/01/18 | 190,000 | 223,894 | ||||||
Citigroup Funding Inc., Unsec. Gtd. Unsub. Global Notes, 2.25%, 12/10/12 | 1,500,000 | 1,540,198 | ||||||
Citigroup Inc., | ||||||||
Sr. Unsec. Global Notes, 6.13%, 11/21/17 | 155,000 | 170,378 | ||||||
8.50%, 05/22/19 | 125,000 | 155,453 | ||||||
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.75%, 07/01/13(c) | 125,000 | 127,971 | ||||||
Unsec. Gtd. Notes, 5.80%, 10/15/12(c) | 30,000 | 32,017 | ||||||
JPMorgan Chase & Co., Sr. Unsec. Global Notes, 4.40%, 07/22/20 | 180,000 | 176,510 | ||||||
Sr. Unsec. Notes, 6.00%, 01/15/18 | 60,000 | 66,749 | ||||||
Merrill Lynch & Co., Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18 | 210,000 | 235,965 | ||||||
3,305,716 | ||||||||
Packaged Foods & Meats–0.27% | ||||||||
Grupo Bimbo S.A.B. de C.V. (Mexico), Sr. Unsec. Gtd. Notes, 4.88%, 06/30/20(c) | 115,000 | 113,868 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Balanced Fund
Principal | ||||||||
Amount | Value | |||||||
Packaged Foods & Meats–(continued) | ||||||||
Kraft Foods Inc., | ||||||||
Sr. Unsec. Global Notes, 5.38%, 02/10/20 | $ | 55,000 | $ | 58,620 | ||||
7.00%, 08/11/37 | 135,000 | 153,360 | ||||||
Sr. Unsec. Notes, 6.88%, 01/26/39 | 95,000 | 107,011 | ||||||
432,859 | ||||||||
Property & Casualty Insurance–0.04% | ||||||||
Travelers Cos., Inc. (The), Sr. Unsec. Notes, 5.35%, 11/01/40 | 75,000 | 72,662 | ||||||
Railroads–0.11% | ||||||||
CSX Corp., Sr. Unsec. Global Notes, 6.15%, 05/01/37 | 40,000 | 42,999 | ||||||
Sr. Unsec. Notes, 5.50%, 04/15/41 | 135,000 | 132,661 | ||||||
175,660 | ||||||||
Real Estate Management & Development–0.05% | ||||||||
Brookfield Asset Management, Inc. (Canada), Sr. Unsec. Notes, 7.13%, 06/15/12 | 80,000 | 84,577 | ||||||
Regional Banks–0.27% | ||||||||
Nationwide Building Society (United Kingdom), Sr. Unsec. Notes, 6.25%, 02/25/20(c) | 205,000 | 213,558 | ||||||
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 02/08/20 | 120,000 | 127,127 | ||||||
Sr. Unsec. Gtd. Notes, 6.70%, 06/10/19 | 80,000 | 93,503 | ||||||
434,188 | ||||||||
Restaurants–0.08% | ||||||||
Yum! Brands, Inc., Sr. Unsec. Global Bonds, 6.25%, 03/15/18 | 45,000 | 50,930 | ||||||
Sr. Unsec. Notes, 5.30%, 09/15/19 | 80,000 | 85,534 | ||||||
136,464 | ||||||||
Retail REIT’s–0.09% | ||||||||
WEA Finance LLC/WT Aust Pty Ltd. Finance, Sr. Unsec. Gtd. Notes, 6.75%, 09/02/19(c) | 125,000 | 143,038 | ||||||
Sovereign Debt–0.34% | ||||||||
Brazilian Government (Brazil), Sr. Unsec. Global Bonds, 6.00%, 01/17/17 | 310,000 | 347,665 | ||||||
Republic of Italy (Italy), Sr. Unsec. Global Notes, 6.88%, 09/27/23 | 145,000 | 162,229 | ||||||
Republic of Peru (Peru), Sr. Unsec. Global Notes, 7.13%, 03/30/19 | 35,000 | 41,641 | ||||||
551,535 | ||||||||
Specialized Finance–0.06% | ||||||||
NASDAQ OMX Group Inc. (The), Sr. Unsec. Notes, 5.55%, 01/15/20 | 100,000 | 100,672 | ||||||
Specialized REIT’s–0.10% | ||||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 170,000 | 167,344 | ||||||
Steel–0.42% | ||||||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 9.85%, 06/01/19 | 165,000 | 212,373 | ||||||
Sr. Unsec. Global Notes, 3.75%, 08/05/15 | 225,000 | 227,483 | ||||||
5.50%, 03/01/21 | 30,000 | 29,807 | ||||||
6.75%, 03/01/41 | 30,000 | 29,753 | ||||||
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, 5.63%, 09/15/19 | 85,000 | 90,406 | ||||||
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, 6.88%, 11/10/39 | 90,000 | 97,663 | ||||||
687,485 | ||||||||
Trucking–0.06% | ||||||||
Ryder System Inc., Sr. Unsec. Medium-Term Notes, 3.15%, 03/02/15 | 95,000 | 96,723 | ||||||
Wireless Telecommunication Services–0.11% | ||||||||
American Tower Corp., Sr. Unsec. Global Notes, 4.63%, 04/01/15 | 50,000 | 52,213 | ||||||
Sr. Unsec. Notes, 4.50%, 01/15/18 | 120,000 | 119,026 | ||||||
171,239 | ||||||||
Total Bonds & Notes (Cost $23,755,801) | 24,829,701 | |||||||
U.S. Treasury Securities–13.87% | ||||||||
U.S. Treasury Bills–0.03% | ||||||||
0.17%, 04/28/11(e)(f) | 45,000 | 44,988 | ||||||
U.S. Treasury Notes–12.37% | ||||||||
0.88%, 02/29/12 | 1,500,000 | 1,508,555 | ||||||
4.38%, 08/15/12 | 500,000 | 528,711 | ||||||
1.38%, 09/15/12 | 1,000,000 | 1,013,359 | ||||||
1.50%, 12/31/13 | 3,000,000 | 3,034,688 | ||||||
1.75%, 03/31/14 | 2,500,000 | 2,541,406 | ||||||
2.38%, 10/31/14 | 5,850,000 | 6,030,984 | ||||||
2.13%, 11/30/14 | 1,950,000 | 1,991,438 | ||||||
2.25%, 01/31/15 | 470,000 | 481,309 | ||||||
2.50%, 03/31/15 | 495,000 | 510,933 | ||||||
3.75%, 11/15/18 | 750,000 | 791,484 | ||||||
3.63%, 08/15/19 | 1,590,000 | 1,649,874 | ||||||
20,082,741 | ||||||||
U.S. Treasury Bonds–1.47% | ||||||||
6.88%, 08/15/25 | 20,000 | 26,481 | ||||||
6.13%, 11/15/27 | 110,000 | 136,744 | ||||||
3.50%, 02/15/39 | 1,890,000 | 1,589,372 | ||||||
4.25%, 05/15/39 | 200,000 | 192,469 | ||||||
4.38%, 11/15/39 | 200,000 | 196,343 | ||||||
4.63%, 02/15/40 | 250,000 | 255,703 | ||||||
2,397,112 | ||||||||
Total U.S. Treasury Securities (Cost $22,382,637) | 22,524,841 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Balanced Fund
Principal | ||||||||
Amount | Value | |||||||
U.S. Government Sponsored Agency Securities–1.71% | ||||||||
Federal Home Loan Mortgage Corp. (FHLMC)–0.47% | ||||||||
Unsec. Global Notes, 4.88%, 06/13/18 | $ | 680,000 | $ | 758,451 | ||||
Federal National Mortgage Association (FNMA)–1.24% | ||||||||
Sr. Unsec. Global Bonds, 6.63%, 11/15/30 | 345,000 | 433,721 | ||||||
Sr. Unsec. Global Notes, 2.88%, 12/11/13 | 600,000 | 627,635 | ||||||
4.38%, 10/15/15 | 880,000 | 963,398 | ||||||
2,024,754 | ||||||||
Total U.S. Government Sponsored Agency Securities (Cost $2,755,211) | 2,783,205 | |||||||
U.S. Government Sponsored Mortgage-Backed Securities–0.14% | ||||||||
Federal Home Loan Mortgage Corp. (FHLMC)–0.00% | ||||||||
Pass Through Ctfs., 7.50%, 06/01/11 to 08/01/11 | 1,568 | 1,592 | ||||||
Federal National Mortgage Association (FNMA)–0.10% | ||||||||
Pass Through Ctfs., 7.00%, 03/01/12 to 07/01/32 | 147,409 | 168,060 | ||||||
Government National Mortgage Association (GNMA)–0.04% | ||||||||
Pass Through Ctfs., 8.00%, 04/15/26 to 08/15/26 | 51,499 | 58,787 | ||||||
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $207,802) | 228,439 | |||||||
Asset-Backed Securities–0.11% | ||||||||
ARI Fleet Lease Trust–Series 2010-A, Class A, Floating Rate Pass Through Ctfs., 1.72%, 08/15/18(c)(d) | 50,843 | 51,238 | ||||||
GE Dealer Floorplan Master Note Trust–Series 2009-2A, Class A, Floating Rate Pass Through Ctfs., 1.81%, 10/20/14(c)(d) | 125,000 | 126,814 | ||||||
Total Asset-Backed Securities (Cost $175,843) | 178,052 | |||||||
Municipal Obligation–0.05% | ||||||||
Texas (State of) Transportation Commission; Series 2010 B, Taxable First Tier Build America RB, 5.03%, 04/01/26 (Cost $90,000) | 90,000 | 89,040 | ||||||
Shares | ||||||||
Money Market Funds–2.57% | ||||||||
Liquid Assets Portfolio–Institutional Class(g) | 2,087,513 | 2,087,513 | ||||||
Premier Portfolio–Institutional Class(g) | 2,087,513 | 2,087,513 | ||||||
Total Money Market Funds (Cost $4,175,026) | 4,175,026 | |||||||
TOTAL INVESTMENTS–100.00% (Cost $151,735,135) | 162,412,876 | |||||||
OTHER ASSETS LESS LIABILITIES–(0.00)% | (6,422 | ) | ||||||
NET ASSETS–100.00% | $ | 162,406,454 | ||||||
Investment Abbreviations:
ADR | – American Depositary Receipt | |
Ctfs. | – Certificates | |
Disc. | – Discounted | |
Gtd. | – Guaranteed | |
RB | – Revenue Bonds | |
REIT | – Real Estate Investment Trust | |
Sec. | – Secured | |
Sr. | – Senior | |
Sub. | – Subordinated | |
Unsec. | – Unsecured | |
Unsub. | – Unsubordinated |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Balanced Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $4,547,196, which represented 2.80% of the Fund’s Net Assets. | |
(d) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(e) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. | |
(f) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4. | |
(g) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By security type, based on Net Assets
of February 28, 2011
Common Stocks & Other Equity Interests | 66.3 | % | ||
Bonds & Notes | 15.3 | |||
U.S. Treasury Securities | 13.8 | |||
U.S. Government Sponsored Agency Securities | 1.7 | |||
U.S. Government Sponsored Mortgage-Backed Securities | 0.1 | |||
Asset-Backed Securities | 0.1 | |||
Municipal Obligations | 0.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.6 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Balanced Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $147,560,109) | $ | 158,237,850 | ||
Investments in affiliated money market funds, at value and cost | 4,175,026 | |||
Total investments, at value (Cost $151,735,135) | 162,412,876 | |||
Receivable for: | ||||
Investments sold | 210,825 | |||
Fund shares sold | 108,854 | |||
Dividends and interest | 703,052 | |||
Investment for trustee deferred compensation and retirement plans | 1,283 | |||
Other assets | 23,903 | |||
Total assets | 163,460,793 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 315,162 | |||
Fund shares reacquired | 449,861 | |||
Variation margin | 3,985 | |||
Accrued fees to affiliates | 198,479 | |||
Accrued other operating expenses | 84,843 | |||
Trustee deferred compensation and retirement plans | 2,009 | |||
Total liabilities | 1,054,339 | |||
Net assets applicable to shares outstanding | $ | 162,406,454 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 177,103,969 | ||
Undistributed net investment income | 232,625 | |||
Undistributed net realized gain (loss) | (25,615,056 | ) | ||
Unrealized appreciation | 10,684,916 | |||
$ | 162,406,454 | |||
Net Assets: | ||||
Class A | $ | 87,316,912 | ||
Class B | $ | 23,555,514 | ||
Class C | $ | 51,187,120 | ||
Class Y | $ | 346,908 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 6,433,810 | |||
Class B | 1,733,429 | |||
Class C | 3,768,581 | |||
Class Y | 25,586 | |||
Class A: | ||||
Net asset value per share | $ | 13.57 | ||
Maximum offering price per share | ||||
(Net asset value of $13.57 divided by 94.50%) | $ | 14.36 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 13.59 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 13.58 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 13.56 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Balanced Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $15,705) | $ | 1,074,161 | ||
Dividends from affiliated money market funds | 2,445 | |||
Interest | 840,955 | |||
Total investment income | 1,917,561 | |||
Expenses: | ||||
Advisory fees | 411,015 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 14,299 | |||
Distribution fees: | ||||
Class A | 102,270 | |||
Class B | 132,350 | |||
Class C | 245,819 | |||
Transfer agent fees | 98,207 | |||
Trustees’ and officers’ fees and benefits | 9,499 | |||
Other | 59,875 | |||
Total expenses | 1,098,129 | |||
Less: Fees waived | (3,094 | ) | ||
Net expenses | 1,095,035 | |||
Net investment income | 822,526 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 3,130,376 | |||
Futures contracts | (34,335 | ) | ||
3,096,041 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 21,523,800 | |||
Futures contracts | 75,950 | |||
21,599,750 | ||||
Net realized and unrealized gain | 24,695,791 | |||
Net increase in net assets resulting from operations | $ | 25,518,317 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Balanced Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the period February 1, 2010 through August 31, 2010 and the year ended January 31, 2010
(Unaudited)
Six months | Seven months | |||||||||||
ended | ended | Year ended | ||||||||||
February 28, | August 31, | January 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 822,526 | $ | 909,935 | $ | 1,809,772 | ||||||
Net realized gain (loss) | 3,096,041 | 5,046,687 | (10,155,277 | ) | ||||||||
Change in net unrealized appreciation (depreciation) | 21,599,750 | (7,022,116 | ) | 48,596,645 | ||||||||
Net increase (decrease) in net assets resulting from operations | 25,518,317 | (1,065,494 | ) | 40,251,140 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (564,093 | ) | (568,837 | ) | (1,570,532 | ) | ||||||
Class B | (91,470 | ) | (113,710 | ) | (653,019 | ) | ||||||
Class C | (162,728 | ) | (176,164 | ) | (720,946 | ) | ||||||
Class Y | (1,853 | ) | (1,791 | ) | (3,358 | ) | ||||||
Total distributions from net investment income | (820,144 | ) | (860,502 | ) | (2,947,855 | ) | ||||||
Share transactions–net: | ||||||||||||
Class A | (2,168,821 | ) | (953,974 | ) | (6,374,948 | ) | ||||||
Class B | (8,421,717 | ) | (11,824,770 | ) | (24,769,334 | ) | ||||||
Class C | (3,809,753 | ) | (4,366,441 | ) | (11,831,774 | ) | ||||||
Class Y | 110,428 | 32,781 | 1,626 | |||||||||
Net increase (decrease) in net assets resulting from share transactions | (14,289,863 | ) | (17,112,404 | ) | (42,974,430 | ) | ||||||
Net increase (decrease) in net assets | 10,408,310 | (19,038,400 | ) | (5,671,145 | ) | |||||||
Net assets: | ||||||||||||
Beginning of period | 151,998,144 | 171,036,544 | 176,707,689 | |||||||||
End of period (includes undistributed net investment income of $232,625, $230,243 and $84,167, respectively) | $ | 162,406,454 | $ | 151,998,144 | $ | 171,036,544 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Balanced Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust, formerly AIM Counselor Series Trust (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Morgan Stanley Balanced Fund (the “Acquired Fund”). The Acquired Fund was reorganized on June 1, 2010 (The “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is to provide capital growth with reasonable current income.
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. 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.
15 Invesco Balanced Fund
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 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. | |
Debt obligations (including convertible bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
A security listed or traded on an exchange (except convertible bonds) 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. | ||
Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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. |
16 Invesco Balanced Fund
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 are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 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. | Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into 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 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 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 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. | |
K. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a |
17 Invesco Balanced Fund
realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized 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. |
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 Net Assets | Rate | |||
First $500 million | 0 | .52% | ||
Over $500 million | 0 | .495% | ||
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 Trimark 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, 2012, 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 reimbursement (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 1.10%, 1.85%, 1.85% and 0.85%, 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 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 the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under the expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $3,094.
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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees.
Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.
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 February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates; (1) Class A — up to 0.25% of the average daily net assets of Class A shares; (2) Class B — up to 1.00% of the average daily net assets of Class B shares and (3) Class C — up to 1.00% of the average daily net assets of Class C shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2011, IDI advised the Fund that IDI retained $3,215 in front-end sales commissions from the sale of Class A shares and $0, $9,298 and $766 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 Invesco, IIS and/or IDI.
18 Invesco Balanced 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 111,111,581 | $ | 668,017 | $ | — | $ | 111,779,598 | ||||||||
U.S. Treasury Securities | — | 22,524,841 | — | 22,524,841 | ||||||||||||
U.S. Government Sponsored Securities | — | 3,011,644 | — | 3,011,644 | ||||||||||||
Corporate Debt Securities | — | 24,278,166 | — | 24,278,166 | ||||||||||||
Asset-Backed Securities | — | 178,052 | — | 178,052 | ||||||||||||
Municipal Obligations | — | 89,040 | — | 89,040 | ||||||||||||
Foreign Government Debt Securities | — | 551,535 | — | 551,535 | ||||||||||||
$ | 111,111,581 | $ | 51,301,295 | $ | — | $ | 162,412,876 | |||||||||
Futures* | 7,175 | — | — | 7,175 | ||||||||||||
Total Investments | $ | 111,118,756 | $ | 51,301,295 | $ | — | $ | 162,420,051 | ||||||||
* | Unrealized appreciation. |
NOTE 4—Derivative Investments
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/ Derivative Type | Assets | Liabilities | ||||||
Interest rate risk | ||||||||
Futures contracts(a) | $ | 17,185 | $ | (10,010 | ) | |||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
19 Invesco Balanced Fund
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain (Loss) on | ||||
Statement of Operations | ||||
Futures* | ||||
Realized Gain (Loss) | ||||
Interest rate risk | $ | (34,335 | ) | |
Change in Unrealized Appreciation | ||||
Interest rate risk | 75,950 | |||
Total | $ | 41,615 | ||
* | The average notional value of futures outstanding during the period was $10,595,305. |
Open Futures Contracts | ||||||||||||||||
Unrealized | ||||||||||||||||
Number of | Month/ | Notional | Appreciation | |||||||||||||
Contract | Contracts | Commitment | Value | (Depreciation) | ||||||||||||
U.S. Treasury 2 Year Notes | 15 | June-2011/Long | $ | 3,274,453 | $ | 3,719 | ||||||||||
U.S. Treasury 30 Year Bonds | 5 | June-2011/Long | 601,719 | 13,466 | ||||||||||||
Subtotal | $ | 3,876,172 | $ | 17,185 | ||||||||||||
U.S. Treasury 5 Year Notes | 39 | June-2011/Short | (4,560,563 | ) | (9,527 | ) | ||||||||||
U.S. Treasury 10 Year Notes | 6 | June-2011/Short | (714,281 | ) | (483 | ) | ||||||||||
Subtotal | $ | (5,274,844 | ) | (10,010 | ) | |||||||||||
Total | $ | (1,398,672 | ) | $ | 7,175 | |||||||||||
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 are eligible to participate in a retirement plan that provides 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. 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2016 | $ | 6,986,975 | ||
August 31, 2017 | 21,467,140 | |||
Total capital loss carryforward | $ | 28,454,115 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
20 Invesco Balanced Fund
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 February 28, 2011 was $17,205,317 and $29,414,495, 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 | $ | 15,631,746 | ||
Aggregate unrealized (depreciation) of investment securities | (5,454,439 | ) | ||
Net unrealized appreciation of investment securities | $ | 10,177,307 | ||
Cost of investments for tax purposes is $152,235,569. |
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Seven months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | January 31, 2010 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 245,313 | $ | 3,150,647 | 484,668 | $ | 5,899,762 | 959,087 | $ | 10,246,614 | |||||||||||||||
Class B | 63,911 | 811,511 | 62,447 | 767,548 | 93,585 | 967,454 | ||||||||||||||||||
Class C | 75,960 | 978,995 | 44,355 | 537,899 | 115,755 | 1,209,724 | ||||||||||||||||||
Class Y | 10,386 | 133,362 | 5,647 | 67,204 | 3,413 | 39,790 | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 35,656 | 440,681 | 40,471 | 492,773 | 147,522 | 1,516,567 | ||||||||||||||||||
Class B | 5,569 | 68,813 | 7,798 | 95,166 | 61,655 | 615,910 | ||||||||||||||||||
Class C | 10,546 | 130,434 | 12,745 | 155,361 | 69,816 | 702,940 | ||||||||||||||||||
Class Y | 119 | 1,470 | 135 | 1,633 | 302 | 3,126 | ||||||||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||||||||||
Class A | 434,046 | 5,578,681 | 258,918 | 3,089,605 | 162,126 | 1,746,014 | ||||||||||||||||||
Class B | (433,240 | ) | (5,578,681 | ) | (258,519 | ) | (3,089,605 | ) | (161,899 | ) | (1,746,014 | ) | ||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (890,988 | ) | (11,338,830 | ) | (864,622 | ) | (10,436,114 | ) | (1,889,433 | ) | (19,884,143 | ) | ||||||||||||
Class B | (292,763 | ) | (3,723,360 | ) | (787,908 | ) | (9,597,879 | ) | (2,343,828 | ) | (24,606,684 | ) | ||||||||||||
Class C | (385,913 | ) | (4,919,182 | ) | (416,934 | ) | (5,059,701 | ) | (1,329,489 | ) | (13,744,438 | ) | ||||||||||||
Class Y | (1,872 | ) | (24,404 | ) | (3,078 | ) | (36,056 | ) | (3,891 | ) | (41,290 | ) | ||||||||||||
Net increase (decrease) in share activity | (1,123,270 | ) | $ | (14,289,863 | ) | (1,413,877 | ) | $ | (17,112,404 | ) | (4,115,279 | ) | $ | (42,974,430 | ) | |||||||||
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 75% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. |
21 Invesco Balanced Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | distributions | of period | return(b) | (000s omitted) | absorbed | absorbed | net assets | turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 11.61 | $ | 0.09 | $ | 1.96 | $ | 2.05 | $ | (0.09 | ) | $ | — | $ | (0.09 | ) | $ | 13.57 | 17.70 | % | $ | 87,317 | 1.03 | %(d) | 1.03 | %(d) | 1.40 | %(d) | 13 | % | ||||||||||||||||||||||||||
Seven months ended 08/31/10 | 11.79 | 0.09 | (0.18 | ) | (0.09 | ) | (0.09 | ) | — | (0.09 | ) | 11.61 | (0.82 | ) | 76,745 | 1.13 | (e) | 1.13 | (e) | 1.33 | (e) | 22 | ||||||||||||||||||||||||||||||||||
Year ended 01/31/10 | 9.49 | 0.16 | 2.37 | 2.53 | (0.23 | ) | — | (0.23 | ) | 11.79 | 26.99 | 78,855 | 1.20 | (f) | 1.20 | (f) | 1.47 | (f) | 68 | |||||||||||||||||||||||||||||||||||||
Year ended 01/31/09 | 13.83 | 0.29 | (4.06 | ) | (3.77 | ) | (0.34 | ) | (0.23 | ) | (0.57 | ) | 9.49 | (28.15 | ) | 69,354 | 1.09 | (f) | 1.09 | (f) | 2.39 | (f) | 62 | |||||||||||||||||||||||||||||||||
Year ended 01/31/08 | 14.89 | 0.32 | (0.35 | ) | (0.03 | ) | (0.35 | ) | (0.68 | ) | (1.03 | ) | 13.83 | (0.42 | ) | 114,929 | 1.04 | 1.04 | 2.10 | 64 | ||||||||||||||||||||||||||||||||||||
Year ended 01/31/07 | 14.57 | 0.30 | 1.20 | 1.50 | (0.29 | ) | (0.89 | ) | (1.18 | ) | 14.89 | 10.54 | 125,180 | 1.14 | 1.14 | 2.06 | 56 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.63 | 0.04 | 1.96 | 2.00 | (0.04 | ) | — | (0.04 | ) | 13.59 | 17.24 | 23,556 | 1.78 | (d) | 1.78 | (d) | 0.65 | (d) | 13 | |||||||||||||||||||||||||||||||||||||
Seven months ended 08/31/10 | 11.81 | 0.04 | (0.18 | ) | (0.14 | ) | (0.04 | ) | — | (0.04 | ) | 11.63 | (1.20 | ) | 27,785 | 1.88 | (e) | 1.88 | (e) | 0.58 | (e) | 22 | ||||||||||||||||||||||||||||||||||
Year ended 01/31/10 | 9.50 | 0.08 | 2.37 | 2.45 | (0.14 | ) | — | (0.14 | ) | 11.81 | 26.06 | 39,746 | 1.95 | (f) | 1.95 | (f) | 0.72 | (f) | 68 | |||||||||||||||||||||||||||||||||||||
Year ended 01/31/09 | 13.84 | 0.20 | (4.07 | ) | (3.87 | ) | (0.24 | ) | (0.23 | ) | (0.47 | ) | 9.50 | (28.71 | ) | 54,297 | 1.84 | (f) | 1.84 | (f) | 1.64 | (f) | 62 | |||||||||||||||||||||||||||||||||
Year ended 01/31/08 | 14.90 | 0.20 | (0.35 | ) | (0.15 | ) | (0.23 | ) | (0.68 | ) | (0.91 | ) | 13.84 | (1.20 | ) | 123,951 | 1.79 | (f) | 1.79 | (f) | 1.35 | (f) | 64 | |||||||||||||||||||||||||||||||||
Year ended 01/31/07 | 14.56 | 0.19 | 1.22 | 1.41 | (0.18 | ) | (0.89 | ) | (1.07 | ) | 14.90 | 9.80 | 185,534 | 1.89 | 1.89 | 1.31 | 56 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.62 | 0.04 | 1.96 | 2.00 | (0.04 | ) | — | (0.04 | ) | 13.58 | 17.25 | 51,187 | 1.77 | (d) | 1.77 | (d) | 0.66 | (d) | 13 | |||||||||||||||||||||||||||||||||||||
Seven months ended 08/31/10 | 11.80 | 0.04 | (0.18 | ) | (0.14 | ) | (0.04 | ) | — | (0.04 | ) | 11.62 | (1.19 | ) | 47,272 | 1.88 | (e) | 1.88 | (e) | 0.58 | (e) | 22 | ||||||||||||||||||||||||||||||||||
Year ended 01/31/10 | 9.50 | 0.08 | 2.37 | 2.45 | (0.15 | ) | — | (0.15 | ) | 11.80 | 26.00 | 52,268 | 1.95 | (f) | 1.95 | (f) | 0.72 | (f) | 68 | |||||||||||||||||||||||||||||||||||||
Year ended 01/31/09 | 13.84 | 0.20 | (4.07 | ) | (3.87 | ) | (0.24 | ) | (0.23 | ) | (0.47 | ) | 9.50 | (28.70 | ) | 52,920 | 1.84 | (f) | 1.84 | (f) | 1.64 | (f) | 62 | |||||||||||||||||||||||||||||||||
Year ended 01/31/08 | 14.90 | 0.20 | (0.34 | ) | (0.14 | ) | (0.24 | ) | (0.68 | ) | (0.92 | ) | 13.84 | (1.19 | ) | 99,121 | 1.79 | (f) | 1.79 | (f) | 1.35 | (f) | 64 | |||||||||||||||||||||||||||||||||
Year ended 01/31/07 | 14.57 | 0.19 | 1.21 | 1.40 | (0.18 | ) | (0.89 | ) | (1.07 | ) | 14.90 | 9.75 | 123,508 | 1.89 | 1.89 | 1.31 | 56 | |||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.60 | 0.10 | 1.96 | 2.06 | (0.10 | ) | — | (0.10 | ) | 13.56 | 17.86 | 347 | 0.78 | (d) | 0.78 | (d) | 1.65 | (d) | 13 | |||||||||||||||||||||||||||||||||||||
Seven months ended 08/31/10 | 11.77 | 0.11 | (0.18 | ) | (0.07 | ) | (0.10 | ) | — | (0.10 | ) | 11.60 | (0.62 | ) | 197 | 0.88 | (e) | 0.88 | (e) | 1.58 | (e) | 22 | ||||||||||||||||||||||||||||||||||
Year ended 01/31/10 | 9.47 | 0.18 | 2.37 | 2.55 | (0.25 | ) | — | (0.25 | ) | 11.77 | 27.37 | 168 | 0.95 | (f) | 0.95 | (f) | 1.72 | (f) | 68 | |||||||||||||||||||||||||||||||||||||
Year ended 01/31/09 | 13.82 | 0.33 | (4.08 | ) | (3.75 | ) | (0.37 | ) | (0.23 | ) | (0.60 | ) | 9.47 | (28.06 | ) | 137 | 0.84 | (f) | 0.84 | (f) | 2.64 | (f) | 62 | |||||||||||||||||||||||||||||||||
Year ended 01/31/08 | 14.89 | 0.36 | (0.36 | ) | 0.00 | (0.39 | ) | (0.68 | ) | (1.07 | ) | 13.82 | (0.23 | ) | 481 | 0.79 | (f) | 0.79 | (f) | 2.35 | (f) | 64 | ||||||||||||||||||||||||||||||||||
Year ended 01/31/07 | 14.56 | 0.34 | 1.21 | 1.55 | (0.33 | ) | (0.89 | ) | (1.22 | ) | 14.89 | 10.89 | 2,181 | 0.89 | 0.89 | 2.31 | 56 | |||||||||||||||||||||||||||||||||||||||
(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 $82,494, $26,689, $49,942 and $266 for Class A, Class B, Class C and Class Y shares, respectively. | |
(e) | Annualized. | |
(f) | The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is 0.01% for the year ended January 31, 2009 and less 0.005% for the years ended January 31, 2008 and 2010, respectively. |
NOTE 11—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen Equity and Income Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in May 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.
In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
22 Invesco Balanced 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,177.00 | $ | 5.56 | $ | 1,019.69 | $ | 5.16 | 1.03 | % | ||||||||||||||||||
B | 1,000.00 | 1,171.50 | 9.58 | 1,015.97 | 8.90 | 1.78 | ||||||||||||||||||||||||
C | 1,000.00 | 1,172.50 | 9.53 | 1,016.02 | 8.85 | 1.77 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,177.70 | 4.21 | 1,020.93 | 3.91 | 0.78 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
23 Invesco Balanced Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-BAL-SAR-1 | Invesco Distributors, Inc. |
Invesco California Tax-Free Income Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: CLFAX § B: CLFBX § C: CLFCX § Y: CLFDX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
11 | Financial Statements | |
13 | Notes to Financial Statements | |
19 | Financial Highlights | |
20 | 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
Performance summary
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | -6.01 | % | ||
Class B Shares | -6.04 | |||
Class C Shares | -6.28 | |||
Class Y Shares | -5.87 | |||
Barclays Capital California Municipal Index▼ (Broad Market Index) | -4.34 | |||
Barclays Capital California Insured Municipal Index▼ (Style-Specific Index) | -5.08 | |||
Lipper California Municipal Debt Funds Index§ (Peer Group Index) | -5.52 |
▼ | Invesco, IDC via FactSet Research; §Lipper Inc. |
The Barclays Capital California Municipal Index is an index of California investment grade municipal bonds.
The Barclays Capital California Insured Municipal Index tracks the performance of California issued municipal bonds with two or more years to maturity.
The Lipper California Municipal Debt Funds Index is an unmanaged index considered representative of California municipal debt funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco California Tax-Free Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
After Taxes | ||||||||||||||||
After Taxes | on Distributions | |||||||||||||||
Before | on | and Sale of | ||||||||||||||
Taxes | Distributions | Fund Shares | ||||||||||||||
Class A Shares | ||||||||||||||||
Inception (7/28/97) | 3.45 | % | 3.35 | % | 3.56 | % | ||||||||||
10 | Years | 3.04 | 2.95 | 3.21 | ||||||||||||
5 | Years | 1.18 | 1.14 | 1.63 | ||||||||||||
1 | Year | -4.75 | -4.76 | -1.50 | ||||||||||||
Class B Shares | ||||||||||||||||
Inception (7/11/84) | 6.09 | % | 5.98 | % | 6.02 | % | ||||||||||
10 | Years | 3.55 | 3.46 | 3.67 | ||||||||||||
5 | Years | 1.88 | 1.85 | 2.26 | ||||||||||||
1 | Year | -4.88 | -4.88 | -1.51 | ||||||||||||
Class C Shares | ||||||||||||||||
Inception (7/28/97) | 3.32 | % | 3.22 | % | 3.39 | % | ||||||||||
10 | Years | 2.99 | 2.90 | 3.11 | ||||||||||||
5 | Years | 1.66 | 1.62 | 1.98 | ||||||||||||
1 | Year | -1.56 | -1.56 | 0.47 | ||||||||||||
Class Y Shares | ||||||||||||||||
Inception (7/28/97) | 4.08 | % | 3.99 | % | 4.16 | % | ||||||||||
10 | Years | 3.78 | 3.69 | 3.90 | ||||||||||||
5 | Years | 2.43 | 2.40 | 2.75 | ||||||||||||
1 | Year | 0.23 | 0.22 | 1.90 |
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
After Taxes | ||||||||||||||||
After Taxes | on Distributions | |||||||||||||||
Before | on | and Sale of | ||||||||||||||
Taxes | Distributions | Fund Shares | ||||||||||||||
Class A Shares | ||||||||||||||||
Inception (7/28/97) | 3.50 | % | 3.40 | % | 3.60 | % | ||||||||||
10 | Years | 3.11 | 3.01 | 3.27 | ||||||||||||
5 | Years | 1.39 | 1.35 | 1.81 | ||||||||||||
1 | Year | -3.18 | -3.19 | -0.50 | ||||||||||||
Class B Shares | ||||||||||||||||
Inception (7/11/84) | 6.14 | % | 6.02 | % | 6.06 | % | ||||||||||
10 | Years | 3.60 | 3.50 | 3.70 | ||||||||||||
5 | Years | 2.10 | 2.06 | 2.44 | ||||||||||||
1 | Year | -3.20 | -3.21 | -0.44 | ||||||||||||
Class C Shares | ||||||||||||||||
Inception (7/28/97) | 3.37 | % | 3.27 | % | 3.44 | % | ||||||||||
10 | Years | 3.05 | 2.96 | 3.16 | ||||||||||||
5 | Years | 1.87 | 1.83 | 2.16 | ||||||||||||
1 | Year | 0.19 | 0.18 | 1.58 | ||||||||||||
Class Y Shares | ||||||||||||||||
Inception (7/28/97) | 4.14 | % | 4.04 | % | 4.20 | % | ||||||||||
10 | Years | 3.83 | 3.74 | 3.94 | ||||||||||||
5 | Years | 2.65 | 2.61 | 2.93 | ||||||||||||
1 | Year | 1.92 | 1.91 | 2.98 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco California Tax-Free Income Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco California Tax-Free Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Before-tax performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.88%, 0.88%, 1.38% and 0.63%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.
3 Invesco California Tax-Free Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco California Tax-Free Income Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Municipal Obligations–101.61% | ||||||||||||||||
California–96.92% | ||||||||||||||||
Adelanto (City of) Public Utility Authority (Utility System); Series 2009 A, Ref. RB | 6.75 | % | 07/01/39 | $ | 1,500 | $ | 1,441,395 | |||||||||
Alameda (County of) Joint Powers Authority (Juvenile Justice Refunding); | ||||||||||||||||
Series 2008 A, Lease RB (INS–AGM)(a) | 5.00 | % | 12/01/25 | 750 | 765,023 | |||||||||||
Series 2008 A, Lease RB (INS–AGM)(a) | 5.00 | % | 12/01/26 | 1,325 | 1,343,099 | |||||||||||
Alhambra (City of) (Atherton Baptist Homes); Series 2010 A, RB | 7.63 | % | 01/01/40 | 1,575 | 1,596,656 | |||||||||||
Alvord Unified School District (Election of 2007); Series 2008 A, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 08/01/28 | 1,590 | 1,554,670 | |||||||||||
Anaheim (City of) Public Financing Authority (Anaheim Public Improvements); Series 1997 C, Sub. Lease RB (INS–AGM)(a) | 6.00 | % | 09/01/16 | 4,000 | 4,413,160 | |||||||||||
Antelope Valley Healthcare District; Series 1997 A, Ref. RB (INS–AGM)(a) | 5.20 | % | 01/01/20 | 7,000 | 7,002,170 | |||||||||||
Bay Area Toll Authority (San Francisco Bay Area); | ||||||||||||||||
Series 2008 F-1, Toll Bridge RB | 5.00 | % | 04/01/39 | 2,500 | 2,371,700 | |||||||||||
Series 2009 F-1, Toll Bridge RB(b) | 5.25 | % | 04/01/26 | 4,685 | 4,899,901 | |||||||||||
Series 2009 F-1, Toll Bridge RB(b) | 5.25 | % | 04/01/29 | 5,205 | 5,369,114 | |||||||||||
Beverly Hills Unified School District (Election of 2008); | ||||||||||||||||
Series 2009, Unlimited Tax CAB GO Bonds(c) | 0.00 | % | 08/01/26 | 1,465 | 597,471 | |||||||||||
Series 2009, Unlimited Tax CAB GO Bonds(c) | 0.00 | % | 08/01/32 | 3,045 | 799,495 | |||||||||||
California (State of) Department of Water Resources (Central Valley); Series 2003 Y, Water System RB (INS–NATL)(a) | 5.00 | % | 12/01/25 | 10,000 | 10,355,100 | |||||||||||
California (State of) Educational Facilities Authority (California College of the Arts); Series 2005, RB | 5.00 | % | 06/01/35 | 2,000 | 1,537,940 | |||||||||||
California (State of) Educational Facilities Authority (Pitzer College); | ||||||||||||||||
Series 2005 A, RB | 5.00 | % | 04/01/35 | 2,000 | 1,687,420 | |||||||||||
Series 2009, RB | 6.00 | % | 04/01/40 | 2,000 | 2,011,700 | |||||||||||
California (State of) Educational Facilities Authority (University of San Diego); Series 1998, Ref. RB (INS–AMBAC)(a) | 5.00 | % | 10/01/22 | 5,000 | 5,000,900 | |||||||||||
California (State of) Health Facilities Financing Authority (Children’s Hospital Los Angeles); Series 2010 A, RB (INS–AGM)(a) | 5.25 | % | 07/01/38 | 1,250 | 1,142,637 | |||||||||||
California (State of) Health Facilities Financing Authority (Kaiser Permanente); Series 2006 A, RB | 5.25 | % | 04/01/39 | 2,000 | 1,739,040 | |||||||||||
California (State of) Health Facilities Financing Authority (Scripps Health); Series 2010 A, RB | 5.00 | % | 11/15/36 | 3,500 | 3,060,435 | |||||||||||
California (State of) Health Facilities Financing Authority (Sutter Health); Series 2011 B, RB | 5.50 | % | 08/15/26 | 1,000 | 1,006,870 | |||||||||||
California (State of) Municipal Finance Authority (American Heritage Education Foundation); Series 2006 A, Education RB | 5.25 | % | 06/01/26 | 1,000 | 826,750 | |||||||||||
California (State of) Municipal Finance Authority (Community Hospitals of Central California Obligated Group); Series 2007, COP | 5.00 | % | 02/01/20 | 2,055 | 1,997,296 | |||||||||||
California (State of) Municipal Finance Authority (Eisenhower Medical Center); | ||||||||||||||||
Series 2010 A, RB | 5.50 | % | 07/01/30 | 500 | 464,550 | |||||||||||
Series 2010 A, RB | 5.75 | % | 07/01/40 | 1,500 | 1,380,765 | |||||||||||
California (State of) Municipal Finance Authority (University of La Verne); Series 2010 A, RB | 6.13 | % | 06/01/30 | 1,000 | 979,420 | |||||||||||
California (State of) Pollution Control Financing Authority (Waste Management, Inc.); Series 2002 A, Ref. Solid Waste Disposal RB(d) | 5.00 | % | 01/01/22 | 2,000 | 2,009,180 | |||||||||||
California (State of) Statewide Communities Development Authority (Adventist Health System/West); | ||||||||||||||||
Series 2005 A, Health Facility RB | 5.00 | % | 03/01/30 | 5,000 | 4,569,800 | |||||||||||
Series 2005 A, Health Facility RB | 5.00 | % | 03/01/35 | 1,025 | 900,206 | |||||||||||
California (State of) Statewide Communities Development Authority (American Baptist Homes of the West); Series 2010, RB | 6.25 | % | 10/01/39 | 1,500 | 1,414,440 | |||||||||||
California (State of) Statewide Communities Development Authority (California Baptist University); Series 2007 A, RB | 5.40 | % | 11/01/27 | 1,785 | 1,566,909 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco California Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
California–(continued) | ||||||||||||||||
California (State of) Statewide Communities Development Authority (Cedars Sinai Medical Center); Series 1992, Hospital Revenue COP | 6.50 | % | 08/01/12 | $ | 570 | $ | 588,907 | |||||||||
California (State of) Statewide Communities Development Authority (Cottage Health System Obligated Group); Series 2010, RB | 5.25 | % | 11/01/30 | 1,675 | 1,582,607 | |||||||||||
California (State of); | ||||||||||||||||
Series 2004 B-1, VRD Unlimited Tax GO Bonds (LOC–Citibank N.A.)(e)(f) | 0.19 | % | 05/01/34 | 300 | 300,000 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 5.75 | % | 04/01/31 | 5,000 | 5,167,800 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 6.00 | % | 11/01/35 | 1,750 | 1,821,190 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 6.00 | % | 04/01/38 | 1,250 | 1,292,362 | |||||||||||
Series 2010, Various Purpose Unlimited Tax GO Bonds | 5.25 | % | 11/01/40 | 3,000 | 2,871,630 | |||||||||||
California County Tobacco Securitization Agency (Los Angeles County Securitization Corp.); Series 2006 A, Tobacco Settlement Asset-Backed Conv. Turbo Bonds | 5.45 | % | 06/01/28 | 5,000 | 3,971,250 | |||||||||||
California Infrastructure & Economic Development Bank (California Science Center Phase II); Series 2006 B, RB (INS–NATL)(a) | 5.00 | % | 05/01/31 | 2,000 | 1,745,420 | |||||||||||
California Infrastructure & Economic Development Bank (Kaiser Hospital Assistance I-LLC); Series 2001 A, RB | 5.55 | % | 08/01/31 | 5,000 | 4,805,050 | |||||||||||
California State University; Series 2008 A, Systemwide RB (INS–AGM)(a) | 5.00 | % | 11/01/39 | 3,000 | 2,764,320 | |||||||||||
Chino Basin Regional Financing Authority (Inland Empire Utilities Agency); Series 2008 A, RB (INS–AMBAC)(a) | 5.00 | % | 11/01/33 | 725 | 699,219 | |||||||||||
Clovis Unified School District (Election of 2004); Series 2004 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c) | 0.00 | % | 08/01/29 | 735 | 224,160 | |||||||||||
Corona-Norco Unified School District (Election of 2006); | ||||||||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/24 | 1,000 | 434,410 | |||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/25 | 1,000 | 402,360 | |||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/26 | 1,525 | 565,150 | |||||||||||
Duarte (City of) (City of Hope National Medical Center); Series 1999 A, COP | 5.25 | % | 04/01/19 | 3,000 | 3,007,800 | |||||||||||
Eden (Township of) Healthcare District (Eden Hospital Health Services Corp.); Series 2010, COP | 6.13 | % | 06/01/34 | 1,000 | 940,420 | |||||||||||
El Segundo Unified School District (Election of 2008); Series 2009 A, Unlimited Tax CAB GO Bonds(c) | 0.00 | % | 08/01/33 | 4,430 | 969,373 | |||||||||||
Fontana (City of) Public Financing Authority (North Fontana Redevelopment); Series 2003 A, Tax Allocation RB (INS–AMBAC)(a) | 5.38 | % | 09/01/25 | 1,500 | 1,431,660 | |||||||||||
Foothill/Eastern Transportation Corridor Agency; | ||||||||||||||||
Series 1999, Ref. Conv. Toll Road RB | 5.85 | % | 01/15/23 | 5,000 | 4,622,400 | |||||||||||
Series 1999, Ref. Toll Road RB (INS–NATL)(a) | 5.13 | % | 01/15/19 | 4,000 | 3,777,680 | |||||||||||
Gilroy Unified School District (Election of 2008); | ||||||||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/29 | 5,350 | 1,568,887 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/31 | 3,650 | 918,596 | |||||||||||
Golden State Tobacco Securitization Corp.; | ||||||||||||||||
Series 2007 A-1, Sr. Tobacco Settlement Asset-Backed RB | 5.13 | % | 06/01/47 | 2,500 | 1,499,875 | |||||||||||
Series 2007 A-1, Sr. Tobacco Settlement Asset-Backed RB | 5.75 | % | 06/01/47 | 1,425 | 951,558 | |||||||||||
Grossmont Union High School District (Election of 2004); Series 2006, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c) | 0.00 | % | 08/01/24 | 6,750 | 2,966,827 | |||||||||||
Independent Cities Lease Finance Authority (San Juan Mobile Estates); Series 2006 A, Mobile Home Park RB | 5.13 | % | 05/15/41 | 2,000 | 1,570,360 | |||||||||||
Indio (City of) Redevelopment Agency (Indio Redevelopment Merged Project Area); | ||||||||||||||||
Series 2008 A, Sub. Tax Allocation RB | 5.25 | % | 08/15/27 | 780 | 712,085 | |||||||||||
Series 2008 A, Sub. Tax Allocation RB | 5.25 | % | 08/15/28 | 470 | 425,787 | |||||||||||
Irvine Unified School District (Community Facilities District No. 06-1–Portola Springs); Series 2010, Special Tax RB | 6.70 | % | 09/01/35 | 1,000 | 1,018,270 | |||||||||||
Kern (County of) Water Agency Improvement District No. 4; Series 2008 A, COP (INS–AGC)(a) | 5.00 | % | 05/01/28 | 1,700 | 1,685,380 | |||||||||||
Long Beach (City of) Financing Authority; Series 1992, RB (INS–AMBAC)(a) | 6.00 | % | 11/01/17 | 20,000 | 21,637,600 | |||||||||||
Long Beach (City of); Series 2010 A, Sr. Airport RB | 5.00 | % | 06/01/40 | 2,000 | 1,729,280 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco California Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
California–(continued) | ||||||||||||||||
Los Angeles (City of) Department of Airports (Los Angeles International Airport); | ||||||||||||||||
Series 2010 A, Sr. RB | 5.00 | % | 05/15/35 | $ | 1,500 | $ | 1,432,995 | |||||||||
Series 2010 B, Sub. RB | 5.00 | % | 05/15/40 | 1,000 | 920,840 | |||||||||||
Los Angeles (City of) Department of Water & Power; | ||||||||||||||||
Series 2001 A, Water System RB | 5.13 | % | 07/01/41 | 3,000 | 2,909,970 | |||||||||||
Series 2001 A-1, Power System RB (INS–AGM)(a) | 5.25 | % | 07/01/22 | 10,000 | 10,122,400 | |||||||||||
Series 2008 A-1, Power System RB | 5.25 | % | 07/01/38 | 2,000 | 1,986,920 | |||||||||||
Los Angeles (City of); Series 2003 B, Ref. Wastewater System RB (INS–AGM)(a) | 5.00 | % | 06/01/22 | 5,000 | 5,253,450 | |||||||||||
Madera (County of) (Valley Children’s Hospital); Series 1995, COP (INS–NATL)(a) | 6.50 | % | 03/15/15 | 6,180 | 6,550,244 | |||||||||||
Menifee Union School District (Election of 2008); Series 2009 C, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/35 | 940 | 178,863 | |||||||||||
Metropolitan Water District of Southern California; Series 2009 B, Ref. Water RB(b) | 5.00 | % | 07/01/27 | 8,585 | 9,054,342 | |||||||||||
Moorpark Unified School District (Election of 2008); Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(c) | 0.00 | % | 08/01/31 | 840 | 207,682 | |||||||||||
Northern California Tobacco Securitization Authority (Sacramento County Tobacco Securitization Corp.); Series 2005 A-1, Sr. Tobacco Settlement Asset-Backed Turbo RB | 5.38 | % | 06/01/38 | 1,000 | 686,650 | |||||||||||
Oakland (City of) Joint Powers Financing Authority (Oakland Administration Buildings); | ||||||||||||||||
Series 2008 B, Ref. Lease RB (INS–AGC)(a) | 5.00 | % | 08/01/25 | 850 | 862,070 | |||||||||||
Series 2008 B, Ref. Lease RB (INS–AGC)(a) | 5.00 | % | 08/01/26 | 1,215 | 1,223,942 | |||||||||||
Oakland (Port of); | ||||||||||||||||
Series 2002 L, RB(d)(g)(h) | 5.00 | % | 11/01/12 | 110 | 118,179 | |||||||||||
Series 2002 L, RB (INS–NATL)(a)(d) | 5.00 | % | 11/01/21 | 890 | 865,908 | |||||||||||
Palomar Pomerado Health Care District; Series 2009, COP | 6.75 | % | 11/01/39 | 2,000 | 1,984,700 | |||||||||||
Patterson Joint Unified School District (Election of 2008); | ||||||||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/44 | 6,250 | 606,875 | |||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/45 | 6,715 | 608,110 | |||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/46 | 7,050 | 593,540 | |||||||||||
Series 2009 B, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/47 | 1,700 | 132,770 | |||||||||||
Poway Unified School District (Election of 2008–School Facilities Improvement District No. 2007-1); Series 2009 A, Unlimited Tax CAB GO Bonds(c) | 0.00 | % | 08/01/32 | 6,460 | 1,480,180 | |||||||||||
Poway Unified School District Public Financing Authority; Series 2007, Special Tax RB (INS–AMBAC)(a) | 4.63 | % | 09/15/42 | 2,530 | 1,937,727 | |||||||||||
Riverside (County of) Transportation Commission; Series 2010 A, Limited Sales Tax RB | 5.00 | % | 06/01/32 | 1,000 | 967,500 | |||||||||||
Roseville (City of) Finance Authority; Series 2010, Ref. Electric System RB | 5.00 | % | 02/01/37 | 750 | 703,403 | |||||||||||
Roseville Joint Union High School District (Election of 2004); | ||||||||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/24 | 2,515 | 1,084,317 | |||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/25 | 1,970 | 786,463 | |||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/26 | 1,350 | 496,287 | |||||||||||
Sacramento (County of); Series 2010, Sr. Airport System RB | 5.00 | % | 07/01/40 | 2,200 | 1,975,842 | |||||||||||
San Diego (County of) (Burnham Institute for Medical Research); Series 2006, COP | 5.00 | % | 09/01/34 | 2,000 | 1,540,040 | |||||||||||
San Diego (County of) Regional Airport Authority; Series 2010 A, Sub. RB | 5.00 | % | 07/01/40 | 2,335 | 2,065,448 | |||||||||||
San Francisco (City & County of) (Laguna Honda Hospital); Series 2005 I, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 06/15/30 | 8,000 | 8,015,040 | |||||||||||
San Francisco (City & County of) Airport Commission (San Francisco International Airport–Issue 27B); Series 2009 E, Ref. Second Series RB (INS–NATL)(a) | 5.13 | % | 05/01/26 | 5,000 | 5,000,550 | |||||||||||
San Jose (City of); Series 2001 A, Airport RB (INS–NATL)(a) | 5.00 | % | 03/01/25 | 10,000 | 10,003,700 | |||||||||||
Santa Monica Community College District (Election of 2002); | ||||||||||||||||
Series 2007 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c) | 0.00 | % | 08/01/23 | 1,385 | 687,348 | |||||||||||
Series 2007 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c) | 0.00 | % | 08/01/24 | 1,385 | 641,407 | |||||||||||
Series 2007 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c) | 0.00 | % | 08/01/25 | 1,380 | 593,497 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco California Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
California–(continued) | ||||||||||||||||
School Facilities Financing Authority (Grant Joint Union High School District); | ||||||||||||||||
Series 2008 A, CAB GO RB (INS–AGM)(a)(c) | 0.00 | % | 08/01/31 | $ | 2,040 | $ | 512,285 | |||||||||
Series 2008 A, CAB GO RB (INS–AGM)(a)(c) | 0.00 | % | 08/01/32 | 6,395 | 1,486,965 | |||||||||||
Simi Valley Unified School District (Election of 2004); | ||||||||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/28 | 3,480 | 1,111,199 | |||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/30 | 2,765 | 755,896 | |||||||||||
Southern California Public Power Authority (Mead-Adelanto); | ||||||||||||||||
Series 1994 A, RB (INS–AMBAC)(a)(i) | 8.57 | % | 07/01/15 | 3,500 | 4,263,070 | |||||||||||
Series 2008 A, VRD RB(e) | 0.19 | % | 07/01/20 | 300 | 300,000 | |||||||||||
Southern California Public Power Authority (Mead-Phoenix); Series 1994 A, RB (INS–AMBAC)(a)(i) | 8.57 | % | 07/01/15 | 2,500 | 3,045,050 | |||||||||||
Southern California Tobacco Securitization Authority (San Diego County Tobacco Asset Securitization Corp.); Series 2006 A-1, Sr. Tobacco Settlement Asset-Backed RB | 5.00 | % | 06/01/37 | 3,000 | 1,956,960 | |||||||||||
Torrance (City of) (Torrance Memorial Medical Center); Series 2010 A, RB | 5.00 | % | 09/01/40 | 1,000 | 831,360 | |||||||||||
Tustin Unified School District (Election of 2002–School Facilities Improvement District No. 2002-1); Series 2008 C, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 06/01/28 | 1,750 | 1,767,377 | |||||||||||
Twin Rivers Unified School District; Series 2009, Unlimited Tax CAB GO BAN(c) | 0.00 | % | 04/01/14 | 1,700 | 1,544,127 | |||||||||||
University of California; | ||||||||||||||||
Series 2009 E, Medical Center Pooled RB | 5.50 | % | 05/15/27 | 2,500 | 2,573,950 | |||||||||||
Series 2009 Q, General RB(b)(j) | 5.00 | % | 05/15/34 | 920 | 888,674 | |||||||||||
Vernon (City of); Series 2009 A, Electric System RB | 5.13 | % | 08/01/21 | 2,000 | 2,057,940 | |||||||||||
Walnut Energy Center Authority; Series 2010 A, Ref. RB | 5.00 | % | 01/01/35 | 2,000 | 1,835,620 | |||||||||||
Yosemite Community College District (Election of 2004); Series 2008 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c) | 0.00 | % | 08/01/24 | 4,685 | 2,035,211 | |||||||||||
267,719,768 | ||||||||||||||||
Guam–0.59% | ||||||||||||||||
Guam (Territory of) (Section 30); | ||||||||||||||||
Series 2009 A, Limited Obligation RB | 5.38 | % | 12/01/24 | 1,000 | 980,870 | |||||||||||
Series 2009 A, Limited Obligation RB | 5.63 | % | 12/01/29 | 660 | 651,288 | |||||||||||
1,632,158 | ||||||||||||||||
Puerto Rico–2.91% | ||||||||||||||||
Puerto Rico Electric Power Authority; Series 2007 TT, Power RB | 5.00 | % | 07/01/37 | 2,000 | 1,699,400 | |||||||||||
Puerto Rico Public Buildings Authority; | ||||||||||||||||
Series 2002 D, Gtd. CAB RB(c)(g)(h) | 0.00 | % | 07/01/17 | 3,680 | 3,955,227 | |||||||||||
Series 2002 D, Gtd. CAB RB (INS–AMBAC)(a)(c) | 0.00 | % | 07/01/31 | 1,320 | 1,051,248 | |||||||||||
Puerto Rico Sales Tax Financing Corp.; Series 2010 C, First Sub. Sales Tax RB | 5.00 | % | 08/01/35 | 1,500 | 1,335,285 | |||||||||||
8,041,160 | ||||||||||||||||
Virgin Islands–1.19% | ||||||||||||||||
Virgin Islands Public Finance Authority (Virgin Islands Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 1,675 | 1,722,185 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco California Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Virgin Islands–(continued) | ||||||||||||||||
Virgin Islands Public Finance Authority (Virgin Islands Matching Fund Loan Note); Series 2010 A, Sr. Lien Working Capital RB | 5.00 | % | 10/01/25 | $ | 1,600 | $ | 1,579,055 | |||||||||
3,301,240 | ||||||||||||||||
TOTAL INVESTMENTS(k)–101.61% (Cost $287,790,944) | 280,694,326 | |||||||||||||||
FLOATING RATE NOTE OBLIGATIONS–(4.68%) | ||||||||||||||||
Notes with interest rates ranging from 0.23% to 0.32% at 02/28/11 and contractual maturities of collateral ranging from 04/01/26 to 05/15/34 (See Note 1I)(l) | (12,930,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–3.07% | 8,468,927 | |||||||||||||||
NET ASSETS–100.00% | $ | 276,233,253 | ||||||||||||||
Investment Abbreviations:
AGC | – Assured Guaranty Corp. | |
AGM | – Assured Guaranty Municipal Corp. | |
AMBAC | – American Municipal Bond Assurance Corp.* | |
BAN | – Bond Anticipation Note | |
CAB | – Capital Appreciation Bond | |
Conv. | – Convertible | |
COP | – Certificates of Participation | |
GO | – General Obligation | |
Gtd. | – Guaranteed | |
INS | – Insurer | |
LOC | – Letter of Credit | |
NATL | – National Public Finance Guarantee Corp. | |
RB | – Revenue Bonds | |
Ref. | – Refunding | |
Sr. | – Senior | |
Sub. | – Subordinated | |
VRD | – Variable Rate Demand |
Notes to Schedule of Investments:
(a) | Principal and/or interest payments are secured by the bond insurance company listed. | |
(b) | Underlying security related to Dealer Trusts entered into by the Fund. See Note 1I. | |
(c) | Zero coupon bond issued at a discount. | |
(d) | Security subject to the alternative minimum tax. | |
(e) | Demand security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(f) | Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary. | |
(g) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. | |
(h) | Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral. | |
(i) | Current coupon rate for inverse floating rate municipal obligations. This rate resets periodically as the auction rate on the related security changes. Positions in inverse floating rate municipal obligations have a total vale of $7,308,120 which represents 2.6% of Net Assets. | |
(j) | Security is subject to a shortfall agreement which may require the Fund to pay amounts to a counterparty in the event of a significant decline in the market value of the security underlying the Dealer Trusts. In case of a shortfall, the maximum potential amount of payments the Fund could ultimately be required to make under the agreement is $615,000. However, such shortfall payment would be reduced by the proceeds from the sale of the security underlying the Dealer Trusts. | |
(k) | This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations. |
Entities | Percentage | |||
Assured Guaranty Municipal Corp. | 19.7 | % | ||
National Public Finance Guarantee Corp. | 15.7 | |||
American Municipal Bond Assurance Corp.* | 14.1 | |||
(1) | Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at February 28, 2011. At February 28, 2011, the Fund’s investments with a value of $20,212,031 are held by Dealer Trusts and serve as collateral for the $12,930,000 in the floating rate note obligations outstanding at that date. | |
* | AMBAC filed for bankruptcy on November 8, 2010. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco California Tax-Free Income Fund
By credit sector, based on total investments
Revenue Bonds | 82.1 | % | ||
General Obligation Bonds | 16.2 | |||
Pre-refunded Bonds | 1.5 | |||
Other | 0.2 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco California Tax-Free Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $287,790,944) | $ | 280,694,326 | ||
Cash | 4,238,271 | |||
Receivable for: | ||||
Investments sold | 1,320,000 | |||
Fund shares sold | 41,103 | |||
Interest | 3,999,001 | |||
Fund expenses absorbed | 102,294 | |||
Investment for trustee deferred compensation and retirement plans | 1,491 | |||
Other assets | 9,832 | |||
Total assets | 290,406,318 | |||
Liabilities: | ||||
Floating rate note obligations | 12,930,000 | |||
Payable for: | ||||
Fund shares reacquired | 470,539 | |||
Dividends | 541,170 | |||
Accrued fees to affiliates | 73,361 | |||
Accrued other operating expenses | 93,383 | |||
Trustee deferred compensation and retirement plans | 64,612 | |||
Total liabilities | 14,173,065 | |||
Net assets applicable to shares outstanding | $ | 276,233,253 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 293,874,007 | ||
Undistributed net investment income | 1,023,755 | |||
Undistributed net realized gain (loss) | (11,567,891 | ) | ||
Unrealized appreciation (depreciation) | (7,096,618 | ) | ||
$ | 276,233,253 | |||
Net Assets: | ||||
Class A | $ | 22,133,336 | ||
Class B | $ | 216,810,871 | ||
Class C | $ | 14,597,815 | ||
Class Y | $ | 22,691,231 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 2,050,924 | |||
Class B | 19,958,975 | |||
Class C | 1,344,877 | |||
Class Y | 2,095,686 | |||
Class A: | ||||
Net asset value per share | $ | 10.79 | ||
Maximum offering price per share, (net asset value of $10.79 divided by 95.25%) | $ | 11.33 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.86 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.85 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.83 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco California Tax-Free Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Interest | $ | 8,138,772 | ||
Expenses: | ||||
Advisory fees | 698,365 | |||
Administrative services fees | 49,052 | |||
Custodian fees | 9,657 | |||
Distribution fees: | ||||
Class A | 29,790 | |||
Class B | 298,904 | |||
Class C | 60,102 | |||
Interest, facilities and maintenance fees | 58,169 | |||
Transfer agent fees | 55,139 | |||
Trustees’ and officers’ fees and benefits | 10,248 | |||
Other | 93,742 | |||
Total expenses | 1,363,168 | |||
Net investment income | 6,775,604 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from investment securities | (3,461,471 | ) | ||
Change in net unrealized appreciation (depreciation) of investment securities | (22,329,605 | ) | ||
Net realized and unrealized gain (loss) | (25,791,076 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (19,015,472 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco California Tax-Free Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the eight months ended August 31, 2010 and the year ended December 31, 2009
(Unaudited)
Six months ended | Eight months ended | Year ended | ||||||||||
February 28, | August 31, | December 31, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 6,775,604 | $ | 10,514,315 | $ | 15,794,946 | ||||||
Net realized gain (loss) | (3,461,471 | ) | (2,623,315 | ) | (2,671,016 | ) | ||||||
Change in net unrealized appreciation (depreciation) | (22,329,605 | ) | 17,229,887 | 33,565,363 | ||||||||
Net increase (decrease) in net assets resulting from operations | (19,015,472 | ) | 25,120,887 | 46,689,293 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (557,036 | ) | (1,378,626 | ) | (1,074,299 | ) | ||||||
Class B | (5,439,659 | ) | (7,178,057 | ) | (12,491,580 | ) | ||||||
Class C | (334,391 | ) | (463,014 | ) | (718,214 | ) | ||||||
Class Y | (604,221 | ) | (851,291 | ) | (1,394,249 | ) | ||||||
Total distributions from net investment income | (6,935,307 | ) | (9,870,988 | ) | (15,678,342 | ) | ||||||
Share transactions–net: | ||||||||||||
Class A | (1,811,883 | ) | (1,379,537 | ) | (529,261 | ) | ||||||
Class B | (17,769,338 | ) | (21,543,146 | ) | (25,717,984 | ) | ||||||
Class C | (1,517,001 | ) | (520,499 | ) | (1,452,113 | ) | ||||||
Class Y | (2,004,067 | ) | (1,800,697 | ) | (3,693,538 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions | (23,102,289 | ) | (25,243,879 | ) | (31,392,896 | ) | ||||||
Net increase (decrease) in net assets | (49,053,068 | ) | (9,993,980 | ) | (381,945 | ) | ||||||
Net assets: | ||||||||||||
Beginning of period | 325,286,321 | 335,280,301 | 335,662,246 | |||||||||
End of period (includes undistributed net investment income of $1,023,755, $1,183,458 and $364,824, respectively) | $ | 276,233,253 | $ | 325,286,321 | $ | 335,280,301 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco California Tax-Free Income Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust), formerly AIM Counselor Series Trust, (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 twenty-two 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.
Prior to June 1, 2010, the Fund operated as Morgan Stanley California Tax-Free Income Fund (the “Acquired Fund”). The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is to provide a high level of current income exempt from federal and California income tax, consistent with the preservation 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. Redemption of Class B shares prior to conversion date will be subject to a CDSC.
13 Invesco California Tax-Free Income 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. | |
Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. 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, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments. | ||
Securities for which market quotations either are not readily available or are 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. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances. | ||
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, adjusted for amortization of premiums and accretion of discounts on investments, is recorded on the accrual basis from settlement 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 gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized 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 realized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares 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 are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt 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. | |
In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code. | ||
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 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 |
14 Invesco California Tax-Free Income Fund
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. | Floating Rate Note Obligations — The Fund invests in inverse floating rate securities, such as Residual Interest Bonds (“RIBs”) or Tender Option Bonds (“TOBs”) for investment purposes and to enhance the yield of the Fund. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Such transactions may be purchased in the secondary market without first owning the underlying bond or by the sale of fixed rate bonds by the Fund to special purpose trusts established by a broker dealer (“Dealer Trusts”) in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The Dealer Trusts finance the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. | |
TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities. | ||
The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption Floating rate note obligations on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption Interest and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts as a component of Interest, facilities and maintenance fees on the Statement of Operations. | ||
The Fund generally invests in inverse floating rate securities that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The primary risks associated with inverse floating rate securities are varying degrees of liquidity and the changes in the value of such securities in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate securities. In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation. | ||
J. | Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located. | |
Since, many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities. | ||
There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service. | ||
K. | Interest, Facilities and Maintenance Fees — Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate note obligations, if any. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisors, Inc. (the “Advisor” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund’s average daily net assets.
Average Net Assets | Rate | |||
First $500 million | 0 | .47% | ||
Next $250 million | 0 | .445% | ||
Next $250 million | 0 | .42% | ||
Next $250 million | 0 | .395% | ||
Over $1.25 billion | 0 | .37% | ||
Under the terms of a master sub-advisory agreement approved by shareholders of the Funds 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 Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).
15 Invesco California Tax-Free Income Fund
The Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses and/or reimbursement (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.85%, 1.35%, 1.30% and 0.60% of average daily net assets, respectively. 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 net annual fund operating expenses and/or reimbursement to exceed the numbers reflected above: (1) interest, facilities and maintenance fees; (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 the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
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 February 28, 2011, 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 February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates; (1) Class A — up to 0.25% of the average daily net assets of Class A shares; (2) Class B — up to 1.00% of the average daily net assets of Class B shares and (3) Class C — up to 1.00% of the average daily net assets of Class C shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the six months ended February 28, 2011, IDI advised the Fund that IDI retained $2,864 in front-end sales commissions from the sale of Class A shares and $162, $16,405 and $4,919 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 Invesco, 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Municipal Obligations | $ | — | $ | 280,694,326 | $ | — | $ | 280,694,326 | ||||||||
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 are eligible to participate in a retirement plan that provides 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
16 Invesco California Tax-Free Income Fund
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.
During the six months ended February 28, 2011, the Fund paid legal fees of $1,034 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
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. 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.
Inverse floating rate obligations resulting from the transfer of bonds to Dealer Trusts are accounted for as secured borrowings. The average floating rate notes outstanding and average annual interest and fees related to inverse floating rate note obligations during the six months ended February 28, 2011 were $12,930,000 and 0.91%, respectively.
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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2016 | $ | 2,435,320 | ||
August 31, 2018 | 5,670,924 | |||
Total capital loss carryforward | $ | 8,106,244 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
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 February 28, 2011 was $21,095,421 and $52,475,136 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 | $ | 8,803,421 | ||
Aggregate unrealized (depreciation) of investment securities | (14,644,891 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (5,841,470 | ) | |
Cost of investments for tax purposes is $286,535,796. |
17 Invesco California Tax-Free Income Fund
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Eight months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | December 31, 2009 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 179,074 | $ | 2,052,318 | 16,592,673 | $ | 188,126,111 | 240,802 | $ | 2,646,138 | |||||||||||||||
Class B | 46,407 | 530,054 | 16,273,049 | 187,452,860 | 476,617 | 5,223,297 | ||||||||||||||||||
Class C | 55,028 | 615,585 | 90,112 | 1,035,827 | 78,373 | 864,886 | ||||||||||||||||||
Class Y | 544 | 5,998 | 9,681 | 114,432 | 6,220 | 70,350 | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 25,378 | 278,790 | 107,362 | 1,226,512 | 94,573 | 1,032,819 | ||||||||||||||||||
Class B | 249,384 | 2,758,882 | 502,966 | 5,768,076 | 1,066,514 | 11,724,571 | ||||||||||||||||||
Class C | 16,598 | 183,940 | 34,647 | 397,150 | 63,528 | 697,878 | ||||||||||||||||||
Class Y | 26,618 | 293,381 | 61,690 | 705,418 | 120,543 | 1,320,593 | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (368,033 | ) | (4,142,991 | ) | (16,660,323 | ) | (190,732,160 | ) | (389,291 | ) | (4,208,218 | ) | ||||||||||||
Class B | (1,892,896 | ) | (21,058,274 | ) | (18,818,269 | ) | (214,764,082 | ) | (3,903,492 | ) | (42,665,852 | ) | ||||||||||||
Class C | (210,181 | ) | (2,316,526 | ) | (171,039 | ) | (1,953,476 | ) | (274,857 | ) | (3,014,877 | ) | ||||||||||||
Class Y | (208,341 | ) | (2,303,446 | ) | (229,966 | ) | (2,620,547 | ) | (463,743 | ) | (5,084,481 | ) | ||||||||||||
Net increase (decrease) in share activity | (2,080,420 | ) | $ | (23,102,289 | ) | (2,207,417 | ) | $ | (25,243,879 | ) | (2,884,213 | ) | $ | (31,392,896 | ) | |||||||||
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 84% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. |
18 Invesco California Tax-Free Income Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expense | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
to average | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
net assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of | Ratio of | with fee waivers | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | and/or expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | absorbed, | Ratio of net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | exclusive of | investment | |||||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | interest, | income | |||||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | facilities and | to average | Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||
of period | income | unrealized) | operations | income | gains | Distributions | of period | return(a) | (000s omitted) | absorbed | absorbed | maintenance fees(b) | net assets | turnover(c) | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 11.75 | $ | 0.25 | (d) | $ | (0.95 | ) | $ | (0.70 | ) | $ | (0.26 | ) | $ | — | $ | (0.26 | ) | $ | 10.79 | (6.01 | )% | $ | 22,133 | 0.91 | %(e) | 0.91 | %(e) | 0.87 | %(e) | 4.57 | %(e) | 7 | % | |||||||||||||||||||||||||
Eight months ended 08/31/10 | 11.21 | 0.37 | 0.52 | 0.89 | (0.35 | ) | — | (0.35 | ) | 11.75 | 8.05 | 26,015 | 0.88 | (f) | 0.91 | (f) | 0.84 | (f) | 4.88 | (f) | 15 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 10.23 | 0.51 | 0.97 | 1.48 | (0.50 | ) | — | (0.50 | ) | 11.21 | 14.74 | 24,377 | 0.86 | 0.92 | 0.85 | 4.65 | 19 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.83 | 0.49 | (1.56 | ) | (1.07 | ) | (0.49 | ) | (0.04 | ) | (0.53 | ) | 10.23 | (9.28 | ) | 22,799 | 0.86 | 0.90 | 0.86 | 4.33 | 10 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 12.16 | 0.50 | (0.31 | ) | 0.19 | (0.49 | ) | (0.03 | ) | (0.52 | ) | 11.83 | 1.62 | 24,645 | 1.00 | 1.04 | 0.84 | 4.12 | 5 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 12.16 | 0.49 | 0.06 | 0.55 | (0.49 | ) | (0.06 | ) | (0.55 | ) | 12.16 | 4.64 | 299,414 | 0.86 | 0.89 | 0.85 | 4.06 | 5 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 12.46 | 0.52 | (0.10 | ) | 0.42 | (0.51 | ) | (0.21 | ) | (0.72 | ) | 12.16 | 3.44 | 329,938 | 0.86 | 0.87 | 0.86 | 4.11 | 23 | |||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.83 | 0.25 | (d) | (0.96 | ) | (0.71 | ) | (0.26 | ) | — | (0.26 | ) | 10.86 | (6.04 | ) | 216,811 | 0.91 | (e) | 0.91 | (e) | 0.87 | (e) | 4.57 | (e) | 7 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 11.28 | 0.37 | 0.53 | 0.90 | (0.35 | ) | — | (0.35 | ) | 11.83 | 8.10 | 254,907 | 0.88 | (f) | 0.91 | (f) | 0.84 | (f) | 4.88 | (f) | 15 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 10.30 | 0.51 | 0.98 | 1.49 | (0.51 | ) | — | (0.51 | ) | 11.28 | 14.68 | 266,270 | 0.85 | 0.94 | 0.84 | 4.66 | 19 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.91 | 0.50 | (1.57 | ) | (1.07 | ) | (0.50 | ) | (0.04 | ) | (0.54 | ) | 10.30 | (9.23 | ) | 267,308 | 0.85 | 0.89 | 0.85 | 4.34 | 10 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 12.24 | 0.50 | (0.30 | ) | 0.20 | (0.50 | ) | (0.03 | ) | (0.53 | ) | 11.91 | 1.65 | 344,606 | 0.97 | 1.01 | 0.81 | 4.15 | 5 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 12.24 | 0.52 | 0.05 | 0.57 | (0.51 | ) | (0.06 | ) | (0.57 | ) | 12.24 | 4.81 | 132,162 | 0.69 | 0.72 | 0.68 | 4.23 | 5 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 12.52 | 0.54 | (0.08 | ) | 0.46 | (0.53 | ) | (0.21 | ) | (0.74 | ) | 12.24 | 3.74 | 159,221 | 0.68 | 0.69 | 0.68 | 4.29 | 23 | |||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.82 | 0.23 | (d) | (0.97 | ) | (0.74 | ) | (0.23 | ) | — | (0.23 | ) | 10.85 | (6.28 | ) | 14,598 | 1.41 | (e) | 1.41 | (e) | 1.37 | (e) | 4.07 | (e) | 7 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 11.27 | 0.34 | 0.52 | 0.86 | (0.31 | ) | — | (0.31 | ) | 11.82 | 7.76 | 17,528 | 1.38 | (f) | 1.41 | (f) | 1.34 | (f) | 4.38 | (f) | 15 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 10.29 | 0.46 | 0.97 | 1.43 | (0.45 | ) | — | (0.45 | ) | 11.27 | 14.11 | 17,245 | 1.36 | 1.42 | 1.35 | 4.15 | 19 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.90 | 0.44 | (1.57 | ) | (1.13 | ) | (0.44 | ) | (0.04 | ) | (0.48 | ) | 10.29 | (9.74 | ) | 17,105 | 1.36 | 1.40 | 1.36 | 3.83 | 10 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 12.23 | 0.44 | (0.30 | ) | 0.14 | (0.44 | ) | (0.03 | ) | (0.47 | ) | 11.90 | 1.14 | 22,800 | 1.50 | 1.54 | 1.34 | 3.62 | 5 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 12.23 | 0.43 | 0.06 | 0.49 | (0.43 | ) | (0.06 | ) | (0.49 | ) | 12.23 | 4.12 | 23,320 | 1.36 | 1.39 | 1.35 | 3.56 | 5 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 12.52 | 0.45 | (0.08 | ) | 0.37 | (0.45 | ) | (0.21 | ) | (0.66 | ) | 12.23 | 2.97 | 26,385 | 1.36 | 1.37 | 1.36 | 3.61 | 23 | |||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.79 | 0.27 | (d) | (0.96 | ) | (0.69 | ) | (0.27 | ) | — | (0.27 | ) | 10.83 | (5.87 | ) | 22,691 | 0.66 | (e) | 0.66 | (e) | 0.62 | (e) | 4.82 | (e) | 7 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 11.25 | 0.39 | 0.52 | 0.91 | (0.37 | ) | — | (0.37 | ) | 11.79 | 8.21 | 26,837 | 0.63 | (f) | 0.66 | (f) | 0.59 | (f) | 5.13 | (f) | 15 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 10.26 | 0.54 | 0.98 | 1.52 | (0.53 | ) | — | (0.53 | ) | 11.25 | 15.10 | 27,388 | 0.61 | 0.67 | 0.60 | 4.90 | 19 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.86 | 0.52 | (1.56 | ) | (1.04 | ) | (0.52 | ) | (0.04 | ) | (0.56 | ) | 10.26 | (9.02 | ) | 28,450 | 0.61 | 0.65 | 0.61 | 4.58 | 10 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 12.20 | 0.53 | (0.32 | ) | 0.21 | (0.52 | ) | (0.03 | ) | (0.55 | ) | 11.86 | 1.80 | 49,024 | 0.76 | 0.80 | 0.60 | 4.36 | 5 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 12.20 | 0.53 | 0.05 | 0.58 | (0.52 | ) | (0.06 | ) | (0.58 | ) | 12.20 | 4.90 | 53,954 | 0.61 | 0.64 | 0.60 | 4.31 | 5 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 12.49 | 0.54 | (0.08 | ) | 0.46 | (0.54 | ) | (0.21 | ) | (0.75 | ) | 12.20 | 3.74 | 53,857 | 0.61 | 0.62 | 0.61 | 4.36 | 23 | |||||||||||||||||||||||||||||||||||||||||
(a) | 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. | |
(b) | For the period ended August 31, 2010 and prior, ratio does not exclude facilities and maintenance fees. | |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(d) | Calculated using average shares outstanding. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $24,030, $234,721, $16,160 and $24,729 for Class A, Class B, Class C and Class Y shares, respectively. | |
(f) | Annualized. |
NOTE 10—Significant Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Van Kampen California Insured Tax Free Fund (the “Target Fund”) in exchange for shares of the Fund.
The Target Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated shortly thereafter. Upon closing of the reorganization, shareholders of the Target Fund will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Fund and the Target Fund will liquidate and cease operations.
19 Invesco California Tax-Free Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
ACTUAL | (5% annual return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 939.90 | $ | 4.38 | $ | 1,020.28 | $ | 4.56 | 0.91 | % | ||||||||||||||||||
B | 1,000.00 | 939.60 | 4.38 | 1,020.28 | 4.56 | 0.91 | ||||||||||||||||||||||||
C | 1,000.00 | 937.20 | 6.77 | 1,017.80 | 7.05 | 1.41 | ||||||||||||||||||||||||
Y | 1,000.00 | 941.30 | 3.18 | 1,021.52 | 3.31 | 0.66 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
20 Invesco California Tax-Free Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-CTFI-SAR-1 | Invesco Distributors, Inc. |
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: ACPSX § B: CPBBX § C: CPCFX § R: CPBRX § Y: CPBYX § Institutional: CPIIX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
15 | Financial Statements | |
18 | Notes to Financial Statements | |
25 | Financial Highlights | |
26 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | -0.31 | % | ||
Class B Shares | -0.59 | |||
Class C Shares | -0.68 | |||
Class R Shares | -0.34 | |||
Class Y Shares | -0.09 | |||
Institutional Class Shares | -0.09 | |||
Barclays Capital U.S. Aggregate Index▼ (Broad Market/Style-Specific Index) | -0.83 | |||
Lipper Intermediate Investment Grade Debt Funds Index▼ (Peer Group Index) | 0.46 | |||
▼ | Lipper Inc. |
The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.
The Lipper Intermediate Investment Grade Debt Funds Index is an unmanaged index considered representative of intermediate investment grade debt funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Core Plus Bond Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable
sales charges
sales charges
Class A Shares | ||||||||
Inception (6/3/09) | 4.76 | % | ||||||
1 Year | 0.16 | |||||||
Class B Shares | ||||||||
Inception (6/3/09) | 4.73 | % | ||||||
1 Year | –0.60 | |||||||
Class C Shares | ||||||||
Inception (6/3/09) | 6.94 | % | ||||||
1 Year | 3.40 | |||||||
Class R Shares | ||||||||
Inception (6/3/09) | 7.47 | % | ||||||
1 Year | 4.92 | |||||||
Class Y Shares | ||||||||
Inception (6/3/09) | 8.01 | % | ||||||
1 Year | 5.44 | |||||||
Institutional Class Shares | ||||||||
Inception (6/3/09) | 8.01 | % | ||||||
1 Year | 5.44 |
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares was 0.90%, 1.65%, 1.65%, 1.15%, 0.65% and 0.65%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares was 5.61%, 6.36%, 6.36%, 5.86%, 5.36% and 5.29%, respectively. The expense ratios presented above may vary from the expense ratios presented in other
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (6/3/09) | 4.87 | % | ||||||
1 Year | 1.59 | |||||||
Class B Shares | ||||||||
Inception (6/3/09) | 4.91 | % | ||||||
1 Year | 0.86 | |||||||
Class C Shares | ||||||||
Inception (6/3/09) | 7.36 | % | ||||||
1 Year | 4.86 | |||||||
Class R Shares | ||||||||
Inception (6/3/09) | 7.90 | % | ||||||
1 Year | 6.39 | |||||||
Class Y Shares | ||||||||
Inception (6/3/09) | 8.44 | % | ||||||
1 Year | 6.92 | |||||||
Institutional Class Shares | ||||||||
Inception (6/3/09) | 8.44 | % | ||||||
1 Year | 6.92 |
sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Y and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least December 31, 2011. See current prospectus for more information. |
3 Invesco Core Plus Bond Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Core Plus Bond Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Principal | ||||||||
Amount | Value | |||||||
Bonds & Notes–44.94% | ||||||||
Aerospace & Defense–0.41% | ||||||||
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.88%, 09/15/20 | $ | 5,000 | $ | 5,200 | ||||
BE Aerospace, Inc., Sr. Unsec. Notes, 8.50%, 07/01/18 | 10,000 | 11,069 | ||||||
Bombardier Inc. (Canada), Sr. Notes, 7.50%, 03/15/18(b) | 5,000 | 5,431 | ||||||
7.75%, 03/15/20(b) | 5,000 | 5,475 | ||||||
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15 | 10,000 | 9,576 | ||||||
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17 | 5,000 | 5,362 | ||||||
42,113 | ||||||||
Agricultural Products–1.36% | ||||||||
Cargill Inc., Sr. Unsec. Notes, 5.60%, 09/15/12(b) | 60,000 | 64,124 | ||||||
Corn Products International Inc., Sr. Unsec. Notes, 3.20%, 11/01/15 | 75,000 | 75,233 | ||||||
139,357 | ||||||||
Airlines–2.07% | ||||||||
American Airlines Pass Through Trust, Series 2001-2, Class A-1, Sec. Global Pass Through Ctfs., 6.98%, 04/01/11 | 20,846 | 20,937 | ||||||
Series 2001-2, Class A-2, Sec. Global Pass Through Ctfs., 7.86%, 10/01/11 | 50,000 | 51,750 | ||||||
Series 2011-1, Class B, Sec. Gtd. Pass Through Ctfs., 7.00%, 01/31/18(b) | 40,000 | 40,100 | ||||||
Continental Airlines Inc., Series 2009-1, Sec. Pass Through Ctfs., 9.00%, 07/08/16 | 28,181 | 32,549 | ||||||
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17 | 4,749 | 5,212 | ||||||
Delta Air Lines, Inc., Sr. Sec. Notes, 9.50%, 09/15/14(b) | 4,000 | 4,370 | ||||||
Series 2001-1, Class A-2, Sr. Sec. Pass Through Ctfs., 7.11%, 09/18/11 | 30,000 | 30,862 | ||||||
Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12 | 92 | 93 | ||||||
Delta Air Lines, Inc., Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.38%, 01/02/16 | 5,000 | 4,988 | ||||||
Series 2010-2, Class B, Sec. Pass Through Ctfs., 6.75%, 11/23/15 | 5,000 | 4,994 | ||||||
UAL Corp., Series 2009-1, Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16 | 9,443 | 11,001 | ||||||
Series 2009-2A, Sec. Gtd. Global Pass Through Ctfs., 9.75%, 01/15/17 | 4,614 | 5,341 | ||||||
212,197 | ||||||||
Alternative Carriers–0.15% | ||||||||
Cogent Communications Group, Inc., Sr. Sec. Gtd. Notes, 8.38%, 02/15/18(b) | 5,000 | 5,200 | ||||||
Level 3 Communications Inc., Sr. Unsec. Notes, 11.88%, 02/01/19(b) | 5,000 | 4,888 | ||||||
Level 3 Financing Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 11/01/14 | 5,000 | 5,181 | ||||||
15,269 | ||||||||
Aluminum–0.05% | ||||||||
Century Aluminum Co., Sr. Sec. Notes, 8.00%, 05/15/14 | 5,000 | 5,222 | ||||||
Apparel Retail–0.11% | ||||||||
Limited Brands Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 06/15/19 | 10,000 | 11,450 | ||||||
Apparel, Accessories & Luxury Goods–0.10% | ||||||||
Hanesbrands Inc., Sr. Unsec. Gtd. Global Notes, 6.38%, 12/15/20 | 5,000 | 4,862 | ||||||
Phillips-Van Heusen Corp., Sr. Unsec. Notes, 7.38%, 05/15/20 | 5,000 | 5,350 | ||||||
10,212 | ||||||||
Asset Management & Custody Banks–0.15% | ||||||||
State Street Capital Trust III, Jr. Unsec. Gtd. Sub. Variable Rate Bonds, 8.25%(c)(d) | 15,000 | 15,112 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Auto Parts & Equipment–0.10% | ||||||||
Dana Holding Corp., Sr. Unsec. Notes, 6.50%, 02/15/19 | $ | 5,000 | $ | 5,063 | ||||
6.75%, 02/15/21 | 5,000 | 5,106 | ||||||
10,169 | ||||||||
Automotive Retail–0.35% | ||||||||
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20 | 20,000 | 21,025 | ||||||
O’Reilly Automotive Inc., Sr. Unsec. Gtd. Notes, 4.88%, 01/14/21 | 15,000 | 14,868 | ||||||
35,893 | ||||||||
Brewers–0.50% | ||||||||
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Global Notes, 3.00%, 10/15/12 | 50,000 | 51,494 | ||||||
Broadcasting–1.12% | ||||||||
COX Communications Inc., Sr. Unsec. Notes, 6.75%, 03/15/11 | 40,000 | 40,090 | ||||||
9.38%, 01/15/19(b) | 25,000 | 32,562 | ||||||
Discovery Communications LLC, Sr. Unsec. Gtd. Global Notes, 6.35%, 06/01/40 | 40,000 | 41,805 | ||||||
114,457 | ||||||||
Building Products–0.21% | ||||||||
Building Materials Corp. of America, Sr. Gtd. Notes, 7.50%, 03/15/20(b) | 5,000 | 5,237 | ||||||
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15 | 5,000 | 5,138 | ||||||
Ply Gem Industries Inc., Sr. Sec. Notes, 8.25%, 02/15/18(b) | 5,000 | 5,162 | ||||||
USG Corp., Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b) | 5,000 | 5,450 | ||||||
20,987 | ||||||||
Cable & Satellite–1.36% | ||||||||
British Sky Broadcasting Group PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.50%, 11/15/18(b) | 25,000 | 33,283 | ||||||
Cablevision Systems Corp., Sr. Unsec. Global Notes, 8.63%, 09/15/17 | 5,000 | 5,619 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16 | 60,000 | 66,300 | ||||||
Time Warner Cable Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/40 | 30,000 | 28,425 | ||||||
XM Satellite Radio Inc., Sr. Unsec. Gtd. Notes, 7.63%, 11/01/18(b) | 5,000 | 5,306 | ||||||
138,933 | ||||||||
Casinos & Gaming–0.45% | ||||||||
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Sub. Notes, 7.25%, 02/15/15(b) | 5,000 | 5,125 | ||||||
MGM Resorts International, Sr. Unsec. Gtd. Global Notes, 6.63%, 07/15/15 | 15,000 | 14,400 | ||||||
Sr. Unsec. Gtd. Notes, 10.00%, 11/01/16(b) | 5,000 | 5,362 | ||||||
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17 | 5,000 | 5,512 | ||||||
Snoqualmie Entertainment Authority, Sr. Sec. Notes, 9.13%, 02/01/15(b) | 5,000 | 5,063 | ||||||
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sr. Sec. Gtd. First Mortgage Global Notes, 7.88%, 11/01/17 | 10,000 | 10,700 | ||||||
46,162 | ||||||||
Coal & Consumable Fuels–0.11% | ||||||||
CONSOL Energy Inc., Sr. Unsec. Gtd. Notes, 8.00%, 04/01/17(b) | 5,000 | 5,488 | ||||||
8.25%, 04/01/20(b) | 5,000 | 5,537 | ||||||
11,025 | ||||||||
Communications Equipment–0.71% | ||||||||
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b) | 5,000 | 4,975 | ||||||
Juniper Networks Inc., Sr. Unsec. Notes, 5.95%, 03/15/41 | 15,000 | 15,095 | ||||||
Motorola Solutions Inc., Sr. Unsec. Global Notes, 8.00%, 11/01/11 | 50,000 | 52,400 | ||||||
72,470 | ||||||||
Computer & Electronics Retail–0.05% | ||||||||
Rent-A-Center Inc., Sr. Unsec. Notes, 6.63%, 11/15/20(b) | 5,000 | 4,988 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Construction & Engineering–0.15% | ||||||||
Great Lakes Dredge & Dock Corp., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/19(b) | $ | 5,000 | $ | 5,100 | ||||
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17 | 5,000 | 5,100 | ||||||
Tutor Perini Corp., Sr. Unsec. Gtd. Notes, 7.63%, 11/01/18(b) | 5,000 | 5,206 | ||||||
15,406 | ||||||||
Construction Materials–0.05% | ||||||||
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 08/15/20 | 5,000 | 5,463 | ||||||
Construction, Farm Machinery & Heavy Trucks–0.11% | ||||||||
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21 | 5,000 | 5,537 | ||||||
Titan International Inc., Sr. Sec. Gtd. Notes, 7.88%, 10/01/17(b) | 5,000 | 5,438 | ||||||
10,975 | ||||||||
Consumer Finance–0.73% | ||||||||
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 03/15/20 | 5,000 | 5,638 | ||||||
8.00%, 11/01/31 | 10,000 | 11,450 | ||||||
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16 | 5,000 | 5,575 | ||||||
SLM Corp., Sr. Medium-Term Global Notes, 6.25%, 01/25/16 | 30,000 | 31,007 | ||||||
Series A, Sr. Unsec. Medium-Term Notes, 5.00%, 10/01/13 | 20,000 | 20,819 | ||||||
74,489 | ||||||||
Department Stores–0.75% | ||||||||
Macy’s Retail Holdings Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12 | 65,000 | 67,275 | ||||||
Sears Holdings Corp., Sr. Sec. Notes, 6.63%, 10/15/18(b) | 10,000 | 9,825 | ||||||
77,100 | ||||||||
Diversified Banks–2.05% | ||||||||
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 3.40%, 01/22/15 | 50,000 | 51,723 | ||||||
Credit Suisse AG (Switzerland), Sub. Global Notes, 5.40%, 01/14/20 | 5,000 | 5,065 | ||||||
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/21/16 | 50,000 | 50,897 | ||||||
U.S. Bancorp., Sr. Unsec. Notes, 2.00%, 06/14/13 | 45,000 | 45,713 | ||||||
Wachovia Capital Trust I, Jr. Gtd. Sub. Trust Pfd. Capital Securities, 7.64%, 01/15/27(b) | 55,000 | 56,444 | ||||||
209,842 | ||||||||
Diversified Metals & Mining–0.87% | ||||||||
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17 | 80,000 | 88,675 | ||||||
Electric Utilities–2.64% | ||||||||
Dubai Electricity & Water Authority (Vietnam), Sr. Unsec. Notes, 7.38%, 10/21/20(b) | 100,000 | 94,625 | ||||||
Indiana Michigan Power Co., Sr. Unsec. Notes, 7.00%, 03/15/19 | 25,000 | 29,521 | ||||||
LSP Energy L.P./LSP Batesville Funding Corp., Series D, Sr. Sec. Bonds, 8.16%, 07/15/25 | 5,000 | 3,575 | ||||||
Ohio Power Co., Series M, Sr. Unsec. Notes, 5.38%, 10/01/21 | 30,000 | 32,204 | ||||||
Southern Co., Series A, Sr. Unsec. Notes, 5.30%, 01/15/12 | 60,000 | 62,403 | ||||||
Virginia Electric & Power Co., Sr. Unsec. Notes, 5.10%, 11/30/12 | 25,000 | 26,769 | ||||||
5.00%, 06/30/19 | 20,000 | 21,485 | ||||||
270,582 | ||||||||
Electrical Components & Equipment–0.16% | ||||||||
Belden Inc., Sr. Gtd. Sub. Global Notes, 9.25%, 06/15/19 | 10,000 | 11,125 | ||||||
Polypore International Inc., Sr. Unsec. Gtd. Notes, 7.50%, 11/15/17(b) | 5,000 | 5,219 | ||||||
16,344 | ||||||||
Electronic Manufacturing Services–0.10% | ||||||||
Jabil Circuit, Inc., Sr. Unsec. Notes, 5.63%, 12/15/20 | 10,000 | 9,850 | ||||||
Environmental & Facilities Services–0.26% | ||||||||
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14 | 25,000 | 27,047 | ||||||
Food Retail–0.10% | ||||||||
Wrigley (Wm.) Jr. Co., Sr. Sec. Gtd. Floating Rate Notes, 1.68%, 06/28/11(b)(c) | 10,000 | 10,010 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Gas Utilities–0.05% | ||||||||
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20 | $ | 5,000 | $ | 5,363 | ||||
General Merchandise Stores–0.24% | ||||||||
Family Dollar Stores Inc., Sr. Unsec. Notes, 5.00%, 02/01/21 | 25,000 | 24,695 | ||||||
Health Care Distributors–0.35% | ||||||||
McKesson Corp., Sr. Unsec. Notes, 3.25%, 03/01/16 | 10,000 | 10,083 | ||||||
4.75%, 03/01/21 | 10,000 | 10,185 | ||||||
6.00%, 03/01/41 | 15,000 | 15,381 | ||||||
35,649 | ||||||||
Health Care Equipment–0.83% | ||||||||
Boston Scientific Corp., Sr. Unsec. Notes, 5.45%, 06/15/14 | 40,000 | 42,824 | ||||||
6.00%, 01/15/20 | 15,000 | 15,766 | ||||||
CareFusion Corp., Sr. Unsec. Global Notes, 4.13%, 08/01/12 | 25,000 | 25,961 | ||||||
84,551 | ||||||||
Health Care Facilities–0.27% | ||||||||
CHS/Community Health Systems Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 07/15/15 | 5,000 | 5,331 | ||||||
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20 | 10,000 | 11,050 | ||||||
Healthsouth Corp., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/18 | 5,000 | 5,213 | ||||||
Tenet Healthcare Corp., Sr. Unsec. Global Notes, 9.25%, 02/01/15 | 5,000 | 5,525 | ||||||
27,119 | ||||||||
Health Care Services–0.88% | ||||||||
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 5.25%, 06/15/12 | 50,000 | 52,564 | ||||||
6.25%, 06/15/14 | 25,000 | 27,962 | ||||||
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15 | 10,000 | 9,947 | ||||||
90,473 | ||||||||
Health Care Technology–0.05% | ||||||||
MedAssets Inc., Sr. Unsec. Gtd. Notes, 8.00%, 11/15/18(b) | 5,000 | 5,163 | ||||||
Home Furnishings–0.05% | ||||||||
American Standard Americas, Sr. Sec. Notes, 10.75%, 01/15/16(b) | 5,000 | 5,363 | ||||||
Homebuilding–0.05% | ||||||||
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 07/15/15 | 5,000 | 4,963 | ||||||
Hotels, Resorts & Cruise Lines–0.75% | ||||||||
Hyatt Hotels Corp., Sr. Unsec. Notes, 5.75%, 08/15/15(b) | 20,000 | 21,392 | ||||||
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, 7.50%, 10/15/27 | 5,000 | 4,962 | ||||||
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Notes, 7.15%, 12/01/19 | 5,000 | 5,525 | ||||||
Wyndham Worldwide Corp., Sr. Unsec. Notes, 7.38%, 03/01/20 | 40,000 | 44,500 | ||||||
76,379 | ||||||||
Household Products–0.05% | ||||||||
Central Garden & Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18 | 5,000 | 5,275 | ||||||
Independent Power Producers & Energy Traders–0.26% | ||||||||
AES Corp. (The), Sr. Unsec. Global Notes, 8.00%, 10/15/17 | 10,000 | 10,850 | ||||||
NRG Energy, Inc., Sr. Unsec. Gtd. Notes, 7.38%, 01/15/17 | 15,000 | 15,825 | ||||||
26,675 | ||||||||
Industrial Conglomerates–0.96% | ||||||||
General Electric Capital Corp., Sr. Unsec. Notes, 2.25%, 11/09/15 | 65,000 | 62,994 | ||||||
NBC Universal Media LLC, Sr. Unsec. Notes, 2.10%, 04/01/14(b) | 15,000 | 14,926 | ||||||
5.95%, 04/01/41(b) | 20,000 | 20,086 | ||||||
98,006 | ||||||||
Integrated Oil & Gas–1.62% | ||||||||
Petrobras International Finance Co. (Cayman Islands), Sr. Unsec. Gtd. Global Notes, 3.88%, 01/27/16 | 85,000 | 85,963 | ||||||
5.38%, 01/27/21 | 79,000 | 79,610 | ||||||
165,573 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Integrated Telecommunication Services–0.65% | ||||||||
AT&T Inc., Sr. Unsec. Global Notes, 2.50%, 08/15/15 | $ | 15,000 | $ | 14,921 | ||||
Intelsat Intermediate Holding Co. S.A. (Bermuda), Sr. Unsec. Gtd. Disc. Global Notes, 9.50%, 02/01/15(e) | 10,000 | 10,375 | ||||||
Telefonica Emisiones SAU (Spain), Sr. Unsec. Gtd. Global Notes, 5.46%, 02/16/21 | 40,000 | 40,761 | ||||||
66,057 | ||||||||
Internet Retail–0.73% | ||||||||
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 07/01/16 | 45,000 | 49,134 | ||||||
5.95%, 08/15/20 | 25,000 | 25,428 | ||||||
74,562 | ||||||||
Internet Software & Services–0.05% | ||||||||
Equinix Inc., Sr. Unsec. Notes, 8.13%, 03/01/18 | 5,000 | 5,438 | ||||||
Investment Banking & Brokerage–2.16% | ||||||||
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b) | 10,000 | 10,292 | ||||||
E*Trade Financial Corp., Sr. Unsec. Global Notes, 7.38%, 09/15/13 | 5,000 | 5,050 | ||||||
Goldman Sachs Group Inc. (The), Sr. Global Notes, 3.70%, 08/01/15 | 55,000 | 55,809 | ||||||
6.25%, 02/01/41 | 25,000 | 25,323 | ||||||
Jefferies Group Inc., Sr. Unsec. Notes, 8.50%, 07/15/19 | 20,000 | 23,808 | ||||||
Morgan Stanley, Sr. Unsec. Notes, 2.88%, 01/24/14 | 100,000 | 100,618 | ||||||
220,900 | ||||||||
Leisure Facilities–0.16% | ||||||||
Speedway Motorsports Inc., Sr. Notes, 6.75%, 02/01/19(b) | 5,000 | 5,087 | ||||||
Universal City Development Partners Ltd./UCDP Finance Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 11/15/15 | 10,000 | 10,975 | ||||||
16,062 | ||||||||
Life & Health Insurance–0.50% | ||||||||
Prudential Financial Inc., Series D, Sr. Unsec. Medium-Term Notes, 2.75%, 01/14/13 | 50,000 | 51,029 | ||||||
Life Sciences Tools & Services–0.32% | ||||||||
Life Technologies Corp., Sr. Notes, 6.00%, 03/01/20 | 25,000 | 27,251 | ||||||
Patheon Inc. (Canada), Sr. Sec. Notes, 8.63%, 04/15/17(b) | 5,000 | 5,250 | ||||||
32,501 | ||||||||
Movies & Entertainment–0.81% | ||||||||
Cinemark USA Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 06/15/19 | 25,000 | 27,406 | ||||||
News America Inc, Sr. Unsec. Gtd. Notes, 6.15%, 02/15/41(b) | 55,000 | 55,613 | ||||||
83,019 | ||||||||
Multi-Line Insurance–0.57% | ||||||||
American Financial Group Inc., Sr. Unsec. Notes, 9.88%, 06/15/19 | 10,000 | 12,048 | ||||||
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20 | 20,000 | 20,899 | ||||||
Hartford Financial Services Group Inc. (The), Jr. Unsec. Sub. Variable Rate Deb., 8.13%, 06/15/38(c) | 5,000 | 5,562 | ||||||
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(b) | 20,000 | 20,100 | ||||||
58,609 | ||||||||
Multi-Utilities–0.19% | ||||||||
Pacific Gas & Electric Co., Sr. Unsec. Notes, 5.40%, 01/15/40 | 20,000 | 19,854 | ||||||
Office Electronics–0.50% | ||||||||
Xerox Corp., Sr. Unsec. Notes, 6.88%, 08/15/11 | 50,000 | 51,343 | ||||||
Office REIT’s–0.21% | ||||||||
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 5.88%, 02/01/20 | 20,000 | 21,139 | ||||||
Office Services & Supplies–0.80% | ||||||||
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25 | 5,000 | 4,875 | ||||||
Steelcase Inc., Sr. Unsec. Notes, 6.38%, 02/15/21 | 75,000 | 77,036 | ||||||
81,911 | ||||||||
Oil & Gas Drilling–0.36% | ||||||||
Transocean Inc. (Cayman Islands), Sr. Unsec. Gtd. Global Notes, 4.95%, 11/15/15 | 35,000 | 37,059 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Oil & Gas Equipment & Services–0.11% | ||||||||
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17 | $ | 5,000 | $ | 5,288 | ||||
Key Energy Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 12/01/14 | 5,000 | 5,437 | ||||||
10,725 | ||||||||
Oil & Gas Exploration & Production–1.28% | ||||||||
Anadarko Petroleum Corp., Sr. Unsec. Notes, 6.38%, 09/15/17 | 15,000 | 16,708 | ||||||
Chaparral Energy Inc., Sr. Unsec. Gtd. Notes, 8.25%, 09/01/21(b) | 5,000 | 5,125 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 6.63%, 08/15/20 | 5,000 | 5,294 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17 | 10,000 | 10,562 | ||||||
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 10/01/19 | 5,000 | 5,556 | ||||||
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16 | 5,000 | 5,669 | ||||||
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19 | 5,000 | 5,200 | ||||||
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14 | 10,000 | 10,975 | ||||||
Pemex Project Funding Master Trust, Sr. Unsec. Gtd. Global Bonds, 6.63%, 06/15/35 | 25,000 | 24,980 | ||||||
Petrohawk Energy Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 08/15/18 | 5,000 | 5,194 | ||||||
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21 | 20,000 | 20,227 | ||||||
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 8.63%, 10/15/19 | 5,000 | 5,581 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 10/01/17 | 5,000 | 5,325 | ||||||
SM Energy Co., Sr. Unsec. Notes, 6.63%, 02/15/19(b) | 5,000 | 5,075 | ||||||
131,471 | ||||||||
Oil & Gas Refining & Marketing–0.20% | ||||||||
Tesoro Corp., Sr. Unsec. Gtd. Global Notes, 6.63%, 11/01/15 | 5,000 | 5,169 | ||||||
United Refining Co., Sr. Sec. Gtd. Notes, 10.50%, 02/28/18(b) | 5,000 | 4,975 | ||||||
Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12 | 10,000 | 10,031 | ||||||
20,175 | ||||||||
Oil & Gas Storage & Transportation–1.33% | ||||||||
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Notes, 7.63%, 02/15/12 | 50,000 | 53,158 | ||||||
5.20%, 09/01/20 | 15,000 | 15,478 | ||||||
6.45%, 09/01/40 | 15,000 | 15,716 | ||||||
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.50%, 08/15/21 | 5,000 | 5,006 | ||||||
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18 | 5,000 | 5,012 | ||||||
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18 | 5,000 | 5,231 | ||||||
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20 | 20,000 | 21,324 | ||||||
Williams Partners L.P., Sr. Unsec. Global Notes, 6.30%, 04/15/40 | 15,000 | 15,680 | ||||||
136,605 | ||||||||
Other Diversified Financial Services–4.02% | ||||||||
Bank of America Corp., Sr. Unsec. Global Notes, 4.50%, 04/01/15 | 40,000 | 41,807 | ||||||
3.70%, 09/01/15 | 30,000 | 30,324 | ||||||
6.50%, 08/01/16 | 10,000 | 11,217 | ||||||
Citigroup Inc., Sr. Unsec. Global Notes, 6.01%, 01/15/15 | 45,000 | 49,487 | ||||||
Sr. Unsec. Notes, 4.75%, 05/19/15 | 25,000 | 26,436 | ||||||
ERAC USA Finance LLC, Gtd. Notes, | ||||||||
2.25%, 01/10/14(b) | 50,000 | 49,974 | ||||||
Unsec. Gtd. Notes, 5.80%, 10/15/12(b) | 50,000 | 53,362 | ||||||
General Electric Capital Corp., Sr. Unsec. Global Notes, 5.90%, 05/13/14 | 25,000 | 27,790 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Other Diversified Financial Services–(continued) | ||||||||
International Lease Finance Corp., Sr. Sec. Notes, 6.50%, 09/01/14(b) | $ | 40,000 | $ | 42,960 | ||||
Sr. Unsec. Notes, 8.88%, 09/15/15(b) | 5,000 | 5,600 | ||||||
9.00%, 03/15/17(b) | 5,000 | 5,675 | ||||||
JPMorgan Chase & Co., Floating Rate Medium-Term Notes, 0.96%, 02/26/13(c) | 40,000 | 40,185 | ||||||
JPMorgan Chase Capital XXVII, Series AA, Jr. Unsec. Gtd. Sub. Notes, 7.00%, 11/01/39 | 25,000 | 26,332 | ||||||
411,149 | ||||||||
Packaged Foods & Meats–0.30% | ||||||||
Blue Merger Sub Inc., Sr. Gtd. Notes, 7.63%, 02/15/19(b) | 5,000 | 5,087 | ||||||
Dole Food Co. Inc., Sr. Sec. Notes, 8.00%, 10/01/16(b) | 5,000 | 5,375 | ||||||
Kraft Foods Inc., Sr. Unsec. Global Notes, 2.63%, 05/08/13 | 20,000 | 20,568 | ||||||
31,030 | ||||||||
Paper Packaging–0.05% | ||||||||
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20 | 5,000 | 5,263 | ||||||
Paper Products–0.14% | ||||||||
Clearwater Paper Corp., Sr. Gtd. Notes, 7.13%, 11/01/18(b) | 5,000 | 5,225 | ||||||
Neenah Paper, Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/14 | 4,000 | 4,105 | ||||||
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16 | 5,000 | 5,206 | ||||||
14,536 | ||||||||
Pharmaceuticals–0.10% | ||||||||
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes, 6.75%, 10/01/17(b) | 5,000 | 5,200 | ||||||
7.00%, 10/01/20(b) | 5,000 | 5,200 | ||||||
10,400 | ||||||||
Publishing–0.11% | ||||||||
Reed Elsevier Capital Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 08/01/11 | 11,000 | 11,278 | ||||||
Railroads–0.39% | ||||||||
CSX Corp., Sr. Unsec. Notes, 5.50%, 04/15/41 | 30,000 | 29,480 | ||||||
Kansas City Southern de Mexico S.A. de C.V. (Mexico), Sr. Unsec. Global Notes, 8.00%, 02/01/18 | 10,000 | 10,857 | ||||||
40,337 | ||||||||
Regional Banks–0.44% | ||||||||
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 3.63%, 02/08/15 | 25,000 | 25,900 | ||||||
Regions Financial Corp., Unsec. Sub. Notes, 7.38%, 12/10/37 | 10,000 | 9,700 | ||||||
Synovus Financial Corp., Unsec. Sub. Global Notes, 5.13%, 06/15/17 | 5,000 | 4,700 | ||||||
Zions Bancorp., Unsec. Sub. Notes, 5.50%, 11/16/15 | 5,000 | 5,075 | ||||||
45,375 | ||||||||
Semiconductor Equipment–0.05% | ||||||||
Amkor Technology Inc., Sr. Unsec. Global Notes, 7.38%, 05/01/18 | 5,000 | 5,250 | ||||||
Semiconductors–0.05% | ||||||||
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b) | 5,000 | 5,587 | ||||||
Sovereign Debt–1.01% | ||||||||
Provincia de Buenos Aires (Argentina), Notes, 11.75%, 10/05/15(b) | 100,000 | 103,250 | ||||||
Specialized Finance–0.30% | ||||||||
CIT Group Inc., Sec. Bonds, 7.00%, 05/01/14 | 5,000 | 5,119 | ||||||
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Notes, 2.63%, 09/16/12 | 25,000 | 25,669 | ||||||
30,788 | ||||||||
Specialized REIT’s–0.97% | ||||||||
Entertainment Properties Trust, Sr. Unsec. Gtd. Notes, 7.75%, 07/15/20(b) | 65,000 | 69,396 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 30,000 | 29,531 | ||||||
98,927 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Steel–1.40% | ||||||||
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 05/15/20 | $ | 5,000 | $ | 5,150 | ||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Notes, 3.75%, 08/05/15 | 30,000 | 30,331 | ||||||
7.00%, 10/15/39 | 40,000 | 41,973 | ||||||
Class A, Sr. Unsec. Medium-Term Global Notes, 5.50%, 03/01/21 | 15,000 | 14,904 | ||||||
6.75%, 03/01/41 | 15,000 | 14,876 | ||||||
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18 | 5,000 | 5,237 | ||||||
Vale Overseas Ltd., Sr. Unsec. Gtd. Global Notes, 4.63%, 09/15/20 | 20,000 | 19,705 | ||||||
6.88%, 11/10/39 | 10,000 | 10,851 | ||||||
143,027 | ||||||||
Systems Software–0.05% | ||||||||
Allen Systems Group Inc., Sec. Gtd. Notes, 10.50%, 11/15/16(b) | 5,000 | 5,188 | ||||||
Tires & Rubber–0.09% | ||||||||
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 7.63%, 03/15/27 | 10,000 | 9,650 | ||||||
Trading Companies & Distributors–0.10% | ||||||||
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16 | 5,000 | 5,238 | ||||||
Hertz Corp. (The), Sr. Unsec. Gtd. Notes, 7.38%, 01/15/21(b) | 5,000 | 5,237 | ||||||
10,475 | ||||||||
Trucking–0.15% | ||||||||
Ryder System Inc., Sr. Unsec. Medium-Term Notes, 3.15%, 03/02/15 | 15,000 | 15,272 | ||||||
Wireless Telecommunication Services–0.55% | ||||||||
American Tower Corp., Sr. Unsec. Notes, 4.50%, 01/15/18 | 20,000 | 19,837 | ||||||
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b) | 5,000 | 5,400 | ||||||
Cricket Communications, Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 10/15/20 | 5,000 | 4,825 | ||||||
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20 | 5,000 | 4,869 | ||||||
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19 | 10,000 | 11,100 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/28 | 5,000 | 4,519 | ||||||
Sprint Nextel Corp., Sr. Unsec. Notes, 8.38%, 08/15/17 | 5,000 | 5,569 | ||||||
56,119 | ||||||||
Total Bonds & Notes (Cost $4,465,599) | 4,599,900 | |||||||
U.S. Government Sponsored Mortgage-Backed Securities–30.04% | ||||||||
| ||||||||
Federal Home Loan Mortgage Corp. (FHLMC)–10.20% | ||||||||
Pass Through Ctfs., 5.50%, 01/01/34 | 213,896 | 230,388 | ||||||
5.00%, 06/01/40 | 311,396 | 329,300 | ||||||
Pass Through Ctfs., TBA, 4.50%, 03/01/41(f) | 475,000 | 483,832 | ||||||
1,043,520 | ||||||||
| ||||||||
Federal National Mortgage Association (FNMA)–19.84% | ||||||||
Pass Through Ctfs., 5.00%, 06/01/23 | 234,577 | 249,371 | ||||||
6.00%, 03/01/38 to 10/01/39 | 490,489 | 534,521 | ||||||
5.50%, 06/01/40 | 138,667 | 148,362 | ||||||
Pass Through Ctfs., TBA, 3.50%, 03/01/26(f) | 125,000 | 125,274 | ||||||
4.00%, 03/01/26 to 03/01/41(f) | 400,000 | 400,735 | ||||||
4.50%, 03/01/26(f) | 250,000 | 261,953 | ||||||
5.50%, 03/01/26(f) | 50,000 | 53,945 | ||||||
5.00%, 03/01/41(f) | 245,000 | 256,561 | ||||||
2,030,722 | ||||||||
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $3,087,283) | 3,074,242 | |||||||
U.S. Treasury Securities–20.73% | ||||||||
U.S. Treasury Bills–4.20% | ||||||||
0.18%, 05/19/11(g)(h) | 430,000 | 429,881 | ||||||
U.S. Treasury Notes–13.93% | ||||||||
4.50%, 04/30/12 | 300,000 | 314,461 | ||||||
2.25%, 05/31/14 | 200,000 | 206,125 | ||||||
2.63%, 12/31/14 | 250,000 | 259,766 | ||||||
1.25%, 08/31/15 | 350,000 | 339,992 | ||||||
2.75%, 05/31/17 | 200,000 | 201,875 | ||||||
3.63%, 08/15/19 | 100,000 | 103,766 | ||||||
1,425,985 | ||||||||
U.S. Treasury Bonds–2.60% | ||||||||
5.38%, 02/15/31 | 145,000 | 166,659 | ||||||
4.25%, 05/15/39 | 20,000 | 19,247 | ||||||
4.50%, 08/15/39 | 35,000 | 35,104 | ||||||
3.88%, 08/15/40 | 50,000 | 44,898 | ||||||
265,908 | ||||||||
Total U.S. Treasury Securities (Cost $2,108,950) | 2,121,774 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Core Plus Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Asset-Backed Securities–12.24% | ||||||||
Banc of America Commercial Mortgage Inc., Series 2003-1, Class A2, Pass Through Ctfs., 4.65%, 09/11/36 | $ | 40,000 | $ | 41,801 | ||||
Bear Stearns Commercial Mortgage Securities, Series 2004-PWR6, Class A4, Pass Through Ctfs., 4.52%, 11/11/41 | 25,000 | 25,526 | ||||||
Series 2004-PWR6, Class A6, Pass Through Ctfs., 4.83%, 11/11/41 | 25,000 | 26,425 | ||||||
Series 2005-T18, Class A4, Variable Rate Pass Through Ctfs., 4.93%, 02/13/42(c) | 45,000 | 48,019 | ||||||
Series 2006-PW11, Class AAB, Variable Rate Pass Through Ctfs., 5.45%, 03/11/39(c) | 40,000 | 42,503 | ||||||
Series 2006-T22, Class A2, Variable Rate Pass Through Ctfs., 5.52%, 04/12/38(c) | 11,217 | 11,215 | ||||||
Series 2006-T24, Class A4, Pass Through Ctfs., 5.54%, 10/12/41 | 40,000 | 43,355 | ||||||
Citibank Credit Card Issuance Trust, Series 2009-A5, Class A5, Pass Through Ctfs., 2.25%, 12/23/14 | 50,000 | 51,101 | ||||||
Citigroup Mortgage Loan Trust Inc., Series 2004-UST1, Class A4, Variable Rate Pass Through Ctfs., 2.40%, 08/25/34(c) | 32,263 | 32,921 | ||||||
Commercial Mortgage Pass Through Ctfs., Series 2001-J2A, Class A2F, Floating Rate Pass Through Ctfs., 0.75%, 07/16/34(b)(c) | 52,203 | 52,126 | ||||||
Credit Suisse Mortgage Capital Ctfs., Series 2010-6R, Class 1A1, Pass Through Ctfs., 5.50%, 02/27/37(b) | 25,527 | 26,293 | ||||||
DBUBS Mortgage Trust, Series 2011-LC1A, Class C, Variable Rate Pass Through Ctfs., 5.56%, 11/10/46(b)(c) | 40,000 | 41,277 | ||||||
Discover Card Master Trust, Series 2010-A1, Class A1, Floating Rate Pass Through Ctfs., 0.92%, 09/15/15(c) | 40,000 | 40,304 | ||||||
Fannie Mae REMICS, Series 2005-35, Class AC, Pass Through Ctfs., 4.00%, 08/25/18 | 41,010 | 42,222 | ||||||
Freddie Mac REMICS, Series 2611, Class HA, Pass Through Ctfs., 4.00%, 10/15/21 | 16,112 | 16,430 | ||||||
Series 2937, Class JD, Pass Through Ctfs., 5.00%, 03/15/28 | 20,778 | 21,038 | ||||||
Series 3339, Class PC, Pass Through Ctfs., 5.00%, 05/15/32 | 35,000 | 35,796 | ||||||
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A2, Pass Through Ctfs., 6.53%, 05/15/33 | 5,448 | 5,444 | ||||||
GE Capital Credit Card Master Note Trust, Series 2010-3, Class A, Pass Through Ctfs., 2.21%, 06/15/16 | 70,000 | 71,119 | ||||||
GS Mortgage Securities Corp. II, Series 2005-GG4, Class A4A, Pass Through Ctfs., 4.75%, 07/10/39 | 55,000 | 58,216 | ||||||
Series 2010-C1, Class C, Variable Rate Pass Through Ctfs., 5.64%, 08/10/43(b)(c) | 70,000 | 72,928 | ||||||
LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class A3, Pass Through Ctfs., 4.65%, 07/15/30 | 30,000 | 30,499 | ||||||
Morgan Stanley Capital I, Series 2005-HQ5, Class A3, Pass Through Ctfs., 5.01%, 01/14/42 | 46,991 | 47,789 | ||||||
Series 2005-HQ7, Class A4, Variable Rate Pass Through Ctfs., 5.20%, 11/14/42(c) | 35,000 | 37,883 | ||||||
Series 2005-T17, Class A4, Pass Through Ctfs., 4.52%, 12/13/41 | 29,647 | 30,072 | ||||||
Series 2005-T19, Class A4A, Pass Through Ctfs., 4.89%, 06/12/47 | 30,000 | 31,890 | ||||||
Nissan Auto Lease Trust, Series 2009-B, Class A3, Pass Through Ctfs., 2.07%, 01/15/15 | 29,732 | 29,882 | ||||||
PNC Mortgage Acceptance Corp., Series 2001-C1, Class A2, Pass Through Ctfs., 6.36%, 03/12/34 | 11,918 | 11,922 | ||||||
RBSCF Trust, Series 2010-RR3, Class MS4A, Variable Rate Pass Through Ctfs., 4.97%, 04/16/40(b)(c) | 100,000 | 106,050 | ||||||
TIAA Seasoned Commercial Mortgage Trust, Series 2007-C4, Class A2, Variable Rate Pass Through Ctfs., 5.70%, 08/15/39(c) | 40,000 | 41,763 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C21, Class A4, Variable Rate Pass Through Ctfs., 5.21%, 10/15/44(c) | 20,000 | 21,640 | ||||||
Series 2005-C21, Class AJ, Variable Rate Pass Through Ctfs., 5.21%, 10/15/44(c) | 25,000 | 26,381 | ||||||
Series 2005-C21, Class AM, Variable Rate Pass Through Ctfs., 5.21%, 10/15/44(c) | 20,000 | 21,393 | ||||||
Wells Fargo Mortgage Backed Securities Trust, Series 2004-K, Class 1A2, Floating Rate Pass Through Ctfs., 4.48%, 07/25/34(c) | 9,739 | 10,114 | ||||||
Total Asset-Backed Securities (Cost $1,197,962) | 1,253,337 | |||||||
Municipal Obligations–0.73% | ||||||||
California (State of), Series 2010, Various Purpose Unlimited Taxable GO Bonds, 5.75%, 03/01/17 | 10,000 | 10,650 | ||||||
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); Series 2010 A, Taxable Build America RB, 6.64%, 04/01/57 | 25,000 | 25,200 | ||||||
New Jersey (State of) Transportation Trust Fund Authority; Series 2010 C, Taxable Build America RB, 5.75%, 12/15/28 | 40,000 | 39,014 | ||||||
Total Municipal Obligations (Cost $75,065) | 74,864 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Core Plus Bond Fund
Shares | Value | |||||||
Money Market Funds–5.96% | ||||||||
Liquid Assets Portfolio–Institutional Class(i) | 305,023 | $ | 305,023 | |||||
Premier Portfolio–Institutional Class(i) | 305,023 | 305,023 | ||||||
Total Money Market Funds (Cost $610,046) | 610,046 | |||||||
TOTAL INVESTMENTS–114.64% (Cost $11,544,905) | 11,734,163 | |||||||
OTHER ASSETS LESS LIABILITIES–(14.64)% | (1,498,915 | ) | ||||||
NET ASSETS–100.00% | $ | 10,235,248 | ||||||
Investment Abbreviations:
Ctfs. | – Certificates | |
Deb. | – Debentures | |
GO | – General Obligation | |
Gtd. | – Guaranteed | |
Jr. | – Junior | |
Pfd. | – Preferred | |
RB | – Revenue Bonds | |
REIT | – Real Estate Investment Trust | |
REMICS | – Real Estate Mortgage Investment Conduits | |
Sec. | – Secured | |
Sr. | – Senior | |
Sub. | – Subordinated | |
TBA | – To Be Announced | |
Unsec. | – Unsecured |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $1,301,063, which represented 12.71% of the Fund’s Net Assets. | |
(c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(d) | Perpetual bond with no specified maturity date. | |
(e) | Step coupon bond. The interest rate represents the coupon rate at which the bond will accrue at a specified future date. | |
(f) | Security purchased on a forward commitment basis. This security is subject to dollar roll transactions. See Note 1J. | |
(g) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. | |
(h) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4. | |
(i) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By security type, based on Net Assets
as of February 28, 2011
Bonds & Notes | 45.0 | % | ||
U.S. Government Sponsored Securities | 30.0 | |||
U.S. Treasury Securities | 20.7 | |||
Asset-Backed Securities | 12.3 | |||
Municipal Obligations | 0.7 | |||
Money Market Funds Plus Other Assets Less Liabilities | (8.7 | ) | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Core Plus Bond Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $10,934,859) | $ | 11,124,117 | ||
Investments in affiliated money market funds, at value and cost | 610,046 | |||
Total investments, at value (Cost $11,544,905) | 11,734,163 | |||
Receivable for: | ||||
Investments sold | 6,111 | |||
Variation margin | 1,172 | |||
Fund shares sold | 18,522 | |||
Dividends and interest | 91,925 | |||
Fund expenses absorbed | 67,941 | |||
Principal paydowns | 1,198 | |||
Investment for trustee deferred compensation and retirement plans | 4,379 | |||
Other assets | 18,198 | |||
Total assets | 11,943,609 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 1,634,082 | |||
Fund shares reacquired | 12,264 | |||
Dividends | 8,057 | |||
Accrued fees to affiliates | 8,875 | |||
Accrued other operating expenses | 40,703 | |||
Trustee deferred compensation and retirement plans | 4,380 | |||
Total liabilities | 1,708,361 | |||
Net assets applicable to shares outstanding | $ | 10,235,248 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 10,119,886 | ||
Undistributed net investment income | (5,272 | ) | ||
Undistributed net realized gain (loss) | (72,995 | ) | ||
Unrealized appreciation | 193,629 | |||
$ | 10,235,248 | |||
Net Assets: | ||||
Class A | $ | 8,171,666 | ||
Class B | $ | 722,651 | ||
Class C | $ | 984,204 | ||
Class R | $ | 126,834 | ||
Class Y | $ | 118,437 | ||
Institutional Class | $ | 111,456 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 784,679 | |||
Class B | 69,399 | |||
Class C | 94,502 | |||
Class R | 12,180 | |||
Class Y | 11,374 | |||
Institutional Class | 10,703 | |||
Class A: | ||||
Net asset value per share | $ | 10.41 | ||
Maximum offering price per share (Net asset value of $10.41 divided by 95.25%) | $ | 10.93 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.41 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.41 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.41 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.41 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 10.41 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Core Plus Bond Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Interest | $ | 184,809 | ||
Dividends from affiliated money market funds | 955 | |||
Total investment income | 185,764 | |||
Expenses: | ||||
Advisory fees | 22,089 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 4,209 | |||
Distribution fees: | ||||
Class A | 9,559 | |||
Class B | 4,481 | |||
Class C | 4,439 | |||
Class R | 362 | |||
Transfer agent fees — A, B, C, R and Y | 8,136 | |||
Transfer agent fees — Institutional | 32 | |||
Trustees’ and officers’ fees and benefits | 5,907 | |||
Registration and filing fees | 31,959 | |||
Reports to shareholders | 13,452 | |||
Professional services fees | 14,733 | |||
Other | 7,628 | |||
Total expenses | 151,781 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (102,351 | ) | ||
Net expenses | 49,430 | |||
Net investment income | 136,334 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 27,821 | |||
Foreign currencies | (288 | ) | ||
Futures contracts | (73,555 | ) | ||
(46,022 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (140,476 | ) | ||
Futures contracts | 20,293 | |||
(120,183 | ) | |||
Net realized and unrealized gain (loss) | (166,205 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (29,871 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Core Plus Bond Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 136,334 | $ | 198,401 | ||||
Net realized gain (loss) | (46,022 | ) | 152,692 | |||||
Change in net unrealized appreciation (depreciation) | (120,183 | ) | 232,044 | |||||
Net increase (decrease) in net assets resulting from operations | (29,871 | ) | 583,137 | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (113,862 | ) | (194,225 | ) | ||||
Class B | (9,903 | ) | (21,593 | ) | ||||
Class C | (9,854 | ) | (16,420 | ) | ||||
Class R | (1,999 | ) | (6,254 | ) | ||||
Class Y | (2,100 | ) | (5,893 | ) | ||||
Institutional Class | (1,802 | ) | (5,318 | ) | ||||
Total distributions from net investment income | (139,520 | ) | (249,703 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (111,995 | ) | (25,492 | ) | ||||
Class B | (14,844 | ) | (3,459 | ) | ||||
Class C | (13,430 | ) | (2,577 | ) | ||||
Class R | (2,158 | ) | (1,019 | ) | ||||
Class Y | (1,898 | ) | (847 | ) | ||||
Institutional Class | (1,619 | ) | (762 | ) | ||||
Total distributions from net realized gains | (145,944 | ) | (34,156 | ) | ||||
Share transactions–net: | ||||||||
Class A | 1,192,884 | 4,108,451 | ||||||
Class B | (198,985 | ) | 718,206 | |||||
Class C | 169,476 | 598,636 | ||||||
Class R | (20,931 | ) | 40,961 | |||||
Class Y | (20,854 | ) | 12,808 | |||||
Institutional Class | 496 | 6,079 | ||||||
Net increase in net assets resulting from share transactions | 1,122,086 | 5,485,141 | ||||||
Net increase in net assets | 806,751 | 5,784,419 | ||||||
Net assets: | ||||||||
Beginning of period | 9,428,497 | 3,644,078 | ||||||
End of period (includes undistributed net investment income of $(5,272) and $(2,086), respectively) | $ | 10,235,248 | $ | 9,428,497 | ||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Core Plus Bond Fund
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Core Plus Bond Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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 total return, comprised of current income and capital appreciation.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Institutional 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. 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. 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 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. | |
Debt obligations (including convertible bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
A security listed or traded on an exchange (except convertible bonds) 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. | ||
Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. |
18 Invesco Core Plus Bond Fund
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. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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 realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares 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 are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 the Institutional Class 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 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. | Other Risks — The Funds may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the underlying fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Many securities purchased by the Fund are not guaranteed by the U.S. Government. | |
J. | Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date. |
19 Invesco Core Plus Bond Fund
In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act. | ||
Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations. | ||
At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated. | ||
Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold. | ||
Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure. | ||
K. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized 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. |
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 Net Assets | Rate | |||
First $500 million | 0 | .45% | ||
Next $500 million | 0 | .425% | ||
Next $1.5 billion | 0 | .40% | ||
Next $2.5 billion | 0 | .375% | ||
Over $5 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 Trimark 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 discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
20 Invesco Core Plus Bond Fund
The Adviser has contractually agreed, through at least December 31, 2011, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waiver and/or reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares to 0.90%, 1.65%, 1.65%, 1.15%, 0.65% and 0.65%, 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on December 31, 2011. The Advisor 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees and reimbursed Fund level expenses of $94,183 and reimbursed class level expenses of $6,388, $749, $742, $121, $108 and $32 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares in proportion to the relative net assets of such classes.
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 February 28, 2011, 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 February 28, 2011, 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 Institutional 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 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $1,721 in front-end sales commissions from the sale of Class A shares and $0, $1,433 and $14 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 Invesco, 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. |
21 Invesco Core Plus Bond Fund
The following is a summary of the tiered valuation input levels, as of February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 610,046 | $ | — | $ | — | $ | 610,046 | ||||||||
U.S. Treasury Securities | — | 2,121,774 | — | 2,121,774 | ||||||||||||
U.S. Government Sponsored Securities | — | 3,074,242 | — | 3,074,242 | ||||||||||||
Corporate Debt Securities | — | 4,599,900 | — | 4,599,900 | ||||||||||||
Asset-Backed Securities | — | 1,253,337 | — | 1,253,337 | ||||||||||||
Municipal Obligations | — | 74,864 | — | 74,864 | ||||||||||||
Subtotal | $ | 610,046 | $ | 11,124,117 | $ | — | $ | 11,734,163 | ||||||||
Futures* | 4,371 | — | — | 4,371 | ||||||||||||
Total Investments | $ | 614,417 | $ | 11,124,117 | $ | — | $ | 11,738,534 | ||||||||
* | Unrealized appreciation. |
NOTE 4—Derivative Investments
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/ Derivative Type | Assets | Liabilities | ||||||
Interest rate risk | ||||||||
Futures contracts(a) | $ | 5,649 | $ | (1,278 | ) | |||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain on | ||||
Statement of Operations | ||||
Futures* | ||||
Realized Gain (loss) | ||||
Interest rate risk | $ | (73,555 | ) | |
Change in Unrealized Appreciation | ||||
Interest rate risk | 20,293 | |||
Total | $ | (53,262 | ) | |
* | The average notional value of futures outstanding during the period was $1,159,813. |
Open Futures Contracts | ||||||||||||||||
Unrealized | ||||||||||||||||
Number of | Month/ | Notional | Appreciation | |||||||||||||
Contract | Contracts | Commitment | Value | (Depreciation) | ||||||||||||
U.S. Treasury 5 Year Notes | 4 | June-2011/Long | $ | 467,750 | $ | 991 | ||||||||||
U.S. Treasury 30 Year Bonds | 2 | June-2011/Long | 240,687 | 2,324 | ||||||||||||
U.S. Ultra Treasury Bonds | 1 | June-2011/Long | 123,594 | 2,334 | ||||||||||||
Subtotal | $ | 832,031 | $ | 5,649 | ||||||||||||
U.S. Treasury 10 Year Notes | 5 | June-2011/Short | (595,234 | ) | (1,278 | ) | ||||||||||
Total | $ | 236,797 | $ | 4,371 | ||||||||||||
22 Invesco Core Plus Bond Fund
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended August 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $28.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $758 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—Cash Balances
The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. 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.
The Fund did not have a capital loss carryforward as of August 31, 2010.
NOTE 9—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 February 28, 2011 was $3,868,731 and $1,510,996, 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 | $ | 216,638 | ||
Aggregate unrealized (depreciation) of investment securities | (67,405 | ) | ||
Net unrealized appreciation of investment securities | $ | 149,233 | ||
Cost of investments for tax purposes is $11,584,930. |
23 Invesco Core Plus Bond Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 244,109 | $ | 2,582,038 | 473,287 | $ | 4,957,006 | ||||||||||
Class B | 28,889 | 306,326 | 90,484 | 943,362 | ||||||||||||
Class C | 51,224 | 537,234 | 73,730 | 773,555 | ||||||||||||
Class R | 1,342 | 13,951 | 3,891 | 40,441 | ||||||||||||
Class Y | 699 | 7,267 | 3,631 | 38,392 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 13,415 | 141,049 | 20,806 | 216,953 | ||||||||||||
Class B | 1,806 | 18,958 | 2,149 | 22,398 | ||||||||||||
Class C | 1,890 | 19,835 | 1,761 | 18,357 | ||||||||||||
Class R | 135 | 1,427 | 697 | 7,259 | ||||||||||||
Class Y | 100 | 1,054 | 644 | 6,703 | ||||||||||||
Institutional Class | 46 | 496 | 584 | 6,079 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 3,622 | 37,922 | 2,004 | 21,070 | ||||||||||||
Class B | (3,622 | ) | (37,922 | ) | (2,004 | ) | (21,070 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (148,334 | ) | (1,568,125 | ) | (104,344 | ) | (1,086,578 | ) | ||||||||
Class B | (46,505 | ) | (486,347 | ) | (21,771 | ) | (226,484 | ) | ||||||||
Class C | (37,193 | ) | (387,593 | ) | (18,543 | ) | (193,276 | ) | ||||||||
Class R | (3,504 | ) | (36,309 | ) | (629 | ) | (6,739 | ) | ||||||||
Class Y | (2,785 | ) | (29,175 | ) | (3,116 | ) | (32,287 | ) | ||||||||
Net increase in share activity | 105,334 | $ | 1,122,086 | 523,261 | $ | 5,485,141 | ||||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 16% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust 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, 33% 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. |
24 Invesco Core Plus Bond Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return(b) | (000s omitted) | absorbed | absorbed | net assets | turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 10.75 | $ | 0.15 | $ | (0.18 | ) | $ | (0.03 | ) | $ | (0.16 | ) | $ | (0.15 | ) | $ | (0.31 | ) | $ | 10.41 | (0.31 | )% | $ | 8,172 | 0.87 | %(d) | 2.96 | %(d) | 2.91 | %(d) | 19 | % | |||||||||||||||||||||||
Year ended 08/31/10 | 10.29 | 0.37 | 0.65 | 1.02 | (0.49 | ) | (0.07 | ) | (0.56 | ) | 10.75 | 10.26 | 7,219 | 0.87 | 5.61 | 3.55 | 78 | |||||||||||||||||||||||||||||||||||||||
Three months ended 08/31/09(e) | 10.00 | 0.09 | 0.27 | 0.36 | (0.07 | ) | — | (0.07 | ) | 10.29 | 3.58 | 2,882 | 0.84 | (f) | 12.89 | (f) | 3.47 | (f) | 43 | |||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 10.74 | 0.12 | (0.18 | ) | (0.06 | ) | (0.12 | ) | (0.15 | ) | (0.27 | ) | 10.41 | (0.59 | ) | 723 | 1.62 | (d) | 3.71 | (d) | 2.16 | (d) | 19 | |||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.29 | 0.29 | 0.64 | 0.93 | (0.41 | ) | (0.07 | ) | (0.48 | ) | 10.74 | 9.34 | 954 | 1.62 | 6.36 | 2.80 | 78 | |||||||||||||||||||||||||||||||||||||||
Three months ended 08/31/09(e) | 10.00 | 0.07 | 0.27 | 0.34 | (0.05 | ) | — | (0.05 | ) | 10.29 | 3.39 | 205 | 1.59 | (f) | 13.64 | (f) | 2.72 | (f) | 43 | |||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 10.74 | 0.12 | (0.18 | ) | (0.06 | ) | (0.12 | ) | (0.15 | ) | (0.27 | ) | 10.41 | (0.58 | ) | 984 | 1.62 | (d) | 3.71 | (d) | 2.16 | (d) | 19 | |||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.29 | 0.29 | 0.64 | 0.93 | (0.41 | ) | (0.07 | ) | (0.48 | ) | 10.74 | 9.34 | 844 | 1.62 | 6.36 | 2.80 | 78 | |||||||||||||||||||||||||||||||||||||||
Three months ended 08/31/09(e) | 10.00 | 0.07 | 0.27 | 0.34 | (0.05 | ) | — | (0.05 | ) | 10.29 | 3.39 | 223 | 1.59 | (f) | 13.64 | (f) | 2.72 | (f) | 43 | |||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 10.74 | 0.14 | (0.18 | ) | (0.04 | ) | (0.14 | ) | (0.15 | ) | (0.29 | ) | 10.41 | (0.34 | ) | 127 | 1.12 | (d) | 3.21 | (d) | 2.66 | (d) | 19 | |||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.29 | 0.34 | 0.64 | 0.98 | (0.46 | ) | (0.07 | ) | (0.53 | ) | 10.74 | 9.88 | 153 | 1.12 | 5.86 | 3.30 | 78 | |||||||||||||||||||||||||||||||||||||||
Three months ended 08/31/09(e) | 10.00 | 0.08 | 0.27 | 0.35 | (0.06 | ) | — | (0.06 | ) | 10.29 | 3.51 | 105 | 1.09 | (f) | 13.14 | (f) | 3.22 | (f) | 43 | |||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 10.74 | 0.17 | (0.18 | ) | (0.01 | ) | (0.17 | ) | (0.15 | ) | (0.32 | ) | 10.41 | (0.09 | ) | 118 | 0.62 | (d) | 2.71 | (d) | 3.16 | (d) | 19 | |||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.29 | 0.40 | 0.63 | 1.03 | (0.51 | ) | (0.07 | ) | (0.58 | ) | 10.74 | 10.43 | 144 | 0.62 | 5.36 | 3.80 | 78 | |||||||||||||||||||||||||||||||||||||||
Three months ended 08/31/09(e) | 10.00 | 0.09 | 0.27 | 0.36 | (0.07 | ) | — | (0.07 | ) | 10.29 | 3.64 | 126 | 0.59 | (f) | 12.64 | (f) | 3.72 | (f) | 43 | |||||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 10.74 | 0.09 | (0.10 | ) | (0.01 | ) | (0.17 | ) | (0.15 | ) | (0.32 | ) | 10.41 | (0.09 | ) | 111 | 0.62 | (d) | 2.60 | (d) | 3.16 | (d) | 19 | |||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.29 | 0.40 | 0.64 | 1.04 | (0.52 | ) | (0.07 | ) | (0.59 | ) | 10.74 | 10.43 | 115 | 0.62 | 5.29 | 3.80 | 78 | |||||||||||||||||||||||||||||||||||||||
Three months ended 08/31/09(e) | 10.00 | 0.09 | 0.27 | 0.36 | (0.07 | ) | — | (0.07 | ) | 10.29 | 3.64 | 104 | 0.59 | (f) | 12.68 | (f) | 3.72 | (f) | 43 | |||||||||||||||||||||||||||||||||||||
(a) | Calculated using average shares outstanding. | |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. | |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(d) | Ratios are based on average daily net assets (000’s) of $7,710, $904, $895, $146, $131 and $113 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. | |
(e) | Commencement date of June 3, 2009. | |
(f) | Annualized. |
NOTE 12—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Core Bond Fund (the “Target Fund”) in exchange for shares of the Fund.
The Target Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated shortly thereafter. Upon closing of the reorganization, shareholders of the Target Fund will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Fund and the Target Fund will liquidate and cease operations.
25 Invesco Core Plus Bond 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
ACTUAL | (5% annual return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 996.90 | $ | 4.31 | $ | 1,020.48 | $ | 4.36 | 0.87 | % | ||||||||||||||||||
B | 1,000.00 | 994.10 | 8.01 | 1,016.76 | 8.10 | 1.62 | ||||||||||||||||||||||||
C | 1,000.00 | 993.20 | 8.01 | 1,016.76 | 8.10 | 1.62 | ||||||||||||||||||||||||
R | 1,000.00 | 996.60 | 5.54 | 1,019.24 | 5.61 | 1.12 | ||||||||||||||||||||||||
Y | 1,000.00 | 999.10 | 3.07 | 1,021.72 | 3.11 | 0.62 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 999.10 | 3.07 | 1,021.72 | 3.11 | 0.62 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
26 Invesco Core Plus Bond Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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.
CPB-SAR-1 | Invesco Distributors, Inc. |
Invesco Dividend Growth Securities Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: DIVAX § B: DIVBX § C: DIVCX § Y: DIVDX
A: DIVAX § B: DIVBX § C: DIVCX § Y: DIVDX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
10 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 24.71 | % | ||
Class B Shares | 24.60 | |||
Class C Shares | 24.14 | |||
Class Y Shares | 24.83 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Russell 1000 Index▼ (Style-Specific Index) | 28.65 | |||
Lipper Large-Cap Core Funds Index▼ (Peer Group Index) | 26.16 | |||
▼Lipper Inc.
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 1000® Index is an unmanaged index considered representative of large-cap stocks. The Russell 1000 Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Core Funds Index is an unmanaged index considered representative of large-cap core funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 | Invesco Dividend Growth Securities Fund |
Average Annual Total Returns
As of 2/28/11, including maximum applicable
sales charges
sales charges
Class A Shares | ||||||||
Inception (7/28/97) | 2.38 | % | ||||||
10 | Years | 0.88 | ||||||
5 | Years | -0.58 | ||||||
1 | Year | 11.32 | ||||||
Class B Shares | ||||||||
Inception (3/30/81) | 9.79 | % | ||||||
10 | Years | 1.29 | ||||||
5 | Years | 0.40 | ||||||
1 | Year | 12.60 | ||||||
Class C Shares | ||||||||
Inception (7/28/97) | 2.04 | % | ||||||
10 | Years | 0.69 | ||||||
5 | Years | -0.21 | ||||||
1 | Year | 15.79 | ||||||
Class Y Shares | ||||||||
Inception (7/28/97) | 3.06 | % | ||||||
10 | Years | 1.71 | ||||||
5 | Years | 0.81 | ||||||
1 | Year | 18.03 | ||||||
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Dividend Growth Securities Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Dividend Growth Securities Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (7/28/97) | 2.00 | % | ||||||
10 | Years | 0.11 | ||||||
5 | Years | -1.36 | ||||||
1 | Year | 4.38 | ||||||
Class B Shares | ||||||||
Inception (3/30/81) | 9.65 | % | ||||||
10 | Years | 0.49 | ||||||
5 | Years | -0.38 | ||||||
1 | Year | 5.66 | ||||||
Class C Shares | ||||||||
Inception (7/28/97) | 1.67 | % | ||||||
10 | Years | -0.06 | ||||||
5 | Years | -0.98 | ||||||
1 | Year | 8.74 | ||||||
Class Y Shares | ||||||||
Inception (7/28/97) | 2.68 | % | ||||||
10 | Years | 0.93 | ||||||
5 | Years | 0.02 | ||||||
1 | Year | 10.71 | ||||||
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, and Class Y shares was 0.95%, 0.94%, 1.70% and 0.70%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 | Invesco Dividend Growth Securities Fund |
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 | Invesco Dividend Growth Securities Fund |
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–96.83% | ||||||||
Aerospace & Defense–3.94% | ||||||||
General Dynamics Corp. | 371,736 | $ | 28,296,544 | |||||
Raytheon Co. | 438,738 | 22,467,773 | ||||||
50,764,317 | ||||||||
Apparel Retail–0.50% | ||||||||
Ross Stores, Inc. | 89,464 | 6,444,987 | ||||||
Apparel, Accessories & Luxury Goods–0.30% | ||||||||
VF Corp. | 40,083 | 3,834,741 | ||||||
Asset Management & Custody Banks–2.87% | ||||||||
Federated Investors, Inc.–Class B | 818,916 | 22,569,325 | ||||||
State Street Corp. | 321,396 | 14,372,829 | ||||||
36,942,154 | ||||||||
Auto Parts & Equipment–1.90% | ||||||||
Johnson Controls, Inc. | 598,120 | 24,403,296 | ||||||
Brewers–2.80% | ||||||||
Foster’s Group Ltd. (Australia) | 1,861,679 | 10,872,542 | ||||||
Heineken N.V. (Netherlands) | 488,894 | 25,205,034 | ||||||
36,077,576 | ||||||||
Building Products–1.90% | ||||||||
Masco Corp. | 1,801,509 | 24,482,507 | ||||||
Casinos & Gaming–1.36% | ||||||||
International Game Technology | 1,065,020 | 17,530,229 | ||||||
Construction & Farm Machinery & Heavy Trucks–0.62% | ||||||||
Caterpillar Inc. | 77,964 | 8,024,834 | ||||||
Consumer Finance–2.29% | ||||||||
Capital One Financial Corp. | 591,053 | 29,416,708 | ||||||
Data Processing & Outsourced Services–2.36% | ||||||||
Automatic Data Processing, Inc. | 607,510 | 30,375,500 | ||||||
Department Stores–0.35% | ||||||||
Nordstrom, Inc. | 98,440 | 4,455,394 | ||||||
Distributors–0.76% | ||||||||
Genuine Parts Co. | 185,018 | 9,748,598 | ||||||
Diversified Banks–2.39% | ||||||||
Societe Generale (France) | 293,633 | 20,644,994 | ||||||
U.S. Bancorp | 366,819 | 10,171,891 | ||||||
30,816,885 | ||||||||
Diversified Chemicals–1.41% | ||||||||
E. I. du Pont de Nemours and Co. | 329,847 | 18,098,705 | ||||||
Drug Retail–1.55% | ||||||||
Walgreen Co. | 461,715 | 20,010,728 | ||||||
Electric Utilities–3.72% | ||||||||
American Electric Power Co., Inc. | 706,531 | 25,279,679 | ||||||
Entergy Corp. | 171,599 | 12,217,849 | ||||||
Exelon Corp. | 248,463 | 10,375,815 | ||||||
47,873,343 | ||||||||
Electrical Components & Equipment–1.44% | ||||||||
Emerson Electric Co. | 310,786 | 18,541,493 | ||||||
Electronic Components–0.91% | ||||||||
Corning Inc. | 506,784 | 11,686,439 | ||||||
Food Distributors–1.57% | ||||||||
Sysco Corp. | 727,324 | 20,212,334 | ||||||
Gas Utilities–0.80% | ||||||||
AGL Resources Inc. | 269,587 | 10,247,002 | ||||||
General Merchandise Stores–1.30% | ||||||||
Target Corp. | 317,218 | 16,669,806 | ||||||
Health Care Equipment–1.90% | ||||||||
Stryker Corp. | 385,814 | 24,406,594 | ||||||
Hotels, Resorts & Cruise Lines–1.45% | ||||||||
Accor S.A. (France) | 214,190 | 10,086,086 | ||||||
Marriott International Inc.–Class A | 218,279 | 8,558,719 | ||||||
18,644,805 | ||||||||
Household Products–4.24% | ||||||||
Kimberly-Clark Corp. | 520,122 | 34,276,040 | ||||||
Procter & Gamble Co. (The) | 321,941 | 20,298,380 | ||||||
54,574,420 | ||||||||
Industrial Machinery–4.44% | ||||||||
Eaton Corp. | 53,672 | 5,945,784 | ||||||
Pentair, Inc. | 698,090 | 25,885,177 | ||||||
Snap-on, Inc. | 440,468 | 25,296,078 | ||||||
57,127,039 | ||||||||
Insurance Brokers–0.66% | ||||||||
Marsh & McLennan Cos., Inc. | 280,002 | 8,523,261 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Dividend Growth Securities Fund
Shares | Value | |||||||
Integrated Oil & Gas–3.81% | ||||||||
Eni S.p.A. (Italy) | 752,689 | $ | 18,367,991 | |||||
Exxon Mobil Corp. | 190,444 | 16,288,675 | ||||||
Total S.A. (France) | 234,687 | 14,399,351 | ||||||
49,056,017 | ||||||||
Integrated Telecommunication Services–0.88% | ||||||||
AT&T Inc. | 400,807 | 11,374,903 | ||||||
Investment Banking & Brokerage–1.60% | ||||||||
Charles Schwab Corp. (The) | 1,085,040 | 20,583,209 | ||||||
IT Consulting & Other Services–0.56% | ||||||||
International Business Machines Corp. | 44,624 | 7,223,733 | ||||||
Life & Health Insurance–1.81% | ||||||||
Lincoln National Corp. | 446,423 | 14,160,537 | ||||||
StanCorp Financial Group, Inc.(b) | 198,309 | 9,122,214 | ||||||
23,282,751 | ||||||||
Motorcycle Manufacturers–0.98% | ||||||||
Harley-Davidson, Inc. | 307,491 | 12,551,783 | ||||||
Movies & Entertainment–1.67% | ||||||||
Time Warner, Inc. | 562,293 | 21,479,593 | ||||||
Multi-Utilities–1.21% | ||||||||
Dominion Resources, Inc. | 341,968 | 15,604,000 | ||||||
Oil & Gas Equipment & Services–1.38% | ||||||||
Baker Hughes, Inc. | 249,505 | 17,727,330 | ||||||
Oil & Gas Storage & Transportation–0.58% | ||||||||
Southern Union Co. | 263,143 | 7,504,838 | ||||||
Other Diversified Financial Services–0.28% | ||||||||
JPMorgan Chase & Co. | 76,219 | 3,558,665 | ||||||
Packaged Foods & Meats–5.76% | ||||||||
Campbell Soup Co. | 421,706 | 14,194,624 | ||||||
General Mills, Inc. | 693,126 | 25,742,700 | ||||||
Kraft Foods, Inc.,–Class A | 730,544 | 23,260,521 | ||||||
Mead Johnson Nutrition Co. | 183,390 | 10,975,891 | ||||||
74,173,736 | ||||||||
Paper Products–1.92% | ||||||||
International Paper Co. | 891,820 | 24,774,760 | ||||||
Pharmaceuticals–5.54% | ||||||||
Bristol-Myers Squibb Co. | 621,789 | 16,048,374 | ||||||
Eli Lilly and Co. | 439,302 | 15,182,277 | ||||||
Johnson & Johnson | 386,694 | 23,758,480 | ||||||
Novartis AG (Switzerland) | 150,714 | 8,463,988 | ||||||
Pfizer, Inc. | 411,297 | 7,913,354 | ||||||
71,366,473 | ||||||||
Property & Casualty Insurance–1.19% | ||||||||
Travelers Cos., Inc. (The) | 255,166 | 15,292,098 | ||||||
Regional Banks–6.03% | ||||||||
Fifth Third Bancorp | 1,578,211 | 23,041,881 | ||||||
SunTrust Banks, Inc. | 1,089,525 | 32,870,969 | ||||||
Zions Bancorp. | 926,652 | 21,646,591 | ||||||
77,559,441 | ||||||||
Restaurants–1.63% | ||||||||
Brinker International, Inc. | 888,299 | 20,999,388 | ||||||
Semiconductors–1.20% | ||||||||
Texas Instruments Inc. | 432,021 | 15,384,268 | ||||||
Soft Drinks–1.50% | ||||||||
Coca-Cola Co. (The) | 301,218 | 19,253,854 | ||||||
Specialized Consumer Services–0.74% | ||||||||
H&R Block, Inc. | 628,204 | 9,542,419 | ||||||
Specialty Chemicals–0.75% | ||||||||
Lubrizol Corp. (The) | 88,668 | 9,653,285 | ||||||
Systems Software–1.47% | ||||||||
Microsoft Corp. | 482,035 | 12,812,490 | ||||||
Oracle Corp. | 186,511 | 6,136,212 | ||||||
18,948,702 | ||||||||
Thrifts & Mortgage Finance–1.58% | ||||||||
Hudson City Bancorp, Inc. | 1,769,957 | 20,354,505 | ||||||
Tobacco–3.03% | ||||||||
Altria Group, Inc. | 809,732 | 20,542,901 | ||||||
Philip Morris International Inc. | 294,742 | 18,503,903 | ||||||
39,046,804 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $1,023,397,719) | 1,246,230,250 | |||||||
Money Market Funds–3.52% | ||||||||
Liquid Assets Portfolio–Institutional Class(b) | 22,644,193 | 22,644,193 | ||||||
Premier Portfolio–Institutional Class(b) | 22,644,193 | 22,644,193 | ||||||
Total Money Market Funds (Cost $45,288,386) | 45,288,386 | |||||||
TOTAL INVESTMENTS–100.35% (Cost $1,068,686,105) | 1,291,518,636 | |||||||
OTHER ASSETS LESS LIABILITIES–(0.35)% | (4,479,221 | ) | ||||||
NET ASSETS–100.00% | $ | 1,287,039,415 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Dividend Growth Securities Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on Net Assets
as of February 28, 2011
Financials | 20.7 | % | ||
Consumer Staples | 20.5 | |||
Consumer Discretionary | 12.9 | |||
Industrials | 12.3 | |||
Health Care | 7.4 | |||
Information Technology | 6.5 | |||
Utilities | 6.3 | |||
Energy | 5.2 | |||
Materials | 4.1 | |||
Telecommunication Services | 0.9 | |||
Money Market Funds Plus Other Assets Less Liabilities | 3.2 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Dividend Growth Securities Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $1,023,397,719) | $ | 1,246,230,250 | ||
Investments in affiliated money market funds, at value and cost | 45,288,386 | |||
Total investments, at value (Cost $1,068,686,105) | 1,291,518,636 | |||
Receivable for: | ||||
Investments sold | 7,989,769 | |||
Fund shares sold | 72,260 | |||
Dividends | 2,885,105 | |||
Investment for trustee deferred compensation and retirement plans | 2,700 | |||
Other assets | 44,141 | |||
Total assets | 1,302,512,611 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 11,363,717 | |||
Fund shares reacquired | 3,210,404 | |||
Accrued fees to affiliates | 626,712 | |||
Accrued other operating expenses | 201,482 | |||
Trustee deferred compensation and retirement plans | 70,881 | |||
Total liabilities | 15,473,196 | |||
Net assets applicable to shares outstanding | $ | 1,287,039,415 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 999,595,374 | ||
Undistributed net investment income | 3,080,353 | |||
Undistributed net realized gain | 61,528,177 | |||
Unrealized appreciation | 222,835,511 | |||
$ | 1,287,039,415 | |||
Net Assets: | ||||
Class A | $ | 41,278,705 | ||
Class B | $ | 1,206,774,698 | ||
Class C | $ | 22,220,544 | ||
Class Y | $ | 16,765,468 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 3,055,852 | |||
Class B | 88,578,771 | |||
Class C | 1,651,499 | |||
Class Y | 1,239,030 | |||
Class A: | ||||
Net asset value per share | $ | 13.51 | ||
Maximum offering price per share | ||||
(Net asset value of $13.51 divided by 94.50%) | $ | 14.30 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 13.62 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 13.45 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 13.53 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Dividend Growth Securities Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $106,158) | $ | 16,208,693 | ||
Dividends from affiliated money market funds (includes securities lending income of $9,397) | 42,058 | |||
Total investment income | 16,250,751 | |||
Expenses: | ||||
Advisory fees | 2,744,767 | |||
Administrative services fees | 158,457 | |||
Custodian fees | 40,644 | |||
Distribution fees: | ||||
Class A | 48,485 | |||
Class B | 1,462,627 | |||
Class C | 102,940 | |||
Transfer agent fees | 1,188,426 | |||
Trustees’ and officers’ fees and benefits | 25,167 | |||
Other | 229,501 | |||
Total expenses | 6,001,014 | |||
Less: fees waived and expense offset arrangement(s) | (40,942 | ) | ||
Net expenses | 5,960,072 | |||
Net investment income | 10,290,679 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 106,754,376 | |||
Foreign currencies | (36,055 | ) | ||
106,718,321 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 156,561,107 | |||
Foreign currencies | 3,325 | |||
156,564,432 | ||||
Net realized and unrealized gain | 263,282,753 | |||
Net increase in net assets resulting from operations | $ | 273,573,432 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Dividend Growth Securities Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the period March 1, 2010 through August 31, 2010 and the year ended February 28, 2010
(Unaudited)
Six months ended | Six months ended | For the year ended | ||||||||||
February 28, | August 31, | February 28, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 10,290,679 | $ | 8,628,277 | $ | 16,502,985 | ||||||
Net realized gain | 106,718,321 | 131,432,030 | 114,832,276 | |||||||||
Change in net unrealized appreciation (depreciation) | 156,564,432 | (205,859,095 | ) | 390,530,068 | ||||||||
Net increase (decrease) in net assets resulting from operations | 273,573,432 | (65,798,788 | ) | 521,865,329 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (356,541 | ) | (240,567 | ) | (652,947 | ) | ||||||
Class B | (10,793,612 | ) | (7,447,974 | ) | (20,107,994 | ) | ||||||
Class C | (116,150 | ) | (49,742 | ) | (196,960 | ) | ||||||
Class Y | (171,027 | ) | (119,698 | ) | (307,798 | ) | ||||||
Total distributions from net investment income | (11,437,330 | ) | (7,857,981 | ) | (21,265,699 | ) | ||||||
Distributions to shareholders from net realized gains: | ||||||||||||
Class A | (5,357,101 | ) | (502,982 | ) | — | |||||||
Class B | (158,028,377 | ) | (15,558,772 | ) | — | |||||||
Class C | (2,823,194 | ) | (279,283 | ) | — | |||||||
Class Y | (2,254,792 | ) | (208,816 | ) | — | |||||||
Total distributions from net realized gains | (168,463,464 | ) | (16,549,853 | ) | — | |||||||
Share transactions–net: | ||||||||||||
Class A | 3,180,565 | 3,659,368 | (6,433,097 | ) | ||||||||
Class B | 26,686,194 | (122,101,048 | ) | (207,681,641 | ) | |||||||
Class C | 1,189,422 | (1,911,669 | ) | (4,506,366 | ) | |||||||
Class Y | 463,046 | (500,151 | ) | (2,992,150 | ) | |||||||
Net increase (decrease) in net assets resulting from share transactions | 31,519,227 | (120,853,500 | ) | (221,613,254 | ) | |||||||
Net increase (decrease) in net assets | 125,191,865 | (211,060,122 | ) | 278,986,376 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 1,161,847,550 | 1,372,907,672 | 1,093,921,296 | |||||||||
End of period (includes undistributed net investment income of $3,080,353, $4,227,004 and $3,606,211, respectively) | $ | 1,287,039,415 | $ | 1,161,847,550 | $ | 1,372,907,672 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Dividend Growth Securities Fund (the “Fund”) is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust, formerly AIM Counselor Series Trust (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 twenty-two 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.
Prior to June 1, 2010, the Fund operated as Morgan Stanley Dividend Growth Securities, Inc. (the “Acquired Fund”), as a diversified, open-end management investment company. The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).
10 Invesco Dividend Growth Securities Fund
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is to provide reasonable current income and long-term growth of income and 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. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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. |
11 Invesco Dividend Growth Securities Fund
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 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. | Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into 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 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 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 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. |
12 Invesco Dividend Growth Securities 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 Net Assets | Rate | |||
First $250 million | 0 | .545% | ||
Next $750 million | 0 | .42% | ||
Next $1 billion | 0 | .395% | ||
Next $1 billion | 0 | .37% | ||
Next $1 billion | 0 | .345% | ||
Next $1 billion | 0 | .32% | ||
Next $1 billion | 0 | .295% | ||
Next $2 billion | 0 | .27% | ||
Next $2 billion | 0 | .245% | ||
Next $5 billion | 0 | .22% | ||
Over $15 billion | 0 | .195% | ||
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 Trimark 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 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, 2012, 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 reimbursement (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.95%, 1.70%, 1.70% and 0.70%, 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 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 the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $40,001.
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 February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as administrative services fees.
Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.
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 February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates; (1) Class A — up to 0.25% of the average daily net assets of Class A shares; (2) Class B — up to 1.00% of the average daily net assets of Class B shares and (3) Class C — up to 1.00% of the average daily net assets of Class C shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2011, IDI advised the Fund that IDI retained $3,205 in front-end sales commissions from the sale of Class A shares and $8, $34,189 and $568 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 Invesco, IIS and/or IDI.
13 Invesco Dividend Growth Securities 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 1,229,328,679 | $ | 62,189,957 | $ | — | $ | 1,291,518,636 | ||||||||
NOTE 4—Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price.
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $941.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $1,865 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—Cash Balances
Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
14 Invesco Dividend Growth Securities Fund
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 February 28, 2011 was $256,744,600 and $372,033,857, 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 | $ | 231,699,238 | ||
Aggregate unrealized (depreciation) of investment securities | (8,881,864 | ) | ||
Net unrealized appreciation of investment securities | $ | 222,817,374 | ||
Cost of investments for tax purposes is $1,068,701,262. |
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Six months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | February 28, 2010 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 677,142 | $ | 8,751,517 | 65,780,971 | $ | 859,627,511 | 136,093 | $ | 1,677,854 | |||||||||||||||
Class B | 11,356,893 | 142,326,363 | 64,207,654 | 837,627,834 | 419,998 | 5,119,934 | ||||||||||||||||||
Class C | 279,132 | 3,503,476 | 31,099 | 436,565 | 79,592 | 996,499 | ||||||||||||||||||
Class Y | 187,595 | 2,349,021 | 14,853 | 200,938 | 35,249 | 414,675 | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 33,828 | 428,463 | 52,264 | 709,513 | 55,201 | 636,422 | ||||||||||||||||||
Class B | 1,121,470 | 14,322,816 | 1,625,653 | 22,245,980 | 1,696,800 | 19,707,658 | ||||||||||||||||||
Class C | 10,734 | 135,519 | 23,677 | 318,283 | 17,061 | 190,978 | ||||||||||||||||||
Class Y | 12,851 | 164,398 | 23,449 | 319,096 | 26,153 | 303,025 | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (446,653 | ) | (5,999,415 | ) | (66,093,179 | ) | (856,677,656 | ) | (707,016 | ) | (8,747,373 | ) | ||||||||||||
Class B | (9,576,412 | ) | (129,962,985 | ) | (73,989,998 | ) | (981,974,862 | ) | (19,013,548 | ) | (232,509,233 | ) | ||||||||||||
Class C | (181,043 | ) | (2,449,573 | ) | (194,501 | ) | (2,666,517 | ) | (467,509 | ) | (5,693,843 | ) | ||||||||||||
Class Y | (153,313 | ) | (2,050,373 | ) | (73,311 | ) | (1,020,185 | ) | (301,983 | ) | (3,709,850 | ) | ||||||||||||
Net increase (decrease) in share activity | 3,322,224 | $ | 31,519,227 | (8,591,369 | ) | $ | (120,853,500 | ) | (18,023,909 | ) | $ | (221,613,254 | ) | |||||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 76% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
15 Invesco Dividend Growth Securities Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Rebate from | Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return(b) | (000s omitted) | absorbed | absorbed | net assets | affiliates | turnover(c) | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 12.65 | $ | 0.11 | $ | 2.83 | $ | 2.94 | $ | (0.13 | ) | $ | (1.95 | ) | $ | (2.08 | ) | $ | 13.51 | 24.70 | % | $ | 41,279 | 0.94 | %(d) | 0.95 | %(d) | 1.66 | %(d) | — | % | 21 | % | |||||||||||||||||||||||||||
Six months ended 08/31/10 | 13.65 | 0.09 | (0.83 | ) | (0.74 | ) | (0.08 | ) | (0.18 | ) | (0.26 | ) | 12.65 | (5.57 | ) | 35,315 | 0.89 | (e)(f) | 1.30 | (e)(f) | — | 59 | ||||||||||||||||||||||||||||||||||||||
Year ended 02/28/10 | 9.22 | 0.15 | 4.47 | 4.62 | (0.19 | ) | — | (0.19 | ) | 13.65 | 50.54 | 42 | 1.01 | (e) | 1.23 | (e) | 0.00 | (g) | 42 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/09 | 17.45 | 0.23 | (7.55 | ) | (7.32 | ) | (0.23 | ) | (0.68 | ) | (0.91 | ) | 9.22 | (44.10 | ) | 33 | 0.95 | (e) | 1.52 | (e) | 0.00 | (g) | 67 | |||||||||||||||||||||||||||||||||||||
Year ended 02/29/08 | 20.78 | 0.14 | (0.80 | ) | (0.66 | ) | (0.25 | ) | (2.42 | ) | (2.67 | ) | 17.45 | (4.42 | ) | 61 | 0.88 | (e) | 1.00 | (e) | 0.00 | (g) | 34 | |||||||||||||||||||||||||||||||||||||
Year ended 02/28/07 | 33.51 | 0.29 | 2.07 | 2.36 | (0.34 | ) | (14.75 | ) | (15.09 | ) | 20.78 | 8.55 | 2,502 | 0.88 | (e) | 1.04 | (e) | — | 105 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/06 | 37.21 | 0.39 | 1.69 | 2.08 | (0.47 | ) | (5.31 | ) | (5.78 | ) | 33.51 | 5.94 | 3,412 | 0.85 | 1.05 | — | 44 | |||||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 12.75 | 0.11 | 2.84 | 2.95 | (0.13 | ) | (1.95 | ) | (2.08 | ) | 13.62 | 24.60 | 1,206,775 | 0.94 | (d) | 0.95 | (d) | 1.66 | (d) | — | 21 | |||||||||||||||||||||||||||||||||||||||
Six months ended 08/31/10 | 13.76 | 0.09 | (0.84 | ) | (0.75 | ) | (0.08 | ) | (0.18 | ) | (0.26 | ) | 12.75 | (5.59 | ) | 1,091,986 | 0.88 | (e)(f) | 1.31 | (e)(f) | — | 59 | ||||||||||||||||||||||||||||||||||||||
Year ended 02/28/10 | 9.29 | 0.15 | 4.52 | 4.67 | (0.20 | ) | — | (0.20 | ) | 13.76 | 50.71 | 1,291 | 1.00 | (f) | 1.24 | (e) | 0.00 | (g) | 42 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/09 | 17.58 | 0.23 | (7.60 | ) | (7.37 | ) | (0.24 | ) | (0.68 | ) | (0.92 | ) | 9.29 | (44.12 | ) | 1,029 | 0.94 | (f) | 1.53 | (e) | 0.00 | (g) | 67 | |||||||||||||||||||||||||||||||||||||
Year ended 02/29/08 | 20.92 | 0.22 | (0.87 | ) | (0.65 | ) | (0.27 | ) | (2.42 | ) | (2.69 | ) | 17.58 | (4.39 | ) | 2,305 | 0.86 | (f) | 1.02 | (e) | 0.00 | (g) | 34 | |||||||||||||||||||||||||||||||||||||
Year ended 02/28/07 | 33.65 | 0.33 | 2.08 | 2.41 | (0.39 | ) | (14.75 | ) | (15.14 | ) | 20.92 | 8.66 | 848 | 0.75 | (f) | 1.17 | (e) | — | 105 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/06 | 37.34 | 0.39 | 1.72 | 2.11 | (0.49 | ) | (5.31 | ) | (5.80 | ) | 33.65 | 6.03 | 1,320 | 0.75 | 1.15 | — | 44 | |||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 12.60 | 0.06 | 2.82 | 2.88 | (0.08 | ) | (1.95 | ) | (2.03 | ) | 13.45 | 24.23 | 22,221 | 1.67 | (d) | 1.68 | (d) | 0.93 | (d) | — | 21 | |||||||||||||||||||||||||||||||||||||||
Six months ended 08/31/10 | 13.61 | 0.04 | (0.84 | ) | (0.80 | ) | (0.03 | ) | (0.18 | ) | (0.21 | ) | 12.60 | (6.00 | ) | 19,445 | 1.64 | (e)(f) | 0.55 | (e)(f) | — | 59 | ||||||||||||||||||||||||||||||||||||||
Year ended 02/28/10 | 9.18 | 0.06 | 4.47 | 4.53 | (0.10 | ) | — | (0.10 | ) | 13.61 | 49.62 | 23 | 1.76 | (e) | 0.48 | (e) | 0.00 | (g) | 42 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/09 | 17.38 | 0.11 | (7.52 | ) | (7.41 | ) | (0.11 | ) | (0.68 | ) | (0.79 | ) | 9.18 | (44.56 | ) | 19 | 1.70 | (e) | 0.77 | (e) | 0.00 | (g) | 67 | |||||||||||||||||||||||||||||||||||||
Year ended 02/29/08 | 20.71 | 0.05 | (0.87 | ) | (0.82 | ) | (0.09 | ) | (2.42 | ) | (2.51 | ) | 17.38 | (5.17 | ) | 44 | 1.63 | (e) | 0.25 | (e) | 0.00 | (g) | 34 | |||||||||||||||||||||||||||||||||||||
Year ended 02/28/07 | 33.42 | 0.08 | 2.06 | 2.14 | (0.10 | ) | (14.75 | ) | (14.85 | ) | 20.71 | 7.74 | 60 | 1.64 | (e) | 0.28 | (e) | — | 105 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/06 | 37.11 | 0.11 | 1.71 | 1.82 | (0.20 | ) | (5.31 | ) | (5.51 | ) | 33.42 | 5.21 | 80 | 1.59 | 0.31 | — | 44 | |||||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 12.67 | 0.13 | 2.83 | 2.96 | (0.15 | ) | (1.95 | ) | (2.10 | ) | 13.53 | 24.83 | 16,765 | 0.69 | (d) | 0.70 | (d) | 1.91 | (d) | — | 21 | |||||||||||||||||||||||||||||||||||||||
Six months ended 08/31/10 | 13.67 | 0.11 | (0.84 | ) | (0.73 | ) | (0.09 | ) | (0.18 | ) | (0.27 | ) | 12.67 | (5.44 | ) | 15,102 | 0.64 | (e)(f) | 1.55 | (e)(f) | — | 59 | ||||||||||||||||||||||||||||||||||||||
Year ended 02/28/10 | 9.23 | 0.18 | 4.48 | 4.66 | (0.22 | ) | — | (0.22 | ) | 13.67 | 50.97 | 17 | 0.76 | (e) | 1.48 | (e) | 0.00 | (g) | 42 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/09 | 17.47 | 0.25 | (7.54 | ) | (7.29 | ) | (0.27 | ) | (0.68 | ) | (0.95 | ) | 9.23 | (43.96 | ) | 14 | 0.70 | (e) | 1.77 | (e) | 0.00 | (g) | 67 | |||||||||||||||||||||||||||||||||||||
Year ended 02/29/08 | 20.81 | 0.26 | (0.87 | ) | (0.61 | ) | (0.31 | ) | (2.42 | ) | (2.73 | ) | 17.47 | (4.19 | ) | 112 | 0.63 | (e) | 1.25 | (e) | 0.00 | (g) | 34 | |||||||||||||||||||||||||||||||||||||
Year ended 02/28/07 | 33.54 | 0.38 | 2.06 | 2.44 | (0.42 | ) | (14.75 | ) | (15.17 | ) | 20.81 | 8.84 | 247 | 0.64 | (e) | 1.28 | (e) | — | 105 | |||||||||||||||||||||||||||||||||||||||||
Year ended 02/28/06 | 37.23 | 0.46 | 1.71 | 2.17 | (0.55 | ) | (5.31 | ) | (5.86 | ) | 33.54 | 6.22 | 511 | 0.60 | 1.30 | — | 44 | |||||||||||||||||||||||||||||||||||||||||||
(a) | Calculated using average shares outstanding. | |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year. | |
(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 $39,110, $1,181,952, $21,209 and $16,597 for Class A, Class B, Class C and Class Y shares, respectively. | |
(e) | The ratios reflect the rebate of certain Portfolio expenses in connection with investments in an affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from affiliate”. | |
(f) | Annualized. | |
(g) | Amount is less than 0.005%. |
16 Invesco Dividend Growth Securities 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,247.10 | $ | 5.24 | $ | 1,020.13 | $ | 4.71 | 0.94 | % | ||||||||||||||||||
B | 1,000.00 | 1,246.00 | 5.23 | 1,020.13 | 4.71 | 0.94 | ||||||||||||||||||||||||
C | 1,000.00 | 1,241.40 | 9.28 | 1,016.51 | 8.35 | 1.67 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,248.30 | 3.85 | 1,021.37 | 3.46 | 0.69 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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 Dividend Growth Securities Fund
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov.Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-DGS-SAR-1 | Invesco Distributors, Inc. |
Invesco Equally-Weighted S&P 500 Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: VADAX § B: VADBX § C: VADCX § R: VADRX § Y: VADDX
A: VADAX § B: VADBX § C: VADCX § R: VADRX § Y: VADDX
2 | Fund Performance | |
3 | Letters to Shareholders | |
4 | Schedule of Investments | |
14 | Financial Statements | |
16 | Notes to Financial Statements | |
23 | Financial Highlights | |
24 | 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 |
Performance summary
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 31.07 | % | ||
Class B Shares | 30.56 | |||
Class C Shares | 30.57 | |||
Class R Shares | 30.91 | |||
Class Y Shares | 31.24 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
S&P 500 Equal Weight Indexn (Style-Specific Index) | 31.44 | |||
Lipper Multi-Cap Core Funds Index▼ (Peer Group Index) | 28.76 | |||
▼Lipper Inc.; nInvesco, Bloomberg L.P.
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The S&P 500® Equal Weight Index is the equally weighted version of the S&P 500® Index.
The Lipper Multi-Cap Core Funds Index is an unmanaged index considered representative of multi-cap core funds tracked by Lipper.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (7/28/97) | 6.87 | % | ||||||
10 | Years | 5.77 | ||||||
5 | Years | 3.26 | ||||||
1 | Year | 20.65 | ||||||
Class B Shares | ||||||||
Inception (12/1/87) | 10.92 | % | ||||||
10 | Years | 5.73 | ||||||
5 | Years | 3.36 | ||||||
1 | Year | 21.72 | ||||||
Class C Shares | ||||||||
Inception (7/28/97) | 6.53 | % | ||||||
10 | Years | 5.58 | ||||||
5 | Years | 3.66 | ||||||
1 | Year | 25.71 | ||||||
Class R Shares | ||||||||
Inception (3/31/08) | 6.80 | % | ||||||
1 | Year | 27.41 | ||||||
Class Y Shares | ||||||||
Inception (7/28/97) | 7.57 | % | ||||||
10 | Years | 6.63 | ||||||
5 | Years | 4.69 | ||||||
1 | Year | 28.02 | ||||||
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (7/28/97) | 6.47 | % | ||||||
10 | Years | 4.92 | ||||||
5 | Years | 2.84 | ||||||
1 | Year | 14.53 | ||||||
Class B Shares | ||||||||
Inception (12/1/87) | 10.70 | % | ||||||
10 | Years | 4.87 | ||||||
5 | Years | 2.94 | ||||||
1 | Year | 15.30 | ||||||
Class C Shares | ||||||||
Inception (7/28/97) | 6.13 | % | ||||||
10 | Years | 4.74 | ||||||
5 | Years | 3.25 | ||||||
1 | Year | 19.33 | ||||||
Class R Shares | ||||||||
Inception (3/31/08) | 4.89 | % | ||||||
1 | Year | 20.97 | ||||||
Class Y Shares | ||||||||
Inception (7/28/97) | 7.18 | % | ||||||
10 | Years | 5.77 | ||||||
5 | Years | 4.27 | ||||||
1 | Year | 21.51 | ||||||
Effective June 1, 2010, Class A, Class B, Class C, Class R, Class W and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C, Class R, Class A and Class Y shares, respectively, of Invesco Equally-Weighted S&P 500 Fund. Returns shown above for Class A, Class B, Class C, Class R and Class Y shares are blended returns of the predecessor fund and Invesco Equally-Weighted S&P 500 Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R and Class Y shares was 0.62%, 1.37%, 1.37%, 0.87% and 0.37%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class R and Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
2 | Invesco Equally-Weighted S&P 500 Fund |
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
3 | Invesco Equally-Weighted S&P 500 Fund |
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–98.22% | ||||||||
Advertising–0.42% | ||||||||
Interpublic Group of Cos., Inc. (The) | 188,702 | $ | 2,490,867 | |||||
Omnicom Group Inc. | 44,006 | 2,239,905 | ||||||
4,730,772 | ||||||||
Aerospace & Defense–2.38% | ||||||||
Boeing Co. (The) | 31,425 | 2,262,914 | ||||||
General Dynamics Corp. | 29,078 | 2,213,417 | ||||||
Goodrich Corp. | 23,549 | 2,030,630 | ||||||
Honeywell International Inc. | 38,565 | 2,233,299 | ||||||
ITT Corp. | 39,528 | 2,289,857 | ||||||
L-3 Communications Holdings, Inc. | 29,012 | 2,300,362 | ||||||
Lockheed Martin Corp. | 29,165 | 2,308,702 | ||||||
Northrop Grumman Corp. | 31,871 | 2,125,158 | ||||||
Precision Castparts Corp. | 14,531 | 2,059,769 | ||||||
Raytheon Co. | 45,243 | 2,316,894 | ||||||
Rockwell Collins, Inc. | 35,035 | 2,257,656 | ||||||
United Technologies Corp. | 25,934 | 2,166,526 | ||||||
26,565,184 | ||||||||
Agricultural Products–0.23% | ||||||||
Archer-Daniels-Midland Co. | 68,053 | 2,530,211 | ||||||
Air Freight & Logistics–0.69% | ||||||||
C.H. Robinson Worldwide, Inc. | 25,868 | 1,872,584 | ||||||
Expeditors International of Washington, Inc. | 36,921 | 1,764,824 | ||||||
FedEx Corp. | 21,957 | 1,976,569 | ||||||
United Parcel Service, Inc.–Class B | 27,971 | 2,064,260 | ||||||
7,678,237 | ||||||||
Airlines–0.17% | ||||||||
Southwest Airlines Co. | 158,054 | 1,869,779 | ||||||
Aluminum–0.21% | ||||||||
Alcoa Inc. | 140,360 | 2,365,066 | ||||||
Apparel Retail–1.18% | ||||||||
Abercrombie & Fitch Co.–Class A | 35,783 | 2,052,871 | ||||||
Gap, Inc. (The) | 96,444 | 2,172,883 | ||||||
Limited Brands, Inc. | 65,417 | 2,094,653 | ||||||
Ross Stores, Inc. | 32,458 | 2,338,274 | ||||||
TJX Cos., Inc. (The) | 47,045 | 2,346,134 | ||||||
Urban Outfitters, Inc.(b) | 56,205 | 2,157,148 | ||||||
13,161,963 | ||||||||
Apparel, Accessories & Luxury Goods–0.57% | ||||||||
Coach, Inc. | 35,095 | 1,927,417 | ||||||
Polo Ralph Lauren Corp. | 17,901 | 2,268,236 | ||||||
VF Corp. | 22,907 | 2,191,513 | ||||||
6,387,166 | ||||||||
Application Software–1.15% | ||||||||
Adobe Systems Inc.(b) | 70,984 | 2,448,948 | ||||||
Autodesk, Inc.(b) | 52,227 | 2,196,146 | ||||||
Citrix Systems, Inc.(b) | 29,527 | 2,071,614 | ||||||
Compuware Corp.(b) | 174,522 | 1,965,118 | ||||||
Intuit Inc.(b) | 41,376 | 2,175,550 | ||||||
Salesforce.com, Inc.(b) | 14,971 | 1,980,214 | ||||||
12,837,590 | ||||||||
Asset Management & Custody Banks–1.94% | ||||||||
Ameriprise Financial, Inc. | 37,021 | 2,344,170 | ||||||
Bank of New York Mellon Corp. (The) | 69,535 | 2,113,169 | ||||||
Federated Investors, Inc.–Class B | 76,944 | 2,120,576 | ||||||
Franklin Resources, Inc. | 17,832 | 2,240,056 | ||||||
Invesco Ltd. | 89,712 | 2,407,870 | ||||||
Janus Capital Group Inc. | 163,884 | 2,200,962 | ||||||
Legg Mason, Inc. | 56,236 | 2,038,555 | ||||||
Northern Trust Corp. | 37,663 | 1,942,281 | ||||||
State Street Corp. | 44,945 | 2,009,940 | ||||||
T. Rowe Price Group Inc. | 32,443 | 2,173,032 | ||||||
21,590,611 | ||||||||
Auto Parts & Equipment–0.19% | ||||||||
Johnson Controls, Inc. | 52,875 | 2,157,300 | ||||||
Automobile Manufacturers–0.16% | ||||||||
Ford Motor Co.(b) | 121,645 | 1,830,757 | ||||||
Automotive Retail–0.75% | ||||||||
AutoNation, Inc.(b) | 75,188 | 2,529,324 | ||||||
AutoZone, Inc.(b) | 7,569 | 1,952,424 | ||||||
CarMax, Inc.(b) | 57,551 | 2,035,579 | ||||||
O’Reilly Automotive, Inc.(b) | 32,557 | 1,809,518 | ||||||
8,326,845 | ||||||||
Biotechnology–1.06% | ||||||||
Amgen Inc.(b) | 35,590 | 1,826,835 | ||||||
Biogen Idec Inc.(b) | 29,991 | 2,051,384 | ||||||
Celgene Corp.(b) | 34,479 | 1,830,835 | ||||||
Cephalon Inc.(b) | 31,324 | 1,763,854 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Biotechnology–(continued) | ||||||||
Genzyme Corp.(b) | 29,282 | $ | 2,209,327 | |||||
Gilead Sciences, Inc.(b) | 54,951 | 2,141,990 | ||||||
11,824,225 | ||||||||
Brewers–0.16% | ||||||||
Molson Coors Brewing Co.–Class B | 40,228 | 1,839,626 | ||||||
Broadcasting–0.60% | ||||||||
CBS Corp.–Class B | 108,878 | 2,597,829 | ||||||
Discovery Communications, Inc.–Class A(b) | 48,119 | 2,074,410 | ||||||
Scripps Networks Interactive Inc.–Class A | 39,239 | 2,038,074 | ||||||
6,710,313 | ||||||||
Building Products–0.19% | ||||||||
Masco Corp. | 156,481 | 2,126,577 | ||||||
Cable & Satellite–0.84% | ||||||||
Cablevision Systems Corp.–Class A | 59,720 | 2,200,682 | ||||||
Comcast Corp.–Class A | 95,453 | 2,458,869 | ||||||
DIRECTV–Class A(b) | 52,054 | 2,392,923 | ||||||
Time Warner Cable Inc. | 31,295 | 2,258,873 | ||||||
9,311,347 | ||||||||
Casinos & Gaming–0.39% | ||||||||
International Game Technology | 120,925 | 1,990,425 | ||||||
Wynn Resorts Ltd. | 19,472 | 2,393,693 | ||||||
4,384,118 | ||||||||
Coal & Consumable Fuels–0.64% | ||||||||
CONSOL Energy Inc. | 47,626 | 2,415,114 | ||||||
Massey Energy Co. | 39,961 | 2,530,730 | ||||||
Peabody Energy Corp. | 33,761 | 2,211,008 | ||||||
7,156,852 | ||||||||
Commercial Printing–0.19% | ||||||||
R. R. Donnelley & Sons Co. | 116,579 | 2,170,701 | ||||||
Communications Equipment–1.80% | ||||||||
Cisco Systems, Inc.(b) | 104,802 | 1,945,125 | ||||||
F5 Networks, Inc.(b) | 15,025 | 1,773,100 | ||||||
Harris Corp. | 44,044 | 2,055,093 | ||||||
JDS Uniphase Corp.(b) | 142,117 | 3,506,026 | ||||||
Juniper Networks, Inc.(b) | 56,005 | 2,464,220 | ||||||
Motorola Mobility Holdings Inc.(b) | 68,132 | 2,057,587 | ||||||
Motorola Solutions, Inc.(b) | 56,192 | 2,171,259 | ||||||
QUALCOMM, Inc. | 41,435 | 2,468,697 | ||||||
Tellabs, Inc. | 304,115 | 1,639,180 | ||||||
20,080,287 | ||||||||
Computer & Electronics Retail–0.49% | ||||||||
Best Buy Co., Inc. | 59,633 | 1,922,568 | ||||||
GameStop Corp.–Class A(b) | 94,307 | 1,881,425 | ||||||
RadioShack Corp. | 111,613 | 1,651,872 | ||||||
5,455,865 | ||||||||
Computer Hardware–0.61% | ||||||||
Apple Inc.(b) | 6,374 | 2,251,361 | ||||||
Dell Inc.(b) | 149,827 | 2,371,761 | ||||||
Hewlett-Packard Co. | 48,704 | 2,124,955 | ||||||
6,748,077 | ||||||||
Computer Storage & Peripherals–0.95% | ||||||||
EMC Corp.(b) | 89,009 | 2,421,935 | ||||||
Lexmark International, Inc.–Class A(b) | 58,506 | 2,195,730 | ||||||
NetApp, Inc.(b) | 37,985 | 1,962,305 | ||||||
SanDisk Corp.(b) | 41,818 | 2,074,173 | ||||||
Western Digital Corp.(b) | 61,984 | 1,895,471 | ||||||
10,549,614 | ||||||||
Construction & Engineering–0.63% | ||||||||
Fluor Corp. | 32,051 | 2,267,929 | ||||||
Jacobs Engineering Group, Inc.(b) | 46,958 | 2,350,717 | ||||||
Quanta Services, Inc.(b) | 104,963 | 2,394,206 | ||||||
7,012,852 | ||||||||
Construction Materials–0.18% | ||||||||
Vulcan Materials Co. | 44,369 | 2,034,319 | ||||||
Construction, Farm Machinery & Heavy Trucks–0.94% | ||||||||
Caterpillar Inc. | 22,071 | 2,271,768 | ||||||
Cummins Inc. | 18,929 | 1,914,101 | ||||||
Deere & Co. | 25,059 | 2,259,069 | ||||||
Joy Global Inc. | 22,819 | 2,222,114 | ||||||
PACCAR Inc. | 36,170 | 1,813,202 | ||||||
10,480,254 | ||||||||
Consumer Electronics–0.19% | ||||||||
Harman International Industries, Inc. | 42,754 | 2,079,555 | ||||||
Consumer Finance–0.85% | ||||||||
American Express Co. | 46,436 | 2,023,216 | ||||||
Capital One Financial Corp. | 50,472 | 2,511,991 | ||||||
Discover Financial Services | 113,409 | 2,466,646 | ||||||
SLM Corp.(b) | 169,457 | 2,511,353 | ||||||
9,513,206 | ||||||||
Data Processing & Outsourced Services–1.82% | ||||||||
Automatic Data Processing, Inc. | 43,611 | 2,180,550 | ||||||
Computer Sciences Corp. | 42,224 | 2,032,241 | ||||||
Fidelity National Information Services, Inc. | 74,476 | 2,412,278 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Data Processing & Outsourced Services–(continued) | ||||||||
Fiserv, Inc.(b) | 33,812 | $ | 2,139,285 | |||||
MasterCard, Inc.–Class A | 9,236 | 2,221,812 | ||||||
Paychex, Inc. | 65,923 | 2,216,991 | ||||||
Total System Services, Inc. | 133,746 | 2,373,992 | ||||||
Visa Inc.–Class A | 30,547 | 2,231,458 | ||||||
Western Union Co. | 111,796 | 2,458,394 | ||||||
20,267,001 | ||||||||
Department Stores–0.96% | ||||||||
JC Penney Co., Inc. | 60,642 | 2,120,044 | ||||||
Kohl’s Corp. | 37,985 | 2,047,012 | ||||||
Macy’s, Inc. | 78,935 | 1,886,547 | ||||||
Nordstrom, Inc. | 48,301 | 2,186,103 | ||||||
Sears Holdings Corp.(b) | 30,150 | 2,511,796 | ||||||
10,751,502 | ||||||||
Distillers & Vintners–0.35% | ||||||||
Brown-Forman Corp.–Class B | 29,190 | 2,018,489 | ||||||
Constellation Brands, Inc.–Class A(b) | 92,264 | 1,874,804 | ||||||
3,893,293 | ||||||||
Distributors–0.19% | ||||||||
Genuine Parts Co. | 39,976 | 2,106,335 | ||||||
Diversified Banks–0.56% | ||||||||
Comerica Inc. | 49,435 | 1,923,021 | ||||||
U.S. Bancorp | 78,001 | 2,162,968 | ||||||
Wells Fargo & Co. | 68,212 | 2,200,519 | ||||||
6,286,508 | ||||||||
Diversified Chemicals–0.99% | ||||||||
Dow Chemical Co. (The) | 60,195 | 2,236,846 | ||||||
E. I. du Pont de Nemours and Co. | 40,986 | 2,248,902 | ||||||
Eastman Chemical Co. | 25,465 | 2,378,686 | ||||||
FMC Corp. | 25,625 | 1,984,400 | ||||||
PPG Industries, Inc. | 24,919 | 2,202,341 | ||||||
11,051,175 | ||||||||
Diversified Metals & Mining–0.36% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 35,944 | 1,903,235 | ||||||
Titanium Metals Corp.(b) | 113,033 | 2,146,496 | ||||||
4,049,731 | ||||||||
Diversified REIT’s–0.21% | ||||||||
Vornado Realty Trust | 25,577 | 2,387,101 | ||||||
Diversified Support Services–0.36% | ||||||||
Cintas Corp. | 70,011 | 1,968,709 | ||||||
Iron Mountain Inc. | 80,712 | 2,098,512 | ||||||
4,067,221 | ||||||||
Drug Retail–0.39% | ||||||||
CVS Caremark Corp. | 59,408 | 1,964,028 | ||||||
Walgreen Co. | 54,381 | 2,356,873 | ||||||
4,320,901 | ||||||||
Education Services–0.43% | ||||||||
Apollo Group, Inc.–Class A(b) | 53,109 | 2,403,713 | ||||||
DeVry, Inc. | 44,388 | 2,408,049 | ||||||
4,811,762 | ||||||||
Electric Utilities–2.43% | ||||||||
American Electric Power Co., Inc. | 56,783 | 2,031,696 | ||||||
Duke Energy Corp. | 115,199 | 2,072,430 | ||||||
Edison International | 52,834 | 1,961,198 | ||||||
Entergy Corp. | 28,983 | 2,063,590 | ||||||
Exelon Corp. | 49,748 | 2,077,476 | ||||||
FirstEnergy Corp. | 56,329 | 2,157,405 | ||||||
NextEra Energy, Inc. | 39,551 | 2,193,894 | ||||||
Northeast Utilities | 64,104 | 2,182,100 | ||||||
Pepco Holdings, Inc. | 111,613 | 2,090,512 | ||||||
Pinnacle West Capital Corp. | 49,232 | 2,079,067 | ||||||
PPL Corp. | 78,510 | 1,996,509 | ||||||
Progress Energy, Inc. | 46,808 | 2,139,594 | ||||||
Southern Co. | 53,922 | 2,054,967 | ||||||
27,100,438 | ||||||||
Electrical Components & Equipment–0.61% | ||||||||
Emerson Electric Co. | 35,035 | 2,090,188 | ||||||
Rockwell Automation, Inc. | 28,359 | 2,487,935 | ||||||
Roper Industries, Inc. | 26,166 | 2,201,346 | ||||||
6,779,469 | ||||||||
Electronic Components–0.42% | ||||||||
Amphenol Corp.–Class A | 38,449 | 2,210,048 | ||||||
Corning Inc. | 107,616 | 2,481,625 | ||||||
4,691,673 | ||||||||
Electronic Equipment & Instruments–0.21% | ||||||||
FLIR Systems, Inc. | 71,832 | 2,320,174 | ||||||
Electronic Manufacturing Services–0.45% | ||||||||
Jabil Circuit, Inc. | 116,980 | 2,506,882 | ||||||
Molex Inc. | 90,427 | 2,525,626 | ||||||
5,032,508 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Environmental & Facilities Services–0.57% | ||||||||
Republic Services, Inc. | 67,202 | $ | 1,989,851 | |||||
Stericycle, Inc.(b) | 25,950 | 2,242,599 | ||||||
Waste Management, Inc. | 56,329 | 2,087,553 | ||||||
6,320,003 | ||||||||
Fertilizers & Agricultural Chemicals–0.41% | ||||||||
CF Industries Holdings, Inc. | 16,351 | 2,310,070 | ||||||
Monsanto Co. | 31,634 | 2,274,168 | ||||||
4,584,238 | ||||||||
Food Distributors–0.17% | ||||||||
Sysco Corp. | 69,748 | 1,938,297 | ||||||
Food Retail–0.77% | ||||||||
Kroger Co. (The) | 94,177 | 2,156,653 | ||||||
Safeway Inc. | 94,789 | 2,068,296 | ||||||
SUPERVALU Inc. | 233,293 | 2,013,319 | ||||||
Whole Foods Market, Inc. | 40,204 | 2,354,346 | ||||||
8,592,614 | ||||||||
Footwear–0.18% | ||||||||
NIKE, Inc.–Class B | 22,694 | 2,020,447 | ||||||
Gas Utilities–0.41% | ||||||||
Nicor Inc. | 41,143 | 2,169,882 | ||||||
ONEOK, Inc. | 37,732 | 2,436,355 | ||||||
4,606,237 | ||||||||
General Merchandise Stores–0.60% | ||||||||
Big Lots, Inc.(b) | 69,158 | 2,837,553 | ||||||
Family Dollar Stores, Inc. | 41,218 | 2,064,197 | ||||||
Target Corp. | 34,921 | 1,835,099 | ||||||
6,736,849 | ||||||||
Gold–0.17% | ||||||||
Newmont Mining Corp. | 34,404 | 1,901,509 | ||||||
Health Care Distributors–0.82% | ||||||||
AmerisourceBergen Corp. | 61,592 | 2,334,953 | ||||||
Cardinal Health, Inc. | 52,793 | 2,198,300 | ||||||
McKesson Corp. | 29,699 | 2,354,537 | ||||||
Patterson Cos. Inc. | 66,158 | 2,208,354 | ||||||
9,096,144 | ||||||||
Health Care Equipment–2.35% | ||||||||
Baxter International Inc. | 39,859 | 2,118,506 | ||||||
Becton, Dickinson and Co. | 23,983 | 1,918,640 | ||||||
Boston Scientific Corp.(b) | 267,144 | 1,912,751 | ||||||
C.R. Bard, Inc. | 21,349 | 2,087,078 | ||||||
CareFusion Corp.(b) | 82,205 | 2,245,841 | ||||||
Covidien PLC (Ireland) | 41,683 | 2,144,590 | ||||||
Intuitive Surgical, Inc.(b) | 7,689 | 2,521,607 | ||||||
Medtronic, Inc. | 54,642 | 2,181,309 | ||||||
St. Jude Medical, Inc. | 48,018 | 2,299,102 | ||||||
Stryker Corp. | 37,476 | 2,370,732 | ||||||
Varian Medical Systems, Inc.(b) | 29,040 | 2,011,891 | ||||||
Zimmer Holdings, Inc.(b) | 37,497 | 2,337,563 | ||||||
26,149,610 | ||||||||
Health Care Facilities–0.20% | ||||||||
Tenet Healthcare Corp.(b) | 303,212 | 2,177,062 | ||||||
Health Care Services–0.95% | ||||||||
DaVita, Inc.(b) | 29,190 | 2,316,810 | ||||||
Express Scripts, Inc.(b) | 37,217 | 2,092,340 | ||||||
Laboratory Corp. of America Holdings(b) | 22,982 | 2,071,368 | ||||||
Medco Health Solutions, Inc.(b) | 32,881 | 2,026,785 | ||||||
Quest Diagnostics Inc. | 37,691 | 2,138,964 | ||||||
10,646,267 | ||||||||
Health Care Supplies–0.20% | ||||||||
DENTSPLY International Inc. | 59,339 | 2,217,498 | ||||||
Health Care Technology–0.19% | ||||||||
Cerner Corp.(b) | 21,072 | 2,116,682 | ||||||
Home Entertainment Software–0.22% | ||||||||
Electronic Arts Inc.(b) | 128,451 | 2,414,879 | ||||||
Home Furnishings–0.18% | ||||||||
Leggett & Platt, Inc. | 87,974 | 2,028,680 | ||||||
Home Improvement Retail–0.39% | ||||||||
Home Depot, Inc. (The) | 58,223 | 2,181,616 | ||||||
Lowe’s Cos., Inc. | 81,193 | 2,124,821 | ||||||
4,306,437 | ||||||||
Homebuilding–0.58% | ||||||||
D.R. Horton, Inc. | 179,425 | 2,124,392 | ||||||
Lennar Corp.–Class A | 117,993 | 2,378,739 | ||||||
Pulte Group Inc.(b) | 289,468 | 1,997,329 | ||||||
6,500,460 | ||||||||
Homefurnishing Retail–0.19% | ||||||||
Bed Bath & Beyond Inc.(b) | 42,825 | 2,062,024 | ||||||
Hotels, Resorts & Cruise Lines–0.73% | ||||||||
Carnival Corp. | 48,074 | 2,051,318 | ||||||
Marriott International Inc.–Class A | 49,067 | 1,923,917 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 34,202 | 2,089,742 | ||||||
Wyndham Worldwide Corp. | 66,829 | 2,090,411 | ||||||
8,155,388 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Household Appliances–0.39% | ||||||||
Stanley Black & Decker Inc. | 32,248 | $ | 2,445,366 | |||||
Whirlpool Corp. | 22,686 | 1,871,595 | ||||||
4,316,961 | ||||||||
Household Products–0.75% | ||||||||
Clorox Co. (The) | 32,676 | 2,214,126 | ||||||
Colgate-Palmolive Co. | 25,229 | 1,980,981 | ||||||
Kimberly-Clark Corp. | 32,572 | 2,146,495 | ||||||
Procter & Gamble Co. (The) | 31,532 | 1,988,092 | ||||||
8,329,694 | ||||||||
Housewares & Specialties–0.38% | ||||||||
Fortune Brands, Inc. | 33,245 | 2,056,536 | ||||||
Newell Rubbermaid Inc. | 113,535 | 2,195,767 | ||||||
4,252,303 | ||||||||
Human Resource & Employment Services–0.32% | ||||||||
Monster Worldwide, Inc.(b) | 82,872 | 1,421,255 | ||||||
Robert Half International, Inc. | 67,180 | 2,143,042 | ||||||
3,564,297 | ||||||||
Hypermarkets & Super Centers–0.37% | ||||||||
Costco Wholesale Corp. | 28,446 | 2,127,476 | ||||||
Wal-Mart Stores, Inc. | 37,559 | 1,952,317 | ||||||
4,079,793 | ||||||||
Independent Power Producers & Energy Traders–0.59% | ||||||||
AES Corp. (The)(b) | 178,641 | 2,209,789 | ||||||
Constellation Energy Group Inc. | 71,083 | 2,208,549 | ||||||
NRG Energy, Inc.(b) | 109,461 | 2,188,125 | ||||||
6,606,463 | ||||||||
Industrial Conglomerates–0.82% | ||||||||
3M Co. | 23,661 | 2,182,254 | ||||||
General Electric Co. | 115,460 | 2,415,423 | ||||||
Textron Inc. | 87,748 | 2,377,093 | ||||||
Tyco International Ltd. (Switzerland) | 48,949 | 2,219,348 | ||||||
9,194,118 | ||||||||
Industrial Gases–0.57% | ||||||||
Air Products & Chemicals, Inc. | 22,877 | 2,104,684 | ||||||
Airgas, Inc. | 32,417 | 2,028,656 | ||||||
Praxair, Inc. | 21,852 | 2,171,652 | ||||||
6,304,992 | ||||||||
Industrial Machinery–1.75% | ||||||||
Danaher Corp. | 43,667 | 2,209,550 | ||||||
Dover Corp. | 35,627 | 2,289,035 | ||||||
Eaton Corp. | 20,427 | 2,262,903 | ||||||
Flowserve Corp. | 17,599 | 2,199,347 | ||||||
Illinois Tool Works Inc. | 39,322 | 2,127,320 | ||||||
Ingersoll-Rand PLC (Ireland) | 43,482 | 1,969,735 | ||||||
Pall Corp. | 40,872 | 2,221,802 | ||||||
Parker Hannifin Corp. | 24,093 | 2,148,614 | ||||||
Snap-on Inc. | 35,721 | 2,051,457 | ||||||
19,479,763 | ||||||||
Industrial REIT’s–0.21% | ||||||||
ProLogis | 146,288 | 2,378,643 | ||||||
Insurance Brokers–0.42% | ||||||||
Aon Corp. | 45,313 | 2,385,276 | ||||||
Marsh & McLennan Cos., Inc. | 75,438 | 2,296,333 | ||||||
4,681,609 | ||||||||
Integrated Oil & Gas–1.50% | ||||||||
Chevron Corp. | 23,094 | 2,396,002 | ||||||
ConocoPhillips | 31,411 | 2,445,975 | ||||||
Exxon Mobil Corp. | 28,316 | 2,421,867 | ||||||
Hess Corp. | 27,089 | 2,357,556 | ||||||
Marathon Oil Corp. | 58,041 | 2,878,834 | ||||||
Murphy Oil Corp. | 28,340 | 2,083,840 | ||||||
Occidental Petroleum Corp. | 21,466 | 2,188,888 | ||||||
16,772,962 | ||||||||
Integrated Telecommunication Services–1.04% | ||||||||
AT&T Inc. | 69,963 | 1,985,550 | ||||||
CenturyLink Inc. | 45,283 | 1,864,754 | ||||||
Frontier Communications Corp. | 220,935 | 1,875,738 | ||||||
Qwest Communications International Inc. | 275,796 | 1,880,929 | ||||||
Verizon Communications Inc. | 58,996 | 2,178,132 | ||||||
Windstream Corp. | 146,079 | 1,831,831 | ||||||
11,616,934 | ||||||||
Internet Retail–0.73% | ||||||||
Amazon.com, Inc.(b) | 11,508 | 1,994,221 | ||||||
Expedia, Inc. | 76,169 | 1,512,716 | ||||||
Netflix Inc.(b) | 11,352 | 2,346,118 | ||||||
Priceline.com Inc.(b) | 5,100 | 2,314,788 | ||||||
8,167,843 | ||||||||
Internet Software & Services–0.90% | ||||||||
Akamai Technologies, Inc.(b) | 40,173 | 1,507,693 | ||||||
eBay Inc.(b) | 68,624 | 2,299,247 | ||||||
Google Inc.–Class A(b) | 3,459 | 2,121,750 | ||||||
VeriSign, Inc. | 59,616 | 2,103,849 | ||||||
Yahoo! Inc.(b) | 125,224 | 2,053,674 | ||||||
10,086,213 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Investment Banking & Brokerage–0.79% | ||||||||
Charles Schwab Corp. (The) | 121,572 | $ | 2,306,221 | |||||
E*TRADE Financial Corp.(b) | 132,532 | 2,117,861 | ||||||
Goldman Sachs Group, Inc. (The) | 12,457 | 2,040,207 | ||||||
Morgan Stanley | 77,882 | 2,311,538 | ||||||
8,775,827 | ||||||||
IT Consulting & Other Services–0.79% | ||||||||
Cognizant Technology Solutions Corp.–Class A(b) | 28,226 | 2,169,733 | ||||||
International Business Machines Corp. | 14,093 | 2,281,375 | ||||||
SAIC, Inc.(b) | 130,169 | 2,126,961 | ||||||
Teradata Corp.(b) | 46,980 | 2,246,584 | ||||||
8,824,653 | ||||||||
Leisure Products–0.35% | ||||||||
Hasbro, Inc. | 41,335 | 1,855,941 | ||||||
Mattel, Inc. | 79,642 | 1,995,829 | ||||||
3,851,770 | ||||||||
Life & Health Insurance–1.40% | ||||||||
Aflac, Inc. | 36,782 | 2,164,989 | ||||||
Lincoln National Corp. | 71,883 | 2,280,129 | ||||||
MetLife, Inc. | 46,520 | 2,203,187 | ||||||
Principal Financial Group, Inc. | 64,003 | 2,192,743 | ||||||
Prudential Financial, Inc. | 35,180 | 2,315,899 | ||||||
Torchmark Corp. | 33,834 | 2,207,668 | ||||||
Unum Group | 85,759 | 2,275,186 | ||||||
15,639,801 | ||||||||
Life Sciences Tools & Services–0.93% | ||||||||
Agilent Technologies, Inc.(b) | 50,410 | 2,121,253 | ||||||
Life Technologies Corp.(b) | 36,841 | 1,966,204 | ||||||
PerkinElmer, Inc. | 78,480 | 2,079,720 | ||||||
Thermo Fisher Scientific, Inc.(b) | 36,636 | 2,045,022 | ||||||
Waters Corp.(b) | 25,490 | 2,116,944 | ||||||
10,329,143 | ||||||||
Managed Health Care–1.30% | ||||||||
Aetna Inc. | 67,291 | 2,513,992 | ||||||
CIGNA Corp. | 55,685 | 2,342,668 | ||||||
Coventry Health Care, Inc.(b) | 76,713 | 2,316,733 | ||||||
Humana Inc.(b) | 36,914 | 2,399,779 | ||||||
UnitedHealth Group Inc. | 58,306 | 2,482,669 | ||||||
WellPoint Inc. | 36,538 | 2,428,681 | ||||||
14,484,522 | ||||||||
Metal & Glass Containers–0.38% | ||||||||
Ball Corp. | 59,666 | 2,153,942 | ||||||
Owens-Illinois, Inc.(b) | 68,189 | 2,079,083 | ||||||
4,233,025 | ||||||||
Shares | ||||||||
Motorcycle Manufacturers–0.22% | ||||||||
Harley-Davidson, Inc. | 59,236 | 2,418,014 | ||||||
Movies & Entertainment–0.87% | ||||||||
News Corp.–Class A | 141,233 | 2,453,217 | ||||||
Time Warner Inc. | 64,856 | 2,477,499 | ||||||
Viacom Inc.–Class B | 52,930 | 2,363,854 | ||||||
Walt Disney Co. (The) | 55,159 | 2,412,655 | ||||||
9,707,225 | ||||||||
Multi-Line Insurance–0.96% | ||||||||
American International Group, Inc.(b) | 46,566 | 1,725,736 | ||||||
Assurant, Inc. | 54,936 | 2,232,050 | ||||||
Genworth Financial Inc.–Class A(b) | 159,162 | 2,105,713 | ||||||
Hartford Financial Services Group, Inc. (The) | 78,090 | 2,311,464 | ||||||
Loews Corp. | 52,875 | 2,286,844 | ||||||
10,661,807 | ||||||||
Multi-Sector Holdings–0.21% | ||||||||
Leucadia National Corp. | 71,555 | 2,370,617 | ||||||
Multi-Utilities–2.80% | ||||||||
Ameren Corp. | 71,959 | 2,011,974 | ||||||
CenterPoint Energy, Inc. | 128,774 | 2,042,356 | ||||||
CMS Energy Corp. | 107,053 | 2,061,841 | ||||||
Consolidated Edison, Inc. | 41,418 | 2,070,072 | ||||||
Dominion Resources, Inc. | 48,006 | 2,190,514 | ||||||
DTE Energy Co. | 45,044 | 2,120,671 | ||||||
Integrys Energy Group, Inc. | 41,503 | 2,032,402 | ||||||
NiSource Inc. | 119,441 | 2,288,489 | ||||||
PG&E Corp. | 42,487 | 1,956,951 | ||||||
Public Service Enterprise Group Inc. | 64,590 | 2,112,093 | ||||||
SCANA Corp. | 50,138 | 2,029,586 | ||||||
Sempra Energy | 38,948 | 2,073,202 | ||||||
TECO Energy, Inc. | 116,846 | 2,116,081 | ||||||
Wisconsin Energy Corp. | 34,561 | 2,046,011 | ||||||
Xcel Energy, Inc. | 86,121 | 2,061,737 | ||||||
31,213,980 | ||||||||
Office Electronics–0.17% | ||||||||
Xerox Corp. | 173,928 | 1,869,726 | ||||||
Office REIT’s–0.21% | ||||||||
Boston Properties, Inc. | 24,586 | 2,358,289 | ||||||
Office Services & Supplies–0.36% | ||||||||
Avery Dennison Corp. | 48,313 | 1,928,655 | ||||||
Pitney Bowes Inc. | 83,278 | 2,096,940 | ||||||
4,025,595 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Oil & Gas Drilling–1.16% | ||||||||
Diamond Offshore Drilling, Inc. | 31,931 | $ | 2,497,962 | |||||
Helmerich & Payne, Inc. | 41,929 | 2,724,966 | ||||||
Nabors Industries Ltd. (Bermuda)(b) | 93,573 | 2,664,023 | ||||||
Noble Corp. (Switzerland)(b) | 56,439 | 2,523,388 | ||||||
Rowan Cos., Inc.(b) | 59,425 | 2,535,665 | ||||||
12,946,004 | ||||||||
Oil & Gas Equipment & Services–1.31% | ||||||||
Baker Hughes Inc. | 36,330 | 2,581,246 | ||||||
Cameron International Corp.(b) | 41,251 | 2,439,172 | ||||||
FMC Technologies, Inc.(b) | 23,641 | 2,223,436 | ||||||
Halliburton Co. | 51,232 | 2,404,830 | ||||||
National Oilwell Varco Inc. | 32,142 | 2,557,539 | ||||||
Schlumberger Ltd. | 25,124 | 2,347,084 | ||||||
14,553,307 | ||||||||
Oil & Gas Exploration & Production–3.07% | ||||||||
Anadarko Petroleum Corp. | 30,963 | 2,533,702 | ||||||
Apache Corp. | 17,549 | 2,186,956 | ||||||
Cabot Oil & Gas Corp. | 55,791 | 2,547,417 | ||||||
Chesapeake Energy Corp. | 87,710 | 3,123,353 | ||||||
Denbury Resources Inc.(b) | 109,052 | 2,642,330 | ||||||
Devon Energy Corp. | 27,960 | 2,556,662 | ||||||
EOG Resources, Inc. | 22,293 | 2,503,727 | ||||||
EQT Corp. | 46,393 | 2,287,175 | ||||||
Newfield Exploration Co.(b) | 28,779 | 2,094,824 | ||||||
Noble Energy, Inc. | 24,033 | 2,226,898 | ||||||
Pioneer Natural Resources Co. | 24,025 | 2,458,719 | ||||||
QEP Resources Inc. | 55,669 | 2,201,709 | ||||||
Range Resources Corp. | 47,849 | 2,598,201 | ||||||
Southwestern Energy Co.(b) | 57,132 | 2,255,571 | ||||||
34,217,244 | ||||||||
Oil & Gas Refining & Marketing–0.69% | ||||||||
Sunoco, Inc. | 52,957 | 2,216,780 | ||||||
Tesoro Corp.(b) | 117,181 | 2,786,564 | ||||||
Valero Energy Corp. | 96,947 | 2,731,967 | ||||||
7,735,311 | ||||||||
Oil & Gas Storage & Transportation–0.69% | ||||||||
El Paso Corp. | 154,821 | 2,879,670 | ||||||
Spectra Energy Corp. | 83,756 | 2,240,473 | ||||||
Williams Cos., Inc. (The) | 85,508 | 2,596,023 | ||||||
7,716,166 | ||||||||
Other Diversified Financial Services–0.61% | ||||||||
Bank of America Corp. | 162,581 | 2,323,282 | ||||||
Citigroup Inc.(b) | 434,820 | 2,034,958 | ||||||
JPMorgan Chase & Co. | 51,516 | 2,405,282 | ||||||
6,763,522 | ||||||||
Packaged Foods & Meats–2.67% | ||||||||
Campbell Soup Co. | 57,746 | 1,943,730 | ||||||
ConAgra Foods, Inc. | 90,869 | 2,104,526 | ||||||
Dean Foods Co.(b) | 253,555 | 2,677,541 | ||||||
General Mills, Inc. | 56,174 | 2,086,302 | ||||||
H.J. Heinz Co. | 40,268 | 2,022,259 | ||||||
Hershey Co. (The) | 42,311 | 2,213,712 | ||||||
Hormel Foods Corp. | 79,286 | 2,172,437 | ||||||
J M Smucker Co. (The) | 31,029 | 2,136,036 | ||||||
Kellogg Co. | 39,890 | 2,136,508 | ||||||
Kraft Foods Inc.–Class A | 64,003 | 2,037,856 | ||||||
McCormick & Co., Inc. | 42,834 | 2,041,040 | ||||||
Mead Johnson Nutrition Co. | 32,687 | 1,956,317 | ||||||
Sara Lee Corp. | 118,403 | 2,027,059 | ||||||
Tyson Foods, Inc.–Class A | 118,954 | 2,216,113 | ||||||
29,771,436 | ||||||||
Paper Packaging–0.38% | ||||||||
Bemis Co., Inc. | 61,741 | 2,028,192 | ||||||
Sealed Air Corp. | 81,582 | 2,245,136 | ||||||
4,273,328 | ||||||||
Paper Products–0.41% | ||||||||
International Paper Co. | 78,783 | 2,188,592 | ||||||
MeadWestvaco Corp. | 81,160 | 2,382,046 | ||||||
4,570,638 | ||||||||
Personal Products–0.40% | ||||||||
Avon Products, Inc. | 70,861 | 1,970,644 | ||||||
Estee Lauder Cos. Inc. (The)–Class A | 25,770 | 2,432,946 | ||||||
4,403,590 | ||||||||
Pharmaceuticals–2.03% | ||||||||
Abbott Laboratories | 42,224 | 2,030,974 | ||||||
Allergan, Inc. | 28,844 | 2,139,360 | ||||||
Bristol-Myers Squibb Co. | 77,147 | 1,991,164 | ||||||
Eli Lilly and Co. | 58,373 | 2,017,371 | ||||||
Forest Laboratories, Inc.(b) | 62,477 | 2,024,255 | ||||||
Hospira, Inc.(b) | 35,578 | 1,880,297 | ||||||
Johnson & Johnson | 32,676 | 2,007,614 | ||||||
Merck & Co., Inc. | 56,020 | 1,824,571 | ||||||
Mylan Inc.(b) | 95,497 | 2,184,016 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Pharmaceuticals–(continued) | ||||||||
Pfizer Inc. | 120,002 | $ | 2,308,839 | |||||
Watson Pharmaceuticals, Inc.(b) | 39,597 | 2,217,036 | ||||||
22,625,497 | ||||||||
Property & Casualty Insurance–1.55% | ||||||||
ACE Ltd. (Switzerland) | 33,474 | 2,117,230 | ||||||
Allstate Corp. (The) | 65,271 | 2,074,312 | ||||||
Berkshire Hathaway Inc.–Class B(b) | 25,561 | 2,230,964 | ||||||
Chubb Corp. (The) | 34,520 | 2,094,674 | ||||||
Cincinnati Financial Corp. | 64,245 | 2,187,542 | ||||||
Progressive Corp. (The) | 104,161 | 2,169,674 | ||||||
Travelers Cos., Inc. (The) | 37,035 | 2,219,508 | ||||||
XL Group PLC (Ireland) | 94,177 | 2,199,033 | ||||||
17,292,937 | ||||||||
Publishing–0.58% | ||||||||
Gannett Co., Inc. | 132,019 | 2,179,634 | ||||||
McGraw-Hill Cos., Inc. (The) | 56,298 | 2,177,606 | ||||||
Washington Post Co. (The)–Class B | 4,831 | 2,092,258 | ||||||
6,449,498 | ||||||||
Railroads–0.60% | ||||||||
CSX Corp. | 32,101 | 2,396,661 | ||||||
Norfolk Southern Corp. | 32,609 | 2,138,498 | ||||||
Union Pacific Corp. | 22,412 | 2,138,329 | ||||||
6,673,488 | ||||||||
Real Estate Services–0.22% | ||||||||
CB Richard Ellis Group, Inc.–Class A(b) | 99,690 | 2,496,238 | ||||||
Regional Banks–2.19% | ||||||||
BB&T Corp. | 78,120 | 2,156,112 | ||||||
Fifth Third Bancorp | 145,248 | 2,120,621 | ||||||
First Horizon National Corp. | 187,835 | 2,160,102 | ||||||
Huntington Bancshares Inc. | 328,033 | 2,243,746 | ||||||
KeyCorp | 242,713 | 2,218,397 | ||||||
M&T Bank Corp. | 24,696 | 2,174,483 | ||||||
Marshall & Ilsley Corp. | 298,343 | 2,318,125 | ||||||
PNC Financial Services Group, Inc. | 34,933 | 2,155,366 | ||||||
Regions Financial Corp. | 327,508 | 2,502,161 | ||||||
SunTrust Banks, Inc. | 75,578 | 2,280,188 | ||||||
Zions Bancorp. | 91,767 | 2,143,677 | ||||||
24,472,978 | ||||||||
Research & Consulting Services–0.36% | ||||||||
Dun & Bradstreet Corp. (The) | 25,056 | 2,024,525 | ||||||
Equifax Inc. | 57,005 | 2,037,929 | ||||||
4,062,454 | ||||||||
Residential REIT’s–0.60% | ||||||||
Apartment Investment & Management Co.–Class A | 83,346 | 2,137,825 | ||||||
AvalonBay Communities, Inc. | 18,757 | 2,270,160 | ||||||
Equity Residential | 41,011 | 2,260,116 | ||||||
6,668,101 | ||||||||
Restaurants–0.72% | ||||||||
Darden Restaurants, Inc. | 40,962 | 1,930,539 | ||||||
McDonald’s Corp. | 26,606 | 2,013,542 | ||||||
Starbucks Corp. | 62,382 | 2,057,359 | ||||||
Yum! Brands, Inc. | 40,831 | 2,055,024 | ||||||
8,056,464 | ||||||||
Retail REIT’s–0.42% | ||||||||
Kimco Realty Corp. | 120,854 | 2,342,150 | ||||||
Simon Property Group, Inc. | 21,414 | 2,356,397 | ||||||
4,698,547 | ||||||||
Semiconductor Equipment–1.14% | ||||||||
Applied Materials, Inc. | 150,157 | 2,467,079 | ||||||
KLA-Tencor Corp. | 51,309 | 2,504,905 | ||||||
MEMC Electronic Materials, Inc.(b) | 184,445 | 2,502,919 | ||||||
Novellus Systems, Inc.(b) | 62,230 | 2,486,711 | ||||||
Teradyne, Inc.(b) | 147,343 | 2,745,000 | ||||||
12,706,614 | ||||||||
Semiconductors–2.90% | ||||||||
Advanced Micro Devices, Inc.(b) | 252,303 | 2,323,711 | ||||||
Altera Corp. | 55,822 | 2,336,709 | ||||||
Analog Devices, Inc. | 54,511 | 2,173,899 | ||||||
Broadcom Corp.–Class A | 46,637 | 1,922,377 | ||||||
First Solar, Inc.(b) | 15,336 | 2,260,373 | ||||||
Intel Corp. | 95,230 | 2,044,588 | ||||||
Linear Technology Corp. | 58,523 | 2,022,555 | ||||||
LSI Corp.(b) | 340,609 | 2,142,430 | ||||||
Microchip Technology Inc. | 59,930 | 2,212,016 | ||||||
Micron Technology, Inc.(b) | 248,921 | 2,770,491 | ||||||
National Semiconductor Corp. | 148,090 | 2,295,395 | ||||||
NVIDIA Corp.(b) | 142,216 | 3,222,614 | ||||||
Texas Instruments Inc. | 62,823 | 2,237,127 | ||||||
Xilinx, Inc. | 72,443 | 2,408,730 | ||||||
32,373,015 | ||||||||
Soft Drinks–0.72% | ||||||||
Coca-Cola Co. (The) | 31,105 | 1,988,232 | ||||||
Coca-Cola Enterprises Inc. | 80,935 | 2,128,591 | ||||||
Dr Pepper Snapple Group, Inc. | 53,822 | 1,940,821 | ||||||
PepsiCo, Inc. | 30,977 | 1,964,561 | ||||||
8,022,205 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Equally-Weighted S&P 500 Fund
Shares | Value | |||||||
Specialized Consumer Services–0.21% | ||||||||
H&R Block, Inc. | 157,324 | $ | 2,389,752 | |||||
Specialized Finance–1.05% | ||||||||
CME Group Inc. | 6,401 | 1,992,503 | ||||||
IntercontinentalExchange Inc.(b) | 17,140 | 2,197,348 | ||||||
Moody’s Corp. | 77,557 | 2,474,069 | ||||||
NASDAQ OMX Group, Inc. (The)(b) | 86,964 | 2,488,040 | ||||||
NYSE Euronext | 68,463 | 2,533,131 | ||||||
11,685,091 | ||||||||
Specialized REIT’s–1.48% | ||||||||
HCP, Inc. | 58,826 | 2,235,388 | ||||||
Health Care REIT, Inc. | 45,303 | 2,365,723 | ||||||
Host Hotels & Resorts Inc. | 118,472 | 2,179,885 | ||||||
Plum Creek Timber Co., Inc. | 57,421 | 2,409,385 | ||||||
Public Storage | 20,810 | 2,335,922 | ||||||
Ventas, Inc. | 41,168 | 2,281,531 | ||||||
Weyerhaeuser Co. | 112,535 | 2,746,979 | ||||||
16,554,813 | ||||||||
Specialty Chemicals–0.73% | ||||||||
Ecolab Inc. | 40,815 | 1,985,242 | ||||||
International Flavors & Fragrances Inc. | 37,089 | 2,112,218 | ||||||
Sherwin-Williams Co. (The) | 24,915 | 2,046,020 | ||||||
Sigma-Aldrich Corp. | 30,615 | 1,955,992 | ||||||
8,099,472 | ||||||||
Specialty Stores–0.35% | ||||||||
Staples, Inc. | 90,708 | 1,932,080 | ||||||
Tiffany & Co. | 31,362 | 1,930,331 | ||||||
3,862,411 | ||||||||
Steel–1.00% | ||||||||
AK Steel Holding Corp. | 125,531 | 2,005,986 | ||||||
Allegheny Technologies, Inc. | 35,466 | 2,379,059 | ||||||
Cliffs Natural Resources Inc. | 26,854 | 2,606,718 | ||||||
Nucor Corp. | 45,842 | 2,198,582 | ||||||
United States Steel Corp. | 34,696 | 1,994,673 | ||||||
11,185,018 | ||||||||
Systems Software–1.27% | ||||||||
BMC Software, Inc.(b) | 42,346 | 2,096,127 | ||||||
CA, Inc. | 82,106 | 2,034,587 | ||||||
Microsoft Corp. | 73,538 | 1,954,640 | ||||||
Novell, Inc.(b) | 340,609 | 2,002,781 | ||||||
Oracle Corp. | 65,104 | 2,141,922 | ||||||
Red Hat, Inc.(b) | 42,727 | 1,763,770 | ||||||
Symantec Corp.(b) | 120,640 | 2,175,139 | ||||||
14,168,966 | ||||||||
Thrifts & Mortgage Finance–0.35% | ||||||||
Hudson City Bancorp, Inc. | 163,360 | 1,878,640 | ||||||
People’s United Financial Inc. | 150,157 | 1,979,069 | ||||||
3,857,709 | ||||||||
Tires & Rubber–0.22% | ||||||||
Goodyear Tire & Rubber Co.(b) | 175,571 | 2,489,597 | ||||||
Tobacco–0.74% | ||||||||
Altria Group, Inc. | 81,778 | 2,074,708 | ||||||
Lorillard, Inc. | 24,804 | 1,904,203 | ||||||
Philip Morris International Inc. | 34,237 | 2,149,399 | ||||||
Reynolds American Inc. | 62,958 | 2,160,718 | ||||||
8,289,028 | ||||||||
Trading Companies & Distributors–0.37% | ||||||||
Fastenal Co. | 34,323 | 2,132,488 | ||||||
W.W. Grainger, Inc. | 15,005 | 1,998,816 | ||||||
4,131,304 | ||||||||
Trucking–0.17% | ||||||||
Ryder System, Inc. | 40,371 | 1,930,945 | ||||||
Wireless Telecommunication Services–0.61% | ||||||||
American Tower Corp.–Class A(b) | 41,193 | 2,222,774 | ||||||
MetroPCS Communications, Inc.(b) | 169,176 | 2,436,135 | ||||||
Sprint Nextel Corp.(b) | 491,262 | 2,146,815 | ||||||
6,805,724 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $512,246,429) | 1,095,592,380 | |||||||
Money Market Funds–1.36% | ||||||||
Liquid Assets Portfolio–Institutional Class(c) | 7,590,202 | 7,590,202 | ||||||
Premier Portfolio–Institutional Class(c) | 7,590,202 | 7,590,202 | ||||||
Total Money Market Funds (Cost $15,180,404) | 15,180,404 | |||||||
TOTAL INVESTMENTS–99.58% (Cost $527,426,833) | 1,110,772,784 | |||||||
OTHER ASSETS LESS LIABILITIES–0.42% | 4,720,224 | |||||||
NET ASSETS–100.00% | $ | 1,115,493,008 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Equally-Weighted S&P 500 Fund
Investment Abbreviation:
REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on Net Assets
as of February 28, 2011
Financials | 16.0 | % | ||
Consumer Discretionary | 15.2 | |||
Information Technology | 14.9 | |||
Industrials | 11.6 | |||
Health Care | 9.8 | |||
Energy | 9.1 | |||
Consumer Staples | 7.7 | |||
Utilities | 6.2 | |||
Materials | 6.0 | |||
Telecommunication Services | 1.7 | |||
Money Market Funds | 1.8 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Equally-Weighted S&P 500 Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $512,246,429) | $ | 1,095,592,380 | ||
Investments in affiliated money market funds, at value and cost | 15,180,404 | |||
Total investments, at value (Cost $527,426,833) | 1,110,772,784 | |||
Cash | 23,948 | |||
Receivable for: | ||||
Investments sold | 4,296,032 | |||
Variation margin | 95,083 | |||
Fund shares sold | 5,784,885 | |||
Dividends | 1,658,702 | |||
Investment for trustee deferred compensation and retirement plans | 2,322 | |||
Other assets | 45,882 | |||
Total assets | 1,122,679,638 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 4,323,430 | |||
Fund shares reacquired | 1,772,224 | |||
Accrued fees to affiliates | 828,849 | |||
Accrued other operating expenses | 189,051 | |||
Trustee deferred compensation and retirement plans | 73,076 | |||
Total liabilities | 7,186,630 | |||
Net assets applicable to shares outstanding | $ | 1,115,493,008 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 620,052,289 | ||
Undistributed net investment income | 6,661,814 | |||
Undistributed net realized gain (loss) | (95,015,920 | ) | ||
Unrealized appreciation | 583,794,825 | |||
$ | 1,115,493,008 | |||
Net Assets: | ||||
Class A | $ | 721,128,815 | ||
Class B | $ | 115,213,990 | ||
Class C | $ | 77,303,252 | ||
Class R | $ | 470,166 | ||
Class Y | $ | 201,376,785 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 22,068,926 | |||
Class B | 3,534,417 | |||
Class C | 2,445,433 | |||
Class R | 14,429 | |||
Class Y | 6,120,257 | |||
Class A: | ||||
Net asset value per share | $ | 32.68 | ||
Maximum offering price per share | ||||
(Net asset value of $32.68 divided by 94.50%) | $ | 34.58 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 32.60 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 31.61 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 32.58 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 32.90 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Equally-Weighted S&P 500 Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends | $ | 9,630,801 | ||
Dividends from affiliated money market funds | 7,738 | |||
Total investment income | 9,638,539 | |||
Expenses: | ||||
Advisory fees | 606,174 | |||
Administrative services fees | 136,019 | |||
Custodian fees | 23,348 | |||
Distribution fees: | ||||
Class A | 810,251 | |||
Class B | 584,456 | |||
Class C | 330,445 | |||
Class R | 550 | |||
Transfer agent fees | 366,095 | |||
Trustees’ and officers’ fees and benefits | 15,967 | |||
Other | 118,796 | |||
Total expenses | 2,992,101 | |||
Less: Fees waived | (7,645 | ) | ||
Net expenses | 2,984,456 | |||
Net investment income | 6,654,083 | |||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 36,578,531 | |||
Futures contracts | 2,252,158 | |||
38,830,689 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 221,276,880 | |||
Futures contracts | 749,584 | |||
222,026,464 | ||||
Net realized and unrealized gain | 260,857,153 | |||
Net increase in net assets resulting from operations | $ | 267,511,236 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Equally-Weighted S&P 500 Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the two months ended August 31, 2010 and the year
(Unaudited)
Six months ended | Two months ended | Year ended | ||||||||||
February 28, | August 31, | June 30, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 6,654,083 | $ | 2,656,524 | $ | 10,126,037 | ||||||
Net realized gain | 38,830,689 | 2,252,815 | 71,238,173 | |||||||||
Change in net unrealized appreciation | 222,026,464 | 13,919,070 | 120,955,977 | |||||||||
Net increase in net assets resulting from operations | 267,511,236 | 18,828,409 | 202,320,187 | |||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (8,801,770 | ) | — | (5,859,977 | ) | |||||||
Class B | (420,658 | ) | — | (1,053,529 | ) | |||||||
Class C | (250,401 | ) | — | (469,837 | ) | |||||||
Class R | (1,842 | ) | — | (1,726 | ) | |||||||
Class Y | (2,834,438 | ) | — | (1,887,353 | ) | |||||||
Total distributions from net investment income | (12,309,109 | ) | — | (9,272,422 | ) | |||||||
Share transactions–net: | ||||||||||||
Class A | 1,437,070 | — | — | |||||||||
Class B | (25,896,797 | ) | — | — | ||||||||
Class C | 4,420,057 | — | — | |||||||||
Class R | 210,216 | — | — | |||||||||
Class Y | 1,290,541 | — | — | |||||||||
Net increase (decrease) in net assets resulting from share transactions | (18,538,913 | ) | (19,801,062 | ) | (155,254,964 | ) | ||||||
Net increase in net assets | 236,663,214 | (972,653 | ) | 37,792,801 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 878,829,794 | 879,802,447 | 842,009,646 | |||||||||
End of period (includes undistributed net investment income of $6,661,814 and $12,316,840 and $9,670,755, respectively) | $ | 1,115,493,008 | $ | 878,829,794 | $ | 879,802,447 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Equally-Weighted S&P 500 Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Morgan Stanley Equally-Weighted S&P 500 Fund (the “Acquired Fund”). The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A and Class W shares received Class A shares of the Fund; holders of the Acquired Fund’s Class B, Class C and Class R shares received the corresponding class of shares of the Fund and holders of the Acquired Fund’s Class I shares received Class Y shares of the Fund. Information for the Acquired Fund’s — Class W and Class I shares prior to the Reorganization is included with Class A and Class Y shares, respectively, throughout this report.
The Fund’s investment objective is to achieve a high level of total return on its assets through a combination of capital appreciation and current income.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class R 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”).
16 Invesco Equally-Weighted S&P 500 Fund
Class C shares are sold with a CDSC. Class R and 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. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. |
17 Invesco Equally-Weighted S&P 500 Fund
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 paid annually and recorded on 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 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 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 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. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. | |
J. | 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. |
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 Net Assets | Rate | |||
First $2 billion | 0 | .12% | ||
Over $2 billion | 0 | .10% | ||
Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets.
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 Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such
18 Invesco Equally-Weighted S&P 500 Fund
Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
Effective on the Reorganization date, the Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses and/or reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R and Class Y shares to 0.75%, 1.50%, 1.50%, 1.00% and 0.50% of average daily net assets, respectively. 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 net annual fund operating expenses and/or 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 the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $7,645.
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 February 28, 2011, 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 February 28, 2011, the expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates; (1) Class A — up to 0.25% of the average daily net assets of Class A shares; (2) Class B — up to 1.00% of the average daily net assets of Class B shares; (3) Class C — up to 1.00% of the average daily net assets of Class C shares and (4) Class R — up to 0.50% of the average daily net assets of Class R shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2011, IDI advised the Fund that IDI retained $16,459 in front-end sales commissions from the sale of Class A shares and $229, $37,122 and $2,227 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 Invesco, 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 February 28, 2011. 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.
19 Invesco Equally-Weighted S&P 500 Fund
During the six months ended February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 1,110,772,784 | $ | — | $ | — | $ | 1,110,772,784 | ||||||||
Futures* | 448,875 | — | — | 448,875 | ||||||||||||
Total Investments | $ | 1,111,221,659 | $ | — | $ | — | $ | 1,111,221,659 | ||||||||
* | Unrealized appreciation. |
NOTE 4—Derivative Investments
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk Futures contracts(a) | $ | 453,224 | $ | (4,349 | ) | |||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain on | ||||
Statement of Operations | ||||
Futures* | ||||
Realized Gain | ||||
Equity risk | $ | 2,252,158 | ||
Change in Unrealized Appreciation | ||||
Equity risk | $ | 749,584 | ||
Total | $ | 3,001,742 | ||
* | The average notional value of futures outstanding during the period was $13,704,203. |
Open Futures Contracts | ||||||||||||||||
Number of | Month/ | Notional | Unrealized | |||||||||||||
Contract | Contracts | Commitment | Value | Appreciation | ||||||||||||
S&P 500 E-Mini | 254 | March-2011/Long | $ | 16,841,470 | $ | 448,875 | ||||||||||
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $1,603 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
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. 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
20 Invesco Equally-Weighted S&P 500 Fund
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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $2,248,161 of capital loss carryforward in the fiscal year ending August 31, 2011.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2016 | $ | 22,990,899 | ||
August 31, 2017 | 69,691,799 | |||
Total capital loss carryforward | $ | 92,682,698 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
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 February 28, 2011 was $106,573,682 and $132,065,553, 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 | $ | 547,021,327 | ||
Aggregate unrealized (depreciation) of investment securities | (4,981,973 | ) | ||
Net unrealized appreciation of investment securities | $ | 542,039,354 | ||
Cost of investments for tax purposes is $568,733,430. |
21 Invesco Equally-Weighted S&P 500 Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Two months ended | Year ended | ||||||||||||||||||||||
February 28, 2011 | August 31, 2010 | June 30, 2010 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 1,430,688 | $ | 43,779,832 | 169,578 | $ | 4,450,136 | 2,724,971 | $ | 69,929,082 | |||||||||||||||
Class B | 87,381 | 2,556,477 | 12,287 | 319,874 | 175,476 | 4,444,539 | ||||||||||||||||||
Class C | 334,556 | 9,748,364 | 17,659 | 446,294 | 186,847 | 4,577,184 | ||||||||||||||||||
Class R | 9,563 | 303,644 | 384 | 9,924 | 5,381 | 137,925 | ||||||||||||||||||
Class Y | 606,454 | 19,075,878 | 249,691 | 6,529,012 | 549,168 | 13,969,777 | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 257,336 | 7,789,564 | — | — | 224,579 | 5,695,319 | ||||||||||||||||||
Class B | 12,636 | 382,126 | — | — | 40,171 | 1,015,527 | ||||||||||||||||||
Class C | 7,811 | 229,099 | — | — | 18,629 | 456,604 | ||||||||||||||||||
Class R | 52 | 1,575 | — | — | 31 | 792 | ||||||||||||||||||
Class Y | 83,013 | 2,528,575 | — | — | 73,263 | 1,869,683 | ||||||||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||||||||||
Class A | 536,326 | 16,091,170 | 226,963 | 5,965,412 | 129,389 | 3,510,993 | ||||||||||||||||||
Class B | (539,421 | ) | (16,091,171 | ) | (228,827 | ) | (5,965,412 | ) | (130,102 | ) | (3,510,993 | ) | ||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (2,204,153 | ) | (66,223,496 | ) | (686,526 | ) | (17,839,000 | ) | (4,918,358 | ) | (123,914,889 | ) | ||||||||||||
Class B | (432,767 | ) | (12,744,229 | ) | (203,247 | ) | (5,282,607 | ) | (2,996,031 | ) | (75,680,661 | ) | ||||||||||||
Class C | (194,343 | ) | (5,557,406 | ) | (90,618 | ) | (2,278,711 | ) | (479,138 | ) | (11,635,394 | ) | ||||||||||||
Class R | (3,321 | ) | (95,003 | ) | (685 | ) | (17,703 | ) | (630 | ) | (17,386 | ) | ||||||||||||
Class Y | (676,889 | ) | (20,313,912 | ) | (233,702 | ) | (6,138,281 | ) | (1,835,049 | ) | (46,103,066 | ) | ||||||||||||
Net increase (decrease) in share activity | (685,078 | ) | $ | (18,538,913 | ) | (767,043 | ) | $ | (19,801,062 | ) | (6,231,403 | ) | $ | (155,254,964 | ) | |||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 75% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
22 Invesco Equally-Weighted S&P 500 Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | expenses | expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(losses) | Distributions | to average | to average net | Ratio of net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | on securities | Dividends | from net | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | (both | Total from | from net | realized | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | gains | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Rebate from | Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | (loss) | Distributions | of period | return(b) | (000s omitted) | absorbed | absorbed | net assets | affiliates | turnover(c) | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 25.26 | $ | 0.21 | $ | 7.62 | $ | 7.83 | $ | (0.41 | ) | $ | — | $ | (0.41 | ) | $ | 32.68 | 31.11 | % | $ | 721,129 | 0.50 | %(d) | 0.50 | %(d) | 1.41 | %(d) | — | 11 | % | |||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.74 | 0.08 | 0.44 | 0.52 | — | — | — | 25.26 | 2.10 | 556,910 | — | (e) | 0.65 | (e) | 1.81 | (e) | — | 0 | (f) | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 | 20.14 | 0.30 | 4.56 | 4.86 | (0.26 | ) | — | (0.26 | ) | 24.74 | 24.08 | 552,673 | — | 0.64 | 1.17 | — | 24 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 | 33.39 | 0.37 | (9.39 | ) | (9.02 | ) | (0.46 | ) | (3.77 | ) | (4.23 | ) | 20.14 | (24.61 | ) | 486,937 | — | 0.75 | 1.62 | 0.00 | (g) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/08 | 45.39 | 0.48 | (7.81 | ) | (7.33 | ) | (0.48 | ) | (4.19 | ) | (4.67 | ) | 33.39 | (17.31 | ) | 799,622 | — | 0.62 | 1.22 | 0.00 | (g) | 25 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/07 | 40.04 | 0.45 | 7.54 | 7.99 | (0.40 | ) | (2.24 | ) | (2.64 | ) | 45.39 | 20.44 | 1,070,820 | — | 0.62 | 1.05 | 0.00 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/06 | 37.58 | 0.39 | 3.79 | 4.18 | (0.36 | ) | (1.36 | ) | (1.72 | ) | 40.04 | 11.22 | 850,678 | — | 0.63 | 0.98 | — | 16 | ||||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 25.05 | 0.10 | 7.56 | 7.66 | (0.11 | ) | — | (0.11 | ) | 32.60 | 30.60 | 115,214 | 1.25 | (d) | 1.25 | (d) | 0.66 | (d) | — | 11 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.56 | 0.05 | 0.44 | 0.49 | — | — | — | 25.05 | 2.00 | 110,367 | — | (e) | 1.40 | (e) | 1.06 | (e) | — | 0 | (f) | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 | 20.08 | 0.10 | 4.54 | 4.64 | (0.16 | ) | — | (0.16 | ) | 24.56 | 23.09 | 118,559 | — | 1.39 | 0.42 | — | 24 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 | 33.02 | 0.20 | (9.22 | ) | (9.02 | ) | (0.15 | ) | (3.77 | ) | (3.92 | ) | 20.08 | (25.14 | ) | 155,328 | — | 1.50 | 0.87 | 0.00 | (g) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/08 | 44.85 | 0.18 | (7.74 | ) | (7.56 | ) | (0.08 | ) | (4.19 | ) | (4.27 | ) | 33.02 | (17.96 | ) | 352,174 | — | 1.37 | 0.47 | 0.00 | (g) | 25 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/07 | 39.57 | 0.12 | 7.45 | 7.57 | (0.05 | ) | (2.24 | ) | (2.29 | ) | 44.85 | 19.54 | 630,489 | — | 1.38 | 0.29 | 0.00 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/06 | 37.10 | 0.09 | 3.74 | 3.83 | 0.00 | (1.36 | ) | (1.36 | ) | 39.57 | 10.38 | 674,371 | — | 1.38 | 0.23 | — | 16 | |||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 24.29 | 0.10 | 7.33 | 7.43 | (0.11 | ) | — | (0.11 | ) | 31.61 | 30.61 | 77,303 | 1.24 | (d) | 1.24 | (d) | 0.67 | (d) | — | 11 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 23.82 | 0.04 | 0.43 | 0.47 | — | — | — | 24.29 | 1.97 | 55,797 | — | (e) | 1.40 | (e) | 1.06 | (e) | — | 0 | (f) | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 | 19.49 | 0.10 | 4.42 | 4.52 | (0.19 | ) | — | (0.19 | ) | 23.82 | 23.15 | 56,462 | — | 1.39 | 0.42 | — | 24 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 | 32.33 | 0.19 | (9.06 | ) | (8.87 | ) | (0.20 | ) | (3.77 | ) | (3.97 | ) | 19.49 | (25.17 | ) | 51,534 | — | 1.50 | 0.87 | 0.00 | (g) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/08 | 44.08 | 0.19 | (7.58 | ) | (7.39 | ) | (0.17 | ) | (4.19 | ) | (4.36 | ) | 32.33 | (17.89 | ) | 88,658 | — | 1.35 | 0.49 | 0.00 | (g) | 25 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/07 | 38.97 | 0.14 | 7.33 | 7.47 | (0.12 | ) | (2.24 | ) | (2.36 | ) | 44.08 | 19.53 | 124,080 | — | 1.34 | 0.33 | 0.00 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/06 | 36.60 | 0.11 | 3.69 | 3.80 | (0.07 | ) | (1.36 | ) | (1.43 | ) | 38.97 | 10.44 | 101,809 | — | 1.33 | 0.28 | — | 16 | ||||||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 25.14 | 0.17 | 7.58 | 7.75 | (0.31 | ) | — | (0.31 | ) | 32.58 | 30.91 | 470 | 0.75 | (d) | 0.75 | (d) | 1.16 | (d) | — | 11 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.63 | 0.07 | 0.44 | 0.51 | — | — | — | 25.14 | 2.07 | 205 | — | (e) | 0.90 | (e) | 1.56 | (e) | — | 0 | (f) | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 | 20.10 | 0.23 | 4.56 | 4.79 | (0.26 | ) | — | (0.26 | ) | 24.63 | 23.78 | 208 | — | 0.89 | 0.92 | — | 24 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 | 33.66 | 0.30 | (9.35 | ) | (9.05 | ) | (0.44 | ) | (3.77 | ) | (4.21 | ) | 20.10 | (24.78 | ) | 73 | — | 1.00 | 1.37 | 0.00 | (g) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/08(h) | 34.26 | 0.09 | (0.99 | ) | (0.90 | ) | — | — | — | 33.36 | (2.63 | ) | 97 | --(i | ) | 0.86 | (i) | 0.98 | (i) | 0.00 | (g) | 25 | ||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 25.47 | 0.25 | 7.67 | 7.92 | (0.49 | ) | — | (0.49 | ) | 32.90 | 31.24 | 201,377 | 0.25 | (d) | 0.25 | (d) | 1.66 | (d) | — | 11 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.94 | 0.09 | 0.44 | 0.53 | — | — | — | 25.47 | 2.12 | 155,551 | — | (e) | 0.40 | (e) | 2.06 | (e) | — | 0 | (f) | |||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 | 20.27 | 0.36 | 4.59 | 4.95 | (0.28 | ) | — | (0.28 | ) | 24.94 | 24.39 | 151,901 | — | 0.39 | 1.42 | — | 24 | |||||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 | 33.62 | 0.43 | (9.46 | ) | (9.03 | ) | (0.55 | ) | (3.77 | ) | (4.32 | ) | 20.27 | (24.41 | ) | 148,051 | — | 0.50 | 1.87 | 0.00 | (g) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/08 | 45.68 | 0.59 | (7.87 | ) | (7.28 | ) | (0.59 | ) | (4.19 | ) | (4.78 | ) | 33.62 | (17.11 | ) | 351,338 | — | 0.37 | 1.47 | 0.00 | (g) | 25 | ||||||||||||||||||||||||||||||||||||||
Year ended 06/30/07 | 40.28 | 0.56 | 7.58 | �� | 8.14 | (0.50 | ) | (2.24 | ) | (2.74 | ) | 45.68 | 20.72 | 537,295 | — | 0.38 | 1.29 | 0.00 | (g) | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/06 | 37.77 | 0.49 | 3.81 | 4.30 | (0.43 | ) | (1.36 | ) | (1.79 | ) | 40.28 | 11.49 | 508,494 | — | 0.38 | 1.23 | — | 16 | ||||||||||||||||||||||||||||||||||||||||||
(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. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns. | |
(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 $653,573, $117,860, $67,520, $222 and $179,489 for Class A, Class B, Class C, Class R and Class Y shares, respectively. | |
(e) | The ratios reflect the rebate of certain Fund expenses in connection with investments in an affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from affiliates”. | |
(f) | Amount is less than 0.5%. | |
(g) | Amount is less than 0.005%. | |
(h) | Commencement date of March 31, 2008 for Class R shares. | |
(i) | Annualized. |
23 Invesco Equally-Weighted S&P 500 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,310.70 | $ | 2.86 | $ | 1,022.32 | $ | 2.51 | 0.50 | % | ||||||||||||||||||
B | 1,000.00 | 1,305.60 | 7.15 | 1,018.60 | 6.26 | 1.25 | ||||||||||||||||||||||||
C | 1,000.00 | 1,305.70 | 7.09 | 1,018.65 | 6.21 | 1.24 | ||||||||||||||||||||||||
R | 1,000.00 | 1,309.10 | 4.29 | 1,021.08 | 3.76 | 0.75 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,312.40 | 1.43 | 1,023.55 | 1.25 | 0.25 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
24 Invesco Equally-Weighted S&P 500 Fund
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-EWSP-SAR-1 | Invesco Distributors, Inc. |
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: AFRAX § C: AFRCX § R: AFRRX § Y: AFRYX § Institutional: AFRIX
A: AFRAX § C: AFRCX § R: AFRRX § Y: AFRYX § Institutional: AFRIX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
25 | Financial Statements | |
28 | Notes to Financial Statements | |
35 | Financial Highlights | |
36 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 7.53 | % | ||
Class C Shares | 7.15 | |||
Class R Shares | 7.38 | |||
Class Y Shares | 7.67 | |||
Institutional Class Shares | 7.71 | |||
Barclays Capital U.S. Aggregate Index▼ (Broad Market Index) | -0.83 | |||
S&P/LSTA Leveraged Loan Index§ (Style-Specific Index) | 7.20 | |||
Lipper Loan Participation Funds Category Average▼ (Peer Group) | 6.45 | |||
▼Lipper Inc.; §Invesco, Standard & Poor’s |
The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.
The S&P/LSTA Leveraged Loan Index is a weekly total return index that tracks the current outstanding balance and spread over LIBOR for fully funded term loans.
The Lipper Loan Participation Funds Category Average represents an average of all of the funds in the Lipper Loan Participation Funds category.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Floating Rate Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (5/1/97) | 4.02 | % | ||||||
10 | Years | 3.35 | ||||||
5 | Years | 2.78 | ||||||
1 | Year | 7.36 | ||||||
Class C Shares | ||||||||
Inception (3/31/00) | 3.33 | % | ||||||
10 | Years | 3.19 | ||||||
5 | Years | 2.75 | ||||||
1 | Year | 8.56 | ||||||
Class R Shares | ||||||||
10 | Years | 3.51 | % | |||||
5 | Years | 3.10 | ||||||
1 | Year | 9.95 | ||||||
Class Y Shares | ||||||||
10 | Years | 3.65 | % | |||||
5 | Years | 3.38 | ||||||
1 | Year | 10.37 | ||||||
Institutional Class Shares | ||||||||
10 | Years | 3.78 | % | |||||
5 | Years | 3.63 | ||||||
1 | Year | 10.44 |
On April 13, 2006, the Fund reorganized from a Closed-End Fund to an Open-End Fund. Performance shown for Class A shares prior to that date is that of the Closed-End Fund’s Class B shares and includes the management and 12b-1 fees applicable to B shares. The Closed-End Fund’s B-share performance reflects any applicable fee waivers or expense reimbursements.
On April 13, 2006, the Fund reorganized from a Closed-End Fund to an Open-End Fund. Performance shown for Class C shares prior to that date is that of the Closed-End Fund’s Class C shares and includes the management and 12b-1 fees applicable to C shares. The Closed-End Fund’s C-share performance reflects any applicable fee waivers or expense reimbursements.
Class R shares incepted on April 13, 2006. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (5/1/97) | 3.90 | % | ||||||
10 | Years | 3.24 | ||||||
5 | Years | 2.59 | ||||||
1 | Year | 7.90 | ||||||
Class C Shares | ||||||||
Inception (3/31/00) | 3.18 | % | ||||||
10 | Years | 3.10 | ||||||
5 | Years | 2.57 | ||||||
1 | Year | 9.16 | ||||||
Class R Shares | ||||||||
10 | Years | 3.40 | % | |||||
5 | Years | 2.92 | ||||||
1 | Year | 10.41 | ||||||
Class Y Shares | ||||||||
10 | Years | 3.54 | % | |||||
5 | Years | 3.18 | ||||||
1 | Year | 10.97 | ||||||
Institutional Class Shares | ||||||||
10 | Years | 3.66 | % | |||||
5 | Years | 3.43 | ||||||
1 | Year | 10.91 |
Class Y shares incepted on October 3, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Institutional Class shares incepted on April 13, 2006. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of
Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class C, Class R, Class Y and Institutional Class shares was 1.14%, 1.64%, 1.39%, 0.89% and 0.81%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 2.50% sales charge and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
A redemption fee of 2% will be imposed on certain redemptions or exchanges out of the Fund within 31 days of purchase. Exceptions to the redemption fee are listed in the Fund’s prospectus.
Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.
3 Invesco Floating Rate Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Floating Rate Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Senior Secured Floating Rate Interest Loans–100.74%(b)(c) | ||||||||||||||||
Advertising–0.32% | ||||||||||||||||
Advantage Sales & Marketing Inc. | ||||||||||||||||
First Lien Term Loan B | 5.25 | % | 12/17/17 | $ | 1,584,990 | $ | 1,598,454 | |||||||||
Second Lien Term Loan | 9.25 | % | 06/18/18 | 530,670 | 541,618 | |||||||||||
Affinion Group, Inc., Term Loan B | 5.00 | % | 10/10/16 | 718,918 | 724,687 | |||||||||||
Lamar Media Corp., Term Loan B | 4.25 | % | 12/30/16 | 189,329 | 190,926 | |||||||||||
Valassis Communications, Inc. | ||||||||||||||||
Delay Draw Term Loan | 2.56 | % | 03/02/14 | 68,122 | 68,272 | |||||||||||
Term Loan B | 2.56 | % | 03/02/14 | 204,020 | 204,467 | |||||||||||
3,328,424 | ||||||||||||||||
Aerospace & Defense–2.30% | ||||||||||||||||
Aero Technology Supply | ||||||||||||||||
Revolver Loan(d) | 0 | % | 03/12/13 | 276,364 | 272,218 | |||||||||||
Revolver Loan | 11.25 | % | 03/12/13 | 221,091 | 217,775 | |||||||||||
Term Loan | 11.25 | % | 03/12/13 | 565,174 | 562,348 | |||||||||||
Term Loan | 10.75 | % | 03/12/15 | 1,234,788 | 1,166,875 | |||||||||||
ARINC Inc., Second Lien Term Loan(e) | — | 10/25/15 | 1,142,269 | 1,110,856 | ||||||||||||
Avio S.p.A. | ||||||||||||||||
Facility Term Loan B2(e) | — | 12/13/14 | 967,144 | 948,154 | ||||||||||||
Facility Term Loan C2(e) | — | 12/13/15 | 1,031,019 | 1,015,930 | ||||||||||||
Dubai Aerospace Enterprise | ||||||||||||||||
Term Loan B1 | 5.31 | % | 07/31/14 | 270,718 | 273,764 | |||||||||||
Term Loan B2 | 5.29 - 5.31 | % | 07/31/14 | 261,468 | 264,409 | |||||||||||
DynCorp International, Term Loan | 6.25 | % | 07/07/16 | 2,062,181 | 2,085,391 | |||||||||||
Hawker Beechcraft Corp., Term Loan | 2.26 - 2.30 | % | 03/26/14 | 995,439 | 893,905 | |||||||||||
IAP Worldwide Services, Inc., Term Loan B | 8.25 | % | 12/30/12 | 3,472,448 | 3,474,253 | |||||||||||
Scitor Corp., Term Loan B | 5.75 | % | 02/15/17 | 1,256,586 | 1,268,624 | |||||||||||
Sequa Corp., Term Loan B | 3.56 | % | 12/03/14 | 5,312,579 | 5,275,391 | |||||||||||
SI Organization, Inc., Term Loan B | 5.75 | % | 11/22/16 | 669,848 | 677,384 | |||||||||||
TransDigm Group Inc., Term Loan B | 5.25 | % | 02/14/17 | 2,115,577 | 2,133,200 | |||||||||||
Triumph Group, Inc., Term Loan B | 4.50 | % | 06/16/16 | 820,053 | 824,158 | |||||||||||
Wesco Aircraft Hardware Corp., Term Loan | 2.52 | % | 09/29/13 | 366,907 | 367,422 | |||||||||||
Wyle Laboratories, Inc., Incremental Term Loan | 7.75 | % | 03/25/16 | 993,071 | 998,970 | |||||||||||
23,831,027 | ||||||||||||||||
Agricultural Products–0.06% | ||||||||||||||||
Darling International Inc., Term Loan | 5.00 - 5.75 | % | 12/16/16 | 294,448 | 298,681 | |||||||||||
Earthbound Farm Holdings III, LLC, Term Loan B | 6.75 | % | 12/21/16 | 347,146 | 352,136 | |||||||||||
650,817 | ||||||||||||||||
Air Freight & Logistics–0.14% | ||||||||||||||||
CEVA Group PLC, Term Loan B | 0.20 - 5.26 | % | 08/31/16 | 1,476,033 | 1,461,272 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Airlines–0.72% | ||||||||||||||||
Delta Air Lines, Inc. | ||||||||||||||||
Revolver Loan(e) | — | 04/30/12 | $ | 4,054,535 | $ | 3,991,547 | ||||||||||
Revolver Loan(d) | 0 | % | 03/28/13 | 1,500,000 | 1,455,000 | |||||||||||
Syn Revolver Credit Loan(d) | 0 | % | 04/30/12 | 2,000,000 | 1,949,170 | |||||||||||
7,395,717 | ||||||||||||||||
Airport Services–0.83% | ||||||||||||||||
Dollar Thrifty Automotive Group, Inc., Term Loan | 2.76 | % | 06/15/13 | 1,185,000 | 1,183,134 | |||||||||||
Hertz Global Holdings Inc. | ||||||||||||||||
Syn LOC | 0.26 | % | 12/21/12 | 388,444 | 388,718 | |||||||||||
Term Loan B | 2.01 | % | 12/21/12 | 7,016,706 | 7,021,653 | |||||||||||
8,593,505 | ||||||||||||||||
Alternative Carriers–1.33% | ||||||||||||||||
Level 3 Communications, Inc. | ||||||||||||||||
Add On Term Loan B | 11.50 | % | 03/13/14 | 204,533 | 220,130 | |||||||||||
Term Loan | 2.55 | % | 03/13/14 | 13,903,226 | 13,571,286 | |||||||||||
13,791,416 | ||||||||||||||||
Aluminum–0.01% | ||||||||||||||||
Noranda Aluminum, Inc., Term Loan B | 2.01 | % | 05/18/14 | 149,035 | 149,035 | |||||||||||
Apparel Retail–1.72% | ||||||||||||||||
Destination Maternity Corp., Term Loan B | 2.51 - 2.55 | % | 03/13/13 | 104,894 | 103,845 | |||||||||||
DSW Inc., Term Loan | 4.31 | % | 03/02/12 | 3,000,000 | 2,895,000 | |||||||||||
J. Crew Group, Inc., Term Loan B(e) | — | 03/07/18 | 6,631,988 | 6,641,339 | ||||||||||||
Neiman Marcus, Inc., Term Loan B2 | 4.30 | % | 04/06/16 | 8,088,141 | 8,146,295 | |||||||||||
17,786,479 | ||||||||||||||||
Apparel, Accessories & Luxury Goods–0.48% | ||||||||||||||||
Levi Strauss & Co., Term Loan | 2.51 | % | 03/27/14 | 3,000,000 | 2,957,820 | |||||||||||
Phillips Van Heusen Corp. | ||||||||||||||||
Term Loan B(e) | — | 05/06/16 | 1,384,855 | 1,391,876 | ||||||||||||
Term Loan B | 5.25 | % | 05/06/16 | 603,331 | 606,390 | |||||||||||
4,956,086 | ||||||||||||||||
Application Software–0.13% | ||||||||||||||||
Rovi Corp. | ||||||||||||||||
Term Loan A | 2.82 | % | 02/07/16 | 916,859 | 919,152 | |||||||||||
Term Loan B | 4.00 | % | 02/07/18 | 387,558 | 390,464 | |||||||||||
1,309,616 | ||||||||||||||||
Auto Parts & Equipment–2.93% | ||||||||||||||||
Federal-Mogul Corp. | ||||||||||||||||
Delay Draw Term Loan C2 | 2.20 | % | 12/27/15 | 1,168,519 | 1,132,184 | |||||||||||
Term Loan B | 2.20 - 2.21 | % | 12/27/14 | 10,907,201 | 10,568,041 | |||||||||||
Goodyear Tire & Rubber Co. (The), Second Lien Term Loan | 1.96 | % | 04/30/14 | 6,535,343 | 6,453,651 | |||||||||||
Key Safety Systems, Inc. | ||||||||||||||||
Revolver Loan(d) | 0 | % | 03/08/13 | 122,500 | 115,199 | |||||||||||
Revolver Loan | 3.05 | % | 03/08/13 | 1,877,500 | 1,765,601 | |||||||||||
Term Loan B | 2.55 | % | 03/08/14 | 2,986,709 | 2,912,042 | |||||||||||
Pep Boys-Manny, Moe & Jack (The), Term Loan | 2.30 | % | 10/27/13 | 40,318 | 40,217 | |||||||||||
Sensata Technologies, Inc., Term Loan | 2.03 - 2.05 | % | 04/26/13 | 1,994,778 | 1,994,957 | |||||||||||
Tenneco Automotive, Term Loan B | 5.05 | % | 06/03/16 | 2,587,000 | 2,618,536 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Auto Parts & Equipment–(continued) | ||||||||||||||||
Veyance Technologies, Inc. | ||||||||||||||||
First Lien Delay Draw Term Loan | 2.77 | % | 07/31/14 | $ | 231,273 | $ | 217,542 | |||||||||
First Lien Term Loan | 2.77 | % | 07/31/14 | 1,577,932 | 1,484,251 | |||||||||||
Viking Acquisition Inc., Term Loan B | 6.00 | % | 11/05/16 | 1,041,437 | 1,050,549 | |||||||||||
30,352,770 | ||||||||||||||||
Automobile Manufacturers–0.84% | ||||||||||||||||
Ford Motor Co., Term Loan | 3.02 | % | 12/15/13 | 8,726,600 | 8,730,527 | |||||||||||
Automotive Retail–0.40% | ||||||||||||||||
KAR Holdings, Inc., Term Loan B | 3.02 | % | 10/21/13 | 4,131,803 | 4,136,121 | |||||||||||
Broadcasting–9.06% | ||||||||||||||||
Atlantic Broadband, Inc. | ||||||||||||||||
Term Loan B(e) | — | 11/27/15 | 2,500,000 | 2,509,375 | ||||||||||||
Term Loan B | 5.00 | % | 11/27/15 | 1,611,767 | 1,617,811 | |||||||||||
Bresnan Communications, LLC, Term Loan B | 4.50 | % | 12/14/17 | 1,217,906 | 1,228,946 | |||||||||||
Cequel Communications, LLC, First Lien Term Loan | 2.26 | % | 11/05/13 | 1,443,534 | 1,444,834 | |||||||||||
Charter Communications, Inc. | ||||||||||||||||
Term Loan B1 | 2.27 | % | 03/06/14 | 213,777 | 213,403 | |||||||||||
Term Loan C | 3.56 | % | 09/06/16 | 15,038,855 | 15,088,258 | |||||||||||
Citadel Broadcasting Corp., Term Loan B | 4.25 | % | 12/30/16 | 663,150 | 668,952 | |||||||||||
Clear Channel Communications, Inc. | ||||||||||||||||
Term Loan B(e) | — | 01/29/16 | 485,396 | 425,029 | ||||||||||||
Term Loan B | 3.91 | % | 01/29/16 | 12,560,410 | 11,534,713 | |||||||||||
CSC Holdings, Inc. | ||||||||||||||||
Incremental Term Loan B2 | 2.01 | % | 03/29/16 | 1,174,033 | 1,183,695 | |||||||||||
Incremental Term Loan B3 | 2.01 | % | 03/29/16 | 330,905 | 333,206 | |||||||||||
FoxCo Acquisition LLC, Term Loan B | 7.50 | % | 07/14/15 | 1,396,429 | 1,402,887 | |||||||||||
Gray Television Inc., Term Loan B | 3.77 | % | 12/31/14 | 102,484 | 102,356 | |||||||||||
High Plains Broadcasting, LLC, Term Loan | 9.00 | % | 09/14/16 | 429,298 | 432,183 | |||||||||||
Insight Communications Co., Term Loan B | 2.01 - 2.05 | % | 04/06/14 | 1,070,444 | 1,069,326 | |||||||||||
Intelsat, Ltd., Tranche B | 5.25 | % | 04/02/18 | 6,449,722 | 6,511,349 | |||||||||||
Local TV LLC, Term Loan B | 2.31 | % | 05/07/13 | 900,540 | 882,714 | |||||||||||
Mediacom Communications Corp. | ||||||||||||||||
Add on Term Loan | 5.50 | % | 03/31/17 | 3,166,479 | 3,194,977 | |||||||||||
Term Loan D1 | 2.01 | % | 01/31/15 | 1,991,847 | 1,968,702 | |||||||||||
Term Loan D2 | 2.01 | % | 01/31/15 | 275,487 | 272,286 | |||||||||||
Term Loan E | 4.50 | % | 10/23/17 | 2,003,277 | 2,008,906 | |||||||||||
Term Loan F | 4.50 | % | 10/23/17 | 7,999,831 | 8,047,830 | |||||||||||
Newport Television, LLC, Term Loan | 9.00 | % | 09/14/16 | 1,569,610 | 1,580,158 | |||||||||||
TWCC Holding Corp., Term Loan B | 4.25 | % | 02/11/17 | 4,554,065 | 4,602,471 | |||||||||||
Univision Communications Inc. | ||||||||||||||||
Extended Term Loan B1 | 4.51 | % | 03/31/17 | 16,140,571 | 15,734,313 | |||||||||||
Term Loan | 2.51 | % | 09/29/14 | 495,175 | 481,424 | |||||||||||
UPC Broadband Holding B.V., Term Loan X | 3.76 | % | 12/31/17 | 5,500,000 | 5,525,355 | |||||||||||
WaveDivision Holdings, LLC, Term Loan B | 2.56 - 2.60 | % | 06/30/14 | 375,599 | 368,087 | |||||||||||
WOW! | ||||||||||||||||
First Lien Term Loan | 2.76 - 4.75 | % | 06/30/14 | 984,934 | 933,717 | |||||||||||
First Lien Term Loan A | 6.76 - 8.75 | % | 06/28/14 | 2,359,131 | 2,367,990 | |||||||||||
93,735,253 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Building Products–0.42% | ||||||||||||||||
Champion Window Manufacturing Inc., Term Loan | 7.50 | % | 12/31/13 | $ | 211,408 | $ | 211,672 | |||||||||
CPG International, Inc., Term Loan B | 6.00 | % | 02/18/17 | 2,016,345 | 2,028,957 | |||||||||||
Custon Building Products, Inc., Term Loan | 5.75 | % | 03/19/15 | 2,000,000 | 2,025,000 | |||||||||||
United Subcontractors, Inc., Term Loan | 1.80 | % | 06/30/15 | 107,501 | 101,051 | |||||||||||
4,366,680 | ||||||||||||||||
Casinos & Gaming–5.86% | ||||||||||||||||
BLB Investors, LLC, Term Loan | 8.50 | % | 11/05/15 | 3,374,064 | 3,406,400 | |||||||||||
Boyd Gaming Corp., Revolver Loan(e) | — | 05/24/12 | 5,562,500 | 5,403,552 | ||||||||||||
Caesars Entertainment Operating Co. Inc., Term Loan B1 | 3.30 | % | 01/28/15 | 8,483,592 | 7,883,892 | |||||||||||
Term Loan B2 | 3.30 | % | 01/28/15 | 16,787,974 | 15,601,232 | |||||||||||
Cannery Casino | ||||||||||||||||
Delay Draw Term Loan | 4.51 | % | 05/18/13 | 884,620 | 875,774 | |||||||||||
Second Lien Term Loan | 4.51 | % | 05/18/14 | 1,084,000 | 986,440 | |||||||||||
Term Loan B | 4.51 | % | 05/18/13 | 661,009 | 654,399 | |||||||||||
CCM Merger Corp. | ||||||||||||||||
Term Loan | 7.00 | % | 03/01/17 | 4,107,459 | 4,172,151 | |||||||||||
Term Loan B | 8.50 | % | 07/23/12 | 2,977,723 | 2,985,793 | |||||||||||
Isle of Capri Casinos, Inc. | ||||||||||||||||
Delay Draw Term Loan A | 5.00 | % | 11/25/13 | 1,101,704 | 1,101,566 | |||||||||||
Delay Draw Term Loan B | 5.00 | % | 11/25/13 | 1,252,600 | 1,252,443 | |||||||||||
Term Loan | 5.00 | % | 11/25/13 | 3,131,499 | 3,131,108 | |||||||||||
Las Vegas Sands Corp. | ||||||||||||||||
Delay Draw Term Loan 1(e) | — | 11/23/16 | 132,307 | 131,803 | ||||||||||||
Dealy Draw Term Loan 1 | 3.04 | % | 11/23/16 | 44,931 | 44,760 | |||||||||||
Delay Draw Term Loan 2(e) | — | 11/23/15 | 131,821 | 131,319 | ||||||||||||
Delay Draw Term Loan 2 | 2.04 | % | 05/23/13 | 457,327 | 454,938 | |||||||||||
Delay Draw Term Loan 2 | 3.04 | % | 11/23/15 | 1,037,670 | 1,033,716 | |||||||||||
Delay Draw Term Loan B1(e) | — | 05/23/14 | 14,222 | 14,148 | ||||||||||||
Delay Draw Term Loan B1 | 2.04 | % | 05/23/14 | 60,846 | 60,528 | |||||||||||
Term Loan B(e) | — | 05/23/14 | 856,429 | 851,954 | ||||||||||||
Term Loan B | 2.04 | % | 05/23/14 | 2,253,750 | 2,241,974 | |||||||||||
Term Loan B(e) | — | 11/23/16 | 893,776 | 904,143 | ||||||||||||
Term Loan B | 3.04 | % | 11/23/16 | 2,367,190 | 2,344,399 | |||||||||||
Venetian Macau US Finance Co. LLC Delay Draw Term Loan B | 4.79 | % | 05/25/12 | 1,825,104 | 1,830,670 | |||||||||||
Term Loan B | 4.79 | % | 05/27/13 | 3,159,732 | 3,169,369 | |||||||||||
60,668,471 | ||||||||||||||||
Coal & Consumable Fuels–0.45% | ||||||||||||||||
Oxbow Carbon LLC, Term Loan B1 | 3.76 - 3.80 | % | 05/08/16 | 4,582,450 | 4,616,818 | |||||||||||
Commercial Printing–0.38% | ||||||||||||||||
Aster Sr. Flint Inc. | ||||||||||||||||
Term Loan B5 | 2.71 | % | 12/31/12 | 795,787 | 793,228 | |||||||||||
Term Loan C5 | 2.71 | % | 12/31/13 | 813,772 | 815,225 | |||||||||||
Cenveo, Inc., Term Loan B | 6.25 | % | 12/21/16 | 2,253,126 | 2,277,527 | |||||||||||
3,885,980 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Commodity Chemicals–0.47% | ||||||||||||||||
Houghton International, Inc., Term Loan B1 | 6.75 | % | 01/29/16 | $ | 1,233,104 | $ | 1,251,089 | |||||||||
Univar Corp., Term Loan B | 6.25 | % | 11/30/16 | 3,622,130 | 3,658,913 | |||||||||||
4,910,002 | ||||||||||||||||
Communications Equipment–2.46% | ||||||||||||||||
Avaya Inc. | ||||||||||||||||
Term Loan | 3.03 | % | 10/26/14 | 1,988,508 | 1,933,973 | |||||||||||
Term Loan B3 | 4.81 | % | 10/26/17 | 3,994,328 | 3,920,992 | |||||||||||
CommScope, Inc., Term Loan B | 5.00 | % | 01/14/18 | 1,389,954 | 1,410,456 | |||||||||||
Consolidated Communications, Inc. | ||||||||||||||||
Delay Draw Term Loan | 2.77 | % | 12/31/14 | 1,000,000 | 995,000 | |||||||||||
Term Loan B | 2.77 | % | 12/31/14 | 3,000,000 | 2,985,000 | |||||||||||
NTELOS Holdings Corporations, Term Loan B | 6.00 | % | 08/07/15 | 5,763,896 | 5,774,703 | |||||||||||
One Communications Corp., Term Loan C | 11.75 - 12.25 | % | 06/30/12 | 1,212,213 | 1,221,305 | |||||||||||
TowerCo LLC, Term Loan B | 5.25 | % | 02/02/17 | 2,433,918 | 2,458,257 | |||||||||||
Time Warner Telecom Inc., Term Loan B2 | 3.52 | % | 12/30/16 | 4,709,018 | 4,737,484 | |||||||||||
25,437,170 | ||||||||||||||||
Computer Hardware–0.01% | ||||||||||||||||
Quantum Corp., Term Loan B | 3.80 | % | 07/12/14 | 144,703 | 144,101 | |||||||||||
Construction & Farm Machinery & Heavy Trucks–0.29% | ||||||||||||||||
Manitowoc Company, Inc. (The) | ||||||||||||||||
Term Loan A | 5.31 | % | 11/06/13 | 844,565 | 849,844 | |||||||||||
Term Loan B | 8.00 | % | 11/06/14 | 2,153,385 | 2,179,172 | |||||||||||
3,029,016 | ||||||||||||||||
Construction Materials–0.11% | ||||||||||||||||
Hillman Group (The), Term Loan B | 5.50 | % | 05/28/16 | 1,111,317 | 1,118,818 | |||||||||||
Data Processing & Outsourced Services–4.27% | ||||||||||||||||
Affiliated Media Group Inc. | ||||||||||||||||
Term Loan(e) | — | 03/19/14 | 2,051,501 | 2,063,473 | ||||||||||||
Term Loan | 8.50 | % | 03/19/14 | 406,438 | 408,808 | |||||||||||
Fidelity National Information Services, Inc., Term Loan B | 5.25 | % | 07/18/16 | 2,564,387 | 2,592,262 | |||||||||||
First Data Corp. | ||||||||||||||||
Delay Draw Term Loan | 3.01 | % | 09/24/14 | 1,586,845 | 1,491,634 | |||||||||||
Term Loan B1 | 3.01 | % | 09/24/14 | 13,027,556 | 12,339,571 | |||||||||||
Term Loan B2 | 3.01 | % | 09/24/14 | 6,810,242 | 6,451,717 | |||||||||||
Term Loan B3 | 3.01 | % | 09/24/14 | 1,146,438 | 1,085,952 | |||||||||||
iPayment, Inc., Term Loan | 2.26 - 4.25 | % | 05/10/13 | 2,950,370 | 2,939,307 | |||||||||||
NCO Financial Systems, Inc., Term Loan B | 7.25 - 7.50 | % | 05/15/13 | 4,552,687 | 4,526,282 | |||||||||||
Transunion Corp., Term Loan B | 4.75 | % | 02/10/18 | 1,230,709 | 1,247,250 | |||||||||||
West Corp. | ||||||||||||||||
Term Loan B4 | 4.53 - 4.71 | % | 07/15/16 | 3,600,000 | 3,629,232 | |||||||||||
Term Loan B5 | 4.53 - 4.71 | % | 07/15/16 | 5,342,837 | 5,386,221 | |||||||||||
44,161,709 | ||||||||||||||||
Department Stores–0.13% | ||||||||||||||||
Bass Pro, Inc., Term Loan B | 5.00 - 5.75 | % | 04/10/15 | 1,368,786 | 1,379,907 | |||||||||||
Diversified Chemicals–0.50% | ||||||||||||||||
Celanese US Holdings LLC, Prefunded LOC | 0.26 | % | 04/02/14 | 490,939 | 492,422 | |||||||||||
Rockwood Specialties, Inc., Term Loan B | 3.75 | % | 02/12/18 | 2,330,853 | 2,365,652 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Diversified Chemicals–(continued) | ||||||||||||||||
Solutia Inc., Term Loan B | 4.50 | % | 03/17/17 | $ | 1,202,018 | $ | 1,207,090 | |||||||||
Styron LLC, Term Loan | 6.00 | % | 08/02/17 | 1,142,351 | 1,154,883 | |||||||||||
5,220,047 | ||||||||||||||||
Diversified Metals & Mining–0.30% | ||||||||||||||||
Novelis Inc., Term Loan | 5.25 | % | 12/17/16 | 3,044,765 | 3,089,720 | |||||||||||
Diversified Real Estate Activities–0.96% | ||||||||||||||||
Lake Las Vegas Resort | ||||||||||||||||
Revolver Loan (Acquired 08/16/10-02/15/11; Cost $1,478)(e) | — | 12/31/12 | 1,478 | 1,464 | ||||||||||||
Revolver Loan (Acquired 07/15/10; Cost $74,636)(d) | 0 | % | 12/31/12 | 74,636 | 73,889 | |||||||||||
Revolver Loan (Acquired 07/15/10-01/18/11; Cost $50,952) | 15.00 | % | 12/31/12 | 50,952 | 50,442 | |||||||||||
RE/MAX LLC, Term Loan B | 5.50 | % | 04/16/16 | 3,217,068 | 2,436,563 | |||||||||||
Realogy Corp. | ||||||||||||||||
Syn LOC | 4.56 | % | 10/10/16 | 193,363 | 184,822 | |||||||||||
Term Loan | 4.51 | % | 10/10/16 | 2,056,641 | 1,965,799 | |||||||||||
Term Loan | 4.56 | % | 10/10/16 | 5,486,859 | 5,244,505 | |||||||||||
9,957,484 | ||||||||||||||||
Diversified REIT’s–0.33% | ||||||||||||||||
Capital Automotive REIT, Term Loan C | 4.75 | % | 12/14/12 | 3,249,472 | 3,383,513 | |||||||||||
Diversified Support Services–1.09% | ||||||||||||||||
Bankruptcy Management Solutions, Inc. | ||||||||||||||||
First Lien Term Loan B | 7.50 | % | 08/20/14 | 46,039 | 21,638 | |||||||||||
Second Lien Term Loan | 8.30 | % | 08/20/15 | 17,970 | 1,033 | |||||||||||
Brock Holdings III, Inc., Term Loan B | 2.80 | % | 02/26/14 | 375,014 | 367,982 | |||||||||||
Central Parking Corp. | ||||||||||||||||
Second Lien Term Loan | 4.81 | % | 11/22/14 | 25,522 | 16,526 | |||||||||||
Syn LOC | 0.16 | % | 05/22/14 | 63,036 | 53,383 | |||||||||||
Term Loan B | 2.56 | % | 05/22/14 | 139,760 | 118,359 | |||||||||||
Merrill Corp. | ||||||||||||||||
Second Lien Term Loan | 13.75 - 14.00 | % | 11/15/13 | 1,121,161 | 1,122,562 | |||||||||||
Term Loan | 7.50 | % | 12/24/12 | 5,798,537 | 5,803,379 | |||||||||||
Nuance Communications, Inc. | ||||||||||||||||
Incremental Term Loan | 2.02 | % | 03/29/13 | 1,979,487 | 1,974,538 | |||||||||||
Revolver Loan(d) | 0 | % | 04/01/12 | 121,000 | 115,555 | |||||||||||
Term Loan B | 2.02 | % | 04/01/13 | 242,963 | 242,356 | |||||||||||
Production Resources, Inc., Term Loan B | 3.81 | % | 08/15/14 | 1,503,908 | 1,462,551 | |||||||||||
11,299,862 | ||||||||||||||||
Drug Retail–1.00% | ||||||||||||||||
General Nutrition Centers, Inc., Term Loan B | 2.56 - 4.50 | % | 09/16/13 | 3,237,238 | 3,238,582 | |||||||||||
NBTY, Inc., Term Loan B | 6.25 | % | 09/29/17 | 458,694 | 464,485 | |||||||||||
Pantry, Inc. (The) | ||||||||||||||||
Delay Draw Term Loan | 2.02 | % | 05/15/14 | 20,733 | 20,362 | |||||||||||
Term Loan B | 2.02 | % | 05/15/14 | 72,434 | 71,136 | |||||||||||
Rite Aid Corp. | ||||||||||||||||
Tranche 2(e) | — | 06/04/14 | 541,447 | 524,045 | ||||||||||||
Tranche 2 | 2.02 | % | 06/04/14 | 6,197,850 | 5,998,651 | |||||||||||
10,317,261 | ||||||||||||||||
Education Services–0.02% | ||||||||||||||||
Bright Horizons Family Solutions, Inc., Term Loan B | 7.50 | % | 05/28/15 | 243,506 | 245,510 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Electric Utilities–4.78% | ||||||||||||||||
Bicent Power LLC, Second Lien Term Loan | 4.31 | % | 07/10/14 | $ | 250,400 | $ | 40,690 | |||||||||
BRSP LLC, Term Loan B | 7.50 | % | 06/24/14 | 2,785,593 | 2,820,413 | |||||||||||
Calpine Corp., Term Loan B | 7.00 | % | 07/01/17 | 5,964,173 | 6,039,561 | |||||||||||
Dynegy Holdings Inc. | ||||||||||||||||
Loan C | 4.02 | % | 04/02/13 | 9,213,928 | 8,710,747 | |||||||||||
Term Loan B | 4.02 | % | 04/02/13 | 747,523 | 744,100 | |||||||||||
EquiPower Resources Corp., Term Loan B | 5.75 | % | 01/26/18 | 571,175 | 576,887 | |||||||||||
GreatPoint Energy, Delay Draw Term Loan | 5.50 | % | 03/10/17 | 940,245 | 945,534 | |||||||||||
NE Energy, Inc. | ||||||||||||||||
Second Lien Term Loan | 4.81 | % | 05/01/14 | 315,000 | 302,400 | |||||||||||
Syn LOC | 0.16 | % | 11/01/13 | 36,306 | 36,215 | |||||||||||
Term Loan B | 2.81 | % | 11/01/13 | 1,759,518 | 1,755,119 | |||||||||||
NRG Energy, Inc. | ||||||||||||||||
Extended LOC 2 | 3.55 | % | 08/31/15 | 2,201,880 | 2,220,596 | |||||||||||
Syn LOC | 2.05 | % | 02/01/13 | 314 | 313 | |||||||||||
Term Loan B | 2.00 - 2.05 | % | 02/01/13 | 289,680 | 289,158 | |||||||||||
NSG Holdings II, LLC | ||||||||||||||||
Syn LOC | 1.80 | % | 06/15/14 | 26,570 | 26,387 | |||||||||||
Term Loan | 1.80 | % | 06/15/14 | 51,276 | 50,923 | |||||||||||
Texas Competitive Electric Holdings Co. LLC | ||||||||||||||||
Delay Draw Term Loan | 3.76 - 3.80 | % | 10/10/14 | 16,422,418 | 13,788,427 | |||||||||||
Term Loan B2 | 3.76 - 3.80 | % | 10/10/14 | 625,000 | 527,186 | |||||||||||
Term Loan B3 | 3.76 - 3.80 | % | 10/10/14 | 11,000,639 | 9,264,188 | |||||||||||
TPF Generation Holdings, LLC | ||||||||||||||||
First Lien Term Loan | 0.20 | % | 12/15/11 | 93,227 | 93,250 | |||||||||||
Second Lien Term Loan | 4.55 | % | 12/15/14 | 267,000 | 257,877 | |||||||||||
Syn LOC D | 0.20 | % | 12/15/13 | 297,394 | 297,468 | |||||||||||
Term Loan | 2.30 | % | 12/15/13 | 680,683 | 680,853 | |||||||||||
49,468,292 | ||||||||||||||||
Electrical Components & Equipment–0.20% | ||||||||||||||||
Aeroflex Inc., Term Loan B1 | 4.31 | % | 08/15/14 | 1,800,325 | 1,808,202 | |||||||||||
Crown Castle International Corp., Term Loan B | 1.76 | % | 03/06/14 | 278,355 | 277,968 | |||||||||||
2,086,170 | ||||||||||||||||
Electronic Manufacturing Services–0.22% | ||||||||||||||||
Electrical Components International, Inc. | ||||||||||||||||
Syn Revolver Credit | 1.40 | % | 02/04/16 | 21,961 | 22,079 | |||||||||||
Term Loan B | 6.75 | % | 02/04/17 | 351,368 | 353,271 | |||||||||||
Sorenson Communications, Inc., First Lien Term Loan | 6.00 | % | 08/16/13 | 1,922,277 | 1,853,392 | |||||||||||
2,228,742 | ||||||||||||||||
Environmental & Facilities Services–0.02% | ||||||||||||||||
Covanta Holding Corp. | ||||||||||||||||
Syn LOC | 0.20 | % | 02/09/14 | 84,652 | 84,621 | |||||||||||
Term Loan B | 1.81 | % | 02/09/14 | 127,687 | 127,640 | |||||||||||
212,261 | ||||||||||||||||
Food Distributors–2.51% | ||||||||||||||||
Aramark Corp. | ||||||||||||||||
Extended LOC 2 | 0.11 | % | 07/26/16 | 80,809 | 81,158 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Food Distributors–(continued) | ||||||||||||||||
Extended Term Loan B | 3.55 | % | 07/26/16 | $ | 1,228,752 | $ | 1,234,054 | |||||||||
Syn LOC | 0.11 | % | 01/26/14 | 231,266 | 230,952 | |||||||||||
Term Loan | 2.18 | % | 01/26/14 | 2,954,000 | 2,949,983 | |||||||||||
Dean Foods Co. | ||||||||||||||||
Term Loan A | 1.27 | % | 04/02/12 | 392,418 | 389,475 | |||||||||||
Term Loan A(e) | — | 04/02/14 | 1,000,000 | 998,750 | ||||||||||||
Term Loan A | 3.27 | % | 04/02/14 | 2,053,277 | 2,050,710 | |||||||||||
Term Loan B | 3.31 | % | 04/02/16 | 395,613 | 394,772 | |||||||||||
Term Loan B | 3.52 - 3.81 | % | 04/02/17 | 4,182,723 | 4,178,372 | |||||||||||
Pierre Foods Inc. | ||||||||||||||||
First Lien Term Loan(e) | — | 09/30/16 | 204,311 | 206,291 | ||||||||||||
First Lien Term Loan | 7.00 | % | 09/30/16 | 4,323,510 | 4,365,405 | |||||||||||
Second Lien Term Loan | 11.25 | % | 09/30/17 | 244,128 | 250,739 | |||||||||||
Pinnacle Foods Group, Inc. (Aurora Foods) | ||||||||||||||||
Revolver Loan(d) | 0 | % | 04/02/13 | 1,000,000 | 920,000 | |||||||||||
Term Loan B | 2.76 | % | 04/02/14 | 5,601,631 | 5,595,945 | |||||||||||
Term Loan D | 6.00 | % | 04/02/14 | 2,057,338 | 2,078,879 | |||||||||||
25,925,485 | ||||||||||||||||
Food Retail–2.00% | ||||||||||||||||
Dunkin’ Brands, Inc. | ||||||||||||||||
Term Loan B | 4.25 - 5.75 | % | 11/23/17 | 4,842,921 | 4,885,536 | |||||||||||
OSI Restaurant Partners, LLC | ||||||||||||||||
Prefrunded Revolver Credit Loan | 0.12 | % | 06/14/13 | 343,852 | 338,910 | |||||||||||
Prefunded Revolver Credit Loan | 2.56 | % | 06/14/13 | 1,224,245 | 1,206,646 | |||||||||||
Term Loan | 2.63 | % | 06/14/14 | 3,783,293 | 3,728,908 | |||||||||||
Quizno’s Corp. (The), First Lien Term Loan B | 5.01 | % | 05/05/13 | 12,401 | 11,817 | |||||||||||
Roundy’s Supermarkets Inc. | ||||||||||||||||
Extended Term Loan | 5.50 | % | 11/03/13 | 3,244,805 | 3,270,764 | |||||||||||
SUPERVALU Inc. | ||||||||||||||||
Term Loan A | 1.39 | % | 06/02/11 | 318,471 | 318,075 | |||||||||||
Term Loan B | 1.64 | % | 06/02/12 | 1,322,515 | 1,317,562 | |||||||||||
Term Loan B2 | 3.51 | % | 10/05/15 | 4,625,000 | 4,637,534 | |||||||||||
Term Loan C(d) | 0 | % | 06/02/11 | 352,941 | 333,529 | |||||||||||
Wendy’s/Arby’s Restaurants, LLC, Term Loan B | 5.00 | % | 05/24/17 | 637,514 | 644,686 | |||||||||||
20,693,967 | ||||||||||||||||
Forest Products–0.07% | ||||||||||||||||
Georgia-Pacific Corp., Term Loan B | 2.30 | % | 12/21/12 | 725,087 | 726,203 | |||||||||||
Gas Utilities–0.13% | ||||||||||||||||
Obsidian Energy Co., LLC, Term Loan | 7.00 | % | 11/02/15 | 1,349,807 | 1,390,301 | |||||||||||
General Merchandise Stores–0.06% | ||||||||||||||||
Pilot Travel Centers LLC, Term Loan B | 5.25 | % | 06/30/16 | 637,318 | 646,279 | |||||||||||
Health Care Distributors–1.31% | ||||||||||||||||
IMS Health, Inc., Term Loan | 5.25 | % | 02/26/16 | 4,203,944 | 4,221,810 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Health Care Distributors–(continued) | ||||||||||||||||
Warner Chilcott PLC | ||||||||||||||||
Add On Term Loan | 6.25 | % | 04/30/15 | $ | 1,775,730 | $ | 1,793,487 | |||||||||
Term Loan A | 6.00 | % | 10/30/14 | 388,167 | 390,958 | |||||||||||
Term Loan A1 | 4.51 | % | 08/20/14 | 3,412,500 | 3,429,562 | |||||||||||
Term Loan B1 | 6.25 | % | 04/30/15 | 567,484 | 573,159 | |||||||||||
Term Loan B2 | 6.25 | % | 04/30/15 | 944,964 | 954,414 | |||||||||||
Term Loan B3 | 6.50 | % | 02/20/16 | 2,147,360 | 2,170,445 | |||||||||||
13,533,835 | ||||||||||||||||
Health Care Equipment–1.58% | ||||||||||||||||
Biomet, Inc., Term Loan | 3.26 - 3.30 | % | 03/25/15 | 6,865,258 | 6,876,243 | |||||||||||
Carestream Health, Inc., Term Loan B | 5.00 | % | 02/25/17 | 6,997,218 | 6,953,905 | |||||||||||
CONMED Corp., Term Loan | 1.77 | % | 04/13/13 | 886,719 | 833,516 | |||||||||||
DJO Finance LLC, Term Loan | 3.26 | % | 05/20/14 | 1,670,727 | 1,663,944 | |||||||||||
16,327,608 | ||||||||||||||||
Health Care Facilities–4.64% | ||||||||||||||||
Community Health Systems | ||||||||||||||||
Delay Draw Term Loan | 2.51 - 2.56 | % | 07/25/14 | 357,460 | 355,115 | |||||||||||
Extended Term Loan(e) | — | 01/25/17 | 2,210,207 | 2,220,562 | ||||||||||||
Extended Term Loan | 3.76 - 3.81 | % | 01/25/17 | 4,941,053 | 4,964,202 | |||||||||||
Term Loan B | 2.51 - 2.56 | % | 07/25/14 | 6,611,892 | 6,568,518 | |||||||||||
DaVita Inc., Term Loan B | 4.50 | % | 10/20/16 | 8,066,246 | 8,151,949 | |||||||||||
HCA, Inc. | ||||||||||||||||
Revolver Loan(d) | 0 | % | 11/17/12 | 1,072,905 | 1,067,541 | |||||||||||
Revolver Loan | 1.76 | % | 11/17/12 | 427,094 | 424,959 | |||||||||||
Term Loan B | 2.55 | % | 11/18/13 | 265,502 | 264,932 | |||||||||||
Term Loan B2 | 3.55 | % | 03/31/17 | 9,353,547 | 9,401,484 | |||||||||||
Health Management Associates, Inc., Term Loan B | 2.05 | % | 02/28/14 | 4,319,744 | 4,292,746 | |||||||||||
IASIS Healthcare Corp. | ||||||||||||||||
Delay Draw Term Loan | 2.26 | % | 03/14/14 | 697,536 | 697,246 | |||||||||||
LOC | 0.16 | % | 03/14/14 | 381,558 | 381,400 | |||||||||||
Term Loan B | 2.26 | % | 03/14/14 | 2,015,282 | 2,014,446 | |||||||||||
Medical Properties Trust, Inc., Term Loan B | 5.00 | % | 05/17/16 | 1,273,054 | 1,282,602 | |||||||||||
Universal Health Services, Inc. | ||||||||||||||||
Term Loan B(e) | — | 11/15/16 | 2,765,625 | 2,798,800 | ||||||||||||
Term Loan B | 5.50 | % | 11/15/16 | 3,091,707 | 3,128,792 | |||||||||||
48,015,294 | ||||||||||||||||
Health Care Services–1.21% | ||||||||||||||||
Axcan Intermediate Holdings, Inc. | ||||||||||||||||
Term Loan B(e) | — | 02/10/17 | 404,303 | 405,870 | ||||||||||||
Term Loan B | 5.50 | % | 02/10/17 | 808,606 | 811,739 | |||||||||||
Fresenius Medical Care Holdings, Inc. | ||||||||||||||||
Term Loan C1 | 4.50 | % | 09/10/14 | 222,526 | 224,028 | |||||||||||
Term Loan C2 | 4.50 | % | 09/10/14 | 127,112 | 127,970 | |||||||||||
Genoa Healthcare LLC | ||||||||||||||||
Second Lien Term Loan | 10.75 | % | 02/10/13 | 132,000 | 131,340 | |||||||||||
Term Loan B | 5.50 | % | 08/10/12 | 87,524 | 85,445 | |||||||||||
Gentiva Health Serviced, Inc., Term Loan B | 6.75 | % | 08/17/16 | 2,273,447 | 2,315,131 | |||||||||||
Harlan Sprague Dawley, Inc., Term Loan B | 3.77 - 3.79 | % | 07/11/14 | 2,593,674 | 2,417,953 | |||||||||||
Royalty Pharma AG, Term Loan B | 2.55 | % | 04/16/13 | 426,870 | 428,381 | |||||||||||
Rural/Metro Corp., Term Loan B | 6.00 | % | 11/24/16 | 608,953 | 616,312 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Health Care Services–(continued) | ||||||||||||||||
Skilled Healthcare LLC, Term Loan B | 5.25 | % | 04/09/16 | $ | 992,394 | $ | 995,991 | |||||||||
Sun Healthcare Group, Inc., Term Loan | 7.50 | % | 10/18/16 | 1,204,374 | 1,216,797 | |||||||||||
Trizetto Group, Inc. | ||||||||||||||||
Add On Term Loan B1 | 5.75 | % | 08/04/15 | 1,095,957 | 1,106,916 | |||||||||||
Term Loan B | 6.75 | % | 08/04/15 | 727,767 | 735,044 | |||||||||||
United Surgical Partners International, Inc. | ||||||||||||||||
Delay Draw Term Loan | 2.27 | % | 04/18/14 | 171,084 | 169,587 | |||||||||||
Term Loan B | 2.27 - 2.31 | % | 04/18/14 | 748,731 | 742,179 | |||||||||||
12,530,683 | ||||||||||||||||
Health Care Supplies–1.25% | ||||||||||||||||
Bausch & Lomb Inc. | ||||||||||||||||
Delay Draw Term Loan | 3.51 | % | 04/26/15 | 1,901,465 | 1,905,686 | |||||||||||
Revolver Loan(d) | 0 | % | 10/25/13 | 1,360,000 | 1,298,800 | |||||||||||
Revolver Loan | 3.01 | % | 10/25/13 | 640,000 | 611,200 | |||||||||||
Term Loan B | 3.51 - 3.55 | % | 04/26/15 | 7,829,491 | 7,846,872 | |||||||||||
Catalent Pharma Solutions, Term Loan | 2.51 | % | 04/10/14 | 1,232,046 | 1,217,163 | |||||||||||
12,879,721 | ||||||||||||||||
Home Furnishings–0.39% | ||||||||||||||||
National Bedding Co., LLC, Second Lien Term Loan | 5.31 | % | 02/28/14 | 4,080,185 | 4,041,933 | |||||||||||
Hotels, Resorts & Cruise Lines–0.31% | ||||||||||||||||
American Gaming Systems | ||||||||||||||||
Delay Draw Term Loan | 5.25 | % | 05/14/13 | 502,422 | 387,704 | |||||||||||
Term Loan B | 5.25 | % | 05/14/13 | 3,591,087 | 2,771,134 | |||||||||||
Centaur Gaming, Second Lien Term Loan(f) | 14.25 | % | 10/30/13 | 127,336 | 1,274 | |||||||||||
Ginn Club & Resort | ||||||||||||||||
First Lien Term Loan B(f) | 9.50 | % | 06/08/11 | 105,289 | 8,818 | |||||||||||
Revolving Credit Loan(f) | 5.87 - 9.50 | % | 06/08/11 | 49,078 | 4,110 | |||||||||||
Second Lien Term Loan(f) | 13.50 | % | 06/08/12 | 127,556 | 638 | |||||||||||
3,173,678 | ||||||||||||||||
Household Appliances–0.27% | ||||||||||||||||
Goodman Global, Inc. | ||||||||||||||||
First Lien Term Loan B | 5.75 | % | 10/28/16 | 2,429,722 | 2,454,019 | |||||||||||
Second Lien Term Loan | 9.00 | % | 10/30/17 | 295,104 | 306,224 | |||||||||||
2,760,243 | ||||||||||||||||
Household Products–2.22% | ||||||||||||||||
Amscan Inc., Term Loan B | 6.75 | % | 12/02/17 | 4,924,130 | 4,989,990 | |||||||||||
Jarden Corp., Term Loan B5 | 3.55 | % | 01/26/15 | 78,502 | 79,121 | |||||||||||
Nice-Pak Products Inc., Term Loan | 3.30 | % | 06/18/14 | 566,253 | 560,591 | |||||||||||
Prestige Brands, Inc., Term Loan B | 4.75 | % | 03/24/16 | 1,054,721 | 1,063,617 | |||||||||||
Rent-A-Center | ||||||||||||||||
Term Loan B | 2.06 | % | 06/30/12 | 526 | 526 | |||||||||||
Term Loan B | 3.31 | % | 03/31/15 | 125,976 | 126,921 | |||||||||||
Reynolds Packaging Group | ||||||||||||||||
Term Loan | 4.25 | % | 02/09/18 | 9,919,983 | 10,001,228 | |||||||||||
Spectrum Brands, Inc., Term Loan | 8.00 | % | 06/16/16 | 5,113,202 | 5,179,801 | |||||||||||
Sun Products Corp. (The), Second Lien Term Loan | 4.51 | % | 10/26/14 | 1,000,000 | 990,000 | |||||||||||
22,991,795 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Human Resource & Employment Services–0.87% | ||||||||||||||||
Koosharem Corp. | ||||||||||||||||
First Lien Term Loan | 10.25 | % | 06/30/14 | $ | 727,814 | $ | 648,966 | |||||||||
Second Lien Term Loan | 17.50 | % | 12/31/14 | 330,644 | 179,374 | |||||||||||
Term Loan(e) | — | 08/01/11 | 1,850,000 | 1,822,250 | ||||||||||||
Term Loan | 16.25 | % | 08/01/11 | 1,850,000 | 1,822,250 | |||||||||||
Kronos Inc. | ||||||||||||||||
First Lien Term Loan | 2.05 | % | 06/11/14 | 1,268,975 | 1,268,435 | |||||||||||
First Lien Term Loan | 6.05 | % | 06/11/15 | 3,255,649 | 3,248,015 | |||||||||||
8,989,290 | ||||||||||||||||
Industrial Conglomerates–0.03% | ||||||||||||||||
CONTECH Construction Products, Inc., Term Loan B | 5.25 | % | 01/31/13 | 361,328 | 331,518 | |||||||||||
Industrial Machinery–0.51% | ||||||||||||||||
Itron Inc., Term Loan | 3.77 | % | 04/18/14 | 78,078 | 78,493 | |||||||||||
Pro Mach, Inc., Term Loan | 2.52 | % | 12/14/11 | 550,248 | 541,995 | |||||||||||
Rexnord Corp. | ||||||||||||||||
Add On Term Loan B2 | 2.56 | % | 07/19/13 | 93,402 | 93,226 | |||||||||||
Sr. Unsec. Term Loan | 7.30 | % | 03/01/13 | 2,846,678 | 2,441,026 | |||||||||||
Term Loan B | 2.81 | % | 07/19/13 | 2,082,062 | 2,083,031 | |||||||||||
5,237,771 | ||||||||||||||||
Insurance Brokers–0.70% | ||||||||||||||||
CCC Information Services Group Inc., Term Loan B | 5.50 | % | 11/11/15 | 1,799,518 | 1,823,505 | |||||||||||
Crawford & Co., Term Loan | 5.25 | % | 10/30/13 | 3,304,652 | 3,295,365 | |||||||||||
Sedgwick Claims Management Services, Inc., Term Loan B | 5.50 | % | 05/28/16 | 1,378,257 | 1,380,827 | |||||||||||
Swett & Crawford Group, Inc. | ||||||||||||||||
First Lien Term Loan | 2.51 | % | 04/03/14 | 373,983 | 336,585 | |||||||||||
Second Lien Term Loan | 5.76 | % | 10/03/14 | 105,200 | 88,631 | |||||||||||
USI Holdings Corp., Term Loan B | 2.77 | % | 05/05/14 | 314,461 | 313,754 | |||||||||||
7,238,667 | ||||||||||||||||
Integrated Telecommunication Services–0.82% | ||||||||||||||||
Hargray Communications Group, Inc., Term Loan B | 2.56 | % | 06/27/14 | 135,086 | 134,664 | |||||||||||
Integra Telecom, Inc., Term Loan B | 9.25 | % | 04/15/15 | 2,286,001 | 2,323,148 | |||||||||||
Knology, Inc., Term Loan B | 4.00 | % | 08/18/17 | 2,617,371 | 2,641,504 | |||||||||||
Midcontinent Communications, Term Loan B | 6.25 - 6.75 | % | 12/31/16 | 1,257,876 | 1,269,674 | |||||||||||
Syniverse Technologies, Term Loan B | 5.25 | % | 12/21/17 | 2,084,931 | 2,114,120 | |||||||||||
8,483,110 | ||||||||||||||||
Internet Retail–0.84% | ||||||||||||||||
CDW LLC, Extended Term Loan | 5.26 | % | 07/15/17 | 8,692,195 | 8,709,884 | |||||||||||
Internet Software & Services–0.18% | ||||||||||||||||
Network Solutions, LLC, Term Loan B | 2.52 | % | 03/07/14 | 628,651 | 624,722 | |||||||||||
SAVVIS, Inc., Term Loan | 6.75 | % | 08/04/16 | 434,837 | 439,661 | |||||||||||
SkillSoft PLC, Term Loan B | 6.50 | % | 05/26/17 | 782,521 | 796,583 | |||||||||||
1,860,966 | ||||||||||||||||
Investment Banking & Brokerage–0.03% | ||||||||||||||||
Gartmore Investment Ltd., U.S. Term Loan | 2.05 | % | 05/11/14 | 357,741 | 355,282 | |||||||||||
IT Consulting & Other Services–1.48% | ||||||||||||||||
Brocade Communications Systems, Inc., Term Loan | 7.00 | % | 10/07/13 | 1,610,168 | 1,621,842 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
IT Consulting & Other Services–(continued) | ||||||||||||||||
Infor Global Solutions | ||||||||||||||||
Extended Delay Draw Term Loan | 6.02 | % | 07/28/15 | $ | 1,037,904 | $ | 1,027,525 | |||||||||
First Lien Term Loan | 6.02 | % | 07/28/15 | 1,954,284 | 1,934,741 | |||||||||||
SunGuard Data Systems, Inc. | ||||||||||||||||
Incremental Term Loan B | 3.76 | % | 02/28/14 | 1,931,365 | 1,948,651 | |||||||||||
Revolver Loan(d) | 0 | % | 08/11/11 | 1,382,355 | 1,354,707 | |||||||||||
Revolver Loan | 2.26 - 4.25 | % | 08/11/11 | 117,646 | 115,293 | |||||||||||
U.S. Term Loan B | 3.91 - 3.94 | % | 02/28/16 | 7,297,300 | 7,351,119 | |||||||||||
15,353,878 | ||||||||||||||||
Leisure Facilities–1.53% | ||||||||||||||||
24 Hour Fitness Worldwide Inc., Term Loan B | 6.75 | % | 04/22/16 | 6,246,864 | 6,207,821 | |||||||||||
AMF Group | ||||||||||||||||
First Lien Term Loan B | 2.76 | % | 06/08/13 | 1,303,288 | 1,185,992 | |||||||||||
Second Lien Term Loan | 6.51 | % | 12/08/13 | 177,143 | 153,818 | |||||||||||
Cedar Fair, L.P., Term Loan B | 5.50 | % | 12/15/16 | 901,888 | 911,712 | |||||||||||
Chester Downs & Marina, LLC, Term Loan B | 12.38 | % | 07/29/16 | 268,888 | 277,963 | |||||||||||
Live Nation Entertainment, Inc., Term Loan B | 4.50 | % | 11/06/16 | 1,875,612 | 1,890,457 | |||||||||||
Regal Entertainment Group, Term Loan B | 3.55 | % | 08/23/17 | 1,025,598 | 1,031,879 | |||||||||||
Six Flags Inc., Term Loan B | 5.50 | % | 06/30/16 | 4,076,832 | 4,135,396 | |||||||||||
15,795,038 | ||||||||||||||||
Leisure Products–1.12% | ||||||||||||||||
Cinemark USA, Inc., Term Loan | 2.02 - 2.07 | % | 10/05/13 | 188,189 | 188,503 | |||||||||||
Golden Nugget, Inc., Second Lien Term Loan | 3.52 | % | 12/31/14 | 116,593 | 74,376 | |||||||||||
IMG Worldwide, Inc., Term Loan B | 7.25 | % | 06/14/15 | 4,885,327 | 4,885,327 | |||||||||||
Panavision Inc., Second Lien Term Loan | 7.80 | % | 03/30/12 | 9,500 | 5,202 | |||||||||||
Sabre Holdings Corp., Term Loan | 2.26 - 2.30 | % | 09/30/14 | 4,790,994 | 4,502,049 | |||||||||||
Travelport LLC | ||||||||||||||||
Term Loan | 4.80 | % | 08/23/15 | 289,395 | 282,039 | |||||||||||
Term Loan B | 4.96 | % | 08/23/15 | 1,719,401 | 1,675,693 | |||||||||||
11,613,189 | ||||||||||||||||
Marine–0.26% | ||||||||||||||||
Dockwise Ltd. | ||||||||||||||||
Term Loan B1 | 2.05 | % | 01/11/15 | 232,848 | 226,251 | |||||||||||
Term Loan B2 | 2.05 | % | 01/11/15 | 986,164 | 960,691 | |||||||||||
Term Loan C | 2.93 | % | 01/11/16 | 215,939 | 210,901 | |||||||||||
Term Loan C2 | 2.93 | % | 01/11/16 | 986,164 | 960,692 | |||||||||||
US Shipping LLC, Term Loan | 2.50 - 9.20 | % | 08/07/13 | 427,088 | 288,030 | |||||||||||
2,646,565 | ||||||||||||||||
Marine Ports & Services–0.03% | ||||||||||||||||
Fleetcor Technologies, Inc. | ||||||||||||||||
Tranche 1 | 2.51 | % | 04/30/13 | 182,956 | 182,956 | |||||||||||
Tranche 2 | 2.51 | % | 04/30/13 | 150,133 | 150,133 | |||||||||||
333,089 | ||||||||||||||||
Metal & Glass Containers–2.15% | ||||||||||||||||
Berry Plastics Corp., Term Loan C | 2.29 - 2.31 | % | 04/03/15 | 8,721,298 | 8,478,976 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Metal & Glass Containers–(continued) | ||||||||||||||||
BWAY Holding Company | ||||||||||||||||
Term Loan B(e) | — | 02/23/18 | $ | 1,836,913 | $ | 1,852,986 | ||||||||||
Term Loan B | 4.50 | % | 02/23/18 | 3,332,259 | 3,361,416 | |||||||||||
Term Loan C(e) | — | 02/23/18 | 163,086 | 164,514 | ||||||||||||
Term Loan C | 5.50 | % | 02/23/18 | 295,849 | 298,437 | |||||||||||
Graham Packaging Company, L.P. | ||||||||||||||||
Term Loan C | 6.75 | % | 04/05/14 | 959,063 | 965,925 | |||||||||||
Term Loan D | 6.00 | % | 09/23/16 | 6,092,293 | 6,161,258 | |||||||||||
MAUSER Corp. | ||||||||||||||||
Term Loan B2 | 2.64 | % | 06/13/15 | 500,000 | 473,928 | |||||||||||
Term Loan C2 | 2.89 | % | 06/13/16 | 500,000 | 476,428 | |||||||||||
22,233,868 | ||||||||||||||||
Movies & Entertainment–1.11% | ||||||||||||||||
Alpha III | ||||||||||||||||
Term Loan B1(e) | — | 12/31/13 | 1,000,000 | 986,070 | ||||||||||||
Term Loan B1 | 2.71 | % | 12/31/13 | 2,240,571 | 2,209,360 | |||||||||||
Term Loan B2(e) | — | 12/31/13 | 1,000,000 | 986,070 | ||||||||||||
Term Loan B2 | 2.71 | % | 12/31/13 | 1,513,442 | 1,492,360 | |||||||||||
NEP II, Inc. | ||||||||||||||||
Term Loan B(e) | — | 02/16/14 | 3,781,620 | 3,758,011 | ||||||||||||
Term Loan B | 2.55 | % | 02/16/14 | 387,478 | 388,446 | |||||||||||
Zuffa LLC, Term Loan | 2.31 | % | 06/19/15 | 1,644,633 | 1,616,880 | |||||||||||
11,437,197 | ||||||||||||||||
Oil & Gas Drilling–0.40% | ||||||||||||||||
Ram Energy Inc., Term Loan | 12.75 | % | 11/28/12 | 1,171,543 | 1,173,014 | |||||||||||
Venoco, Inc., Second Lien Term Loan(e) | — | 05/07/14 | 3,000,000 | 2,998,125 | ||||||||||||
4,171,139 | ||||||||||||||||
Oil & Gas Equipment & Services–0.55% | ||||||||||||||||
CCS Corp. | ||||||||||||||||
Delay Draw Term Loan | 3.28 - 3.30 | % | 11/14/14 | 959,491 | 922,714 | |||||||||||
Term Loan B | 3.28 - 3.30 | % | 11/14/14 | 3,739,392 | 3,596,060 | |||||||||||
Willbros Group, Inc., Term Loan B | 9.50 | % | 06/30/14 | 1,156,297 | 1,173,641 | |||||||||||
5,692,415 | ||||||||||||||||
Oil & Gas Refining & Marketing–0.62% | ||||||||||||||||
Big West Oil LLC, Term Loan B | 7.00 | % | 03/31/16 | 1,329,426 | 1,350,478 | |||||||||||
CITGO Petroleum Corp. | ||||||||||||||||
Term Loan B | 8.00 | % | 06/24/15 | 2,190,597 | 2,295,438 | |||||||||||
Gary-Williams Energy Corp., Term Loan B | 11.75 | % | 11/13/14 | 910,514 | 892,304 | |||||||||||
Western Refining, Inc., Term Loan B | 10.75 | % | 05/30/14 | 1,802,308 | 1,852,151 | |||||||||||
6,390,371 | ||||||||||||||||
Oil & Gas Storage & Transportation–0.21% | ||||||||||||||||
Sem Group L.P., U.S. Term Loan B2 | 9.00 | % | 11/30/16 | 2,111,662 | 2,145,090 | |||||||||||
Other Diversified Financial Services–0.86% | ||||||||||||||||
CNO Financial Group, Inc., Term Loan | 7.50 | % | 09/30/16 | 39,189 | 39,516 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Other Diversified Financial Services–(continued) | ||||||||||||||||
Fifth Third Processing Solutions LLC | ||||||||||||||||
Second Lien Term Loan | 8.25 | % | 11/03/17 | $ | 312,298 | $ | 319,844 | |||||||||
Term Loan | 5.50 | % | 11/03/16 | 5,413,429 | 5,464,749 | |||||||||||
Tomkins PLC, Term Loan B | 6.25 | % | 09/29/16 | 3,004,030 | 3,038,285 | |||||||||||
8,862,394 | ||||||||||||||||
Packaged Foods & Meats–1.68% | ||||||||||||||||
DelMonte Corp., | ||||||||||||||||
Term Loan(e) | — | 03/08/18 | 2,596,074 | 2,615,960 | ||||||||||||
Term Loan | 4.50 | % | 03/08/18 | 5,436,211 | 5,477,852 | |||||||||||
Dole Foods Co., Inc. | ||||||||||||||||
Term Loan B1 | 5.00 - 5.50 | % | 03/02/17 | 691,422 | 698,841 | |||||||||||
Term Loan C1 | 5.00 - 5.50 | % | 03/02/17 | 1,647,234 | 1,664,909 | |||||||||||
DS Waters of America, Inc., Incremental Term Loan | 2.56 - 4.50 | % | 10/27/12 | 5,190,697 | 5,119,325 | |||||||||||
Michael Foods, Inc. | ||||||||||||||||
Term Loan B | 6.25 | % | 06/29/16 | 623,188 | 630,354 | |||||||||||
Term Loan B | 4.25 | % | 02/25/18 | 297,716 | 300,756 | |||||||||||
Windsor Quality Foods Co., Ltd., Term Loan B | 5.00 | % | 02/16/17 | 913,881 | 920,164 | |||||||||||
17,428,161 | ||||||||||||||||
Paper Packaging–0.96% | ||||||||||||||||
Pelican Products, Inc., Term Loan | 5.75 | % | 11/30/16 | 1,913,429 | 1,930,172 | |||||||||||
Smurfit-Stone Container Corp., Term Loan | 6.75 | % | 02/22/16 | 7,943,602 | 7,998,889 | |||||||||||
9,929,061 | ||||||||||||||||
Paper Products–0.49% | ||||||||||||||||
Xerium S.A. | ||||||||||||||||
Austria Term Loan | 6.50 | % | 11/25/14 | 330,924 | 334,440 | |||||||||||
Canada Term Loan | 6.50 | % | 11/25/14 | 579,117 | 585,269 | |||||||||||
DIP Term Loan | 6.50 | % | 11/25/14 | 2,440,562 | 2,466,493 | |||||||||||
Germany Term Loan | 6.50 | % | 11/25/14 | 1,034,137 | 1,045,124 | |||||||||||
Italia Term Loan | 6.50 | % | 11/25/14 | 248,193 | 250,830 | |||||||||||
Second Lien Term Loan | 8.25 | % | 05/22/15 | 57,661 | 58,004 | |||||||||||
XTI Term Loan | 6.50 | % | 11/25/14 | 330,924 | 334,440 | |||||||||||
5,074,600 | ||||||||||||||||
Personal Products–0.16% | ||||||||||||||||
Topps Company Inc. (The), Term Loan B | 3.06 | % | 10/12/14 | 1,714,644 | 1,628,911 | |||||||||||
Pharmaceuticals–1.14% | ||||||||||||||||
Grifols, S.A., U.S. Term Loan B(e) | — | 09/23/16 | 4,271,033 | 4,328,778 | ||||||||||||
Nycomed US Inc. | ||||||||||||||||
Term Loan A1 | 3.51 | % | 12/29/13 | 554,202 | 543,176 | |||||||||||
Term Loan A2 | 3.51 | % | 12/29/13 | 1,468,895 | 1,439,671 | |||||||||||
Term Loan A3 | 3.51 | % | 12/29/13 | 27,861 | 27,307 | |||||||||||
Term Loan A4 | 3.51 | % | 12/29/13 | 17,748 | 17,395 | |||||||||||
Term Loan A5 | 3.51 | % | 12/29/13 | 86,259 | 84,543 | |||||||||||
Term Loan B2 | 4.26 | % | 12/29/14 | 2,595,894 | 2,556,488 | |||||||||||
Term Loan C2 | 4.76 | % | 12/29/15 | 2,595,105 | 2,568,687 | |||||||||||
Quintiles Transnational Corp. | ||||||||||||||||
Second Lien Term Loan | 4.31 | % | 03/31/14 | 74,764 | 74,764 | |||||||||||
Term Loan B | 2.31 | % | 03/31/13 | 101,648 | 101,521 | |||||||||||
11,742,330 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Publishing–2.33% | ||||||||||||||||
Caribe Information Investment Inc., Term Loan | 2.56 - 2.57 | % | 03/31/13 | $ | 70,518 | $ | 44,250 | |||||||||
Cengage Learning | ||||||||||||||||
Term Loan(e) | — | 07/03/14 | 1,562,500 | 1,496,485 | ||||||||||||
Term Loan | 2.55 | % | 07/03/14 | 5,952,053 | 5,732,251 | |||||||||||
Endurance Business Media, Inc., First Lien Term Loan | 6.50 | % | 12/14/14 | 63,827 | 20,744 | |||||||||||
F & W Publications, Inc., Term Loan | 7.75 | % | 06/09/14 | 52,511 | 46,997 | |||||||||||
Gatehouse Media, Inc. | ||||||||||||||||
Delay Draw Term Loan | 2.27 | % | 08/28/14 | 616,846 | 273,981 | |||||||||||
Term Loan | 2.52 | % | 08/28/14 | 264,314 | 117,399 | |||||||||||
Term Loan B | 2.27 | % | 08/28/14 | 1,034,378 | 459,434 | |||||||||||
Getty Images, Inc., Acquisition Term Loan | 5.25 | % | 11/03/16 | 4,252,014 | 4,314,029 | |||||||||||
Hanley Wood LLC, Term Loan | 2.56 - 2.63 | % | 03/08/14 | 320,100 | 164,253 | |||||||||||
Interactive Data Corp., Term Loan | 4.75 | % | 02/11/18 | 1,874,809 | 1,894,392 | |||||||||||
VNU N.V., Term Loan | 3.76 | % | 05/02/16 | 9,485,473 | 9,537,833 | |||||||||||
24,102,048 | ||||||||||||||||
Real Estate Management & Development–0.08% | ||||||||||||||||
CB Richard Ellis Group, Inc., Term Loan B | 3.51 | % | 11/10/16 | 791,682 | 796,958 | |||||||||||
Research & Consulting Services–0.31% | ||||||||||||||||
Acosta, Inc. | ||||||||||||||||
Term Loan B | 4.75 | % | 03/01/18 | 3,190,662 | 3,217,783 | |||||||||||
Restaurants–0.84% | ||||||||||||||||
Burger King Holdings, Inc., | ||||||||||||||||
Term Loan B(e) | — | 10/19/16 | 2,750,000 | 2,775,222 | ||||||||||||
Term Loan B | 4.50 - 6.25 | % | 10/19/16 | 4,608,699 | 4,637,895 | |||||||||||
DineEquity, Inc., Term Loan B1 | 4.25 | % | 10/19/17 | 1,291,505 | 1,302,677 | |||||||||||
8,715,794 | ||||||||||||||||
Semiconductors–0.67% | ||||||||||||||||
Freescale Semiconductor, Inc. | ||||||||||||||||
Term Loan | 4.51 | % | 12/01/16 | 6,268,988 | 6,277,169 | |||||||||||
Microsemi Corp., Term Loan | 5.00 | % | 11/02/17 | 608,953 | 612,503 | |||||||||||
6,889,672 | ||||||||||||||||
Specialized Consumer Services–2.50% | ||||||||||||||||
Booz Allen Hamilton, Inc., Term Loan B | 4.00 | % | 08/03/17 | 2,300,765 | 2,329,525 | |||||||||||
Jacobson Corp., Term Loan B | 2.77 | % | 06/19/14 | 4,210,071 | 3,978,517 | |||||||||||
LPL Investment Holdings Inc. | ||||||||||||||||
Term Loan | 2.01 - 2.05 | % | 06/28/13 | 295,673 | 296,321 | |||||||||||
Term Loan | 5.25 | % | 06/28/17 | 4,402,917 | 4,438,691 | |||||||||||
ServiceMaster Company (The) | ||||||||||||||||
Delay Draw Term Loan | 2.77 | % | 07/24/14 | 562,261 | 555,975 | |||||||||||
Syn LOC | 0.18 | % | 07/24/14 | 5,000,000 | 4,943,750 | |||||||||||
Term Loan B | 2.76 - 2.81 | % | 07/24/14 | 6,387,198 | 6,315,788 | |||||||||||
TASC Inc., Term Loan B | 5.75 | % | 12/18/15 | 3,000,000 | 3,018,750 | |||||||||||
25,877,317 | ||||||||||||||||
Specialized Finance–1.35% | ||||||||||||||||
Citco Group Ltd. (The), Term Loan B | 4.46 | % | 06/30/14 | 88,147 | 88,587 | |||||||||||
Clarke American Corp., Term Loan B | 2.76 - 2.80 | % | 06/30/14 | 3,338,272 | 3,192,824 | |||||||||||
E.A.Viner International Co., First Lien Term Loan B | 4.81 | % | 07/31/13 | 17,128 | 16,957 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Specialized Finance–(continued) | ||||||||||||||||
MSCI Inc., Term Loan B | 4.75 | % | 06/01/16 | $ | 496,542 | $ | 500,733 | |||||||||
Nuveen Investments, LLC | ||||||||||||||||
First Lien Term Loan(e) | — | 05/13/17 | 1,090,998 | 1,084,861 | ||||||||||||
First Lien Term Loan | 5.80 - 5.81 | % | 05/13/17 | 4,250,425 | 4,263,238 | |||||||||||
Term Loan(e) | — | 11/13/14 | 933,718 | 903,955 | ||||||||||||
Term Loan | 3.30 | % | 11/13/14 | 2,781,839 | 2,693,168 | |||||||||||
RJO Holdings Corp., Term Loan | 6.26 | % | 12/10/15 | 1,666,667 | 1,222,225 | |||||||||||
13,966,548 | ||||||||||||||||
Specialty Chemicals–2.03% | ||||||||||||||||
Cristal Global, Term Loan | 2.55 | % | 05/15/14 | 1,994,859 | 1,993,921 | |||||||||||
Hexion Specialty Chemicals, Inc. | ||||||||||||||||
Credit Linked Deposit | 0.16 | % | 05/05/13 | 88,902 | 84,012 | |||||||||||
Revolver Loan(d) | 0 | % | 05/31/11 | 381,000 | 360,045 | |||||||||||
Term Loan C5 | 4.06 | % | 05/05/15 | 3,088,883 | 3,088,883 | |||||||||||
Term Loan C7 | 4.06 | % | 05/05/15 | 4,181,184 | 4,170,731 | |||||||||||
Huntsman ICI Chemical LLC | ||||||||||||||||
Term Loan B | 1.78 - 1.80 | % | 04/21/14 | 3,913,752 | 3,905,963 | |||||||||||
Term Loan C | 2.51 - 2.53 | % | 06/30/16 | 3,728,525 | 3,737,399 | |||||||||||
MacDermid Inc., Term Loan B | 2.26 | % | 04/12/14 | 172,327 | 170,302 | |||||||||||
Nalco Co., Term Loan B1 | 4.50 | % | 10/05/17 | 749,806 | 761,132 | |||||||||||
OMNOVA Solutions Inc., Term Loan | 5.75 | % | 05/31/17 | 2,715,239 | 2,752,574 | |||||||||||
21,024,962 | ||||||||||||||||
Specialty Stores–1.92% | ||||||||||||||||
Claire’s Stores, Inc., Term Loan B | 3.01 - 5.00 | % | 05/29/14 | 2,999,999 | 2,931,375 | |||||||||||
FTD, Inc., Term Loan B | 6.75 | % | 08/26/14 | 1,889,950 | 1,901,762 | |||||||||||
Gymboree Corp., Term Loan B(e) | — | 02/23/18 | 4,014,999 | 4,025,687 | ||||||||||||
Mattress Firm, Term Loan B | 2.56 | % | 01/18/14 | 302,468 | 286,588 | |||||||||||
Michaels Stores, Inc. | ||||||||||||||||
Term Loan B1 | 2.56 - 2.63 | % | 10/31/13 | 2,404,458 | 2,399,770 | |||||||||||
Term Loan B2 | 4.81 - 4.88 | % | 07/31/16 | 3,669,365 | 3,704,684 | |||||||||||
PETCO Animal Supplies, Inc., Term Loan B | 4.50 | % | 11/24/17 | 4,608,008 | 4,635,867 | |||||||||||
19,885,733 | ||||||||||||||||
Systems Software–1.57% | ||||||||||||||||
Bentley Systems, Inc., Term Loan B | 5.75 | % | 12/29/16 | 682,824 | 689,653 | |||||||||||
Datatel, Inc., First Lien Term Loan(e) | — | 02/18/17 | 1,500,000 | 1,515,280 | ||||||||||||
Datatel, Inc., First Lien Term Loan | 5.00 | % | 02/18/17 | 865,283 | 865,283 | |||||||||||
Dealer Comp-rey, Term Loan B | 5.25 | % | 04/21/17 | 7,311,845 | 7,375,166 | |||||||||||
Interactive Data Corp., Term Loan | 6.75 | % | 01/29/17 | 2,043,421 | 2,064,764 | |||||||||||
Verint Systems, Inc., Term Loan | 5.25 | % | 05/25/14 | 3,590,268 | 3,605,993 | |||||||||||
Vertafore, Inc., Term Loan | 5.25 | % | 07/29/16 | 147,527 | 148,934 | |||||||||||
16,265,073 | ||||||||||||||||
Technology Distributors–0.03% | ||||||||||||||||
Windstream Corp., Term Loan B2 | 3.06 | % | 12/17/15 | 343,172 | 345,189 | |||||||||||
Textiles–0.05% | ||||||||||||||||
Gold ToeMoretz, LLC, First Lien Term Loan | 8.50 | % | 10/30/13 | 468,467 | 466,125 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Floating Rate Fund
Interest | Maturity | Principal | ||||||||||||||
Rate | Date | Amount | Value | |||||||||||||
Trading Companies & Distributors–0.29% | ||||||||||||||||
Brenntag AG | ||||||||||||||||
Term Loan B2 | 3.76 - 3.81 | % | 01/20/14 | $ | 2,603,907 | $ | 2,631,586 | |||||||||
U.S. Acquired Term Loan | 3.76 - 3.95 | % | 01/20/14 | 413,371 | 415,542 | |||||||||||
3,047,128 | ||||||||||||||||
Trucking–0.34% | ||||||||||||||||
Kenan Advantage Group, Inc., Term Loan B | 5.50 | % | 06/11/16 | 1,533,585 | 1,554,671 | |||||||||||
Swift Transportation Corp., Term Loan B | 6.00 | % | 12/16/16 | 1,974,372 | 1,990,414 | |||||||||||
3,545,085 | ||||||||||||||||
Wireless Telecommunication Services–4.21% | ||||||||||||||||
Asurion Corp. | ||||||||||||||||
First Lien Term Loan | 3.26 - 3.31 | % | 07/03/14 | 2,364,112 | 2,330,767 | |||||||||||
Second Lien Term Loan | 6.76 | % | 07/03/15 | 2,913,624 | 2,908,525 | |||||||||||
Term Loan B2(e) | — | 03/31/15 | 2,000,000 | 2,030,700 | ||||||||||||
Term Loan B2 | 6.75 | % | 03/31/15 | 7,762,090 | 7,881,238 | |||||||||||
FairPoint Communications, Inc. | ||||||||||||||||
Term Loan(e) | — | 01/22/16 | 992,079 | 979,846 | ||||||||||||
Term Loan | 6.50 | % | 01/22/16 | 9,151,025 | 9,038,193 | |||||||||||
Global Tel*Link, Term Loan | 7.25 | % | 11/10/16 | 1,822,292 | 1,832,551 | |||||||||||
MetroPCS Communications, Inc., Term Loan B2 | 3.81 | % | 11/03/16 | 4,957,094 | 4,990,802 | |||||||||||
RCN Corp., Term Loan | 6.50 | % | 08/26/16 | 6,009,501 | 6,065,059 | |||||||||||
Securus Technologies, Inc., Term Loan B | 8.00 | % | 10/31/14 | 3,970,000 | 4,029,550 | |||||||||||
U.S. TelePacific, Term Loan B | 5.75 | % | 02/23/17 | 1,431,418 | 1,435,298 | |||||||||||
43,522,529 | ||||||||||||||||
Total Senior Secured Floating Rate Interest Loans (Cost $1,028,083,291) | 1,042,424,352 | |||||||||||||||
Bonds & Notes–1.46% | ||||||||||||||||
Airlines–0.05% | ||||||||||||||||
Continental Airlines Inc., Sr. Sec. Gtd. Notes(g) | 6.75 | % | 09/15/15 | 460,000 | 476,100 | |||||||||||
Commodity Chemicals–0.37% | ||||||||||||||||
Lyondell Chemical Co., Sr. Sec. Gtd. Notes | 11.00 | % | 05/01/18 | 3,385,930 | 3,885,355 | |||||||||||
Independent Power Producers & Energy Traders–0.60% | ||||||||||||||||
Calpine Corp., | ||||||||||||||||
Sr. Sec. Gtd. Notes(g) | 7.88 | % | 01/15/23 | 3,426,258 | 3,537,611 | |||||||||||
Sr. Sec. Notes(g) | 7.50 | % | 02/15/21 | 2,577,695 | 2,648,582 | |||||||||||
6,186,193 | ||||||||||||||||
Metal & Glass Containers–0.09% | ||||||||||||||||
Berry Plastics Holding Corp., Sec. Gtd. Floating Rate Global Notes(h) | 4.18 | % | 09/15/14 | 996,000 | 936,240 | |||||||||||
Oil & Gas Refining & Marketing–0.29% | ||||||||||||||||
Western Refining, Inc., Sr. Sec. Gtd. Floating Rate Notes(g)(h) | 10.75 | % | 06/15/14 | 2,750,000 | 2,997,500 | |||||||||||
Paper Products–0.02% | ||||||||||||||||
Verso Paper Holdings, LLC, Series B, Sr. Sec. Gtd. Floating Rate Global Notes(h) | 4.05 | % | 08/01/14 | 228,000 | 223,440 | |||||||||||
Real Estate Management & Development–0.04% | ||||||||||||||||
Realogy Corp., Sr. Sec. Gtd. Notes(g) | 7.88 | % | 02/15/19 | 399,000 | 401,992 | |||||||||||
Total Bonds & Notes (Cost $14,064,047) | 15,106,820 | |||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco Floating Rate Fund
Shares | Value | |||||||||||||||
Common Stocks & Other Equity Interests–1.21% | ||||||||||||||||
Aerospace & Defense–0.12% | ||||||||||||||||
ACTS Aero Technical Support & Services, Inc.(i) | 122,977 | $ | 1,199,029 | |||||||||||||
Auto Parts & Equipment–0.02% | ||||||||||||||||
Dayco Products, LLC(i) | 3,261 | 185,332 | ||||||||||||||
Dayco Products, LLC(i) | 856 | 48,649 | ||||||||||||||
233,981 | ||||||||||||||||
Broadcasting–0.25% | ||||||||||||||||
Citadel Broadcasting Corp.,–Class B(i) | 1 | 28 | ||||||||||||||
ION Media Networks, Inc.(i) | 4,471 | 2,459,050 | ||||||||||||||
New Vision Television(i) | 1,027 | 0 | ||||||||||||||
New Vision Television(i) | 5,707 | 0 | ||||||||||||||
New Vision Television–Class A(i) | 8,574 | 159,412 | ||||||||||||||
2,618,490 | ||||||||||||||||
Building Products–0.21% | ||||||||||||||||
Masonite Worldwide Holdings (Canada)(i) | 53,093 | 2,030,807 | ||||||||||||||
United Subcontractors, Inc.(i) | 4,587 | 96,321 | ||||||||||||||
2,127,128 | ||||||||||||||||
Casinos & Gaming–0.02% | ||||||||||||||||
BLB Worldwide Holdings, Inc.(i) | 18,663 | 186,630 | ||||||||||||||
Commodity Chemicals–0.33% | ||||||||||||||||
LyondellBasell Industries N.V., (Netherlands)–Class A(i) | 89,865 | 3,422,059 | ||||||||||||||
Diversified Real Estate Activities–0.02% | ||||||||||||||||
Lake Las Vegas Resort,–Class A(i) | 518 | 209,976 | ||||||||||||||
Lake Las Vegas Resort,–Class B(i) | 4 | 1,674 | ||||||||||||||
Lake Las Vegas Resort, Warrant C, expiring 07/15/15(i) | 17 | 0 | ||||||||||||||
Lake Las Vegas Resort, Warrant D, expiring 07/15/15(i) | 24 | 0 | ||||||||||||||
Lake Las Vegas Resort, Warrant E, expiring 07/15/15(i) | 27 | 0 | ||||||||||||||
Lake Las Vegas Resort, Warrant F, expiring 07/15/15(i) | 30 | 0 | ||||||||||||||
Lake Las Vegas Resort, Warrant G, expiring 07/15/15(i) | 34 | 0 | ||||||||||||||
211,650 | ||||||||||||||||
Diversified Support Services–0.00% | ||||||||||||||||
Bankruptcy Management Solutions, Inc.(i) | 214 | 749 | ||||||||||||||
Bankruptcy Management Solutions, Inc.(i) | 18 | 0 | ||||||||||||||
749 | ||||||||||||||||
Environmental & Facilities Services–0.12% | ||||||||||||||||
Safety-Kleen Holdco, Inc. (Acquired 12/24/03; Cost $2,062,077)(g)(i)(j) | 150,812 | 1,206,496 | ||||||||||||||
Industrial Conglomerates–0.00% | ||||||||||||||||
CONTECH Construction Products, Inc. | 60,669 | 3,033 | ||||||||||||||
Industrial Machinery–0.00% | ||||||||||||||||
Xerium Technologies, Inc.(i) | 1,766 | 37,916 | ||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco Floating Rate Fund
Shares | Value | |||||||||||||||
Leisure Products–0.00% | ||||||||||||||||
True Temper Sports Inc.(i) | 2,971 | 20,233 | ||||||||||||||
Marine–0.00% | ||||||||||||||||
US Shipping LLC(i) | 87,805 | 0 | ||||||||||||||
US Shipping LLC(i) | 6,189 | 0 | ||||||||||||||
0 | ||||||||||||||||
Oil & Gas Storage & Transportation–0.02% | ||||||||||||||||
Sem Group L.P.(i) | 6,668 | 190,371 | ||||||||||||||
Publishing–0.00% | ||||||||||||||||
Endurance Business Media, Inc.(i) | 124 | 1,235 | ||||||||||||||
F&W Publications, Inc.(i) | 288 | 36 | ||||||||||||||
F&W Publications, Inc. Wts., expiring 12/09/17(i) | 496 | 62 | ||||||||||||||
MediaNews Group, Inc.(i) | 1 | 27 | ||||||||||||||
1,360 | ||||||||||||||||
Wireless Telecommunication Services–0.10% | ||||||||||||||||
FairPoint Communications, Inc.(i) | 44,928 | 1,083,888 | ||||||||||||||
Total Common Stocks & Other Equity Interests (Cost $18,589,956) | 12,543,013 | |||||||||||||||
Money Market Funds–9.75% | ||||||||||||||||
Liquid Assets Portfolio–Institutional Class(k) | 50,437,405 | 50,437,405 | ||||||||||||||
Premier Portfolio–Institutional Class(k) | 50,437,405 | 50,437,405 | ||||||||||||||
Total Money Market Funds (Cost $100,874,810) | 100,874,810 | |||||||||||||||
TOTAL INVESTMENTS–113.16% (Cost $1,161,612,104) | 1,170,948,995 | |||||||||||||||
OTHER ASSETS LESS LIABILITIES–(13.16%) | (136,209,471 | ) | ||||||||||||||
NET ASSETS–100.00% | $ | 1,034,739,524 | ||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 Invesco Floating Rate Fund
Investment Abbreviations:
DIP | – Debtor-in-possession | |
Gtd. | – Guaranteed | |
LOC | – Letter of Credit | |
REIT | – Real Estate Investment Trust | |
Sec. | – Secured | |
Sr. | – Senior | |
Syn LOC | – Synthetic Letter of Credit | |
Unsec. | – Unsecured | |
Wts. | – Warrants |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Senior secured corporate loans and senior secured debt securities are, at present, not readily marketable, not registered under the Securities Act of 1933, as amended and may be subject to contractual and legal restrictions on sale. Senior secured corporate loans and senior secured debt securities in the Fund’s portfolio generally have variable rates which adjust to a base, such as the London Inter-Bank Offered Rate (“LIBOR”), on set dates, typically every 30 days but not greater than one year; and/or have interest rates that float at a margin above a widely recognized base lending rate such as the Prime Rate of a designated U.S. bank. | |
(c) | Senior secured floating rate interests often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, it is anticipated that the senior secured floating rate interests will have a expected average life of three to five years. | |
(d) | All or a portion of this holding is subject to unfunded loan commitments. See Note 7. | |
(e) | This floating rate interest will settle after February 28, 2011, at which time the interest rate will be determined. | |
(f) | Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The aggregate value of these securities at February 28, 2011 was $115,891, which represented 0.01% of the Fund’s Net Assets. | |
(g) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $11,268,281, which represented 1.09% of the Fund’s Net Assets. | |
(h) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(i) | Non-income producing security. | |
(j) | Acquired as part of a bankruptcy restructuring. | |
(k) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By credit quality rating, based on total investments
as of February 28, 2011
as of February 28, 2011
B | 0.6 | % | ||
Baa2 | 0.2 | |||
Baa3 | 0.8 | |||
Ba1 | 5.3 | |||
Ba2 | 13.7 | |||
Ba3 | 27.5 | |||
B1 | 21.1 | |||
B2 | 9.6 | |||
B3 | 1.8 | |||
CAA1 | 1.8 | |||
CAA2 | 0.3 | |||
CAA3 or lower | 0.5 | |||
Not-Rated | 7.0 | |||
Equity | 1.1 | |||
Money Market Funds | 8.7 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
24 Invesco Floating Rate Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $1,060,737,294) | $ | 1,070,074,185 | ||
Investments in affiliated money market funds, at value and cost | 100,874,810 | |||
Total investments, at value (Cost $1,161,612,104) | 1,170,948,995 | |||
Receivable for: | ||||
Investments sold | 54,264,757 | |||
Fund shares sold | 7,667,223 | |||
Dividends and interest | 3,559,366 | |||
Investment for trustee deferred compensation and retirement plans | 24,223 | |||
Other assets | 116,094 | |||
Total assets | 1,236,580,658 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 198,173,350 | |||
Fund shares reacquired | 1,866,283 | |||
Dividends | 1,141,798 | |||
Accrued fees to affiliates | 442,367 | |||
Accrued other operating expenses | 148,507 | |||
Trustee deferred compensation and retirement plans | 56,051 | |||
Accrued interest, facilities and maintenance fees | 12,778 | |||
Total liabilities | 201,841,134 | |||
Net assets applicable to shares outstanding | $ | 1,034,739,524 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 1,046,762,295 | ||
Undistributed net investment income | 910,185 | |||
Undistributed net realized gain (loss) | (22,269,847 | ) | ||
Unrealized appreciation | 9,336,891 | |||
$ | 1,034,739,524 | |||
Net Assets: | ||||
Class A | $ | 512,423,040 | ||
Class C | $ | 275,154,609 | ||
Class R | $ | 1,528,406 | ||
Class Y | $ | 154,319,010 | ||
Institutional Class | $ | 91,314,459 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 65,190,432 | |||
Class C | 35,161,571 | |||
Class R | 194,014 | |||
Class Y | 19,664,187 | |||
Institutional Class | 11,617,100 | |||
Class A: | ||||
Net asset value per share | $ | 7.86 | ||
Maximum offering price per share | ||||
(Net asset value of $7.86 divided by 97.50%) | $ | 8.06 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 7.83 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 7.88 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 7.85 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 7.86 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
25 Invesco Floating Rate Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Interest | $ | 22,733,684 | ||
Dividends from affiliated money market funds | 61,700 | |||
Total investment income | 22,795,384 | |||
Expenses: | ||||
Advisory fees | 2,580,307 | |||
Administrative services fees | 113,995 | |||
Custodian fees | 28,633 | |||
Distribution fees: | ||||
Class A | 518,242 | |||
Class C | 839,976 | |||
Class R | 3,209 | |||
Interest, facilities and maintenance fees | 73,472 | |||
Transfer agent fees — A, C, R and Y | 323,192 | |||
Transfer agent fees — Institutional | 1,163 | |||
Trustees’ and officers’ fees and benefits | 15,474 | |||
Other | 112,075 | |||
Total expenses | 4,609,738 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (68,399 | ) | ||
Net expenses | 4,541,339 | |||
Net investment income | 18,254,045 | |||
Net realized gain from investment securities | 16,134,780 | |||
Change in net unrealized appreciation of investment securities | 23,237,803 | |||
Net realized and unrealized gain | 39,372,583 | |||
Net increase in net assets resulting from operations | $ | 57,626,628 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
26 Invesco Floating Rate Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 18,254,045 | $ | 27,537,634 | ||||
Net realized gain | 16,134,780 | 9,257,677 | ||||||
Change in net unrealized appreciation | 23,237,803 | 10,038,366 | ||||||
Net increase in net assets resulting from operations | 57,626,628 | 46,833,677 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (9,038,923 | ) | (16,089,153 | ) | ||||
Class C | (4,320,859 | ) | (7,057,402 | ) | ||||
Class R | (26,483 | ) | (35,865 | ) | ||||
Class Y | (2,676,350 | ) | (2,187,865 | ) | ||||
Institutional Class | (1,466,292 | ) | (2,198,237 | ) | ||||
Total distributions from net investment income | (17,528,907 | ) | (27,568,522 | ) | ||||
Share transactions–net: | ||||||||
Class A | 132,489,360 | 129,615,443 | ||||||
Class C | 74,181,866 | 80,508,401 | ||||||
Class R | 384,182 | 634,904 | ||||||
Class Y | 55,204,068 | 72,830,983 | ||||||
Institutional Class | 50,801,922 | (3,020,369 | ) | |||||
Net increase in net assets resulting from share transactions | 313,061,398 | 280,569,362 | ||||||
Net increase in net assets | 353,159,119 | 299,834,517 | ||||||
Net assets: | ||||||||
Beginning of period | 681,580,405 | 381,745,888 | ||||||
End of period (includes undistributed net investment income of $910,185 and $185,047, respectively) | $ | 1,034,739,524 | $ | 681,580,405 | ||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
27 Invesco Floating Rate Fund
Statement of Cash Flows
For the six months ended February 28, 2011
(Unaudited)
Cash provided by operating activities: | ||||
Net increase in net assets resulting from operations | $ | 57,626,628 | ||
Adjustments to reconcile net increase in net assets to net cash provided by (used in) operating activities: | ||||
Purchases of investments | (944,197,945 | ) | ||
Proceeds from disposition of investments and principal payments | 680,450,106 | |||
Increase in receivables and other assets | (415,189 | ) | ||
Amortization of premiums and accretion of discounts on investment securities | (4,535,636 | ) | ||
Increase in accrued expenses and other payables | 99,187 | |||
Unrealized appreciation on investment securities | (23,237,804 | ) | ||
Net realized gain from investment securities | (16,134,779 | ) | ||
Net cash provided by (used in) operating activities | (250,345,432 | ) | ||
Cash provided by financing activities: | ||||
Dividends paid to shareholders | (5,400,955 | ) | ||
Proceeds from shares of beneficial interest sold | 456,876,617 | |||
Decrease in payable to custodian | (37,497 | ) | ||
Disbursements from shares of beneficial interest reacquired | (158,890,889 | ) | ||
Net cash provided by financing activities | 292,547,276 | |||
Net increase in cash and cash equivalents | 42,201,844 | |||
Cash and cash equivalents at beginning of period | 58,672,966 | |||
Cash and cash equivalents at end of period | $ | 100,874,810 | ||
Non-cash financing activities: | ||||
Value of shares of beneficial interest issued in reinvestment of dividends paid to shareholders | 11,865,318 | |||
Supplemental disclosure of cash flow information: | ||||
Cash paid during the six months ended February 28, 2011 for interest, facilities and maintenance fees was $73,333. |
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Floating Rate Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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 total return, comprised of current income and capital appreciation.
The Fund currently consists of five different classes of shares: Class A, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Institutional Class shares are sold at net asset value.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations — Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. | |
Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales 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 (but not |
28 Invesco Floating Rate Fund
securities reported on the NASDAQ Stock Exchange) are valued based on the prices furnished by independent pricing services, in which case the securities may be considered fair valued, or by market makers. Each security reported on the NASDAQ Stock Exchange is valued at the NASDAQ Official Closing Price (“NOCP”) as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. | ||
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 the 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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 transaction 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 the settlement date. Facility fees received may be amortized over the life of the loan. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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 realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares 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 |
29 Invesco Floating Rate Fund
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 are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 the Institutional Class 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 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. | Other Risks — The Fund may invest all or substantially of its assets in senior secured floating rate loans, senior secured debt securities or other securities rated below investment grade. These securities are generally considered to have speculative characteristics and are subject to greater risk of loss of principal and interest than higher rated securities. The value of lower quality debt securities and floating rate loans can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market or economic developments. | |
The Fund invests in Corporate Loans from U.S. or non-U.S. companies (the “Borrowers”). The investment of the Fund in a Corporate Loan may take the form of participation interests or assignments. If the Fund purchases a participation interest from a syndicate of lenders (“Lenders”) or one of the participants in the syndicate (“Participant”), one or more of which administers the loan on behalf of all the Lenders (the “Agent Bank”), the Fund would be required to rely on the Lender that sold the participation interest not only for the enforcement of the Fund’s rights against the Borrower but also for the receipt and processing of payments due to the Fund under the Corporate Loans. As such, the Fund is subject to the credit risk of the Borrower and the Participant. Lenders and Participants interposed between the Fund and a Borrower, together with Agent Banks, are referred to as “Intermediate Participants”. | ||
J. | Redemption Fees — The Fund has a 2% redemption fee that is to be retained by the Fund to offset transaction costs and other expenses associated with short-term redemptions and exchanges. The fee, subject to certain exceptions, is imposed on certain redemptions or exchanges of shares within 31 days of purchase. The redemption fee is recorded as an increase in shareholder capital and is allocated among the share classes based on the relative net assets of each class. | |
K. | Cash and Cash Equivalents — For the purposes of the Statement of Cash Flows the Fund defines Cash and Cash Equivalents as cash (including foreign currency), money market funds and other investments held in lieu of cash and excludes investments made with cash collateral received. | |
L. | Securities Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in Corporate Loans and Corporate Debt Securities and other portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date. | |
M. | Interest, Facilities and Maintenance Fees — Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate obligations, if any. |
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 Net Assets | Rate | |||
First $500 million | 0 | .65% | ||
Next $4.5 billion | 0 | .60% | ||
Next $5 billion | 0 | .575% | ||
Over $10 billion | 0 | .55% | ||
30 Invesco Floating Rate Fund
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 Trimark 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 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 December 31, 2011, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y and Institutional Class shares to 1.50%, 2.00%, 1.75%, 1.25% and 1.25% 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, facilities and maintenance fees; (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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on December 31, 2011. 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $66,621.
At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the six months ended February 28, 2011, Invesco Ltd. reimbursed expenses of the Fund in the amount of $149.
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 February 28, 2011, 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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class C, Class R, Class Y and Institutional 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 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, 0.75% 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $147,026 in front-end sales commissions from the sale of Class A shares and $6,863 and $33,812 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of Invesco, 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. |
31 Invesco Floating Rate Fund
The following is a summary of the tiered valuation input levels, as of February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 107,450,716 | $ | 4,375,936 | $ | 1,591,171 | $ | 113,417,823 | ||||||||
Corporate Debt Securities | — | 1,053,886,672 | 3,644,500 | 1,057,531,172 | ||||||||||||
Total Investments | $ | 107,450,716 | $ | 1,058,262,608 | $ | 5,235,671 | $ | 1,170,948,995 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $1,629.
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $1,382 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6—Borrowings
The Fund is a party to a committed line of credit facility with a syndicate administered by JPMorgan Chase Bank. The Fund may borrow up to the lesser of (1) $50,000,000, or (2) the limits set by its prospectus for borrowings. The Fund is charged a commitment fee of 0.15% on the unused balance of the committed line and an up front fee 0.07% on the aggregate commitment. Prior to October 25, 2010, the commitment fee was 0.03%.
Also, 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. 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—Unfunded Loan Commitments
As of February 28, 2011, the Fund had unfunded loan commitments of $9,315,653, which could be extended at the option of the borrower, pursuant to the following loan agreements with the following borrowers:
Unfunded | ||||||
Borrower | Commitments | |||||
Aero Technology Supply | Revolver Loan | $ | 272,218 | |||
Bausch & Lomb Inc. | Revolver Loan | 1,298,800 | ||||
Delta Air Lines, Inc. | Revolver Loan | 1,455,000 | ||||
Delta Air Lines, Inc. | Revolver Loan | 1,949,170 | ||||
HCA, Inc. | Revolver Loan | 1,067,541 | ||||
Hexion Specialty Chemicals, Inc. | Revolver Loan | 360,045 | ||||
Key Safety Systems, Inc. | Revolver Loan | 115,199 | ||||
Lake Las Vegas Resort | Revolver Loan | 73,889 | ||||
Nuance Communications, Inc. | Revolver Loan | 115,555 | ||||
Pinnacle Foods Group, Inc. (Aurora Foods) | Revolver Loan | 920,000 | ||||
SunGuard Data Systems, Inc. | Revolver Loan | 1,354,707 | ||||
SUPERVALU Inc. | Term Loan C | 333,529 | ||||
$ | 9,315,653 | |||||
32 Invesco Floating Rate Fund
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2011 | $ | 10,298,295 | ||
August 31, 2012 | 2,745,717 | |||
August 31, 2013 | 5,482,284 | |||
August 31, 2014 | 2,498,917 | |||
August 31, 2016 | 1,685,685 | |||
August 31, 2017 | 13,482,530 | |||
Total capital loss carryforward | $ | 36,193,428 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
NOTE 9—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 February 28, 2011 was $1,015,689,817 and $656,920,548, 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 | $ | 22,574,271 | ||
Aggregate unrealized (depreciation) of investment securities | (15,419,363 | ) | ||
Net unrealized appreciation of investment securities | $ | 7,154,908 | ||
Cost of investments for tax purposes is $1,163,794,087. |
33 Invesco Floating Rate Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 28,752,266 | $ | 222,339,283 | 38,559,170 | $ | 287,610,728 | ||||||||||
Class C | 12,245,954 | 94,232,257 | 15,356,905 | 113,997,965 | ||||||||||||
Class R | 53,660 | 413,264 | 89,309 | 674,242 | ||||||||||||
Class Y | 10,902,404 | 84,325,296 | 13,290,665 | 99,476,271 | ||||||||||||
Institutional Class | 7,622,750 | 58,721,848 | 950,425 | 7,085,241 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 817,396 | 6,326,522 | 1,644,780 | 12,202,545 | ||||||||||||
Class C | 355,831 | 2,739,722 | 669,964 | 4,944,909 | ||||||||||||
Class R | 3,008 | 23,306 | 4,552 | 33,848 | ||||||||||||
Class Y | 112,755 | 867,711 | 212,445 | 1,578,879 | ||||||||||||
Institutional Class | 166,263 | 1,283,596 | 294,492 | 2,178,827 | ||||||||||||
Reacquired:(b) | ||||||||||||||||
Class A | (12,481,340 | ) | (96,176,445 | ) | (22,928,890 | ) | (170,197,830 | ) | ||||||||
Class C | (2,972,845 | ) | (22,790,113 | ) | (5,231,659 | ) | (38,434,473 | ) | ||||||||
Class R | (6,830 | ) | (52,388 | ) | (9,775 | ) | (73,186 | ) | ||||||||
Class Y | (3,879,759 | ) | (29,988,939 | ) | (3,826,963 | ) | (28,224,167 | ) | ||||||||
Institutional Class | (1,199,864 | ) | (9,203,522 | ) | (1,679,345 | ) | (12,284,437 | ) | ||||||||
Net increase in share activity | 40,491,649 | $ | 313,061,398 | 37,396,075 | $ | 280,569,362 | ||||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 62% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. | |
(b) | Net of redemption fees of $59,391 and $51,484 allocated among the classes based on relative net assets of each class for the six months ended February 28, 2011 and the year ended August 31, 2010, respectively. |
34 Invesco Floating Rate Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | net assets | assets without | investment | |||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | |||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||
of period | income | unrealized) | operations | income | of period(a) | return(b) | (000s omitted) | absorbed | absorbed | net assets | turnover(c) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 7.47 | $ | 0.17 | (d) | $ | 0.39 | $ | 0.56 | $ | (0.17 | ) | $ | 7.86 | 7.53 | % | $ | 512,423 | 1.03 | %(e)(f) | 1.05 | %(e)(f) | 4.53 | %(e)(f) | 79 | % | ||||||||||||||||||||||
Year ended 08/31/10 | 7.09 | 0.40 | (d) | 0.39 | (g) | 0.79 | (0.41 | ) | 7.47 | 11.28 | (g) | 359,476 | 1.12 | (f) | 1.14 | (f) | 5.34 | (f) | 106 | |||||||||||||||||||||||||||||
Year ended 08/31/09 | 7.99 | 0.41 | (d) | (0.89 | ) | (0.48 | ) | (0.42 | ) | 7.09 | (4.97 | ) | 218,448 | 1.24 | (f) | 1.25 | (f) | 6.50 | (f) | 52 | ||||||||||||||||||||||||||||
Year ended 08/31/08 | 8.67 | 0.53 | (d) | (0.68 | ) | (0.15 | ) | (0.53 | ) | 7.99 | (1.80 | ) | 141,803 | 1.36 | (f) | 1.37 | (f) | 6.36 | (f) | 66 | ||||||||||||||||||||||||||||
Year ended 08/31/07 | 9.06 | 0.60 | (d) | (0.39 | ) | 0.21 | (0.60 | ) | 8.67 | 2.28 | 220,449 | 1.29 | (f) | 1.30 | (f) | 6.65 | (f) | 117 | ||||||||||||||||||||||||||||||
Eight months ended 08/31/06 | 9.04 | 0.37 | (d) | 0.02 | 0.39 | (0.37 | ) | 9.06 | 4.32 | 155,953 | 1.58 | (f)(h) | 1.86 | (f)(h) | 6.06 | (f)(h) | 54 | |||||||||||||||||||||||||||||||
Year ended 12/31/05 | 9.02 | 0.43 | 0.01 | 0.44 | (0.42 | ) | 9.04 | 5.00 | 159,206 | 2.04 | (f) | 2.17 | (f) | 4.69 | (f) | 56 | ||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.44 | 0.15 | (d) | 0.39 | 0.54 | (0.15 | ) | 7.83 | 7.28 | 275,155 | 1.53 | (e)(f) | 1.55 | (e)(f) | 4.03 | (e)(f) | 79 | |||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.06 | 0.36 | (d) | 0.39 | (g) | 0.75 | (0.37 | ) | 7.44 | 10.75 | (g) | 189,966 | 1.62 | (f) | 1.64 | (f) | 4.84 | (f) | 106 | |||||||||||||||||||||||||||||
Year ended 08/31/09 | 7.97 | 0.38 | (d) | (0.90 | ) | (0.52 | ) | (0.39 | ) | 7.06 | (5.61 | ) | 103,975 | 1.74 | (f) | 1.75 | (f) | 6.00 | (f) | 52 | ||||||||||||||||||||||||||||
Year ended 08/31/08 | 8.65 | 0.48 | (d) | (0.68 | ) | (0.20 | ) | (0.48 | ) | 7.97 | (2.31 | ) | 68,452 | 1.86 | (f) | 1.87 | (f) | 5.86 | (f) | 66 | ||||||||||||||||||||||||||||
Year ended 08/31/07 | 9.04 | 0.56 | (d) | (0.39 | ) | 0.17 | (0.56 | ) | 8.65 | 1.76 | 81,479 | 1.79 | (f) | 1.80 | (f) | 6.15 | (f) | 117 | ||||||||||||||||||||||||||||||
Eight months ended 08/31/06 | 9.02 | 0.34 | (d) | 0.02 | 0.36 | (0.34 | ) | 9.04 | 4.05 | 44,853 | 1.97 | (f)(h) | 2.36 | (f)(h) | 5.67 | (f)(h) | 54 | |||||||||||||||||||||||||||||||
Year ended 12/31/05 | 8.99 | 0.40 | 0.03 | 0.43 | (0.40 | ) | 9.02 | 4.85 | 47,624 | 2.29 | (f) | 2.67 | (f) | 4.44 | (f) | 56 | ||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.49 | 0.17 | (d) | 0.38 | 0.55 | (0.16 | ) | 7.88 | 7.38 | 1,528 | 1.28 | (e)(i) | 1.30 | (e)(i) | 4.28 | (e)(i) | 79 | |||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.10 | 0.39 | (d) | 0.39 | (g) | 0.78 | (0.39 | ) | 7.49 | 11.15 | (g) | 1,080 | 1.37 | (i) | 1.39 | (i) | 5.09 | (i) | 106 | |||||||||||||||||||||||||||||
Year ended 08/31/09 | 8.00 | 0.40 | (d) | (0.89 | ) | (0.49 | ) | (0.41 | ) | 7.10 | (5.19 | ) | 427 | 1.49 | (i) | 1.50 | (i) | 6.25 | (i) | 52 | ||||||||||||||||||||||||||||
Year ended 08/31/08 | 8.66 | 0.51 | (d) | (0.66 | ) | (0.15 | ) | (0.51 | ) | 8.00 | (1.81 | ) | 330 | 1.61 | (i) | 1.62 | (i) | 6.11 | (i) | 66 | ||||||||||||||||||||||||||||
Year ended 08/31/07 | 9.06 | 0.58 | (d) | (0.40 | ) | 0.18 | (0.58 | ) | 8.66 | 1.91 | 278 | 1.54 | (i) | 1.55 | (i) | 6.40 | (i) | 117 | ||||||||||||||||||||||||||||||
Period ended 08/31/06(j) | 9.11 | 0.21 | (d) | (0.05 | ) | 0.16 | (0.21 | ) | 9.06 | 1.80 | 78 | 1.53 | (h)(i) | 1.53 | (h)(i) | 6.11 | (h)(i) | 54 | ||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.46 | 0.18 | (d) | 0.39 | 0.57 | (0.18 | ) | 7.85 | 7.67 | 154,319 | 0.78 | (e)(i) | 0.80 | (e)(i) | 4.78 | (e)(i) | 79 | |||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.07 | 0.42 | (d) | 0.39 | (g) | 0.81 | (0.42 | ) | 7.46 | 11.72 | (g) | 93,479 | 0.87 | (i) | 0.89 | (i) | 5.59 | (i) | 106 | |||||||||||||||||||||||||||||
Period ended 08/31/09(j) | 7.29 | 0.41 | (d) | (0.24 | ) | 0.17 | (0.39 | ) | 7.07 | 3.48 | 20,176 | 1.00 | (h)(i) | 1.00 | (h)(i) | 6.74 | (h)(i) | 52 | ||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.47 | 0.19 | (d) | 0.38 | 0.57 | (0.18 | ) | 7.86 | 7.71 | 91,314 | 0.70 | (e)(i) | 0.72 | (e)(i) | 4.86 | (e)(i) | 79 | |||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.09 | 0.42 | (d) | 0.39 | (g) | 0.81 | (0.43 | ) | 7.47 | 11.65 | (g) | 37,580 | 0.79 | (i) | 0.81 | (i) | 5.67 | (i) | 106 | |||||||||||||||||||||||||||||
Year ended 08/31/09 | 7.99 | 0.44 | (d) | (0.89 | ) | (0.45 | ) | (0.45 | ) | 7.09 | (4.62 | ) | 38,720 | 0.88 | (i) | 0.89 | (i) | 6.86 | (i) | 52 | ||||||||||||||||||||||||||||
Year ended 08/31/08 | 8.67 | 0.56 | (d) | (0.68 | ) | (0.12 | ) | (0.56 | ) | 7.99 | (1.46 | ) | 50,786 | 1.01 | (i) | 1.02 | (i) | 6.71 | (i) | 66 | ||||||||||||||||||||||||||||
Year ended 08/31/07 | 9.06 | 0.63 | (d) | (0.39 | ) | 0.24 | (0.63 | ) | 8.67 | 2.62 | 48,138 | 0.95 | (i) | 0.96 | (i) | 6.99 | (i) | 117 | ||||||||||||||||||||||||||||||
Period ended 08/31/06(j) | 9.11 | 0.23 | (d) | (0.05 | ) | 0.18 | (0.23 | ) | 9.06 | 2.00 | 24,335 | 0.98 | (h)(i) | 0.98 | (h)(i) | 6.66 | (h)(i) | 54 | ||||||||||||||||||||||||||||||
(a) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share. | |
(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) | Calculated using average shares outstanding. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $418,029, $225,850, $1,294, $117,254 and $63,136 for Class A, Class C, Class R, Class Y and Institutional Class shares, respectively. | |
(f) | Ratio includes line of credit fees of 0.02% (annualized), 0.02%, 0.02%, 0.06%, 0.02%, 0.01% (annualized) and 0.54% for the six months ended February 28, 2011 and the years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007, the eight months ended August 31, 2006 and the year ended December 31, 2005, respectively. | |
(g) | Includes the impact of the valuation policy on Corporate Loans effective January 1, 2010. Had the policy change not occurred, Net gains on securities (both realized and unrealized) per share would have been $0.33, $0.33, $0.33, $0.33 and $0.33 for Class A, Class C, Class R, Class Y and Institutional Class shares, respectively and total returns would have been lower. | |
(h) | Annualized. | |
(i) | Ratio includes line of credit fees of 0.02% (annualized), 0.02%, 0.02%, 0.06%, 0.02% and 0.01% (annualized) for the six months ended February 28, 2011 and the years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and the eight months ended August 31, 2006, respectively. | |
(j) | Commencement date of April 13, 2006 for Class R and Institutional Class shares and October 3, 2008 for Class Y shares. |
35 Invesco Floating Rate 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,075.30 | $ | 5.30 | $ | 1,019.69 | $ | 5.16 | 1.03 | % | ||||||||||||||||||
C | 1,000.00 | 1,071.50 | 7.86 | 1,017.21 | 7.65 | 1.53 | ||||||||||||||||||||||||
R | 1,000.00 | 1,073.80 | 6.58 | 1,018.45 | 6.41 | 1.28 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,076.70 | 4.02 | 1,020.93 | 3.91 | 0.78 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,077.10 | 3.61 | 1,021.32 | 3.51 | 0.70 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
36 Invesco Floating Rate Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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.
FLR-SAR-1 | Invesco Distributors, Inc. |
Invesco Fundamental Value Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: FVFAX § B: FVFBX § C: FVFCX § Y: FVFDX
A: FVFAX § B: FVFBX § C: FVFCX § Y: FVFDX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
10 | 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 |
Performance summary
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 26.19 | % | ||
Class B Shares | 26.05 | |||
Class C Shares | 25.68 | |||
Class Y Shares | 26.29 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Russell 1000 Value Index▼ (Style-Specific Index) | 26.30 | |||
Lipper Large-Cap Value Funds Index▼ (Peer Group Index) | 26.47 | |||
▼Lipper Inc.
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
��
2 | Invesco Fundamental Value Fund |
Average Annual Total Returns
As of 2/28/11, including maximum applicable
sales charges
sales charges
Class A Shares | ||||
Inception (10/29/02) | 7.62 | % | ||
5 Years | 2.06 | |||
1 Year | 11.11 | |||
Class B Shares | ||||
Inception (10/29/02) | 8.12 | % | ||
5 Years | 2.95 | |||
1 Year | 12.31 | |||
Class C Shares | ||||
Inception (10/29/02) | 7.56 | % | ||
5 Years | 2.45 | |||
1 Year | 15.69 | |||
Class Y Shares | ||||
Inception (10/29/02) | 8.60 | % | ||
5 Years | 3.45 | |||
1 Year | 17.85 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Fundamental Value Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Fundamental Value Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, and Class Y shares was 1.53%, 1.56%, 2.28% and 1.28%, respectively.
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||
Inception (10/29/02) | 6.93 | % | ||
5 Years | 1.29 | |||
1 Year | 4.48 | |||
Class B Shares | ||||
Inception (10/29/02) | 7.43 | % | ||
5 Years | 2.17 | |||
1 Year | 5.36 | |||
Class C Shares | ||||
Inception (10/29/02) | 6.89 | % | ||
5 Years | 1.67 | |||
1 Year | 8.64 | |||
Class Y Shares | ||||
Inception (10/29/02) | 7.93 | % | ||
5 Years | 2.67 | |||
1 Year | 10.82 |
The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 | Invesco Fundamental Value Fund |
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 | Invesco Fundamental Value Fund |
Schedule of Investments
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–88.95%(a) | ||||||||
Asset Management & Custody Banks–0.71% | ||||||||
State Street Corp. | 7,017 | $ | 313,800 | |||||
Cable & Satellite–3.45% | ||||||||
Time Warner Cable Inc. | 20,965 | 1,513,254 | ||||||
Communications Equipment–1.55% | ||||||||
Cisco Systems, Inc.(b) | 36,735 | 681,802 | ||||||
Computer Hardware–2.86% | ||||||||
Dell Inc.(b) | 28,854 | 456,759 | ||||||
Hewlett-Packard Co. | 18,291 | 798,036 | ||||||
1,254,795 | ||||||||
Consumer Electronics–1.49% | ||||||||
Sony Corp.–ADR (Japan) | 17,771 | 654,684 | ||||||
Diversified Banks–1.18% | ||||||||
Wells Fargo & Co. | 16,082 | 518,805 | ||||||
Diversified Chemicals–0.95% | ||||||||
Dow Chemical Co. (The) | 11,277 | 419,053 | ||||||
Drug Retail–1.45% | ||||||||
Walgreen Co. | 14,712 | 637,618 | ||||||
Electric Utilities–3.48% | ||||||||
American Electric Power Co., Inc. | 24,969 | 893,391 | ||||||
Entergy Corp. | 4,165 | 296,548 | ||||||
FirstEnergy Corp. | 8,796 | 336,887 | ||||||
1,526,826 | ||||||||
Food Distributors–1.01% | ||||||||
Sysco Corp. | 15,952 | 443,306 | ||||||
Health Care Distributors–0.92% | ||||||||
Cardinal Health, Inc. | 9,690 | 403,492 | ||||||
Health Care Equipment–1.85% | ||||||||
Covidien PLC (Ireland) | 15,832 | 814,556 | ||||||
Home Improvement Retail–1.63% | ||||||||
Home Depot, Inc. (The) | 19,148 | 717,476 | ||||||
Household Products–1.72% | ||||||||
Procter & Gamble Co. (The) | 12,004 | 756,852 | ||||||
Human Resource & Employment Services–0.98% | ||||||||
Manpower Inc. | 6,766 | 429,641 | ||||||
Industrial Conglomerates–5.95% | ||||||||
General Electric Co. | 88,521 | 1,851,859 | ||||||
Tyco International Ltd. | 16,847 | 763,843 | ||||||
2,615,702 | ||||||||
Industrial Machinery–1.30% | ||||||||
Dover Corp. | 8,918 | 572,981 | ||||||
Insurance Brokers–3.62% | ||||||||
Marsh & McLennan Cos., Inc. | 52,278 | 1,591,342 | ||||||
Integrated Oil & Gas–8.15% | ||||||||
Exxon Mobil Corp. | 8,186 | 700,149 | ||||||
Hess Corp. | 5,152 | 448,379 | ||||||
Occidental Petroleum Corp. | 13,389 | 1,365,276 | ||||||
Royal Dutch Shell PLC–ADR (United Kingdom) | 14,749 | 1,065,615 | ||||||
3,579,419 | ||||||||
Internet Software & Services–2.70% | ||||||||
eBay Inc.(b) | 35,398 | 1,186,010 | ||||||
Investment Banking & Brokerage–3.01% | ||||||||
Charles Schwab Corp. (The) | 38,945 | 738,787 | ||||||
Morgan Stanley | 19,590 | 581,431 | ||||||
1,320,218 | ||||||||
Managed Health Care–1.27% | ||||||||
UnitedHealth Group Inc. | 13,114 | 558,394 | ||||||
Movies & Entertainment–4.82% | ||||||||
Time Warner Inc. | 26,958 | 1,029,796 | ||||||
Viacom Inc.–Class B | 24,358 | 1,087,828 | ||||||
2,117,624 | ||||||||
Office Services & Supplies–1.51% | ||||||||
Avery Dennison Corp. | 16,563 | 661,195 | ||||||
Oil & Gas Equipment & Services–1.73% | ||||||||
Schlumberger Ltd. | 8,152 | 761,560 | ||||||
Oil & Gas Exploration & Production–4.01% | ||||||||
Anadarko Petroleum Corp. | 13,849 | 1,133,264 | ||||||
Devon Energy Corp. | 6,849 | 626,272 | ||||||
1,759,536 | ||||||||
Other Diversified Financial Services–7.43% | ||||||||
Bank of America Corp. | 51,870 | 741,223 | ||||||
Citigroup Inc.(b) | 101,084 | 473,073 | ||||||
JPMorgan Chase & Co. | 43,864 | 2,048,010 | ||||||
3,262,306 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Fundamental Value Fund
Shares | Value | |||||||
Packaged Foods & Meats–2.97% | ||||||||
Kraft Foods Inc.–Class A | 24,031 | $ | 765,147 | |||||
Unilever NV–New York Shares (Netherlands) | 17,895 | 541,145 | ||||||
1,306,292 | ||||||||
Personal Products–0.96% | ||||||||
Avon Products, Inc. | 15,085 | 419,514 | ||||||
Pharmaceuticals–5.22% | ||||||||
Abbott Laboratories | 6,147 | 295,671 | ||||||
Bristol-Myers Squibb Co. | 28,591 | 737,934 | ||||||
Merck & Co., Inc. | 8,831 | 287,625 | ||||||
Pfizer Inc. | 20,799 | 400,173 | ||||||
Roche Holding AG–ADR (Switzerland) | 15,137 | 570,416 | ||||||
2,291,819 | ||||||||
Property & Casualty Insurance–1.03% | ||||||||
Chubb Corp. (The) | 7,421 | 450,306 | ||||||
Regional Banks–3.65% | ||||||||
BB&T Corp. | 9,668 | 266,837 | ||||||
Fifth Third Bancorp | 32,324 | 471,930 | ||||||
PNC Financial Services Group, Inc. | 13,994 | 863,430 | ||||||
1,602,197 | ||||||||
Semiconductors–1.10% | ||||||||
Intel Corp. | 22,550 | 484,149 | ||||||
Systems Software–1.16% | ||||||||
Microsoft Corp. | 19,236 | 511,293 | ||||||
Wireless Telecommunication Services–2.13% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 32,718 | 936,389 | ||||||
Total Common Stocks & Other Equity Interests (Cost $31,085,352) | 39,074,206 | |||||||
Principal | ||||||||
Amount | ||||||||
Bonds & Notes–6.69% | ||||||||
Advertising–0.40% | ||||||||
Interpublic Group of Cos., Inc. (The), Sr. Unsec. Conv. Global Putable Notes, 4.25%, 03/15/23 | $ | 146,000 | 174,470 | |||||
Biotechnology–2.28% | ||||||||
Amgen Inc.–Series B, Sr. Unsec. Conv. Notes, 0.38%, 02/01/13 | 1,000,000 | 1,003,750 | ||||||
Communications Equipment–1.29% | ||||||||
JDS Uniphase Corp., Sr. Unsec. Conv. Putable Notes, 1.00%, 05/15/26(c) | 500,000 | 565,000 | ||||||
Computer Storage & Peripherals–0.66% | ||||||||
SanDisk Corp., Sr. Unsec. Conv. Notes, 1.00%, 05/15/13 | 293,000 | 288,239 | ||||||
Construction & Farm Machinery & Heavy Trucks–0.12% | ||||||||
Navistar International Corp., Sr. Unsec. Sub. Conv. Notes, 3.00%, 10/15/14 | 39,000 | 54,697 | ||||||
Health Care Services–0.21% | ||||||||
Omnicare Inc.–Series OCR, Sr. Unsec. Gtd. Conv. Putable Deb., 3.25%, 12/15/35 | 100,000 | 92,750 | ||||||
Life Sciences Tools & Services–1.06% | ||||||||
Life Technologies Corp., Sr. Unsec. Conv. Putable Notes, 1.50%, 02/15/24 | 400,000 | 467,000 | ||||||
Oil & Gas Equipment & Services–0.37% | ||||||||
Helix Energy Solutions Group, Inc., Sr. Unsec. Conv. Putable Notes, 3.25%, 12/15/25 | 163,000 | 162,796 | ||||||
Semiconductors–0.30% | ||||||||
Micron Technology, Inc., Sr. Unsec. Conv. Notes, 1.88%, 06/01/14 | 122,000 | 131,150 | ||||||
Total Bonds & Notes (Cost $2,596,602) | 2,939,852 | |||||||
Shares | ||||||||
Preferred Stocks–2.87% | ||||||||
Health Care Facilities–0.60% | ||||||||
HealthSouth Corp., 6.50% Conv. Pfd.(c) | 250 | 263,813 | ||||||
Multi-Utilities–2.27% | ||||||||
CenterPoint Energy, Inc., 0.31% Conv. Pfd.(b) | 28,000 | 997,640 | ||||||
Total Preferred Stocks (Cost $909,345) | 1,261,453 | |||||||
Money Market Funds–1.65% | ||||||||
Liquid Assets Portfolio–Institutional Class(d) | 362,922 | 362,922 | ||||||
Premier Portfolio–Institutional Class(d) | 362,921 | 362,921 | ||||||
Total Money Market Funds (Cost $725,843) | 725,843 | |||||||
TOTAL INVESTMENTS–100.16% (Cost $35,317,142) | 44,001,354 | |||||||
OTHER ASSETS LESS LIABILITIES–(0.16)% | (69,811 | ) | ||||||
NET ASSETS–100.00% | $ | 43,931,543 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Fundamental Value Fund
Investment Abbreviations:
ADR | – American Depositary Receipt | |
Conv. | – Convertible | |
Deb. | – Debentures | |
Gtd. | – Guaranteed | |
Pfd. | – Preferred | |
Sr. | – Senior | |
Sub. | – Subordinated | |
Unsec. | – Unsecured |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $828,813, which represented 1.89% of the Fund’s Net Assets. | |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on Net Assets
as of February 28, 2011
Financials | 20.6 | % | ||
Energy | 14.3 | |||
Health Care | 13.4 | |||
Consumer Discretionary | 11.8 | |||
Information Technology | 11.6 | |||
Industrials | 9.9 | |||
Consumer Staples | 8.1 | |||
Utilities | 5.7 | |||
Telecommunication Services | 2.1 | |||
Materials | 1.0 | |||
Money Market Funds Plus Other Assets Less Liabilities | 1.5 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Fundamental Value Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $34,591,299) | $ | 43,275,511 | ||
Investments in affiliated money market funds, at value and cost | 725,843 | |||
Total investments, at value (Cost $35,317,142) | 44,001,354 | |||
Receivable for: | ||||
Fund shares sold | 15,798 | |||
Dividends and interest | 116,248 | |||
Investment for trustee deferred compensation and retirement plans | 1,131 | |||
Other assets | 20,095 | |||
Total assets | 44,154,626 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares reacquired | 129,506 | |||
Accrued fees to affiliates | 45,908 | |||
Accrued other operating expenses | 46,435 | |||
Trustee deferred compensation and retirement plans | 1,234 | |||
Total liabilities | 223,083 | |||
Net assets applicable to shares outstanding | $ | 43,931,543 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 37,071,744 | ||
Undistributed net investment income | 75,900 | |||
Undistributed net realized gain (loss) | (1,900,312 | ) | ||
Unrealized appreciation | 8,684,211 | |||
$ | 43,931,543 | |||
Net Assets: | ||||
Class A | $ | 14,819,771 | ||
Class B | $ | 25,037,701 | ||
Class C | $ | 3,757,938 | ||
Class Y | $ | 316,133 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 1,284,350 | |||
Class B | 2,190,535 | |||
Class C | 329,358 | |||
Class Y | 27,438 | |||
Class A: | ||||
Net asset value per share | $ | 11.54 | ||
Maximum offering price per share | ||||
(Net asset value of $11.54 divided by 94.50%) | $ | 12.21 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.43 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 11.41 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 11.52 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Fundamental Value Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $4,722) | $ | 423,496 | ||
Dividends from affiliated money market funds | 617 | |||
Interest | 34,251 | |||
Total investment income | 458,364 | |||
Expenses: | ||||
Advisory fees | 138,897 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 3,811 | |||
Distribution fees: | ||||
Class A | 17,179 | |||
Class B | 60,382 | |||
Class C | 17,173 | |||
Transfer agent fees | 38,998 | |||
Trustees’ and officers’ fees and benefits | 10,975 | |||
Registration and filing fees | 24,929 | |||
Reports to shareholders | 19,525 | |||
Professional services fees | 19,061 | |||
Other | 4,527 | |||
Total expenses | 380,252 | |||
Less: Fees waived and expense offset arrangement(s) | (988 | ) | ||
Net expenses | 379,264 | |||
Net investment income | 79,100 | |||
Net realized gain from investment securities | 1,585,692 | |||
Change in net unrealized appreciation of investment securities | 7,916,512 | |||
Net realized and unrealized gain | 9,502,204 | |||
Net increase in net assets resulting from operations | $ | 9,581,304 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Fundamental Value Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
Six months ended | Eleven months ended | Year ended | ||||||||||
February 28, | August 31, | September 30, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 79,100 | $ | 265,523 | $ | 558,342 | ||||||
Net realized gain (loss) | 1,585,692 | 2,607,749 | (5,913,268 | ) | ||||||||
Change in net unrealized appreciation (depreciation) | 7,916,512 | (4,161,805 | ) | 673,423 | ||||||||
Net increase (decrease) in net assets resulting from operations | 9,581,304 | (1,288,533 | ) | (4,681,503 | ) | |||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (98,427 | ) | (182,411 | ) | (305,854 | ) | ||||||
Class B | (165,200 | ) | (362,022 | ) | (651,479 | ) | ||||||
Class C | (663 | ) | (15,905 | ) | (52,518 | ) | ||||||
Class Y | (2,849 | ) | (4,507 | ) | (5,596 | ) | ||||||
Total distributions from net investment income | (267,139 | ) | (564,845 | ) | (1,015,447 | ) | ||||||
Distributions to shareholders from net realized gains: | ||||||||||||
Class A | — | — | (817,700 | ) | ||||||||
Class B | — | — | (1,623,014 | ) | ||||||||
Class C | — | — | (214,173 | ) | ||||||||
Class Y | — | — | (13,107 | ) | ||||||||
Total distributions from net realized gains | — | — | (2,667,994 | ) | ||||||||
Share transactions–net: | ||||||||||||
Class A | (762,655 | ) | (2,146,576 | ) | (1,290,423 | ) | ||||||
Class B | (3,425,719 | ) | (5,813,953 | ) | (4,826,261 | ) | ||||||
Class C | (113,830 | ) | (684,650 | ) | (233,774 | ) | ||||||
Class Y | (35,105 | ) | 92,477 | (26,930 | ) | |||||||
Net increase (decrease) in net assets resulting from share transactions | (4,337,309 | ) | (8,552,702 | ) | (6,377,388 | ) | ||||||
Net increase (decrease) in net assets | 4,976,856 | (10,406,080 | ) | (14,742,332 | ) | |||||||
Net assets: | ||||||||||||
Beginning of period | 38,954,687 | 49,360,767 | 64,103,099 | |||||||||
End of period (includes undistributed net investment income of $75,900, $263,939 and $563,261, respectively) | $ | 43,931,543 | $ | 38,954,687 | $ | 49,360,767 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Fundamental Value Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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 to provide total return.
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
10 Invesco Fundamental Value Fund
longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. |
11 Invesco Fundamental Value 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 paid annually and recorded on 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 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 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. | 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. | |
G. | 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 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. | |
H. | 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. | ||
I. | Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into 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 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 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 foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with 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 Net Assets | Rate | |||
First $500 million | 0 | .67% | ||
Over $500 million | 0 | .62% | ||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such
12 Invesco Fundamental Value Fund
Affiliated Sub-Adviser(s) that provide 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 1.65%, 2.40%, 2.40% and 1.40%, 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $812.
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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees.
Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.
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 February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $675 in front-end sales commissions from the sale of Class A shares and $0, $1,764 and $216 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 Invesco, 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 February 28, 2011. 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.
13 Invesco Fundamental Value Fund
During the six months ended February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 39,229,632 | $ | 1,831,869 | $ | — | $ | 41,061,501 | ||||||||
Corporate Debt Securities | — | 2,939,853 | — | 2,939,853 | ||||||||||||
$ | 39,229,632 | $ | 4,771,722 | $ | — | $ | 44,001,354 | |||||||||
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $788 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 920,802 | ||
August 31, 2018 | 2,531,929 | |||
Total capital loss carryforward | $ | 3,452,731 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
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 February 28, 2011 was $2,561,413 and $7,253,089, 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 | $ | 9,311,084 | ||
Aggregate unrealized (depreciation) of investment securities | (660,145 | ) | ||
Net unrealized appreciation of investment securities | $ | 8,650,939 | ||
Cost of investments for tax purposes is $35,350,415. |
14 Invesco Fundamental Value Fund
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Eleven months ended | Year ended | ||||||||||||||||||||||
February 28, 2011 | August 31, 2010 | September 30, 2009 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 58,217 | $ | 632,416 | 1,357,993 | $ | 12,990,847 | 285,610 | $ | 2,306,144 | |||||||||||||||
Class B | 26,909 | 281,253 | 1,300,362 | 12,184,831 | 291,917 | 2,294,118 | ||||||||||||||||||
Class C | 19,581 | 211,920 | 28,761 | 284,911 | 62,444 | 497,765 | ||||||||||||||||||
Class Y | 645 | 6,502 | 15,486 | 155,453 | 3,307 | 26,642 | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 7,853 | 83,873 | 18,337 | 179,701 | 144,994 | 1,113,553 | ||||||||||||||||||
Class B | 13,596 | 143,844 | 36,383 | 354,006 | 293,648 | 2,237,597 | ||||||||||||||||||
Class C | 55 | 579 | 1,585 | 15,389 | 34,579 | 263,144 | ||||||||||||||||||
Class Y | 252 | 2,685 | 461 | 4,507 | 2,438 | 18,703 | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (140,234 | ) | (1,478,944 | ) | (1,613,951 | ) | (15,317,124 | ) | (597,635 | ) | (4,710,120 | ) | ||||||||||||
Class B | (376,076 | ) | (3,850,816 | ) | (1,918,187 | ) | (18,352,790 | ) | (1,177,436 | ) | (9,357,976 | ) | ||||||||||||
Class C | (31,223 | ) | (326,329 | ) | (100,487 | ) | (984,950 | ) | (128,874 | ) | (994,683 | ) | ||||||||||||
Class Y | (4,586 | ) | (44,292 | ) | (6,676 | ) | (67,483 | ) | (10,444 | ) | (72,275 | ) | ||||||||||||
Net increase (decrease) in share activity | (425,011 | ) | $ | (4,337,309 | ) | (879,933 | ) | $ | (8,552,702 | ) | (795,452 | ) | $ | (6,377,388 | ) | |||||||||
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 80% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. |
15 Invesco Fundamental Value Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return(b) | (000s omitted) | absorbed(c) | absorbed(c) | net assets(c) | turnover(d) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 9.21 | $ | 0.03 | $ | 2.38 | $ | 2.41 | $ | (0.08 | ) | $ | — | $ | (0.08 | ) | $ | 11.54 | 26.19 | % | $ | 14,820 | 1.63 | %(e) | 1.63 | %(e) | 0.58 | %(e) | 7 | % | ||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 9.66 | 0.06 | (0.39 | ) | (0.33 | ) | (0.12 | ) | — | (0.12 | ) | 9.21 | (3.52 | ) | 12,509 | 1.51 | 1.51 | 0.69 | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.85 | 0.10 | (0.66 | ) | (0.56 | ) | (0.17 | ) | (0.46 | ) | (0.63 | ) | 9.66 | (3.61 | ) | 15,418 | 1.65 | 1.65 | 1.23 | 57 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 14.25 | 0.13 | (2.24 | ) | (2.11 | ) | (0.18 | ) | (1.11 | ) | (1.29 | ) | 10.85 | (16.08 | ) | 19,137 | 1.38 | 1.38 | 1.09 | 16 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 14.29 | 0.17 | 1.43 | 1.60 | (0.16 | ) | (1.48 | ) | (1.64 | ) | 14.25 | 11.81 | 30,067 | 1.30 | 1.30 | 1.24 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 14.32 | 0.15 | 1.29 | 1.44 | (0.12 | ) | (1.35 | ) | (1.47 | ) | 14.29 | 10.95 | 36,955 | 1.34 | 1.34 | 1.06 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 13.10 | 0.13 | 2.14 | 2.27 | (0.11 | ) | (0.94 | ) | (1.05 | ) | 14.32 | 17.99 | 36,759 | 1.36 | 1.36 | 0.93 | 37 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 9.13 | 0.01 | 2.36 | 2.37 | (0.07 | ) | — | (0.07 | ) | 11.43 | 26.05 | 25,038 | 1.88 | (e) | 1.88 | (e) | 0.33 | (e) | 7 | |||||||||||||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 9.60 | 0.06 | (0.41 | ) | (0.35 | ) | (0.12 | ) | — | (0.12 | ) | 9.13 | (3.70 | ) | 23,065 | 1.54 | 1.54 | 0.66 | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.79 | 0.11 | (0.65 | ) | (0.54 | ) | (0.19 | ) | (0.46 | ) | (0.65 | ) | 9.60 | (3.47 | ) | 29,818 | 1.57 | 1.57 | 1.31 | 57 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 14.19 | 0.14 | (2.23 | ) | (2.09 | ) | (0.20 | ) | (1.11 | ) | (1.31 | ) | 10.79 | (16.03 | ) | 39,935 | 1.28 | 1.28 | 1.19 | 16 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 14.23 | 0.19 | 1.42 | 1.61 | (0.17 | ) | (1.48 | ) | (1.65 | ) | 14.19 | 11.98 | 64,470 | 1.20 | 1.20 | 1.34 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 14.17 | 0.16 | 1.29 | 1.45 | (0.04 | ) | (1.35 | ) | (1.39 | ) | 14.23 | 11.07 | 59,807 | 1.19 | 1.19 | 1.21 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 12.98 | 0.03 | 2.13 | 2.16 | (0.03 | ) | (0.94 | ) | (0.97 | ) | 14.17 | 17.27 | 67,448 | 2.03 | 2.03 | 0.26 | 37 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 9.08 | (0.01 | ) | 2.34 | 2.33 | (0.00 | ) | — | (0.00 | ) | 11.41 | 25.68 | 3,758 | 2.38 | (e) | 2.38 | (e) | (0.17 | )(e) | 7 | ||||||||||||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 9.52 | (0.01 | ) | (0.39 | ) | (0.40 | ) | (0.04 | ) | — | (0.04 | ) | 9.08 | (4.20 | ) | 3,095 | 2.26 | 2.26 | (0.06 | ) | 16 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.71 | 0.04 | (0.66 | ) | (0.62 | ) | (0.11 | ) | (0.46 | ) | (0.57 | ) | 9.52 | (4.39 | ) | 3,914 | 2.40 | 2.40 | 0.48 | 57 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 14.07 | 0.04 | (2.21 | ) | (2.17 | ) | (0.08 | ) | (1.11 | ) | (1.19 | ) | 10.71 | (16.64 | ) | 4,743 | 2.11 | 2.11 | 0.36 | 16 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 14.13 | 0.07 | 1.41 | 1.48 | (0.06 | ) | (1.48 | ) | (1.54 | ) | 14.07 | 11.03 | 6,551 | 2.02 | 2.02 | 0.52 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 14.19 | 0.05 | 1.27 | 1.32 | (0.03 | ) | (1.35 | ) | (1.38 | ) | 14.13 | 10.08 | 7,195 | 2.05 | 2.05 | 0.35 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 12.99 | 0.04 | 2.13 | 2.17 | (0.03 | ) | (0.94 | ) | (0.97 | ) | 14.19 | 17.29 | 6,024 | 1.98 | 1.98 | 0.31 | 37 | |||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 9.21 | 0.04 | 2.37 | 2.41 | (0.10 | ) | — | (0.10 | ) | 11.52 | 26.29 | 316 | 1.38 | (e) | 1.38 | (e) | 0.83 | (e) | 7 | |||||||||||||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 9.66 | 0.09 | (0.40 | ) | (0.31 | ) | (0.14 | ) | — | (0.14 | ) | 9.21 | (3.30 | ) | 287 | 1.26 | 1.26 | 0.94 | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.86 | 0.12 | (0.66 | ) | (0.54 | ) | (0.20 | ) | (0.46 | ) | (0.66 | ) | 9.66 | (3.40 | ) | 211 | 1.40 | 1.40 | 1.48 | 57 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 14.28 | 0.17 | (2.26 | ) | (2.09 | ) | (0.22 | ) | (1.11 | ) | (1.33 | ) | 10.86 | (15.92 | ) | 288 | 1.13 | 1.13 | 1.34 | 16 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 14.31 | 0.21 | 1.43 | 1.64 | (0.19 | ) | (1.48 | ) | (1.67 | ) | 14.28 | 12.12 | 1,499 | 1.06 | 1.06 | 1.48 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 14.34 | 0.18 | 1.29 | 1.47 | (0.15 | ) | (1.35 | ) | (1.50 | ) | 14.31 | 11.17 | 1,565 | 1.10 | 1.10 | 1.30 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 13.13 | 0.16 | 2.15 | 2.31 | (0.16 | ) | (0.94 | ) | (1.10 | ) | 14.34 | 18.31 | 1,548 | 1.11 | 1.11 | 1.18 | 37 | |||||||||||||||||||||||||||||||||||||||
(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) | The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios for all classes was less than 0.005% for the eleven months ended 2010 and for the years ended 2009, 2008, 2007 and 2006, respectively. | |
(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 $13,857, $24,194, $3,463 and $291 for Class A, Class B, Class C and Class Y shares, respectively. |
NOTE 10—Significant Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Core Plus Bond Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in May 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.
In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
16 Invesco Fundamental Value Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,261.90 | $ | 9.14 | $ | 1,016.71 | $ | 8.15 | 1.63 | % | ||||||||||||||||||
Class B | 1,000.00 | 1,260.50 | 10.31 | 1,015.67 | 9.20 | 1.84 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,256.80 | 13.32 | 1,012.99 | 11.88 | 2.38 | ||||||||||||||||||||||||
Class Y | 1,000.00 | 1,262.90 | 7.74 | 1,017.95 | 6.90 | 1.38 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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 Fundamental Value Fund
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-FVAL-SAR-1 | Invesco Distributors, Inc. |
Invesco Large Cap Relative Value Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: IVABX § B: IVAHX § C: IVAKX § Y: MSIVX
A: IVABX § B: IVAHX § C: IVAKX § Y: MSIVX
2 | Fund Performance | |||
4 | Letters to Shareholders | |||
5 | Schedule of Investments | |||
8 | Financial Statements | |||
10 | Notes to Financial Statements | |||
15 | Financial Highlights | |||
16 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 28.27 | % | ||
Class B Shares | 27.76 | |||
Class C Shares | 27.87 | |||
Class Y Shares | 28.39 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Russell 1000 Value Index▼ (Style-Specific Index) | 26.30 | |||
Lipper Large-Cap Value Funds Index▼ (Peer Group Index) | 26.47 | |||
▼ | Lipper Inc. |
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Large Cap Relative Value Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable
sales charges
sales charges
Class A Shares | ||||||||
Inception (1/2/96) | 7.54 | % | ||||||
10 | Years | 3.25 | ||||||
5 | Years | 2.19 | ||||||
1 | Year | 12.51 | ||||||
Class B Shares | ||||||||
10 | Years | 3.21 | % | |||||
5 | Years | 2.20 | ||||||
1 | Year | 13.02 | ||||||
Class C Shares | ||||||||
10 | Years | 3.06 | % | |||||
5 | Years | 2.58 | ||||||
1 | Year | 17.13 | ||||||
Class Y Shares | ||||||||
Inception (1/31/90) | 9.27 | % | ||||||
10 | Years | 4.08 | ||||||
5 | Years | 3.61 | ||||||
1 | Year | 19.30 |
Effective June 1, 2010, Class I and Class P shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class Y and Class A shares, respectively, of Invesco Large Cap Relative Value Fund. Returns shown above for Class Y and Class A shares are blended returns of the predecessor fund and Invesco Large Cap Relative Value Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class B and Class C shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class P shares, restated to reflect the higher 12b-1 fees applicable to Class B and Class C shares, respectively. Class B and Class C share performance reflects any applicable fee waivers or expense reimbursements. The inception date of the predecessor fund’s Class P shares was January 2, 1996.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (1/2/96) | 7.16 | % | ||||||
10 | Years | 2.64 | ||||||
5 | Years | 1.29 | ||||||
1 | Year | 6.11 | ||||||
Class B Shares | ||||||||
10 | Years | 2.61 | % | |||||
5 | Years | 1.31 | ||||||
1 | Year | 6.41 | ||||||
Class C Shares | ||||||||
10 | Years | 2.45 | % | |||||
5 | Years | 1.67 | ||||||
1 | Year | 10.41 | ||||||
Class Y Shares | ||||||||
Inception (1/31/90) | 9.00 | % | ||||||
10 | Years | 3.49 | ||||||
5 | Years | 2.70 | ||||||
1 | Year | 12.56 |
deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.92%, 1.67%, 1.67% and 0.67%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Large Cap Relative Value Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. Sincerely,
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Large Cap Relative Value Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–94.51%(a) | ||||||||
Air Freight & Logistics–0.47% | ||||||||
FedEx Corp. | 5,761 | $ | 518,605 | |||||
Asset Management & Custody Banks–1.00% | ||||||||
State Street Corp. | 25,065 | 1,120,907 | ||||||
Automobile Manufacturers–0.94% | ||||||||
Ford Motor Co.(b) | 34,350 | 516,968 | ||||||
General Motors Co.(b) | 15,848 | 531,383 | ||||||
1,048,351 | ||||||||
Cable & Satellite–3.22% | ||||||||
Comcast Corp.–Class A | 81,842 | 2,108,250 | ||||||
Time Warner Cable Inc. | 20,616 | 1,488,063 | ||||||
3,596,313 | ||||||||
Communications Equipment–0.87% | ||||||||
Cisco Systems, Inc.(b) | 52,075 | 966,512 | ||||||
Computer Hardware–2.71% | ||||||||
Dell Inc.(b) | 90,178 | 1,427,518 | ||||||
Hewlett-Packard Co. | 36,566 | 1,595,374 | ||||||
3,022,892 | ||||||||
Consumer Electronics–1.08% | ||||||||
Sony Corp.–ADR (Japan) | 32,566 | 1,199,731 | ||||||
Data Processing & Outsourced Services–1.20% | ||||||||
Western Union Co. | 60,838 | 1,337,828 | ||||||
Diversified Banks–1.53% | ||||||||
U.S. Bancorp | 24,634 | 683,101 | ||||||
Wells Fargo & Co. | 31,889 | 1,028,739 | ||||||
1,711,840 | ||||||||
Diversified Chemicals–1.82% | ||||||||
Dow Chemical Co. (The) | 27,571 | 1,024,538 | ||||||
PPG Industries, Inc. | 11,326 | 1,000,992 | ||||||
2,025,530 | ||||||||
Diversified Support Services–0.49% | ||||||||
Cintas Corp. | 19,496 | 548,228 | ||||||
Drug Retail–1.52% | ||||||||
Walgreen Co. | 39,226 | 1,700,055 | ||||||
Electric Utilities–3.58% | ||||||||
American Electric Power Co., Inc. | 56,864 | 2,034,594 | ||||||
Edison International | 16,237 | 602,718 | ||||||
Entergy Corp. | 8,702 | 619,582 | ||||||
FirstEnergy Corp. | 19,151 | 733,483 | ||||||
3,990,377 | ||||||||
Food Distributors–0.98% | ||||||||
Sysco Corp. | 39,376 | 1,094,259 | ||||||
Health Care Distributors–0.66% | ||||||||
Cardinal Health, Inc. | 17,750 | 739,110 | ||||||
Health Care Equipment–0.91% | ||||||||
Covidien PLC (Ireland) | 7,633 | 392,718 | ||||||
Medtronic, Inc. | 15,562 | 621,235 | ||||||
1,013,953 | ||||||||
Home Improvement Retail–1.36% | ||||||||
Home Depot, Inc. (The) | 40,576 | 1,520,383 | ||||||
Household Products–2.09% | ||||||||
Energizer Holdings, Inc.(b) | 3,023 | 202,027 | ||||||
Procter & Gamble Co. (The) | 33,822 | 2,132,477 | ||||||
2,334,504 | ||||||||
Human Resource & Employment Services–1.11% | ||||||||
Manpower Inc. | 10,955 | 695,642 | ||||||
Robert Half International, Inc. | 16,971 | 541,375 | ||||||
1,237,017 | ||||||||
Industrial Conglomerates–6.00% | ||||||||
General Electric Co. | 214,381 | 4,484,851 | ||||||
Tyco International Ltd. (Switzerland) | 48,742 | 2,209,962 | ||||||
6,694,813 | ||||||||
Industrial Machinery–1.45% | ||||||||
Dover Corp. | 7,509 | 482,453 | ||||||
Ingersoll-Rand PLC (Ireland) | 25,145 | 1,139,069 | ||||||
1,621,522 | ||||||||
�� Insurance Brokers–2.76% | ||||||||
Marsh & McLennan Cos., Inc. | 101,014 | 3,074,866 | ||||||
Integrated Oil & Gas–8.06% | ||||||||
ConocoPhillips | 10,620 | 826,979 | ||||||
Exxon Mobil Corp. | 14,668 | 1,254,554 | ||||||
Hess Corp. | 23,087 | 2,009,262 | ||||||
Occidental Petroleum Corp. | 26,573 | 2,709,649 | ||||||
Royal Dutch Shell PLC–ADR (United Kingdom) | 30,282 | 2,187,874 | ||||||
8,988,318 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Large Cap Relative Value Fund
Shares | Value | |||||||
Integrated Telecommunication Services–1.06% | ||||||||
Verizon Communications Inc. | 31,933 | $ | 1,178,966 | |||||
Internet Software & Services–3.22% | ||||||||
eBay Inc.(b) | 73,184 | 2,452,030 | ||||||
Yahoo! Inc.(b) | 69,446 | 1,138,914 | ||||||
3,590,944 | ||||||||
Investment Banking & Brokerage–2.96% | ||||||||
Charles Schwab Corp. (The) | 87,284 | 1,655,777 | ||||||
Morgan Stanley | 55,544 | 1,648,546 | ||||||
3,304,323 | ||||||||
IT Consulting & Other Services–0.87% | ||||||||
Amdocs Ltd. (Guernsey)(b) | 32,600 | 972,784 | ||||||
Life & Health Insurance–0.81% | ||||||||
Principal Financial Group, Inc. | 26,258 | 899,599 | ||||||
Managed Health Care–1.97% | ||||||||
UnitedHealth Group Inc. | 51,586 | 2,196,532 | ||||||
Movies & Entertainment–4.01% | ||||||||
Time Warner Inc. | 48,424 | 1,849,797 | ||||||
Viacom Inc.–Class B | 58,649 | 2,619,264 | ||||||
4,469,061 | ||||||||
Office Services & Supplies–0.56% | ||||||||
Avery Dennison Corp. | 15,670 | 625,546 | ||||||
Oil & Gas Equipment & Services–2.34% | ||||||||
Baker Hughes Inc. | 3,438 | 244,270 | ||||||
Cameron International Corp.(b) | 7,826 | 462,751 | ||||||
Schlumberger Ltd. | 20,404 | 1,906,142 | ||||||
2,613,163 | ||||||||
Oil & Gas Exploration & Production–3.93% | ||||||||
Anadarko Petroleum Corp. | 30,973 | 2,534,521 | ||||||
Devon Energy Corp. | 13,706 | 1,253,277 | ||||||
Noble Energy, Inc. | 6,428 | 595,618 | ||||||
4,383,416 | ||||||||
Oil & Gas Storage & Transportation–0.50% | ||||||||
Williams Cos., Inc. (The) | 18,362 | 557,470 | ||||||
Other Diversified Financial Services–7.79% | ||||||||
Bank of America Corp. | 145,452 | 2,078,509 | ||||||
Citigroup Inc.(b) | 292,955 | 1,371,030 | ||||||
JPMorgan Chase & Co. | 112,332 | 5,244,781 | ||||||
8,694,320 | ||||||||
Packaged Foods & Meats–2.40% | ||||||||
Kraft Foods Inc.–Class A | 45,211 | 1,439,518 | ||||||
Unilever NV–New York Registered Shares (Netherlands) | 40,851 | 1,235,334 | ||||||
2,674,852 | ||||||||
Personal Products–1.50% | ||||||||
Avon Products, Inc. | 60,035 | 1,669,573 | ||||||
Pharmaceuticals–5.43% | ||||||||
Abbott Laboratories | 13,962 | 671,572 | ||||||
Bristol-Myers Squibb Co. | 59,865 | 1,545,116 | ||||||
Merck & Co., Inc. | 25,573 | 832,913 | ||||||
Pfizer Inc. | 122,297 | 2,352,994 | ||||||
Roche Holding AG–ADR (Switzerland) | 17,430 | 656,825 | ||||||
6,059,420 | ||||||||
Property & Casualty Insurance–0.67% | ||||||||
Chubb Corp. (The) | 12,301 | 746,425 | ||||||
Regional Banks–3.19% | ||||||||
BB&T Corp. | 21,845 | 602,922 | ||||||
Fifth Third Bancorp | 39,886 | 582,335 | ||||||
PNC Financial Services Group, Inc. | 30,871 | 1,904,741 | ||||||
Regions Financial Corp. | 60,881 | 465,131 | ||||||
3,555,129 | ||||||||
Semiconductors–0.85% | ||||||||
Intel Corp. | 44,372 | 952,667 | ||||||
Soft Drinks–1.14% | ||||||||
Coca-Cola Co. (The) | 11,695 | 747,545 | ||||||
Coca-Cola Enterprises Inc. | 19,747 | 519,346 | ||||||
1,266,891 | ||||||||
Specialty Chemicals–0.51% | ||||||||
LyondellBasell Industries N.V.–Class A (Netherlands)(b) | 14,944 | 569,068 | ||||||
Systems Software–1.25% | ||||||||
Microsoft Corp. | 52,631 | 1,398,932 | ||||||
Wireless Telecommunication Services–1.74% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 67,806 | 1,940,608 | ||||||
Total Common Stocks & Other Equity Interests (Cost $100,686,153) | 105,425,603 | |||||||
Money Market Funds–5.14% | ||||||||
Liquid Assets Portfolio–Institutional Class(c) | 2,870,569 | 2,870,569 | ||||||
Premier Portfolio–Institutional Class(c) | 2,870,568 | 2,870,568 | ||||||
Total Money Market Funds (Cost $5,741,137) | 5,741,137 | |||||||
TOTAL INVESTMENTS–99.65% (Cost $106,427,290) | 111,166,740 | |||||||
OTHER ASSETS LESS LIABILITIES–0.35% | 386,688 | |||||||
NET ASSETS–100.00% | $ | 111,553,428 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Large Cap Relative Value Fund
Investment Abbreviation:
ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
As of February 28, 2011
TOP 10 EQUITY HOLDINGS* | ||||
JPMorgan Chase & Co | 4.7 | % | ||
General Electric Co. | 4.0 | |||
Marsh & McLennan Cos., Inc. | 2.8 | |||
Occidental Petroleum Corp. | 2.4 | |||
Viacom Inc.-Class B | 2.3 | |||
Anadarko Petroleum Corp. | 2.3 | |||
eBay Inc. | 2.2 | |||
Pfizer Inc. | 2.1 | |||
Tyco International Ltd. | 2.0 | |||
UnitedHealth Group Inc. | 2.0 | |||
TOP 10 INDUSTRIES* | ||||
Integrated Oil & Gas | 8.1 | % | ||
Other Diversified Financial Services | 7.8 | |||
Industrial Conglomerates | 6.0 | |||
Pharmaceuticals | 5.4 | |||
Movies & Entertainment | 4.0 | |||
Oil & Gas Exploration & Production | 3.9 | |||
Electric Utilities | 3.6 | |||
Cable & Satellite | 3.2 | |||
Internet Software & Services | 3.2 | |||
Regional Banks | 3.2 | |||
* | Excluding money market fund holdings. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Large Cap Relative Value Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $100,686,153) | $ | 105,425,603 | ||
Investments in affiliated money market funds, at value and cost | 5,741,137 | |||
Total investments, at value (Cost $106,427,290) | 111,166,740 | |||
Receivable for: | ||||
Investments sold | �� | 214,463 | ||
Fund shares sold | 16,233 | |||
Dividends | 244,856 | |||
Fund expenses absorbed | 114,005 | |||
Investment for trustee deferred compensation and retirement plans | 1,402 | |||
Other assets | 40,839 | |||
Total assets | 111,798,538 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 45,217 | |||
Fund shares reacquired | 37,730 | |||
Accrued fees to affiliates | 93,237 | |||
Accrued other operating expenses | 67,524 | |||
Trustee deferred compensation and retirement plans | 1,402 | |||
Total liabilities | 245,110 | |||
Net assets applicable to shares outstanding | $ | 111,553,428 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 98,408,000 | ||
Undistributed net investment income | 205,375 | |||
Undistributed net realized gain | 8,200,603 | |||
Unrealized appreciation | 4,739,450 | |||
$ | 111,553,428 | |||
Net Assets: | ||||
Class A | $ | 40,159,568 | ||
Class B | $ | 35,166 | ||
Class C | $ | 121,926 | ||
Class Y | $ | 71,236,768 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 3,532,955 | |||
Class B | 3,101 | |||
Class C | 10,747 | |||
Class Y | 6,261,213 | |||
Class A: | ||||
Net asset value per share | $ | 11.37 | ||
Maximum offering price per share (Net asset value of $11.37 divided by 94.50%) | $ | 12.03 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.34 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 11.35 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 11.38 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Large Cap Relative Value Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $26,682) | $ | 2,011,820 | ||
Dividends from affiliated money market funds | 6,657 | |||
Total investment income | 2,018,477 | |||
Expenses: | ||||
Advisory fees | 504,644 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 29,996 | |||
Distribution fees: | ||||
Class A | 49,547 | |||
Class B | 93 | |||
Class C | 101 | |||
Transfer agent fees | 141,018 | |||
Trustees’ and officers’ fees and benefits | 10,870 | |||
Reports to shareholders | 56,727 | |||
Other | 72,699 | |||
Total expenses | 890,489 | |||
Less: Fees waived and expenses reimbursed | (122,151 | ) | ||
Net expenses | 768,338 | |||
Net investment income | 1,250,139 | |||
Net realized gain from investment securities | 25,305,718 | |||
Change in net unrealized appreciation of investment securities | 26,549,700 | |||
Net realized and unrealized gain | 51,855,418 | |||
Net increase in net assets resulting from operations | $ | 53,105,557 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Large Cap Relative Value Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the period January 1, 2010 through August 31, 2010
and the year ended December 31, 2009
(Unaudited)
Six months ended | Eight months ended | Year ended | ||||||||||
February 28, | August 31, | December 31, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 1,250,139 | $ | 2,373,524 | $ | 3,557,016 | ||||||
Net realized gain (loss) | 25,305,718 | 13,747,427 | (7,649,091 | ) | ||||||||
Change in net unrealized appreciation (depreciation) | 26,549,700 | (32,466,.179 | ) | 58,943,307 | ||||||||
Net increase in net assets resulting from operations | 53,105,557 | (16,345,228 | ) | 54,851,232 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (208,318 | ) | (302,493 | ) | (540,679 | ) | ||||||
Class B | (20 | ) | (29 | ) | — | |||||||
Class C | (17 | ) | (29 | ) | — | |||||||
Class Y | (1,353,344 | ) | (1,543,619 | ) | (3,012,868 | ) | ||||||
Total distributions from net investment income | (1,561,699 | ) | (1,846,170 | ) | (3,553,547 | ) | ||||||
Share transactions–net: | ||||||||||||
Class A | (4,850,936 | ) | (11,653,435 | ) | 6,292,646 | |||||||
Class B | 21,349 | 10,029 | — | |||||||||
Class C | 108,767 | 10,278 | — | |||||||||
Class Y | (161,035,561 | ) | (8,569,624 | ) | 21,688,989 | |||||||
Net increase (decrease) in net assets resulting from share transactions | (165,756,381 | ) | (20,202,752 | ) | 27,981,635 | |||||||
Net increase (decrease) in net assets | (114,212,523 | ) | (38,394,150 | ) | 79,279,320 | |||||||
Net assets: | ||||||||||||
Beginning of year | 225,765,951 | 264,160,101 | 184,880,781 | |||||||||
End of year (includes undistributed net investment income (loss) of $205,375, 516,935 and $(10,419), respectively) | $ | 111,553,428 | $ | 225,765,951 | $ | 264,160,101 | ||||||
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Large Cap Relative Value Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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 to seek high total return by investing primarily in equity securities that the Adviser believes to be undervalued relative to the stock market in general at the time of purchase.
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. 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. 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 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. |
10 Invesco Large Cap Relative Value Fund
A security listed or traded on an exchange (except convertible bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. | ||
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 |
11 Invesco Large Cap Relative Value Fund
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 paid annually and recorded on 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 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 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 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. |
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 Net Assets | Rate | |||
First $150 million | 0 | .50% | ||
Next $100 million | 0 | .45% | ||
Next $100 million | 0 | .40% | ||
Over $350 million | 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 Trimark 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 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C, and Class Y shares to 0.95%, 1.70%, 1.70% and 0.70%, 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. To the extent that the annualized expense ratios do 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $122,151.
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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees.
Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.
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
12 Invesco Large Cap Relative Value Fund
approved by the Trust’s Board of Trustees. For the six months ended February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $589 in front-end sales commissions from the sale of Class A shares and $0, $0 and $0 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 Invesco, 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 110,509,915 | $ | 656,825 | $ | — | $ | 111,166,740 | ||||||||
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $972 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
13 Invesco Large Cap Relative Value 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 17,107,199 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
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 February 28, 2011 was $55,926,891 and $221,793,280, 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 | $ | 9,971,457 | ||
Aggregate unrealized (depreciation) of investment securities | (5,333,625 | ) | ||
Net unrealized appreciation of investment securities | $ | 4,637,832 | ||
Cost of investments for tax purposes is $100,787,771. |
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||||||||||||||
Six months ended | Eight months ended | Year ended | ||||||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | December 31, 2009 | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Sold: | ||||||||||||||||||||||||||||
Class A | 426,072 | $ | 4,279,147 | 436,507 | $ | 4,252,649 | 1,123,981 | $ | 8,975,796 | |||||||||||||||||||
Class B(b) | 2,000 | 21,349 | 1,098 | 10,000 | — | — | ||||||||||||||||||||||
Class C(b) | 9,656 | 108,878 | 1,902 | 17,622 | — | — | ||||||||||||||||||||||
Class Y | 1,640,262 | 16,656,944 | 3,039,187 | 29,758,628 | 8,322,250 | 66,094,588 | ||||||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||||||
Class A | — | — | 15,960 | 143,795 | 66,694 | 538,599 | ||||||||||||||||||||||
Class B(b) | — | — | 3 | 29 | — | — | ||||||||||||||||||||||
Class C(b) | — | — | 3 | 29 | — | — | ||||||||||||||||||||||
Class Y | 66,125 | 681,087 | 82,064 | 740,212 | 371,731 | 3,003,453 | ||||||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||||||
Class A | (871,202 | ) | (9,130,083 | ) | (1,702,393 | ) | (16,049,879 | ) | (405,848 | ) | (3,221,749 | ) | ||||||||||||||||
Class B(b) | — | — | — | — | — | — | ||||||||||||||||||||||
Class C(b) | (10 | ) | (111 | ) | (804 | ) | (7,373 | ) | — | — | ||||||||||||||||||
Class Y | (16,787,304 | ) | (178,373,592 | ) | (4,072,356 | ) | (39,068,464 | ) | (5,510,984 | ) | (47,409,052 | ) | ||||||||||||||||
Net increase (decrease) in share activity | (15,514,401 | ) | $ | (165,756,381 | ) | (2,198,829 | ) | $ | (20,202,752 | ) | 3,967,824 | $ | 27,981,635 | |||||||||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 88% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, 0.02% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. | |
(b) | Commencement date of June 1, 2010. |
14 Invesco Large Cap Relative Value Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
to average | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
net assets | to average net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | with fee | assets without | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | waivers | fee waivers | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | and/or | and/or | income to | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | expenses | expenses | average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return(b) | (000’s omitted) | absorbed | absorbed | net assets | turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 8.91 | $ | 0.05 | $ | 2.46 | $ | 2.51 | $ | (0.05 | ) | $ | — | $ | (0.05 | ) | $ | 11.37 | 28.27 | % | $ | 40,160 | 0.94 | %(d) | 1.06 | %(d) | 1.00 | %(d) | 16 | % | ||||||||||||||||||||||||||
Eight months ended 08/31/10 | 9.59 | 0.07 | (0.69 | ) | (0.62 | ) | (0.06 | ) | — | (0.06 | ) | 8.91 | (6.53 | ) | 35,442 | 0.91 | (i) | 0.96 | (i) | 1.14 | (i) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 7.84 | 0.11 | 1.75 | 1.86 | (0.11 | ) | — | (0.11 | ) | 9.59 | 24.00 | (f) | 50,149 | 0.94 | (g) | 0.95 | (g) | 1.36 | (g)(h) | 59 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.85 | 0.18 | (3.96 | ) | (3.78 | ) | (0.18 | ) | (0.05 | ) | (0.23 | ) | 7.84 | (32.21 | ) | 34,856 | 0.92 | (g) | 0.92 | (g) | 1.81 | (g) | 50 | |||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 12.18 | 0.19 | 0.15 | 0.34 | (0.18 | ) | (0.49 | ) | (0.67 | ) | 11.85 | 2.72 | 50,287 | 0.92 | (g) | 0.92 | (g) | 1.48 | (g) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 11.09 | 0.17 | 1.61 | 1.78 | (0.17 | ) | (0.52 | ) | (0.69 | ) | 12.18 | 16.38 | 63,300 | 0.93 | 0.93 | 1.44 | 33 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 10.51 | 0.12 | 0.91 | 1.03 | (0.12 | ) | (0.33 | ) | (0.45 | ) | 11.09 | 9.81 | 101,499 | 0.93 | 0.93 | 1.10 | 46 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 8.89 | 0.01 | 2.46 | 2.47 | (0.02 | ) | — | (0.02 | ) | 11.34 | 27.76 | 35 | 1.69 | (d) | 1.81 | (d) | 0.25 | (d) | 16 | |||||||||||||||||||||||||||||||||||||
Eight months ended 8/31/10(e) | 9.11 | 0.01 | (0.20 | ) | (0.19 | ) | (0.03 | ) | — | (0.03 | ) | 8.89 | (2.13 | ) | 10 | 1.62 | (i) | 1.62 | (i) | 0.43 | (i) | 24 | ||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 8.89 | 0.01 | 2.47 | 2.48 | (0.02 | ) | — | (0.02 | ) | 11.35 | 27.87 | 122 | 1.69 | (d) | 1.81 | (d) | 0.25 | (d) | 16 | |||||||||||||||||||||||||||||||||||||
Eight months ended 8/31/10(e) | 9.11 | 0.01 | (0.20 | ) | (0.19 | ) | (0.03 | ) | — | (0.03 | ) | 8.89 | (2.13 | ) | 10 | 1.62 | (i) | 1.62 | (i) | 0.43 | (i) | 24 | ||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 8.92 | 0.06 | 2.46 | 2.52 | (0.06 | ) | — | (0.06 | ) | 11.38 | 28.39 | 71,237 | 0.69 | (d) | 0.81 | (d) | 1.25 | (d) | 16 | |||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 9.60 | 0.09 | (0.70 | ) | (0.61 | ) | (0.07 | ) | — | (0.07 | ) | 8.92 | (6.41 | ) | 190,305 | 0.66 | (i) | 0.71 | (i) | 1.39 | (i) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 7.85 | 0.13 | 1.75 | 1.88 | (0.13 | ) | — | (0.13 | ) | 9.60 | 24.28 | (f) | 214,011 | 0.69 | (g) | 0.70 | (g) | 1.61 | (g)(h) | 59 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.86 | 0.21 | (3.96 | ) | (3.75 | ) | (0.21 | ) | (0.05 | ) | (0.26 | ) | 7.85 | (32.01 | ) | 150,025 | 0.67 | (g) | 0.67 | (g) | 2.06 | (g) | 50 | |||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 12.20 | 0.21 | 0.16 | 0.37 | (0.22 | ) | (0.49 | ) | (0.71 | ) | 11.86 | 2.90 | 236,784 | 0.67 | (g) | 0.67 | (g) | 1.71 | (g) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 11.10 | 0.20 | 1.62 | 1.82 | (0.20 | ) | (0.52 | ) | (0.72 | ) | 12.20 | 16.47 | 211,904 | 0.68 | 0.68 | 1.71 | 33 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 10.52 | 0.15 | 0.90 | 1.05 | (0.14 | ) | (0.33 | ) | (0.47 | ) | 11.10 | 10.07 | 102,973 | 0.68 | 0.68 | 1.36 | 46 | |||||||||||||||||||||||||||||||||||||||
(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 $39,966, $19, $20 and $169,473 for Class A, Class B, Class C and Class Y shares, respectively. | |
(e) | Commencement date of June 1, 2010. | |
(f) | Performance was positively impacted by approximately 0.26% due to receipt of proceeds from the settlements of class action suits involving primarily two of the Fund’s past holdings. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had these settlements not occurred, the total return for Class A and Class Y shares would have been approximately 23.74% and 24.02%, respectively. | |
(g) | The ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is 0.01%, 0.01% and less than 0.005% for the years ended December 31, 2009, 2008 and 2007, respectively. | |
(h) | Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 1.35% and 1.60% for the year ended December 31, 2009 for Class A and Class Y shares, respectively. | |
(i) | Annualized. |
NOTE 10—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen Growth and Income Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in May 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.
In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
15 Invesco Large Cap Relative Value Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,282,70 | $ | 5.32 | $ | 1,020.13 | $ | 4.71 | 0.94 | % | ||||||||||||||||||
B | 1,000.00 | 1,277.60 | 9.54 | 1,016.41 | 8.45 | 1.69 | ||||||||||||||||||||||||
C | 1,000.00 | 1,278.70 | 9.55 | 1,016.41 | 8.45 | 1.69 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,283.90 | 3.91 | 1,021.37 | 3.46 | 0.69 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
16 Invesco Large Cap Relative Value Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-LCRV-SAR-1 | Invesco Distributors, Inc. |
Invesco Multi-Sector Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: IAMSX § B: IBMSX § C: ICMSX § Y: IAMYX § Institutional: IIMSX
Nasdaq:
A: IAMSX § B: IBMSX § C: ICMSX § Y: IAMYX § Institutional: IIMSX
2 | Fund Performance | |||
4 | Letters to Shareholders | |||
5 | Schedule of Investments | |||
8 | Financial Statements | |||
10 | Notes to Financial Statements | |||
17 | Financial Highlights | |||
18 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 31.74 | % | ||
Class B Shares | 31.23 | |||
Class C Shares | 31.25 | |||
Class Y Shares | 31.94 | |||
Institutional Class Shares | 32.07 | |||
S&P 500 Index▼ (Broad Market/Style-Specific Index) | 27.73 | |||
Lipper Multi-Cap Core Funds Index▼ (Peer Group Index) | 28.76 | |||
▼Lipper Inc. |
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Lipper Multi-Cap Core Funds Index is an unmanaged index considered representative of multi-cap core funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Multi-Sector Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales
charges
charges
Class A Shares | ||||||||
Inception (9/3/02) | 7.60 | % | ||||||
5 | Years | 0.24 | ||||||
1 | Year | 15.10 | ||||||
Class B Shares | ||||||||
Inception (9/3/02) | 7.57 | % | ||||||
5 | Years | 0.25 | ||||||
1 | Year | 15.91 | ||||||
Class C Shares | ||||||||
Inception (9/3/02) | 7.53 | % | ||||||
5 | Years | 0.62 | ||||||
1 | Year | 19.92 | ||||||
Class Y Shares | ||||||||
Inception | 8.40 | % | ||||||
5 | Years | 1.51 | ||||||
1 | Year | 22.20 | ||||||
Institutional Class Shares | ||||||||
Inception (5/3/04) | 5.93 | % | ||||||
5 | Years | 1.89 | ||||||
1 | Year | 22.48 |
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end,
including maximum applicable sales charges
including maximum applicable sales charges
Class A Shares | ||||||||
Inception (9/3/02) | 6.93 | % | ||||||
5 | Years | -0.34 | ||||||
1 | Year | 6.81 | ||||||
Class B Shares | ||||||||
Inception (9/3/02) | 6.90 | % | ||||||
5 | Years | -0.32 | ||||||
1 | Year | 7.15 | ||||||
Class C Shares | ||||||||
Inception (9/3/02) | 6.87 | % | ||||||
5 | Years | 0.03 | ||||||
1 | Year | 11.10 | ||||||
Class Y Shares | ||||||||
Inception | 7.73 | % | ||||||
5 | Years | 0.90 | ||||||
1 | Year | 13.26 | ||||||
Institutional Class Shares | ||||||||
Inception (5/3/04) | 5.05 | % | ||||||
5 | Years | 1.29 | ||||||
1 | Year | 13.59 |
Class Y shares incepted on October 3, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y and Institutional Class shares was 1.32%, 2.07%, 2.07%, 1.07% and 0.79%, respectively. The expense ratios presented above may
vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.
3 Invesco Multi-Sector Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett,
Independent Chair,
Invesco Funds Board of Trustees
Bruce L. Crockett,
Independent Chair,
Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor,
Senior Managing Director, Invesco Ltd.
Philip Taylor,
Senior Managing Director, Invesco Ltd.
4 Invesco Multi-Sector Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–94.60% | ||||||||
Advertising–1.10% | ||||||||
Omnicom Group Inc. | 48,418 | $ | 2,464,476 | |||||
Apparel, Accessories & Luxury Goods–0.63% | ||||||||
Polo Ralph Lauren Corp. | 11,172 | 1,415,604 | ||||||
Application Software–1.53% | ||||||||
Quest Software, Inc.(b) | 51,454 | 1,378,453 | ||||||
TIBCO Software Inc.(b) | 83,623 | 2,058,798 | ||||||
3,437,251 | ||||||||
Asset Management & Custody Banks–2.43% | ||||||||
Federated Investors, Inc.–Class B | 117,872 | 3,248,552 | ||||||
State Street Corp. | 49,750 | 2,224,820 | ||||||
5,473,372 | ||||||||
Automobile Manufacturers–0.87% | ||||||||
Ford Motor Co.(b) | 129,335 | 1,946,492 | ||||||
Automotive Retail–1.02% | ||||||||
CarMax, Inc.(b) | 65,081 | 2,301,915 | ||||||
Biotechnology–3.52% | ||||||||
Amgen Inc.(b) | 38,670 | 1,984,931 | ||||||
Gilead Sciences, Inc.(b) | 73,504 | 2,865,186 | ||||||
United Therapeutics Corp.(b) | 45,346 | 3,057,681 | ||||||
7,907,798 | ||||||||
Broadcasting–1.50% | ||||||||
Discovery Communications, Inc.–Class A(b) | 23,838 | 1,027,656 | ||||||
Scripps Networks Interactive Inc.–Class A | 45,108 | 2,342,910 | ||||||
3,370,566 | ||||||||
Cable & Satellite–0.55% | ||||||||
Comcast Corp., Class A | 47,998 | 1,236,428 | ||||||
Casinos & Gaming–0.87% | ||||||||
Penn National Gaming, Inc.(b) | 54,856 | 1,962,199 | ||||||
Coal & Consumable Fuels–0.77% | ||||||||
Peabody Energy Corp. | 26,294 | 1,721,994 | ||||||
Communications Equipment–2.99% | ||||||||
Ciena Corp.(b) | 77,246 | 2,129,672 | ||||||
Juniper Networks, Inc.(b) | 11,633 | 511,852 | ||||||
QUALCOMM, Inc. | 68,440 | 4,077,655 | ||||||
6,719,179 | ||||||||
Computer Hardware–4.13% | ||||||||
Apple Inc.(b) | 26,267 | 9,277,767 | ||||||
Computer Storage & Peripherals–1.71% | ||||||||
EMC Corp.(b) | 122,101 | 3,322,368 | ||||||
SanDisk Corp.(b) | 10,746 | 533,002 | ||||||
3,855,370 | ||||||||
Consumer Finance–1.88% | ||||||||
American Express Co. | 18,228 | 794,194 | ||||||
Capital One Financial Corp. | 69,144 | 3,441,297 | ||||||
4,235,491 | ||||||||
Data Processing & Outsourced Services–2.23% | ||||||||
Alliance Data Systems Corp.(b) | 32,994 | 2,597,948 | ||||||
MasterCard, Inc.–Class A | 6,547 | 1,574,946 | ||||||
Wright Express Corp.(b) | 16,520 | 842,520 | ||||||
5,015,414 | ||||||||
Department Stores–1.33% | ||||||||
Kohl’s Corp. | 35,470 | 1,911,478 | ||||||
Nordstrom, Inc. | 23,717 | 1,073,432 | ||||||
2,984,910 | ||||||||
Diversified Capital Markets–1.10% | ||||||||
UBS AG (Switzerland)(b) | 124,640 | 2,474,104 | ||||||
Drug Retail–1.06% | ||||||||
CVS Caremark Corp. | 72,302 | 2,390,304 | ||||||
Electronic Manufacturing Services–0.81% | ||||||||
Flextronics International Ltd. (Singapore)(b) | 224,829 | 1,818,867 | ||||||
Fertilizers & Agricultural Chemicals–0.29% | ||||||||
Monsanto Co. | 8,996 | 646,722 | ||||||
General Merchandise Stores–1.32% | ||||||||
Target Corp. | 56,467 | 2,967,341 | ||||||
Health Care Facilities–0.68% | ||||||||
Rhoen-Klinikum AG (Germany) | 69,806 | 1,536,834 | ||||||
Health Care Services–3.05% | ||||||||
DaVita, Inc.(b) | 53,614 | 4,255,343 | ||||||
Express Scripts, Inc.(b) | 46,450 | 2,611,419 | ||||||
6,866,762 | ||||||||
Home Improvement Retail–0.99% | ||||||||
Home Depot, Inc. (The) | 59,712 | 2,237,409 | ||||||
Hotels, Resorts & Cruise Lines–1.51% | ||||||||
Marriott International Inc.–Class A | 86,869 | 3,406,133 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Multi-Sector Fund
Shares | Value | |||||||
Insurance Brokers–0.32% | ||||||||
Marsh & McLennan Cos., Inc. | 23,442 | $ | 713,574 | |||||
Integrated Oil & Gas–5.64% | ||||||||
Chevron Corp. | 18,072 | 1,874,970 | ||||||
Exxon Mobil Corp. | 33,554 | 2,869,874 | ||||||
Hess Corp. | 18,067 | 1,572,371 | ||||||
Occidental Petroleum Corp. | 39,492 | 4,026,999 | ||||||
Total SA–ADR (France) | 38,341 | 2,350,303 | ||||||
12,694,517 | ||||||||
Internet Software & Services–2.11% | ||||||||
Google Inc.–Class A(b) | 7,723 | 4,737,288 | ||||||
Investment Banking & Brokerage–1.80% | ||||||||
Charles Schwab Corp. (The) | 150,423 | 2,853,524 | ||||||
Morgan Stanley | 40,277 | 1,195,422 | ||||||
4,048,946 | ||||||||
Life & Health Insurance–0.68% | ||||||||
StanCorp Financial Group, Inc. | 33,184 | 1,526,464 | ||||||
Life Sciences Tools & Services–2.79% | ||||||||
Life Technologies Corp.(b) | 39,055 | 2,084,366 | ||||||
Thermo Fisher Scientific, Inc.(b) | 74,910 | 4,181,476 | ||||||
6,265,842 | ||||||||
Managed Health Care–1.15% | ||||||||
UnitedHealth Group, Inc. | 60,953 | 2,595,379 | ||||||
Movies & Entertainment–3.14% | ||||||||
Time Warner, Inc. | 60,351 | 2,305,408 | ||||||
Walt Disney Co. (The) | 108,641 | 4,751,957 | ||||||
7,057,365 | ||||||||
Oil & Gas Drilling–1.60% | ||||||||
Ensco PLC–ADR (United Kingdom) | 32,250 | 1,809,225 | ||||||
Pride International, Inc.(b) | 43,141 | 1,790,783 | ||||||
3,600,008 | ||||||||
Oil & Gas Equipment & Services–9.51% | ||||||||
Baker Hughes, Inc. | 24,236 | 1,721,968 | ||||||
Cameron International Corp.(b) | 52,079 | 3,079,431 | ||||||
FMC Technologies, Inc.(b) | 19,982 | 1,879,307 | ||||||
Halliburton Co. | 88,255 | 4,142,690 | ||||||
National Oilwell Varco Inc. | 26,949 | 2,144,332 | ||||||
Oceaneering International, Inc.(b) | 28,577 | 2,389,894 | ||||||
Schlumberger Ltd. | 29,611 | 2,766,260 | ||||||
Weatherford International Ltd.(b) | 135,365 | 3,273,126 | ||||||
21,397,008 | ||||||||
Oil & Gas Exploration & Production–3.84% | ||||||||
Anadarko Petroleum Corp. | 23,074 | 1,888,145 | ||||||
Apache Corp. | 11,959 | 1,490,331 | ||||||
EOG Resources, Inc. | 24,809 | 2,786,299 | ||||||
Southwestern Energy Co.(b) | 62,657 | 2,473,698 | ||||||
8,638,473 | ||||||||
Other Diversified Financial Services–1.58% | ||||||||
Bank of America Corp. | 125,645 | 1,795,467 | ||||||
Citigroup, Inc. | 253,363 | 1,185,739 | ||||||
JPMorgan Chase & Co. | 12,333 | 575,828 | ||||||
3,557,034 | ||||||||
Pharmaceuticals–2.48% | ||||||||
Novartis AG–ADR (Switzerland) | 42,813 | 2,409,088 | ||||||
Roche Holding AG (Switzerland) | 21,069 | 3,177,701 | ||||||
5,586,789 | ||||||||
Property & Casualty Insurance–0.86% | ||||||||
XL Group PLC (Ireland) | 82,739 | 1,931,956 | ||||||
Regional Banks–4.17% | ||||||||
Fifth Third Bancorp | 185,679 | 2,710,913 | ||||||
SunTrust Banks, Inc. | 117,939 | 3,558,220 | ||||||
Zions Bancorp. | 133,486 | 3,118,233 | ||||||
9,387,366 | ||||||||
Restaurants–3.19% | ||||||||
Darden Restaurants, Inc. | 59,841 | 2,820,306 | ||||||
McDonald’s Corp. | 27,060 | 2,047,901 | ||||||
Starbucks Corp. | 69,998 | 2,308,534 | ||||||
7,176,741 | ||||||||
Semiconductor Equipment–0.27% | ||||||||
ASML Holding N.V.–New York Shares (Netherlands) | 14,102 | 614,847 | ||||||
Semiconductors–3.26% | ||||||||
ARM Holdings PLC–ADR (United Kingdom) | 3,352 | 101,465 | ||||||
Atmel Corp.(b) | 47,386 | 695,626 | ||||||
Avago Technologies Ltd. (Singapore) | 55,884 | 1,899,497 | ||||||
Cypress Semiconductor Corp.(b) | 19,125 | 400,860 | ||||||
Intel Corp. | 42,650 | 915,695 | ||||||
Micron Technology, Inc.(b) | 32,435 | 361,002 | ||||||
Microsemi Corp.(b) | 48,793 | 1,074,910 | ||||||
RF Micro Devices, Inc.(b) | 31,527 | 236,453 | ||||||
Skyworks Solutions, Inc.(b) | 45,982 | 1,652,593 | ||||||
7,338,101 | ||||||||
Specialized Consumer Services–0.75% | ||||||||
H&R Block, Inc. | 110,415 | 1,677,204 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Multi-Sector Fund
Shares | Value | |||||||
Specialized Finance–0.20% | ||||||||
Moody’s Corp. | 14,134 | $ | 450,875 | |||||
Specialty Stores–0.53% | ||||||||
Staples, Inc. | 55,485 | 1,181,830 | ||||||
Systems Software–3.72% | ||||||||
Ariba Inc.(b) | 43,264 | 1,339,021 | ||||||
CommVault Systems, Inc.(b) | 17,381 | 634,928 | ||||||
Microsoft Corp. | 22,789 | 605,732 | ||||||
Oracle Corp. | 84,910 | 2,793,539 | ||||||
Red Hat, Inc.(b) | 33,916 | 1,400,052 | ||||||
Rovi Corp.(b) | 25,061 | 1,388,880 | ||||||
Velti PLC (Ireland)(b) | 15,518 | 210,114 | ||||||
8,372,266 | ||||||||
Thrifts & Mortgage Finance–1.14% | ||||||||
Hudson City Bancorp, Inc. | 222,712 | 2,561,188 | ||||||
Total Common Stocks & Other Equity Interests (Cost $162,762,773) | 212,781,763 | |||||||
Money Market Funds–4.65% | ||||||||
Liquid Assets Portfolio–Institutional Class(c) | 5,226,918 | 5,226,918 | ||||||
Premier Portfolio–Institutional Class(c) | 5,226,918 | 5,226,918 | ||||||
Total Money Market Funds (Cost $10,453,836) | 10,453,836 | |||||||
TOTAL INVESTMENTS–99.25% (Cost $173,216,609) | 223,235,599 | |||||||
OTHER ASSETS LESS LIABILITIES–0.75% | 1,682,629 | |||||||
NET ASSETS–100.00% | $ | 224,918,228 | ||||||
Investment Abbreviation:
ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on net assets
as of February 28, 2011
Information Technology | 22.7 | % | ||
Energy | 21.4 | |||
Consumer Discretionary | 19.3 | |||
Financials | 16.2 | |||
Health Care | 13.7 | |||
Consumer Staples | 1.0 | |||
Materials | 0.3 | |||
Money Market Funds Plus Other Assets Less Liabilities | 5.4 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Multi-Sector Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $162,762,773) | $ | 212,781,763 | ||
Investments in affiliated money market funds, at value and cost | 10,453,836 | |||
Total investments, at value (Cost $173,216,609) | 223,235,599 | |||
Receivable for: | ||||
Investments sold | 2,247,251 | |||
Fund shares sold | 119,402 | |||
Dividends | 288,139 | |||
Investment for trustee deferred compensation and retirement plans | 17,382 | |||
Other assets | 24,404 | |||
Total assets | 225,932,177 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 10,990 | |||
Fund shares reacquired | 501,989 | |||
Accrued fees to affiliates | 231,427 | |||
Accrued other operating expenses | 211,585 | |||
Trustee deferred compensation and retirement plans | 57,958 | |||
Total liabilities | 1,013,949 | |||
Net assets applicable to shares outstanding | $ | 224,918,228 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 345,122,010 | ||
Undistributed net investment income (loss) | (816,984 | ) | ||
Undistributed net realized gain (loss) | (169,413,308 | ) | ||
Unrealized appreciation | 50,026,510 | |||
$ | 224,918,228 | |||
Net Assets: | ||||
Class A | $ | 155,720,865 | ||
Class B | $ | 26,392,557 | ||
Class C | $ | 38,194,917 | ||
Class Y | $ | 3,014,672 | ||
Institutional Class | $ | 1,595,217 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 6,422,369 | |||
Class B | 1,152,141 | |||
Class C | 1,668,428 | |||
Class Y | 123,930 | |||
Institutional Class | 64,348 | |||
Class A: | ||||
Net asset value per share | $ | 24.25 | ||
Maximum offering price per share (Net asset value of $24.25 divided by 94.50%) | $ | 25.66 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 22.91 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 22.89 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 24.33 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 24.79 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Multi-Sector Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $28,124) | $ | 1,168,478 | ||
Dividends from affiliated money market funds (includes securities lending income of $15,017) | 18,670 | |||
Total investment income | 1,187,148 | |||
Expenses: | ||||
Advisory fees | 799,865 | |||
Administrative services fees | 46,306 | |||
Custodian fees | 11,409 | |||
Distribution fees: | ||||
Class A | 195,482 | |||
Class B | 133,778 | |||
Class C | 184,646 | |||
Transfer agent fees — A, B, C and Y | 287,386 | |||
Transfer agent fees — Institutional | 356 | |||
Trustees’ and officers’ fees and benefits | 9,845 | |||
Reports to shareholders | 167,973 | |||
Other | 83,060 | |||
Total expenses | 1,920,106 | |||
Less: Fees waived and expense offset arrangement(s) | (5,306 | ) | ||
Net expenses | 1,914,800 | |||
Net investment income (loss) | (727,652 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (includes net gains from securities sold to affiliates of $423,443) | (7,725,265 | ) | ||
Foreign currencies | (17,549 | ) | ||
(7,742,814 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 74,714,641 | |||
Foreign currencies | 5,448 | |||
74,720,089 | ||||
Net realized and unrealized gain | 66,977,275 | |||
Net increase in net assets resulting from operations | $ | 66,249,623 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Multi-Sector Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income (loss) | $ | (727,652 | ) | $ | (1,136,152 | ) | ||
Net realized gain (loss) | (7,742,814 | ) | (1,505,582 | ) | ||||
Change in net unrealized appreciation | 74,720,089 | 6,163,317 | ||||||
Net increase in net assets resulting from operations | 66,249,623 | 3,521,583 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | — | (717,578 | ) | |||||
Class Y | — | (6,863 | ) | |||||
Institutional Class | — | (738,087 | ) | |||||
Total distributions from net investment income | — | (1,462,528 | ) | |||||
Share transactions–net: | ||||||||
Class A | (36,919,780 | ) | (71,403,839 | ) | ||||
Class B | (6,160,957 | ) | (12,151,899 | ) | ||||
Class C | (6,190,288 | ) | (9,504,240 | ) | ||||
Class Y | 1,864,460 | (246,895 | ) | |||||
Institutional Class | (71,000,850 | ) | (14,882,232 | ) | ||||
Net increase (decrease) in net assets resulting from share transactions | (118,407,415 | ) | (108,189,105 | ) | ||||
Net increase (decrease) in net assets | (52,157,792 | ) | (106,130,050 | ) | ||||
Net assets: | ||||||||
Beginning of period | 277,076,020 | 383,206,070 | ||||||
End of period (includes undistributed net investment income (loss) of $(816,984) and $(89,332), respectively) | $ | 224,918,228 | $ | 277,076,020 | ||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Multi-Sector Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust) (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 twenty 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 Institutional Class. 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 Institutional 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. 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. 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 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 bonds) 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 |
10 Invesco Multi-Sector Fund
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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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. | ||
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. |
11 Invesco Multi-Sector Fund
D. | Distributions — Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 the Institutional Class 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 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 fails 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 affiliates 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. | ||
K. | Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into 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 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 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 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. |
12 Invesco Multi-Sector 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 Net Assets | Rate | |||
First $250 million | 0 | .695% | ||
Next $250 million | 0 | .67% | ||
Next $500 million | 0 | .645% | ||
Next $1.5 billion | 0 | .62% | ||
Next $2.5 billion | 0 | .595% | ||
Next $2.5 billion | 0 | .57% | ||
Next $2.5 billion | 0 | .545% | ||
Over $10 billion | 0 | .52% | ||
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 Trimark 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 provides 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 December 31, 2011, 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 Institutional Class shares to 2.00%, 2.75%, 2.75%, 1.75% and 1.75% of average daily net assets, respectively. 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on December 31, 2011. 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $4,477.
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 February 28, 2011, 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 February 28, 2011, 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 Institutional 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 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $6,167 in front-end sales commissions from the sale of Class A shares and $2, $34,436 and $657 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 Invesco, IIS and/or IDI.
13 Invesco Multi-Sector 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 223,235,599 | $ | — | $ | — | $ | 223,235,599 | ||||||||
NOTE 4—Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended February 28, 2011, the Fund engaged in securities purchases of $296,648 and securities sales of $2,497,927, which resulted in net realized gains of $423,443.
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $829.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $986 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
14 Invesco Multi-Sector Fund
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 55,800,354 | ||
August 31, 2018 | 100,807,996 | |||
Total capital loss carryforward | $ | 156,608,350 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
NOTE 9—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 February 28, 2011 was $32,758,120 and $155,600,057, 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 | $ | 61,341,135 | ||
Aggregate unrealized (depreciation) of investment securities | (11,884,871 | ) | ||
Net unrealized appreciation of investment securities | $ | 49,456,264 | ||
Cost of investments for tax purposes is $173,779,335. |
15 Invesco Multi-Sector Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 267,931 | $ | 5,993,001 | 634,444 | $ | 12,661,909 | ||||||||||
Class B | 18,079 | 367,049 | 92,129 | 1,751,944 | ||||||||||||
Class C | 58,749 | 1,232,506 | 189,000 | 3,601,521 | ||||||||||||
Class Y | 95,329 | 2,226,629 | 8,115 | 161,510 | ||||||||||||
Institutional Class | 3,544 | 72,872 | 368,416 | 7,306,153 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | — | — | 34,676 | 679,647 | ||||||||||||
Class B | — | — | — | — | ||||||||||||
Class C | — | — | — | — | ||||||||||||
Class Y | — | — | 300 | 5,889 | ||||||||||||
Institutional Class | — | — | 37,053 | 738,087 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 116,974 | 2,585,049 | 174,700 | 3,488,388 | ||||||||||||
Class B | (123,591 | ) | (2,585,049 | ) | (183,711 | ) | (3,488,388 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (2,081,321 | ) | (45,497,830 | ) | (4,438,894 | ) | (88,233,783 | ) | ||||||||
Class B | (190,795 | ) | (3,942,957 | ) | (552,338 | ) | (10,415,455 | ) | ||||||||
Class C | (361,710 | ) | (7,422,794 | ) | (694,887 | ) | (13,105,761 | ) | ||||||||
Class Y | (16,390 | ) | (362,169 | ) | (20,694 | ) | (414,294 | ) | ||||||||
Institutional Class | (3,519,989 | ) | (71,073,722 | ) | (1,131,728 | ) | (22,926,472 | ) | ||||||||
Net increase (decrease) in share activity | (5,733,190 | ) | $ | (118,407,415 | ) | (5,483,419 | ) | $ | (108,189,105 | ) | ||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 38% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
16 Invesco Multi-Sector Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | Return(b) | (000s omitted) | absorbed | absorbed | net assets | turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 18.40 | $ | (0.05 | ) | $ | 5.90 | $ | 5.85 | $ | — | $ | — | $ | — | $ | 24.25 | 31.79 | % | $ | 155,721 | 1.48 | %(e) | 1.48 | %(e) | (0.45 | )%(e) | 14 | % | |||||||||||||||||||||||||||
Year ended 08/31/10 | 18.68 | (0.05 | ) | (0.16 | ) | (0.21 | ) | (0.07 | ) | — | (0.07 | ) | 18.40 | (1.16 | ) | 149,389 | 1.32 | 1.32 | (0.28 | ) | 32 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 25.33 | 0.07 | (5.93 | ) | (5.86 | ) | (0.05 | ) | (0.74 | ) | (0.79 | ) | 18.68 | (22.34 | ) | 218,772 | 1.39 | 1.40 | 0.43 | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 28.93 | 0.07 | (2.34 | ) | (2.27 | ) | — | (1.33 | ) | (1.33 | ) | 25.33 | (8.22 | ) | 418,874 | 1.21 | 1.22 | 0.24 | 58 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 25.53 | (0.04 | ) | 3.88 | 3.84 | (0.12 | ) | (0.32 | ) | (0.44 | ) | 28.93 | 15.13 | 508,895 | 1.23 | 1.29 | (0.15 | ) | 44 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 24.16 | 0.17 | 1.69 | 1.86 | — | (0.49 | ) | (0.49 | ) | 25.53 | 7.74 | 311,492 | 1.30 | 1.37 | 0.67 | 66 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 17.45 | (0.12 | ) | 5.58 | 5.46 | — | — | — | 22.91 | 31.29 | 26,393 | 2.23 | (e) | 2.23 | (e) | (1.20 | )(e) | 14 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 17.78 | (0.19 | ) | (0.14 | ) | (0.33 | ) | — | — | — | 17.45 | (1.86 | ) | 25,274 | 2.07 | 2.07 | (1.03 | ) | 32 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 24.27 | (0.05 | ) | (5.70 | ) | (5.75 | ) | — | (0.74 | ) | (0.74 | ) | 17.78 | (22.93 | ) | 37,206 | 2.14 | 2.15 | (0.32 | ) | 31 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 27.97 | (0.13 | ) | (2.24 | ) | (2.37 | ) | — | (1.33 | ) | (1.33 | ) | 24.27 | (8.89 | ) | 68,526 | 1.96 | 1.97 | (0.51 | ) | 58 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 24.79 | (0.24 | ) | 3.76 | 3.52 | (0.02 | ) | (0.32 | ) | (0.34 | ) | 27.97 | 14.26 | 87,469 | 1.98 | 2.04 | (0.90 | ) | 44 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 23.64 | (0.02 | ) | 1.66 | 1.64 | — | (0.49 | ) | (0.49 | ) | 24.79 | 6.97 | 73,997 | 2.05 | 2.12 | (0.08 | ) | 66 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 17.44 | (0.12 | ) | 5.57 | 5.45 | — | — | — | 22.89 | 31.25 | 38,195 | 2.23 | (e) | 2.23 | (e) | (1.20 | )(e) | 14 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 17.77 | (0.19 | ) | (0.14 | ) | (0.33 | ) | — | — | — | 17.44 | (1.86 | ) | 34,377 | 2.07 | 2.07 | (1.03 | ) | 32 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 24.26 | (0.05 | ) | (5.70 | ) | (5.75 | ) | — | (0.74 | ) | (0.74 | ) | 17.77 | (22.94 | ) | 44,023 | 2.14 | 2.15 | (0.32 | ) | 31 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 27.96 | (0.13 | ) | (2.24 | ) | (2.37 | ) | — | (1.33 | ) | (1.33 | ) | 24.26 | (8.89 | ) | 80,439 | 1.96 | 1.97 | (0.51 | ) | 58 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 24.78 | (0.24 | ) | 3.76 | 3.52 | (0.02 | ) | (0.32 | ) | (0.34 | ) | 27.96 | 14.27 | 94,760 | 1.98 | 2.04 | (0.90 | ) | 44 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 23.63 | (0.02 | ) | 1.66 | 1.64 | — | (0.49 | ) | (0.49 | ) | 24.78 | 6.97 | 69,604 | 2.05 | 2.12 | (0.08 | ) | 66 | ||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 18.44 | (0.02 | ) | 5.91 | 5.89 | — | — | — | 24.33 | 31.94 | 3,015 | 1.23 | (e) | 1.23 | (e) | (0.20 | )(e) | 14 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 18.72 | (0.01 | ) | (0.15 | ) | (0.16 | ) | (0.12 | ) | — | (0.12 | ) | 18.44 | (0.91 | ) | 830 | 1.07 | 1.07 | (0.03 | ) | 32 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09(d) | 20.66 | 0.10 | (1.24 | ) | (1.14 | ) | (0.06 | ) | (0.74 | ) | (0.80 | ) | 18.72 | (4.54 | ) | 1,072 | 1.17 | (f) | 1.18 | (f) | 0.65 | (f) | 31 | |||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 18.77 | 0.01 | 6.01 | 6.02 | — | — | — | 24.79 | 32.07 | 1,595 | 0.98 | (e) | 0.98 | (e) | 0.05 | (e) | 14 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 19.07 | 0.05 | (0.15 | ) | (0.10 | ) | (0.20 | ) | — | (0.20 | ) | 18.77 | (0.61 | ) | 67,207 | 0.79 | 0.79 | 0.25 | 32 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 25.81 | 0.17 | (6.05 | ) | (5.88 | ) | (0.12 | ) | (0.74 | ) | (0.86 | ) | 19.07 | (21.89 | ) | 82,134 | 0.81 | 0.82 | 1.01 | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 29.35 | 0.19 | (2.37 | ) | (2.18 | ) | (0.03 | ) | (1.33 | ) | (1.36 | ) | 25.81 | (7.81 | ) | 156,486 | 0.75 | 0.76 | 0.70 | 58 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 25.83 | 0.09 | 3.93 | 4.02 | (0.18 | ) | (0.32 | ) | (0.50 | ) | 29.35 | 15.67 | 163,891 | 0.77 | 0.83 | 0.31 | 44 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 24.33 | 0.29 | 1.70 | 1.99 | — | (0.49 | ) | (0.49 | ) | 25.83 | 8.23 | 87,147 | 0.83 | 0.90 | 1.14 | 66 | ||||||||||||||||||||||||||||||||||||||||
(a) | Calculated using average shares outstanding. | |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. | |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(d) | Commencement date of October 3, 2008. | |
(e) | Ratios are annualized and based on average daily net assets (000’s) of $157,681, $26,977, $37,235, $1,372 and $8,819 for Class A, Class B, Class C, Class Y and Institutional Class shares, respectively. | |
(f) | Annualized. |
NOTE 12—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Charter Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in May 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.
In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
17 Invesco Multi-Sector Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,317.40 | $ | 8.50 | $ | 1,017.46 | $ | 7.40 | 1.48 | % | ||||||||||||||||||
B | 1,000.00 | 1,312.30 | 12.79 | 1,013.74 | 11.13 | 2.23 | ||||||||||||||||||||||||
C | 1,000.00 | 1,312.50 | 12.79 | 1,013.74 | 11.13 | 2.23 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,319.40 | 7.07 | 1,018.70 | 6.16 | 1.23 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,320.70 | 5.64 | 1,019.93 | 4.91 | 0.98 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
18 Invesco Multi-Sector Fund
Go Paperless with eDelivery Visit invesco.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that’s all about eeees: – environmentally friendly. Go green by reducing the – efficient. Stop waiting for regular mail. Your documents number of trees used to produce paper. will be sent via email as soon as they’re available. – economical. Help reduce your fund’s printing and delivery – easy. Download, save and print files using your home expenses and put more capital back in your fund’s returns.computer with a few clicks of your mouse. This service is provided by Invesco Investment Services, Inc. |
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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. |
I-MSE-SAR-1 Invesco Distributors, Inc.
Invesco New York Tax-Free Income Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: NYFAX § B: NYFBX § C: NYFCX § Y: NYFDX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
10 | Financial Statements | |
12 | Notes to Financial Statements | |
18 | Financial Highlights | |
19 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | -5.08 | % | ||
Class B Shares | -5.33 | |||
Class C Shares | -5.37 | |||
Class Y Shares | -4.95 | |||
Barclays Capital New York Exempt Index▼ (Broad Market/Style-Specific Index) | -3.29 | |||
Lipper New York Municipal Debt Funds Index§ (Peer Group Index) | -5.09 | |||
▼ | Invesco, IDC via FactSet Research Systems Inc.; §Lipper Inc. |
The Barclays Capital New York Exempt Index is an unmanaged index that tracks the performance of New York issued municipal bonds rated at least Baa or BBB by Moody’s Investors Service, Inc. or Standard & Poor’s Corp., respectively, and with maturities of two years or greater.
The Lipper New York Municipal Debt Funds Index is an unmanaged index considered representative of New York municipal debt funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco New York Tax-Free Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
After Taxes | ||||||||||||||||
on Distributions | ||||||||||||||||
Before | After Taxes on | and Sale of | ||||||||||||||
Taxes | Distributions | Fund Shares | ||||||||||||||
Class A Shares | ||||||||||||||||
Inception (7/28/97) | 4.09 | % | 3.90 | % | 4.06 | % | ||||||||||
10 | Years | 3.89 | 3.70 | 3.90 | ||||||||||||
5 | Years | 2.65 | 2.49 | 2.85 | ||||||||||||
1 | Year | -4.29 | -4.29 | -1.28 | ||||||||||||
Class B Shares | ||||||||||||||||
Inception (4/25/85) | 6.14 | % | 5.97 | % | 6.00 | % | ||||||||||
10 | Years | 4.08 | 3.89 | 4.05 | ||||||||||||
5 | Years | 3.35 | 3.18 | 3.47 | ||||||||||||
1 | Year | -4.61 | -4.61 | -1.53 | ||||||||||||
Class C Shares | ||||||||||||||||
Inception (7/28/97) | 3.84 | % | 3.65 | % | 3.80 | % | ||||||||||
10 | Years | 3.74 | 3.55 | 3.72 | ||||||||||||
5 | Years | 3.10 | 2.93 | 3.18 | ||||||||||||
1 | Year | -1.02 | -1.02 | 0.73 | ||||||||||||
Class Y Shares | ||||||||||||||||
Inception (7/28/97) | 4.62 | % | 4.43 | % | 4.57 | % | ||||||||||
10 | Years | 4.51 | 4.32 | 4.48 | ||||||||||||
5 | Years | 3.93 | 3.76 | 4.00 | ||||||||||||
1 | Year | 0.79 | 0.78 | 2.19 |
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
After Taxes | ||||||||||||||||
on Distributions | ||||||||||||||||
Before | After Taxes on | and Sale of | ||||||||||||||
Taxes | Distributions | Fund Shares | ||||||||||||||
Class A Shares | ||||||||||||||||
Inception (7/28/97) | 4.12 | % | 3.93 | % | 4.09 | % | ||||||||||
10 | Years | 3.97 | 3.78 | 3.97 | ||||||||||||
5 | Years | 2.82 | 2.65 | 3.00 | ||||||||||||
1 | Year | -2.98 | -2.98 | -0.44 | ||||||||||||
Class B Shares | ||||||||||||||||
Inception (4/25/85) | 6.17 | % | 6.00 | % | 6.03 | % | ||||||||||
10 | Years | 4.15 | 3.97 | 4.12 | ||||||||||||
5 | Years | 3.51 | 3.34 | 3.61 | ||||||||||||
1 | Year | -3.17 | -3.17 | -0.59 | ||||||||||||
Class C Shares | ||||||||||||||||
Inception (7/28/97) | 3.88 | % | 3.69 | % | 3.83 | % | ||||||||||
10 | Years | 3.84 | 3.65 | 3.80 | ||||||||||||
5 | Years | 3.26 | 3.09 | 3.31 | ||||||||||||
1 | Year | 0.40 | 0.40 | 1.65 | ||||||||||||
Class Y Shares | ||||||||||||||||
Inception (7/28/97) | 4.65 | % | 4.46 | % | 4.60 | % | ||||||||||
10 | Years | 4.58 | 4.39 | 4.55 | ||||||||||||
5 | Years | 4.07 | 3.90 | 4.12 | ||||||||||||
1 | Year | 2.13 | 2.13 | 3.05 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco New York Tax-Free Income Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco New York Tax-Free Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Before-tax performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and
principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.97%, 1.08%, 1.47% and 0.72%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.13%, 1.24%, 1.63% and 0.88%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information. |
3 Invesco New York Tax-Free Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco New York Tax-Free Income Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Municipal Obligations–105.88% | ||||||||||||||||
New York–95.93% | ||||||||||||||||
Albany (City of) Capital Resource Corp. (St. Peters Hospital); Series 2011, RB | 6.25 | % | 11/15/38 | $ | 500 | $ | 499,940 | |||||||||
Albany (County of) Airport Authority; Series 2010 A, Ref. RB (INS–AGM)(a) | 5.00 | % | 12/15/25 | 500 | 508,520 | |||||||||||
Brooklyn (City of) Arena Local Development Corp. (Barclays Center); | ||||||||||||||||
Series 2009, CAB RB(b) | 0.00 | % | 07/15/34 | 1,510 | 315,499 | |||||||||||
Series 2009, PILOT RB | 6.25 | % | 07/15/40 | 200 | 195,772 | |||||||||||
Series 2009, PILOT RB | 6.38 | % | 07/15/43 | 200 | 198,600 | |||||||||||
Chautauqua (County of) Industrial Development Agency (NRG–Dunkirk Power); Series 2009, Exempt Facility RB | 5.88 | % | 04/01/42 | 620 | 596,868 | |||||||||||
Essex (County of) Industrial Development Agency (International Paper); Series 2005 A, Solid Waste Disposal Ref. RB(c) | 5.20 | % | 12/01/23 | 500 | 478,075 | |||||||||||
Hempstead (Town of) Local Development Corp. (Molloy College); Series 2009, Corporate RB | 5.75 | % | 07/01/39 | 545 | 549,622 | |||||||||||
Long Island (City of) Power Authority; | ||||||||||||||||
Series 2000 A, CAB RB (INS–AGM)(a)(b) | 0.00 | % | 06/01/18 | 2,000 | 1,592,600 | |||||||||||
Series 2003 C, Electric System RB (INS–CIFG)(a) | 5.25 | % | 09/01/29 | 405 | 420,115 | |||||||||||
Madison (County of) Industrial Development Agency (Colgate University); Series 2003 B, RB | 5.00 | % | 07/01/33 | 500 | 500,570 | |||||||||||
Metropolitan Transportation Authority (Build America Bonds); | ||||||||||||||||
Series 2009 B, Dedicated Tax Federal RB | 5.00 | % | 11/15/34 | 500 | 491,100 | |||||||||||
Series 2009 B, Dedicated Tax Federal RB | 5.25 | % | 11/15/27 | 615 | 638,019 | |||||||||||
Nassau (County of) Industrial Development Agency (Amsterdam at Harborside); Series 2007 A, Continuing Care Retirement RB | 5.88 | % | 01/01/18 | 500 | 487,125 | |||||||||||
Nassau (County of) Tobacco Settlement Corp.; Series 2006 A-2, Asset-Backed Sr. Conv. RB | 5.25 | % | 06/01/26 | 1,000 | 860,080 | |||||||||||
New York (State of) Dormitory Authority (Brooklyn Law School); Series 2009, Non State Supported Debt Ref. RB | 5.75 | % | 07/01/33 | 660 | 683,813 | |||||||||||
New York (State of) Dormitory Authority (Catholic Health Services of Long Island–St. Francis Hospital); Series 2004, Obligated Group RB | 5.00 | % | 07/01/27 | 1,000 | 963,170 | |||||||||||
New York (State of) Dormitory Authority (Columbia University); Series 2011, Non State Supported Debt RB | 5.00 | % | 10/01/41 | 510 | 522,781 | |||||||||||
New York (State of) Dormitory Authority (Cornell University); Series 2006 A, Non State Supported Debt RB(d) | 5.00 | % | 07/01/35 | 4,725 | 4,756,610 | |||||||||||
New York (State of) Dormitory Authority (Court Facilities Lease); | ||||||||||||||||
Series 2005 A, Non State Supported Debt RB (INS–AMBAC)(a) | 5.50 | % | 05/15/27 | 710 | 749,874 | |||||||||||
Series 2005 A, Non State Supported Debt RB (INS–AMBAC)(a) | 5.50 | % | 05/15/31 | 555 | 574,919 | |||||||||||
New York (State of) Dormitory Authority (FIT Student Housing Corp.); Series 2007, Non State Supported Debt RB (INS–NATL/FGIC)(a) | 5.25 | % | 07/01/28 | 390 | 381,506 | |||||||||||
New York (State of) Dormitory Authority (Fordham University); Series 2008 B, Non State Supported Debt RB (INS–AGC)(a) | 5.00 | % | 07/01/33 | 500 | 501,645 | |||||||||||
New York (State of) Dormitory Authority (Manhattan College); Series 2007 A, Non State Supported Debt RB (INS–RADIAN)(a) | 5.00 | % | 07/01/41 | 400 | 333,744 | |||||||||||
New York (State of) Dormitory Authority (Manhattan Marymount); Series 2009, Non State Supported Debt RB | 5.25 | % | 07/01/29 | 500 | 484,795 | |||||||||||
New York (State of) Dormitory Authority (Mental Health Services Facilities Improvement); Series 2007 A, State Supported Debt RB (INS–AGM)(a) | 5.00 | % | 02/15/27 | 500 | 509,535 | |||||||||||
New York (State of) Dormitory Authority (Montefiore Hospital); Series 2004, FHA Insured Mortgage RB (INS–NATL)(a) | 5.00 | % | 08/01/29 | 1,000 | 996,380 | |||||||||||
New York (State of) Dormitory Authority (New York University Hospital Center); Series 2011 A, Non State Supported Debt RB | 6.00 | % | 07/01/40 | 500 | 500,305 | |||||||||||
New York (State of) Dormitory Authority (New York University); | ||||||||||||||||
Series 2001 1, RB (INS–BHAC)(a) | 5.50 | % | 07/01/31 | 680 | 717,060 | |||||||||||
Series 2008 C, Non State Supported Debt RB | 5.00 | % | 07/01/38 | 660 | 646,939 | |||||||||||
New York (State of) Dormitory Authority (North Shore–Long Island Jewish Obligated Group); Series 2009 A, Non State Supported Debt RB | 5.50 | % | 05/01/37 | 500 | 487,770 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco New York Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
New York–(continued) | ||||||||||||||||
New York (State of) Dormitory Authority (Orange Regional Medical Center); Series 2008, Non State Supported Debt RB | 6.13 | % | 12/01/29 | $ | 500 | $ | 474,085 | |||||||||
New York (State of) Dormitory Authority (Rochester Institute of Technology); Series 2010, Non State Supported Debt RB | 5.00 | % | 07/01/40 | 500 | 483,540 | |||||||||||
New York (State of) Dormitory Authority (School District Financial Program); Series 2009 C, Non State Supported Debt RB (INS–AGC)(a) | 5.00 | % | 10/01/24 | 500 | 522,705 | |||||||||||
New York (State of) Dormitory Authority (School District Revenue Bond Financing Program); | ||||||||||||||||
Series 2002 C, RB (INS–NATL)(a) | 5.25 | % | 04/01/21 | 1,000 | 1,052,450 | |||||||||||
Series 2002 E, RB (INS–NATL)(a) | 5.50 | % | 10/01/17 | 1,000 | 1,056,760 | |||||||||||
Series 2008 D, RB (INS–AGC)(a) | 5.75 | % | 10/01/24 | 500 | 547,530 | |||||||||||
New York (State of) Dormitory Authority (St. Francis College); Series 2010, Non State Supported Debt RB | 5.00 | % | 10/01/40 | 350 | 323,593 | |||||||||||
New York (State of) Dormitory Authority (St. Josephs College); Series 2010, Non State Supported Debt RB | 5.25 | % | 07/01/35 | 500 | 468,665 | |||||||||||
New York (State of) Dormitory Authority (State University Dormitory Facilities Issue); Series 2010 A, Lease RB | 5.00 | % | 07/01/35 | 400 | 391,428 | |||||||||||
New York (State of) Dormitory Authority (Suffolk County); Series 1986, Judicial Facilities Lease RB(e) | 7.38 | % | 07/01/16 | 1,665 | 1,936,562 | |||||||||||
New York (State of) Dormitory Authority (The New School); Series 2010, Non State Supported Debt RB | 5.50 | % | 07/01/40 | 525 | 514,106 | |||||||||||
New York (State of) Dormitory Authority (Vassar College); Series 2007, Non State Supported Debt RB | 5.00 | % | 07/01/46 | 390 | 378,951 | |||||||||||
New York (State of) Dormitory Authority (Winthrop South Nassau University Health System Obligated Group); Series 2003 B, RB | 5.50 | % | 07/01/23 | 750 | 756,488 | |||||||||||
New York (State of) Dormitory Authority; Series 1993 A, State University Educational Facilities RB | 5.25 | % | 05/15/15 | 2,000 | 2,225,640 | |||||||||||
New York (State of) Energy Research & Development Authority (Brooklyn Union Gas Co.); Series 1991 B, Registered Residual Interest Gas Facility RB(c)(f) | 11.92 | % | 07/01/26 | 700 | 701,736 | |||||||||||
New York (State of) Environmental Facilities Corp. (State Clean Water and Drinking Water–Pooled Financing Program – Sub. MFI Bonds); Series 2010 C, State Revolving RB | 5.00 | % | 10/15/39 | 400 | 401,284 | |||||||||||
New York (State of) Environmental Facilities Corp. (2010 Master Financing Program) Series 2005 B, State Revolving RB | 5.50 | % | 04/15/35 | 310 | 339,156 | |||||||||||
New York (State of) Mortgage Agency; Series 2007 143, Homeowner Mortgage RB(c) | 4.90 | % | 10/01/37 | 965 | 864,746 | |||||||||||
New York (State of) Thruway Authority (Second General Highway and Bridge Trust Fund); Series 2009 B, RB | 5.00 | % | 04/01/29 | 500 | 509,135 | |||||||||||
New York (State of) Thruway Authority; Series 2007 H, RB (INS–NATL)(a) | 5.00 | % | 01/01/29 | 1,000 | 1,008,870 | |||||||||||
New York (State of) Urban Development Corp. (Service Contract); Series 2008 B, Ref. RB | 5.25 | % | 01/01/24 | 750 | 792,472 | |||||||||||
New York City (City of) Health & Hospital Corp.; Series 2003 A, Health System RB (INS–AMBAC)(a) | 5.25 | % | 02/15/22 | 1,000 | 1,042,040 | |||||||||||
New York City (City of) Housing Development Corp. (East Midtown); Series 1978, RB(g) | 6.50 | % | 11/15/18 | 1,267 | 1,271,396 | |||||||||||
New York City (City of) Housing Development Corp. (Ruppert); Series 1978, MFH RB(g) | 6.50 | % | 11/15/18 | 1,324 | 1,393,784 | |||||||||||
New York City (City of) Industrial Development Agency (7 World Trade Center); Series 2005 A, Liberty RB | 6.25 | % | 03/01/15 | 425 | 425,200 | |||||||||||
New York City (City of) Industrial Development Agency (Airis JFK I LLC); Series 2001 A, Airport Facility RB(c) | 5.50 | % | 07/01/28 | 1,000 | 851,940 | |||||||||||
New York City (City of) Industrial Development Agency (IAC/Interactive Corp.); Series 2005, Liberty RB | 5.00 | % | 09/01/35 | 625 | 533,206 | |||||||||||
New York City (City of) Industrial Development Agency (New York Stock Exchange); Series 2009 A, Ref. Special Facility RB | 5.00 | % | 05/01/25 | 500 | 516,565 | |||||||||||
New York City (City of) Industrial Development Agency (Polytechnic University); Series 2007, Civic Facility RB (INS–ACA)(a) | 5.25 | % | 11/01/37 | 500 | 455,305 | |||||||||||
New York City (City of) Industrial Development Agency (Queens Baseball Stadium); Series 2006, PILOT RB (INS–AMBAC)(a) | 5.00 | % | 01/01/46 | 1,250 | 980,500 | |||||||||||
New York City (City of) Industrial Development Agency (Staten Island University Hospital); Series 2001 B, Civic Facility RB | 6.38 | % | 07/01/31 | 420 | 407,719 | |||||||||||
New York City (City of) Industrial Development Agency (Terminal One Group Association); Series 2005, Special Facility RB(c)(h)(i) | 5.50 | % | 01/01/16 | 2,000 | 2,001,520 | |||||||||||
New York City (City of) Liberty Development Corp. (Bank of America Tower at One Bryant Park); Series 2010, Ref. Second Priority Liberty RB | 6.38 | % | 07/15/49 | 500 | 500,460 | |||||||||||
New York City (City of) Municipal Water Finance Authority; Series 2009 FF-2, Water & Sewer System RB | 5.50 | % | 06/15/40 | 1,000 | 1,031,140 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco New York Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
New York–(continued) | ||||||||||||||||
New York City (City of) Transitional Finance Authority; | ||||||||||||||||
Series 2008 S-2, Building Aid RB | 6.00 | % | 07/15/33 | $ | 350 | $ | 377,965 | |||||||||
Series 2009 A, Sec. Future Tax Sub. RB(d) | 5.00 | % | 05/01/28 | 755 | 781,840 | |||||||||||
Series 2009 A, Sec. Future Tax Sub. RB(d) | 5.00 | % | 05/01/29 | 605 | 626,090 | |||||||||||
Series 2009 A, Sec. Future Tax Sub. RB(d) | 5.00 | % | 05/01/30 | 605 | 621,504 | |||||||||||
Series 2009 S-3, Building Aid RB | 5.25 | % | 01/15/27 | 500 | 520,080 | |||||||||||
Series 2009 S-3, Building Aid RB | 5.25 | % | 01/15/39 | 500 | 504,305 | |||||||||||
Series 2009 S-5, Building Aid RB | 5.00 | % | 01/15/31 | 595 | 594,595 | |||||||||||
New York City (City of) Trust for Cultural Resources (American Museum of Natural History); Series 2008 A-2, RB(i)(j) | 0.24 | % | 03/18/11 | 300 | 300,000 | |||||||||||
New York City (City of) Trust for Cultural Resources (Carnegie Hall); Series 2009 A, RB | 5.00 | % | 12/01/39 | 350 | 333,074 | |||||||||||
New York City (City of); | ||||||||||||||||
Series 2008 F-1, Unlimited Tax GO Bonds | 5.50 | % | 11/15/28 | 750 | 794,610 | |||||||||||
Subseries 2008 G-1, Unlimited Tax GO Bonds | 6.25 | % | 12/15/35 | 400 | 437,728 | |||||||||||
Subseries 2008 I-1, Unlimited Tax GO Bonds | 5.00 | % | 02/01/25 | 405 | 420,216 | |||||||||||
Subseries 2009 I-1, Unlimited Tax GO Bonds | 5.25 | % | 04/01/32 | 900 | 923,517 | |||||||||||
North Syracuse Central School District (Onondaga County); Series 2007 A, Ref. Unlimited Tax GO Bonds (INS–NATL)(a) | 5.00 | % | 06/15/23 | 935 | 1,018,140 | |||||||||||
Oneida (County of) Industrial Development Agency (St. Elizabeth Medical Center); Series 1999 A, RB | 5.88 | % | 12/01/29 | 425 | 375,997 | |||||||||||
Onondaga Civic Development Corp. (Le Moyne College); Series 2010, RB | 5.38 | % | 07/01/40 | 440 | 424,556 | |||||||||||
Port Authority of New York & New Jersey (JFK International Air Terminal LLC); Series 2010, Special Obligation RB | 6.00 | % | 12/01/42 | 360 | 350,892 | |||||||||||
Seneca (County of) Industrial Development Agency (Seneca Meadows, Inc.); Series 2005, Solid Waste Disposal RB(c)(g)(h)(i) | 6.63 | % | 10/01/13 | 350 | 348,534 | |||||||||||
Suffolk (County of) Economic Development Corp. (Peconic Landing at Southold, Inc.); Series 2010, Ref. RB | 6.00 | % | 12/01/40 | 195 | 183,429 | |||||||||||
Suffolk (County of) Industrial Development Agency (Jefferson’s Ferry); Series 2006, Ref. Continuing Care Retirement Community RB | 5.00 | % | 11/01/28 | 1,000 | 895,890 | |||||||||||
Triborough Bridge & Tunnel Authority; | ||||||||||||||||
Series 2008, General Purpose RB | 4.75 | % | 11/15/29 | 200 | 199,692 | |||||||||||
Series 2008, General Purpose RB | 5.00 | % | 11/15/37 | 500 | 493,070 | |||||||||||
Troy (City of) Capital Resource Corp. (Rensselaer Polytechnic); Series 2010 A, RB | 5.00 | % | 09/01/30 | 500 | 482,485 | |||||||||||
TSASC, Inc.; Series 2006 1, Tobacco Settlement RB | 5.13 | % | 06/01/42 | 475 | 318,549 | |||||||||||
United Nations Development Corp.; Series 2009 A, Ref. RB | 5.00 | % | 07/01/26 | 810 | 824,596 | |||||||||||
Westchester (County of) Tobacco Asset Securitization Corp.; Series 2005, RB | 5.13 | % | 06/01/45 | 1,000 | 694,140 | |||||||||||
63,149,522 | ||||||||||||||||
Guam–0.78% | ||||||||||||||||
Guam (Territory of) (Section 30); Series 2009 A, Limited Obligation RB | 5.63 | % | 12/01/29 | 135 | 133,218 | |||||||||||
Guam (Territory of) Government Waterworks Authority; Series 2010, Water & Wastewater System RB | 5.63 | % | 07/01/40 | 240 | 212,331 | |||||||||||
Guam (Territory of) Power Authority; Series 2010 A, RB | 5.50 | % | 10/01/40 | 185 | 170,577 | |||||||||||
516,126 | ||||||||||||||||
Puerto Rico–7.16% | ||||||||||||||||
Puerto Rico (Commonwealth of) Aqueduct & Sewer Authority; Series 2008 A, Sr. Lien RB | 6.00 | % | 07/01/38 | 650 | 609,414 | |||||||||||
Puerto Rico (Commonwealth of) Electric Power Authority; | ||||||||||||||||
Series 2007 TT, Power RB | 5.00 | % | 07/01/37 | 1,000 | 849,700 | |||||||||||
Series 2008 WW, Power RB | 5.25 | % | 07/01/33 | 500 | 452,435 | |||||||||||
Puerto Rico (Commonwealth of) Highway & Transportation Authority; Series 1993 X, Ref. RB | 5.50 | % | 07/01/15 | 2,000 | 2,117,640 | |||||||||||
Puerto Rico (Commonwealth of) Infrastructure Financing Authority; Series 2005 C, Ref. Special Tax RB (INS–AMBAC)(a) | 5.50 | % | 07/01/27 | 275 | 264,657 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco New York Tax-Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Puerto Rico–(continued) | ||||||||||||||||
Puerto Rico (Commonwealth of) Sales Tax Financing Corp.; | ||||||||||||||||
First Sub. Series 2010 A, Sales Tax RB | 5.38 | % | 08/01/39 | $ | 215 | $ | 198,965 | |||||||||
Series 2010 A, Sales Tax CAB RB(b) | 0.00 | % | 08/01/34 | 1,000 | 217,980 | |||||||||||
4,710,791 | ||||||||||||||||
Virgin Islands–2.01% | ||||||||||||||||
Virgin Islands (Government of) Public Finance Authority (Virgin Islands Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 345 | 354,719 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Virgin Islands Matching Fund Loan Note); Series 2010 A, Sr. Lien RB | 5.00 | % | 10/01/29 | 500 | 471,095 | |||||||||||
Virgin Islands (Government of) Water & Power Authority; Series A, RB | 5.00 | % | 07/01/22 | 500 | 499,965 | |||||||||||
1,325,779 | ||||||||||||||||
TOTAL INVESTMENTS(k)–105.88% (Cost $69,701,487) | 69,702,218 | |||||||||||||||
FLOATING RATE NOTE OBLIGATIONS–(6.77)% | ||||||||||||||||
Notes with interest rates of 0.26% to 0.32% at 02/28/11 and contractual maturities ranging from 05/01/28 to 07/01/35 (see Note 1D)(l) | (4,460,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–0.89% | 588,493 | |||||||||||||||
NET ASSETS–100.00% | $ | 65,830,711 | ||||||||||||||
Investment Abbreviations:
ACA | – ACA Financial Guaranty Corp. | |
AGC | – Assured Guaranty Corp. | |
AGM | – Assured Guaranty Municipal Corp. | |
AMBAC | – American Municipal Bond Assurance Corp.* | |
BHAC | – Berkshire Hathaway Assurance Corp. | |
CAB | – Capital Appreciation | |
CIFG | – CIFG Assurance North America, Inc. | |
Conv. | – Convertible | |
FGIC | – Financial Guaranty Insurance Co. | |
FHA | – Federal Housing Administration | |
GO | – General Obligation | |
INS | – Insurer | |
MFH | – Multi-Family Housing | |
NATL | – National Public Finance Guarantee Corp. | |
PILOT | – Payment-in-Lieu-of-Tax | |
Radian | – Radian Asset Assurance, Inc. | |
RB | – Revenue Bonds | |
Ref. | – Refunding | |
Sr. | – Senior | |
Sub. | – Subordinated |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco New York Tax-Free Income Fund
Notes to Schedule of Investments:
(a) | Principal and/or interest payments are secured by the bond insurance company listed. | |
(b) | Zero coupon bond issued at a discount. | |
(c) | Security subject to the alternative minimum tax. | |
(d) | Underlying security related to Dealer Trusts entered into by the Fund. See Note 1I. | |
(e) | Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral. | |
(f) | Current coupon rate for an inverse floating municipal obligation. This rate resets periodically as the auction rate on the related security changes. Positions in inverse floating rate municipal obligations have a total value of $701,736 which represents 1% of the net assets applicable to common shareholders. | |
(g) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $3,013,713, which represented 4.58% of the Fund’s Net Assets. | |
(h) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(i) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. | |
(j) | Demand security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(k) | This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations. |
Entities | Percentage | |||
National Public Finance Guarantee Corp. | 8.38 | % | ||
American Municipal Bond Assurance Corp.* | 5.49 | |||
* AMBAC filed for bankruptcy on November 8, 2010. | ||
(l) | Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at February 28, 2011. At February 28, 2011, the Fund’s investments with a value of $6,786,044 are held by the Dealer Trusts and serve as collateral for the $4,460,000 in floating rate note obligations outstanding at that date. |
By credit quality, based on total investments
AAA | 5.5 | % | ||
AA | 39.3 | |||
A | 21.1 | |||
BBB | 22.8 | |||
BB | 4.7 | |||
Non-Rated | 6.6 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco New York Tax-Free Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $69,701,487) | $ | 69,702,218 | ||
Receivable for: | ||||
Investments sold | 1,185,444 | |||
Fund shares sold | 3,227 | |||
Interest | 771,792 | |||
Fund expenses absorbed | 18,511 | |||
Investment for trustee deferred compensation and retirement plans | 1,170 | |||
Other assets | 5,778 | |||
Total assets | 71,688,140 | |||
Liabilities: | ||||
Floating rate note obligations | 4,460,000 | |||
Payable for: | ||||
Fund shares reacquired | 193,346 | |||
Amount due custodian | 1,062,738 | |||
Dividends | 11,126 | |||
Accrued fees to affiliates | 24,315 | |||
Accrued other operating expenses | 42,799 | |||
Trustee deferred compensation and retirement plans | 63,105 | |||
Total liabilities | 5,857,429 | |||
Net assets applicable to shares outstanding | $ | 65,830,711 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 66,992,397 | ||
Undistributed net investment income | 263,669 | |||
Undistributed net realized gain (loss) | (1,275,145 | ) | ||
Unrealized appreciation (depreciation) | (150,210 | ) | ||
$ | 65,830,711 | |||
Net Assets: | ||||
Class A | $ | 41,854,207 | ||
Class B | $ | 12,655,565 | ||
Class C | $ | 4,227,719 | ||
Class Y | $ | 7,093,220 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 4,020,256 | |||
Class B | 1,223,973 | |||
Class C | 409,452 | |||
Class Y | 688,821 | |||
Class A: | ||||
Net asset value per share | $ | 10.41 | ||
Maximum offering price per share | ||||
(Net asset value of $10.41 divided by 95.25%) | $ | 10.93 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.34 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.33 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.30 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco New York Tax-Free Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Interest | $ | 1,867,237 | ||
Expenses: | ||||
Advisory fees | 161,489 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 1,793 | |||
Distribution fees: | ||||
Class A | 54,515 | |||
Class B | 45,879 | |||
Class C | 15,622 | |||
Interest, facilities and maintenance fees | 21,416 | |||
Transfer agent fees | 11,999 | |||
Trustees’ and officers’ fees and benefits | 8,915 | |||
Reports to shareholders | 23,488 | |||
Professional services fees | 20,620 | |||
Other | 5,153 | |||
Total expenses | 395,684 | |||
Less: Fees waived | (36,050 | ) | ||
Net expenses | 359,634 | |||
Net investment income | 1,507,603 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from investment securities | (335,497 | ) | ||
Change in net unrealized appreciation (depreciation) of investment securities | (4,961,416 | ) | ||
Net realized and unrealized gain (loss) | (5,296,913 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (3,789,310 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco New York Tax-Free Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, eight months ended August 31, 2010 and the year ended December 31, 2009.
(Unaudited)
Six months ended | Eight months ended | Year ended | ||||||||||
February 28, | August 31, | December 31, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 1,507,603 | $ | 2,046,892 | $ | 3,229,417 | ||||||
Net realized gain (loss) | (335,497 | ) | 366,947 | (956,363 | ) | |||||||
Change in net unrealized appreciation (depreciation) | (4,961,416 | ) | 2,704,990 | 7,884,639 | ||||||||
Net increase (decrease) in net assets resulting from operations | (3,789,310 | ) | 5,118,829 | 10,157,693 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (963,096 | ) | (1,348,666 | ) | (2,069,014 | ) | ||||||
Class B | (274,522 | ) | (399,841 | ) | (691,933 | ) | ||||||
Class C | (81,280 | ) | (82,371 | ) | (128,410 | ) | ||||||
Class Y | (165,963 | ) | (186,410 | ) | (305,375 | ) | ||||||
Total distributions from net investment income | (1,484,861 | ) | (2,017,288 | ) | (3,194,732 | ) | ||||||
Distributions to shareholders from net realized gains: | ||||||||||||
Class A | — | — | (999,885 | ) | ||||||||
Class B | — | — | (334,293 | ) | ||||||||
Class C | — | — | (72,059 | ) | ||||||||
Class Y | — | — | (139,005 | ) | ||||||||
Total distributions from net realized gains | — | — | (1,545,242 | ) | ||||||||
Share transactions–net: | ||||||||||||
Class A | (1,344,656 | ) | (1,355,826 | ) | (858,228 | ) | ||||||
Class B | (1,224,270 | ) | (614,049 | ) | (553,439 | ) | ||||||
Class C | 744,877 | 345,296 | 560,275 | |||||||||
Class Y | 696,016 | 409,554 | (1,019,265 | ) | ||||||||
Net increase (decrease) in net assets resulting from share transactions | (1,128,033 | ) | (1,215,025 | ) | (1,870,657 | ) | ||||||
Net increase (decrease) in net assets | (6,402,204 | ) | 1,886,516 | 3,547,062 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 72,232,915 | 70,346,399 | 66,799,337 | |||||||||
End of period (includes undistributed net investment income of $263,669, $240,927 and $212,455, respectively) | $ | 65,830,711 | $ | 72,232,915 | $ | 70,346,399 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco New York Tax-Free Income Fund, formerly Morgan Stanley New York Tax-Free Income Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust), formerly AIM Counselor Series Trust (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 twenty-two 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 to provide a high-level of current income which is exempt from federal, New York State and New York City income tax, consistent with the preservation of capital.
12 Invesco New York Tax-Free Income Fund
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. 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. 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 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. | |
Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. 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, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments. | ||
Securities for which market quotations either are not readily available or are 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. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances. | ||
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. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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 gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized 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 realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares 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 are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt 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. | |
In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code. | ||
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. |
13 Invesco New York Tax-Free Income Fund
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 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. | Floating Rate Note Obligations — The Fund invests in inverse floating rate securities, such as Residual Interest Bonds (“RIBs”) or Tender Option Bonds (“TOBs”) for investment purposes and to enhance the yield of the Fund. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Such transactions may be purchased in the secondary market without first owning the underlying bond or by the sale of fixed rate bonds by the Fund to special purpose trusts established by a broker dealer (“Dealer Trusts”) in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The Dealer Trusts finance the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. | |
TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities. | ||
The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption Floating rate note obligations on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds as a component of Interest, facilities and maintenance fees and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption Interest expense on the Statement of Operations. | ||
The Fund generally invests in inverse floating rate securities that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The primary risks associated with inverse floating rate securities are varying degrees of liquidity and the changes in the value of such securities in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate securities. In certain instances, the short-term floating rate interests created by the Dealer Trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the Dealer Trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation. | ||
J. | Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located. | |
Since, many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and the Fund’s investments in municipal securities. | ||
There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service. | ||
K. | Interest, Facilities and Maintenance Fees — Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate obligations, if any. |
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 Net Assets | Rate | |||
First $500 million | 0 | .47% | ||
Over $500 million | 0 | .445% | ||
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
14 Invesco New York Tax-Free Income Fund
Trimark 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 provides 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 June 30, 2012, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.90%, 1.40%, 1.40% and 0.65% of average daily net assets, respectively. 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 net annual operating expenses to exceed the numbers reflected above: (1) interest, facilities and maintenance fees; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco Advisers, Inc. mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 period ended February 28, 2011, the Adviser waived advisory fees of $36,050.
Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.
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 February 28, 2011, 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 February 28, 2011, the expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates; (1) Class A — up to 0.25% of the average daily net assets of Class A shares; (2) Class B — up to 1.00% of the average daily net assets of Class B shares and (3) Class C — up to 1.00% of the average daily net assets of Class C shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2011, IDI advised the Fund that IDI retained $1,361 in front-end sales commissions from the sale of Class A shares and $5, $4,342 and $0 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 Invesco, IIS and/or IDI.
NOTE 3—Supplemental 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Municipal Obligations | $ | — | 69,702,218 | $ | — | $ | 69,702,218 | |||||||||
15 Invesco New York Tax-Free Income Fund
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $814 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 5—Cash Balances and Borrowings
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company (“SSB”), the custodian bank. 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.
Inverse floating rate obligations resulting from the transfer of bonds to Dealer Trusts are accounted for as secured borrowings. The average floating rate notes outstanding and average annual interest and fees related to inverse floating rate note obligations during February 28, 2011 were $4,974,286 and 0.87%, respectively.
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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 954,559 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
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 February 28, 2011 was $6,426,063 and $6,239,751, 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 | $ | 2,463,834 | ||
Aggregate unrealized (depreciation) of investment securities | (2,229,435 | ) | ||
Net unrealized appreciation of investment securities | $ | 234,399 | ||
Cost of investments for tax purposes is $69,467,819. |
16 Invesco New York Tax-Free Income Fund
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Eight months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | December 31, 2009 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 141,558 | $ | 1,509,635 | 720,511 | $ | 7,840,290 | 109,018 | $ | 1,153,786 | |||||||||||||||
Class B | 41,761 | 457,107 | 665,555 | 7,245,923 | 104,467 | 1,087,201 | ||||||||||||||||||
Class C | 108,959 | 1,180,515 | 77,020 | 836,095 | 60,818 | 625,415 | ||||||||||||||||||
Class Y | 104,627 | 1,123,700 | 113,389 | 1,243,241 | 27,511 | 284,961 | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 51,885 | 554,852 | 110,526 | 1,198,724 | 279,522 | 2,897,033 | ||||||||||||||||||
Class B | 12,337 | 130,586 | 31,379 | 337,366 | 92,244 | 949,194 | ||||||||||||||||||
Class C | 4,623 | 48,950 | 6,819 | 73,317 | 18,265 | 187,685 | ||||||||||||||||||
Class Y | 9,036 | 95,614 | 14,831 | 159,082 | 37,684 | 386,211 | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (323,052 | ) | (3,409,143 | ) | (950,248 | ) | (10,394,840 | ) | (470,342 | ) | (4,909,047 | ) | ||||||||||||
Class B | (172,901 | ) | (1,811,963 | ) | (759,706 | ) | (8,197,338 | ) | (249,422 | ) | (2,589,834 | ) | ||||||||||||
Class C | (46,627 | ) | (484,588 | ) | (52,507 | ) | (564,116 | ) | (24,224 | ) | (252,825 | ) | ||||||||||||
Class Y | (50,957 | ) | (523,298 | ) | (92,217 | ) | (992,769 | ) | (164,291 | ) | (1,690,437 | ) | ||||||||||||
Net increase (decrease) in share activity | (118,751 | ) | $ | (1,128,033 | ) | (114,648 | ) | $ | (1,215,025 | ) | (178,750 | ) | $ | (1,870,657 | ) | |||||||||
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 72% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. |
17 Invesco New York Tax-Free Income Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of | Ratio of | to average | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | expenses | expenses | net assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(losses) | to average | to average net | with fee waivers | Ratio of net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | on securities | Dividends | Distributions | net assets | assets without | and/or expenses, | investment | |||||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | exclusive of | income | |||||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | interest, facilities | to average | Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||
of period | income | unrealized) | operations | income | gains | Distributions | of period | return(a) | (000s omitted) | absorbed | absorbed | and maintenance fees | net assets | turnover(b) | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 11.21 | $ | 0.24 | $ | (0.80 | ) | $ | (0.56 | ) | $ | (0.24 | ) | $ | — | $ | (0.24 | ) | $ | 10.41 | (5.08 | )% | $ | 41,854 | 0.96 | %(c) | 1.06 | %(c) | 0.90 | %(c) | 4.48 | %(c) | 9 | % | ||||||||||||||||||||||||||
Eight months ended 8/31/10 | 10.73 | 0.32 | 0.48 | 0.80 | (0.32 | ) | — | (0.32 | ) | 11.21 | 7.55 | 46,528 | 0.97 | (d) | 1.14 | (d) | 0.90 | (d) | 4.44 | (d) | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 9.92 | 0.49 | 1.04 | 1.53 | (0.48 | ) | (0.24 | ) | (0.72 | ) | 10.73 | 15.91 | 45,803 | 0.92 | 1.13 | 0.90 | 4.67 | 41 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 11.03 | 0.49 | (0.99 | ) | (0.50 | ) | (0.48 | ) | (0.13 | ) | (0.61 | ) | 9.92 | (4.63 | ) | 43,152 | 0.91 | 1.06 | 0.91 | 4.58 | 9 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 11.29 | 0.50 | (0.26 | ) | 0.24 | (0.49 | ) | (0.01 | ) | (0.50 | ) | 11.03 | 2.33 | 49,048 | 1.00 | 1.16 | 0.90 | 4.49 | 4 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 11.31 | 0.49 | 0.03 | 0.52 | (0.48 | ) | (0.06 | ) | (0.54 | ) | 11.29 | 4.63 | 57,776 | 0.91 | 1.03 | 0.91 | 4.32 | 12 | ||||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.14 | 0.22 | (0.81 | ) | (0.59 | ) | (0.21 | ) | — | (0.21 | ) | 10.34 | (5.34 | ) | 12,656 | 1.38 | (c) | 1.48 | (c) | 1.32 | (c) | 4.06 | (c) | 9 | ||||||||||||||||||||||||||||||||||||
Eight months ended 8/31/10 | 10.65 | 0.31 | 0.48 | 0.79 | (0.30 | ) | — | (0.30 | ) | 11.14 | 7.55 | 14,952 | 1.08 | (d) | 1.25 | (d) | 1.01 | (d) | 4.33 | (d) | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 9.85 | 0.49 | 1.03 | 1.52 | (0.48 | ) | (0.24 | ) | (0.72 | ) | 10.65 | 15.90 | 14,970 | 0.91 | 1.26 | 0.89 | 4.68 | 41 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 10.95 | 0.49 | (0.98 | ) | (0.49 | ) | (0.48 | ) | (0.13 | ) | (0.61 | ) | 9.85 | (4.60 | ) | 14,360 | 0.90 | 1.05 | 0.90 | 4.59 | 9 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 11.21 | 0.51 | (0.26 | ) | 0.25 | (0.50 | ) | (0.01 | ) | (0.51 | ) | 10.95 | 2.36 | 17,424 | 0.87 | 1.03 | 0.77 | 4.62 | 4 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 11.24 | 0.51 | 0.02 | 0.53 | (0.50 | ) | (0.06 | ) | (0.56 | ) | 11.21 | 4.84 | 22,629 | 0.72 | 0.84 | 0.72 | 4.51 | 12 | ||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.12 | 0.21 | (0.79 | ) | (0.58 | ) | (0.21 | ) | — | (0.21 | ) | 10.33 | (5.29 | ) | 4,228 | 1.46 | (c) | 1.56 | (c) | 1.40 | (c) | 3.98 | (c) | 9 | ||||||||||||||||||||||||||||||||||||
Eight months ended 8/31/10 | 10.64 | 0.28 | 0.48 | 0.76 | (0.28 | ) | — | (0.28 | ) | 11.12 | 7.23 | 3,809 | 1.47 | (d) | 1.64 | (d) | 1.40 | (d) | 3.94 | (d) | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 9.86 | 0.43 | 1.02 | 1.45 | (0.43 | ) | (0.24 | ) | (0.67 | ) | 10.64 | 15.09 | 3,311 | 1.42 | 1.63 | 1.40 | 4.17 | 41 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 10.96 | 0.43 | (0.97 | ) | (0.54 | ) | (0.43 | ) | (0.13 | ) | (0.56 | ) | 9.86 | (5.07 | ) | 2,526 | 1.41 | 1.56 | 1.41 | 4.08 | 9 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 11.22 | 0.44 | (0.26 | ) | 0.18 | (0.43 | ) | (0.01 | ) | (0.44 | ) | 10.96 | 1.80 | 2,881 | 1.51 | 1.67 | 1.41 | 3.98 | 4 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 11.25 | 0.43 | 0.03 | 0.46 | (0.43 | ) | (0.06 | ) | (0.49 | ) | 11.22 | 4.11 | 2,832 | 1.41 | 1.53 | 1.41 | 3.82 | 12 | ||||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.09 | 0.25 | (0.79 | ) | (0.54 | ) | (0.25 | ) | — | (0.25 | ) | 10.30 | (4.95 | ) | 7,093 | 0.71 | (c) | 0.81 | (c) | 0.65 | (c) | 4.73 | (c) | 9 | ||||||||||||||||||||||||||||||||||||
Eight months ended 8/31/10 | 10.61 | 0.34 | 0.47 | 0.81 | (0.33 | ) | — | (0.33 | ) | 11.09 | 7.78 | 6,944 | 0.72 | (d) | 0.89 | (d) | 0.65 | (d) | 4.69 | (d) | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 9.81 | 0.51 | 1.03 | 1.54 | (0.50 | ) | (0.24 | ) | (0.74 | ) | 10.61 | 16.22 | 6,262 | 0.67 | 0.88 | 0.65 | 4.92 | 41 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 10.91 | 0.51 | (0.97 | ) | (0.46 | ) | (0.51 | ) | (0.13 | ) | (0.64 | ) | 9.81 | (4.40 | ) | 6,761 | 0.66 | 0.81 | 0.66 | 4.83 | 9 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 11.16 | 0.52 | (0.25 | ) | 0.27 | (0.51 | ) | (0.01 | ) | (0.52 | ) | 10.91 | 2.56 | 10,226 | 0.76 | 0.92 | 0.66 | 4.73 | 4 | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 11.19 | 0.51 | 0.03 | 0.54 | (0.51 | ) | (0.06 | ) | (0.57 | ) | 11.16 | 4.89 | 10,824 | 0.66 | 0.78 | 0.66 | 4.57 | 12 | ||||||||||||||||||||||||||||||||||||||||||
(a) | 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. | |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(c) | Ratios are annualized and based on average daily net assets (000’s omitted) of $43,973, $13,940, $4,200 and $7,174 for Class A, Class B, Class C and Class Y shares, respectively. | |
(d) | Annualized. |
NOTE 10—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen New York Tax-Free Income Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in June 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations. In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
18 Invesco New York Tax-Free Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 949.20 | $ | 4.35 | $ | 1,020.33 | $ | 4.51 | 0.90 | % | ||||||||||||||||||
B | 1,000.00 | 946.70 | 6.37 | 1,018.25 | 6.61 | 1.32 | ||||||||||||||||||||||||
C | 1,000.00 | 946.30 | 6.76 | 1,017.85 | 7.00 | 1.40 | ||||||||||||||||||||||||
Y | 1,000.00 | 950.50 | 3.14 | 1,021.57 | 3.26 | 0.65 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
19 Invesco New York Tax-Free Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
MS-NYTFI-SAR-1 | Invesco Distributors, Inc. |
Invesco S&P 500 Index Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: SPIAX § B: SPIBX § C: SPICX § Y: SPIDX
2 | Fund Performance | |
3 | Letters to Shareholders | |
4 | Schedule of Investments | |
14 | Financial Statements | |
16 | Notes to Financial Statements | |
23 | Financial Highlights | |
24 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 27.46 | % | ||
Class B Shares | 26.99 | |||
Class C Shares | 26.98 | |||
Class Y Shares | 27.64 | |||
S&P 500 Index▼ (Broad Market/Style-Specific Index) | 27.73 | |||
Lipper S&P 500 Objective Funds Index▼ (Peer Group Index) | 27.57 | |||
▼ | Lipper Inc. |
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Lipper S&P 500 Objective Funds Index is an unmanaged index considered representative of S&P 500 objective funds tracked by Lipper.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
Average Annual Total Returns
As of 2/28/11, including maximum applicable
sales charges
sales charges
Class A Shares | ||||||||
Inception (9/26/97) | 3.34 | % | ||||||
10 | Years | 1.49 | ||||||
5 | Years | 1.29 | ||||||
1 | Year | 15.28 | ||||||
Class B Shares | ||||||||
Inception (9/26/97) | 3.30 | % | ||||||
10 | Years | 1.43 | ||||||
5 | Years | 1.30 | ||||||
1 | Year | 16.10 | ||||||
Class C Shares | ||||||||
Inception (9/26/97) | 3.00 | % | ||||||
10 | Years | 1.30 | ||||||
5 | Years | 1.69 | ||||||
1 | Year | 20.14 | ||||||
Class Y Shares | ||||||||
Inception (9/26/97) | 4.02 | % | ||||||
10 | Years | 2.31 | ||||||
5 | Years | 2.70 | ||||||
1 | Year | 22.32 | ||||||
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco S&P 500 Index Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (9/26/97) | 2.95 | % | ||||||
10 | Years | 0.30 | ||||||
5 | Years | 0.72 | ||||||
1 | Year | 8.23 | ||||||
Class B Shares | ||||||||
Inception (9/26/97) | 2.91 | % | ||||||
10 | Years | 0.25 | ||||||
5 | Years | 0.71 | ||||||
1 | Year | 8.64 | ||||||
Class C Shares | ||||||||
Inception (9/26/97) | 2.61 | % | ||||||
10 | Years | 0.11 | ||||||
5 | Years | 1.10 | ||||||
1 | Year | 12.61 | ||||||
Class Y Shares | ||||||||
Inception (9/26/97) | 3.63 | % | ||||||
10 | Years | 1.10 | ||||||
5 | Years | 2.12 | ||||||
1 | Year | 14.79 |
fund and Invesco S&P 500 Index Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the
most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, and Class Y shares was 0.61%, 1.36%, 1.36% and 0.36%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
2 Invesco S&P 500 Index Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
Philip Taylor, Senior Managing Director, Invesco Ltd.
3 Invesco S&P 500 Index Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–99.25% | ||||||||
Advertising–0.18% | ||||||||
Interpublic Group of Cos., Inc. (The) | 22,574 | $ | 297,977 | |||||
Omnicom Group Inc. | 13,914 | 708,222 | ||||||
1,006,199 | ||||||||
Aerospace & Defense–2.68% | ||||||||
Boeing Co. (The) | 33,883 | 2,439,915 | ||||||
General Dynamics Corp. | 17,448 | 1,328,142 | ||||||
Goodrich Corp. | 5,775 | 497,978 | ||||||
Honeywell International Inc. | 36,036 | 2,086,845 | ||||||
ITT Corp. | 8,480 | 491,246 | ||||||
L-3 Communications Holdings, Inc. | 5,204 | 412,625 | ||||||
Lockheed Martin Corp. | 13,639 | 1,079,663 | ||||||
Northrop Grumman Corp. | 13,486 | 899,247 | ||||||
Precision Castparts Corp. | 6,583 | 933,140 | ||||||
Raytheon Co. | 16,837 | 862,223 | ||||||
Rockwell Collins, Inc. | 7,244 | 466,803 | ||||||
United Technologies Corp. | 42,652 | 3,563,148 | ||||||
15,060,975 | ||||||||
Agricultural Products–0.19% | ||||||||
Archer-Daniels-Midland Co. | 29,510 | 1,097,182 | ||||||
Air Freight & Logistics–1.01% | ||||||||
C.H. Robinson Worldwide, Inc. | 7,668 | 555,087 | ||||||
Expeditors International of Washington, Inc. | 9,808 | 468,822 | ||||||
FedEx Corp. | 14,532 | 1,308,171 | ||||||
United Parcel Service, Inc.–Class B | 45,679 | 3,371,110 | ||||||
5,703,190 | ||||||||
Airlines–0.07% | ||||||||
Southwest Airlines Co. | 34,508 | 408,230 | ||||||
Aluminum–0.14% | ||||||||
Alcoa Inc. | 47,180 | 794,983 | ||||||
Apparel Retail–0.46% | ||||||||
Abercrombie & Fitch Co.–Class A | 4,017 | 230,455 | ||||||
Gap, Inc. (The) | 20,295 | 457,247 | ||||||
Limited Brands, Inc. | 12,216 | 391,156 | ||||||
Ross Stores, Inc. | 5,545 | 399,462 | ||||||
TJX Cos., Inc. (The) | 18,282 | 911,723 | ||||||
Urban Outfitters, Inc.(b) | 5,934 | 227,747 | ||||||
2,617,790 | ||||||||
Apparel, Accessories & Luxury Goods–0.27% | ||||||||
Coach, Inc. | 13,689 | 751,800 | ||||||
Polo Ralph Lauren Corp. | 3,029 | 383,805 | ||||||
VF Corp. | 3,966 | 379,427 | ||||||
1,515,032 | ||||||||
Application Software–0.60% | ||||||||
Adobe Systems Inc.(b) | 23,497 | 810,647 | ||||||
Autodesk, Inc.(b) | 10,502 | 441,609 | ||||||
Citrix Systems, Inc.(b) | 8,672 | 608,428 | ||||||
Compuware Corp.(b) | 10,116 | 113,906 | ||||||
Intuit Inc.(b) | 12,912 | 678,913 | ||||||
Salesforce.com, Inc.(b) | 5,461 | 722,326 | ||||||
3,375,829 | ||||||||
Asset Management & Custody Banks–1.20% | ||||||||
Ameriprise Financial, Inc. | 11,453 | 725,204 | ||||||
Bank of New York Mellon Corp. (The) | 57,297 | 1,741,256 | ||||||
Federated Investors, Inc.–Class B | 4,193 | 115,559 | ||||||
Franklin Resources, Inc. | 6,723 | 844,543 | ||||||
Invesco Ltd. | 21,341 | 572,793 | ||||||
Janus Capital Group Inc. | 8,486 | 113,967 | ||||||
Legg Mason, Inc. | 7,066 | 256,143 | ||||||
Northern Trust Corp. | 11,186 | 576,862 | ||||||
State Street Corp. | 23,188 | 1,036,967 | ||||||
T. Rowe Price Group Inc. | 11,844 | 793,311 | ||||||
6,776,605 | ||||||||
Auto Parts & Equipment–0.23% | ||||||||
Johnson Controls, Inc. | 31,149 | 1,270,879 | ||||||
Automobile Manufacturers–0.46% | ||||||||
Ford Motor Co.(b) | 173,060 | 2,604,553 | ||||||
Automotive Retail–0.21% | ||||||||
AutoNation, Inc.(b) | 2,982 | 100,315 | ||||||
AutoZone, Inc.(b) | 1,275 | 328,886 | ||||||
CarMax, Inc.(b) | 10,385 | 367,317 | ||||||
O’Reilly Automotive, Inc.(b) | 6,444 | 358,158 | ||||||
1,154,676 | ||||||||
Biotechnology–1.19% | ||||||||
Amgen Inc.(b) | 43,641 | 2,240,092 | ||||||
Biogen Idec Inc.(b) | 11,006 | 752,810 | ||||||
Celgene Corp.(b) | 21,738 | 1,154,288 | ||||||
Cephalon Inc.(b) | 3,425 | 192,862 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Biotechnology–(continued) | ||||||||
Genzyme Corp.(b) | 11,962 | $ | 902,533 | |||||
Gilead Sciences, Inc.(b) | 37,500 | 1,461,750 | ||||||
6,704,335 | ||||||||
Brewers–0.06% | ||||||||
Molson Coors Brewing Co.–Class B | 7,306 | 334,103 | ||||||
Broadcasting–0.27% | ||||||||
CBS Corp.–Class B | 31,450 | 750,397 | ||||||
Discovery Communications, Inc.–Class A(b) | 13,132 | 566,120 | ||||||
Scripps Networks Interactive Inc.–Class A | 4,121 | 214,045 | ||||||
1,530,562 | ||||||||
Building Products–0.04% | ||||||||
Masco Corp. | 16,558 | 225,023 | ||||||
Cable & Satellite–1.19% | ||||||||
Cablevision Systems Corp.–Class A | 11,086 | 408,519 | ||||||
Comcast Corp.–Class A | 128,876 | 3,319,846 | ||||||
DIRECTV–Class A(b) | 38,509 | 1,770,259 | ||||||
Time Warner Cable Inc. | 16,430 | 1,185,917 | ||||||
6,684,541 | ||||||||
Casinos & Gaming–0.12% | ||||||||
International Game Technology | 13,773 | 226,703 | ||||||
Wynn Resorts Ltd. | 3,491 | 429,149 | ||||||
655,852 | ||||||||
Coal & Consumable Fuels–0.29% | ||||||||
CONSOL Energy Inc. | 10,431 | 528,956 | ||||||
Massey Energy Co. | 4,686 | 296,764 | ||||||
Peabody Energy Corp. | 12,454 | 815,613 | ||||||
1,641,333 | ||||||||
Commercial Printing–0.03% | ||||||||
R. R. Donnelley & Sons Co. | 9,528 | 177,411 | ||||||
Communications Equipment–2.19% | ||||||||
Cisco Systems, Inc.(b) | 256,024 | 4,751,805 | ||||||
F5 Networks, Inc.(b) | 3,689 | 435,339 | ||||||
Harris Corp. | 5,912 | 275,854 | ||||||
JDS Uniphase Corp.(b) | 10,283 | 253,682 | ||||||
Juniper Networks, Inc.(b) | 24,166 | 1,063,304 | ||||||
Motorola Mobility Holdings Inc.(b) | 13,564 | 409,633 | ||||||
Motorola Solutions, Inc.(b) | 15,502 | 598,997 | ||||||
QUALCOMM, Inc. | 74,723 | 4,451,996 | ||||||
Tellabs, Inc. | 17,040 | 91,846 | ||||||
12,332,456 | ||||||||
Computer & Electronics Retail–0.13% | ||||||||
Best Buy Co., Inc. | 15,251 | 491,692 | ||||||
GameStop Corp.–Class A(b) | 6,991 | 139,471 | ||||||
RadioShack Corp. | 5,234 | 77,463 | ||||||
708,626 | ||||||||
Computer Hardware–3.69% | ||||||||
Apple Inc.(b) | 42,370 | 14,965,508 | ||||||
Dell Inc.(b) | 77,569 | 1,227,917 | ||||||
Hewlett-Packard Co. | 104,748 | 4,570,155 | ||||||
20,763,580 | ||||||||
Computer Storage & Peripherals–0.79% | ||||||||
EMC Corp.(b) | 95,170 | 2,589,576 | ||||||
Lexmark International, Inc.–Class A(b) | 3,582 | 134,432 | ||||||
NetApp, Inc.(b) | 16,693 | 862,360 | ||||||
SanDisk Corp.(b) | 10,830 | 537,168 | ||||||
Western Digital Corp.(b) | 10,613 | 324,546 | ||||||
4,448,082 | ||||||||
Construction & Engineering–0.20% | ||||||||
Fluor Corp. | 8,258 | 584,336 | ||||||
Jacobs Engineering Group, Inc.(b) | 5,809 | 290,799 | ||||||
Quanta Services, Inc.(b) | 9,953 | 227,028 | ||||||
1,102,163 | ||||||||
Construction Materials–0.05% | ||||||||
Vulcan Materials Co. | 5,917 | 271,294 | ||||||
Construction, Farm Machinery & Heavy Trucks–1.25% | ||||||||
Caterpillar Inc. | 29,317 | 3,017,599 | ||||||
Cummins Inc. | 9,136 | 923,832 | ||||||
Deere & Co. | 19,578 | 1,764,957 | ||||||
Joy Global Inc. | 4,769 | 464,405 | ||||||
PACCAR Inc. | 16,844 | 844,390 | ||||||
7,015,183 | ||||||||
Consumer Electronics–0.03% | ||||||||
Harman International Industries, Inc. | 3,258 | 158,469 | ||||||
Consumer Finance–0.72% | ||||||||
American Express Co. | 48,373 | 2,107,612 | ||||||
Capital One Financial Corp. | 21,105 | 1,050,396 | ||||||
Discover Financial Services | 25,154 | 547,099 | ||||||
SLM Corp.(b) | 22,428 | 332,383 | ||||||
4,037,490 | ||||||||
Data Processing & Outsourced Services–1.13% | ||||||||
Automatic Data Processing, Inc. | 22,781 | 1,139,050 | ||||||
Computer Sciences Corp. | 7,135 | 343,408 | ||||||
Fidelity National Information Services, Inc. | 12,233 | 396,227 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Data Processing & Outsourced Services–(continued) | ||||||||
Fiserv, Inc.(b) | 6,869 | $ | 434,602 | |||||
MasterCard, Inc.–Class A | 4,472 | 1,075,784 | ||||||
Paychex, Inc. | 14,867 | 499,977 | ||||||
Total System Services, Inc. | 7,539 | 133,817 | ||||||
Visa Inc.–Class A | 22,507 | 1,644,136 | ||||||
Western Union Co. | 30,294 | 666,165 | ||||||
6,333,166 | ||||||||
Department Stores–0.37% | ||||||||
JC Penney Co., Inc. | 10,920 | 381,763 | ||||||
Kohl’s Corp. | 13,505 | 727,785 | ||||||
Macy’s, Inc. | 19,560 | 467,484 | ||||||
Nordstrom, Inc. | 7,774 | 351,851 | ||||||
Sears Holdings Corp.(b) | 2,043 | 170,202 | ||||||
2,099,085 | ||||||||
Distillers & Vintners–0.09% | ||||||||
Brown-Forman Corp.–Class B | 4,764 | 329,430 | ||||||
Constellation Brands, Inc.–Class A(b) | 8,234 | 167,315 | ||||||
496,745 | ||||||||
Distributors–0.07% | ||||||||
Genuine Parts Co. | 7,276 | 383,372 | ||||||
Diversified Banks–1.88% | ||||||||
Comerica Inc. | 8,151 | 317,074 | ||||||
U.S. Bancorp | 88,607 | 2,457,072 | ||||||
Wells Fargo & Co. | 242,443 | 7,821,211 | ||||||
10,595,357 | ||||||||
Diversified Chemicals–0.99% | ||||||||
Dow Chemical Co. (The) | 53,613 | 1,992,259 | ||||||
E. I. du Pont de Nemours and Co. | 42,166 | 2,313,648 | ||||||
Eastman Chemical Co. | 3,380 | 315,726 | ||||||
FMC Corp. | 3,399 | 263,219 | ||||||
PPG Industries, Inc. | 7,529 | 665,413 | ||||||
5,550,265 | ||||||||
Diversified Metals & Mining–0.42% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 43,498 | 2,303,219 | ||||||
Titanium Metals Corp.(b) | 4,122 | 78,277 | ||||||
2,381,496 | ||||||||
Diversified REIT’s–0.12% | ||||||||
Vornado Realty Trust | 7,509 | 700,815 | ||||||
Diversified Support Services–0.07% | ||||||||
Cintas Corp. | 5,824 | 163,771 | ||||||
Iron Mountain Inc. | 9,243 | 240,318 | ||||||
404,089 | ||||||||
Drug Retail–0.70% | ||||||||
CVS Caremark Corp. | 62,763 | 2,074,945 | ||||||
Walgreen Co. | 42,761 | 1,853,262 | ||||||
3,928,207 | ||||||||
Education Services–0.08% | ||||||||
Apollo Group, Inc.–Class A(b) | 5,857 | 265,088 | ||||||
DeVry, Inc. | 2,922 | 158,518 | ||||||
423,606 | ||||||||
Electric Utilities–1.68% | ||||||||
American Electric Power Co., Inc. | 22,183 | 793,708 | ||||||
Duke Energy Corp. | 61,181 | 1,100,646 | ||||||
Edison International | 15,048 | 558,582 | ||||||
Entergy Corp. | 8,356 | 594,947 | ||||||
Exelon Corp. | 30,550 | 1,275,768 | ||||||
FirstEnergy Corp. | 19,315 | 739,775 | ||||||
NextEra Energy, Inc. | 19,207 | 1,065,412 | ||||||
Northeast Utilities | 8,143 | 277,188 | ||||||
Pepco Holdings, Inc. | 10,368 | 194,193 | ||||||
Pinnacle West Capital Corp. | 4,994 | 210,897 | ||||||
PPL Corp. | 22,322 | 567,648 | ||||||
Progress Energy, Inc. | 13,530 | 618,456 | ||||||
Southern Co. | 38,738 | 1,476,305 | ||||||
9,473,525 | ||||||||
Electrical Components & Equipment–0.54% | ||||||||
Emerson Electric Co. | 34,765 | 2,074,080 | ||||||
Rockwell Automation, Inc. | 6,545 | 574,193 | ||||||
Roper Industries, Inc. | 4,336 | 364,787 | ||||||
3,013,060 | ||||||||
Electronic Components–0.38% | ||||||||
Amphenol Corp.–Class A | 8,065 | 463,576 | ||||||
Corning Inc. | 72,189 | 1,664,679 | ||||||
2,128,255 | ||||||||
Electronic Equipment & Instruments–0.04% | ||||||||
FLIR Systems, Inc. | 7,325 | 236,598 | ||||||
Electronic Manufacturing Services–0.07% | ||||||||
Jabil Circuit, Inc. | 9,054 | 194,027 | ||||||
Molex Inc. | 6,374 | 178,026 | ||||||
372,053 | ||||||||
Environmental & Facilities Services–0.28% | ||||||||
Republic Services, Inc. | 14,198 | 420,403 | ||||||
Stericycle, Inc.(b) | 3,908 | 337,729 | ||||||
Waste Management, Inc. | 21,976 | 814,431 | ||||||
1,572,563 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Fertilizers & Agricultural Chemicals–0.40% | ||||||||
CF Industries Holdings, Inc. | 3,284 | $ | 463,963 | |||||
Monsanto Co. | 24,775 | 1,781,075 | ||||||
2,245,038 | ||||||||
Food Distributors–0.13% | ||||||||
Sysco Corp. | 27,024 | 750,997 | ||||||
Food Retail–0.27% | ||||||||
Kroger Co. (The) | 29,457 | 674,565 | ||||||
Safeway Inc. | 17,219 | 375,719 | ||||||
SUPERVALU Inc. | 9,799 | 84,565 | ||||||
Whole Foods Market, Inc. | 6,789 | 397,564 | ||||||
1,532,413 | ||||||||
Footwear–0.28% | ||||||||
NIKE, Inc.–Class B | 17,658 | 1,572,092 | ||||||
Gas Utilities–0.08% | ||||||||
Nicor Inc. | 2,082 | 109,805 | ||||||
ONEOK, Inc. | 4,890 | 315,747 | ||||||
425,552 | ||||||||
General Merchandise Stores–0.38% | ||||||||
Big Lots, Inc.(b) | 3,440 | 141,143 | ||||||
Family Dollar Stores, Inc. | 5,799 | 290,414 | ||||||
Target Corp. | 32,706 | 1,718,700 | ||||||
2,150,257 | ||||||||
Gold–0.22% | ||||||||
Newmont Mining Corp. | 22,775 | 1,258,774 | ||||||
Health Care Distributors–0.40% | ||||||||
AmerisourceBergen Corp. | 12,764 | 483,883 | ||||||
Cardinal Health, Inc. | 16,117 | 671,112 | ||||||
McKesson Corp. | 11,689 | 926,704 | ||||||
Patterson Cos. Inc. | 4,432 | 147,940 | ||||||
2,229,639 | ||||||||
Health Care Equipment–1.77% | ||||||||
Baxter International Inc. | 26,915 | 1,430,532 | ||||||
Becton, Dickinson and Co. | 10,621 | 849,680 | ||||||
Boston Scientific Corp.(b) | 70,213 | 502,725 | ||||||
C.R. Bard, Inc. | 4,254 | 415,871 | ||||||
CareFusion Corp.(b) | 10,297 | 281,314 | ||||||
Covidien PLC (Ireland) | 23,161 | 1,191,634 | ||||||
Intuitive Surgical, Inc.(b) | 1,814 | 594,901 | ||||||
Medtronic, Inc. | 49,879 | 1,991,170 | ||||||
St. Jude Medical, Inc. | 15,835 | 758,180 | ||||||
Stryker Corp. | 15,774 | 997,863 | ||||||
Varian Medical Systems, Inc.(b) | 5,476 | 379,377 | ||||||
Zimmer Holdings, Inc.(b) | 9,119 | 568,479 | ||||||
9,961,726 | ||||||||
Health Care Facilities–0.03% | ||||||||
Tenet Healthcare Corp.(b) | 22,426 | 161,019 | ||||||
Health Care Services–0.66% | ||||||||
DaVita, Inc.(b) | 4,455 | 353,593 | ||||||
Express Scripts, Inc.(b) | 24,344 | 1,368,620 | ||||||
Laboratory Corp. of America Holdings(b) | 4,666 | 420,547 | ||||||
Medco Health Solutions, Inc.(b) | 19,602 | 1,208,267 | ||||||
Quest Diagnostics Inc. | 6,528 | 370,464 | ||||||
3,721,491 | ||||||||
Health Care Supplies–0.04% | ||||||||
DENTSPLY International Inc. | 6,559 | 245,110 | ||||||
Health Care Technology–0.06% | ||||||||
Cerner Corp.(b) | 3,339 | 335,403 | ||||||
Home Entertainment Software–0.05% | ||||||||
Electronic Arts Inc.(b) | 15,327 | 288,148 | ||||||
Home Furnishings–0.03% | ||||||||
Leggett & Platt, Inc. | 6,762 | 155,932 | ||||||
Home Improvement Retail–0.80% | ||||||||
Home Depot, Inc. (The) | 75,698 | 2,836,404 | ||||||
Lowe’s Cos., Inc. | 63,743 | 1,668,154 | ||||||
4,504,558 | ||||||||
Homebuilding–0.07% | ||||||||
D.R. Horton, Inc. | 12,961 | 153,458 | ||||||
Lennar Corp.–Class A | 7,346 | 148,095 | ||||||
Pulte Group Inc.(b) | 15,536 | 107,199 | ||||||
408,752 | ||||||||
Homefurnishing Retail–0.10% | ||||||||
Bed Bath & Beyond Inc.(b) | 11,968 | 576,259 | ||||||
Hotels, Resorts & Cruise Lines–0.38% | ||||||||
Carnival Corp. | 19,892 | 848,792 | ||||||
Marriott International Inc.–Class A | 13,291 | 521,140 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 8,805 | 537,985 | ||||||
Wyndham Worldwide Corp. | 8,081 | 252,774 | ||||||
2,160,691 | ||||||||
Household Appliances–0.15% | ||||||||
Stanley Black & Decker Inc. | 7,663 | 581,085 | ||||||
Whirlpool Corp. | 3,462 | 285,615 | ||||||
866,700 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Household Products–2.06% | ||||||||
Clorox Co. (The) | 6,435 | $ | 436,036 | |||||
Colgate-Palmolive Co. | 22,294 | 1,750,525 | ||||||
Kimberly-Clark Corp. | 18,835 | 1,241,226 | ||||||
Procter & Gamble Co. (The) | 129,296 | 8,152,113 | ||||||
11,579,900 | ||||||||
Housewares & Specialties–0.12% | ||||||||
Fortune Brands, Inc. | 7,047 | 435,927 | ||||||
Newell Rubbermaid Inc. | 13,408 | 259,311 | ||||||
695,238 | ||||||||
Human Resource & Employment Services–0.06% | ||||||||
Monster Worldwide, Inc.(b) | 5,994 | 102,797 | ||||||
Robert Half International, Inc. | 6,796 | 216,793 | ||||||
319,590 | ||||||||
Hypermarkets & Super Centers–1.10% | ||||||||
Costco Wholesale Corp. | 19,969 | 1,493,482 | ||||||
Wal-Mart Stores, Inc. | 90,491 | 4,703,722 | ||||||
6,197,204 | ||||||||
| ||||||||
Independent Power Producers & Energy Traders–0.16% | ||||||||
AES Corp. (The)(b) | 30,578 | 378,250 | ||||||
Constellation Energy Group Inc. | 9,228 | 286,714 | ||||||
NRG Energy, Inc.(b) | 11,418 | 228,246 | ||||||
893,210 | ||||||||
Industrial Conglomerates–2.61% | ||||||||
3M Co. | 33,019 | 3,045,342 | ||||||
General Electric Co.(c) | 492,148 | 10,295,736 | ||||||
Textron Inc. | 12,697 | 343,962 | ||||||
Tyco International Ltd. (Switzerland) | 22,606 | 1,024,956 | ||||||
14,709,996 | ||||||||
Industrial Gases–0.45% | ||||||||
Air Products & Chemicals, Inc. | 9,896 | 910,432 | ||||||
Airgas, Inc. | 3,406 | 213,148 | ||||||
Praxair, Inc. | 14,151 | 1,406,326 | ||||||
2,529,906 | ||||||||
Industrial Machinery–1.07% | ||||||||
Danaher Corp. | 24,769 | 1,253,311 | ||||||
Dover Corp. | 8,627 | 554,285 | ||||||
Eaton Corp. | 7,773 | 861,093 | ||||||
Flowserve Corp. | 2,616 | 326,922 | ||||||
Illinois Tool Works Inc. | 22,907 | 1,239,269 | ||||||
Ingersoll-Rand PLC (Ireland) | 14,965 | 677,914 | ||||||
Pall Corp. | 5,298 | 287,999 | ||||||
Parker Hannifin Corp. | 7,451 | 664,480 | ||||||
Snap-on Inc. | 2,725 | 156,497 | ||||||
6,021,770 | ||||||||
Industrial REIT’s–0.08% | ||||||||
ProLogis | 26,283 | 427,362 | ||||||
Insurance Brokers–0.28% | ||||||||
Aon Corp. | 15,238 | 802,128 | ||||||
Marsh & McLennan Cos., Inc. | 25,101 | 764,075 | ||||||
1,566,203 | ||||||||
Integrated Oil & Gas–7.49% | ||||||||
Chevron Corp. | 92,955 | 9,644,081 | ||||||
ConocoPhillips | 67,863 | 5,284,492 | ||||||
Exxon Mobil Corp. | 232,918 | 19,921,476 | ||||||
Hess Corp. | 13,857 | 1,205,975 | ||||||
Marathon Oil Corp. | 32,790 | 1,626,384 | ||||||
Murphy Oil Corp. | 8,885 | 653,314 | ||||||
Occidental Petroleum Corp. | 37,533 | 3,827,240 | ||||||
42,162,962 | ||||||||
Integrated Telecommunication Services–2.55% | ||||||||
AT&T Inc. | 272,987 | 7,747,371 | ||||||
CenturyLink Inc. | 14,006 | 576,767 | ||||||
Frontier Communications Corp. | 45,907 | 389,751 | ||||||
Qwest Communications International Inc. | 80,497 | 548,990 | ||||||
Verizon Communications Inc. | 130,570 | 4,820,644 | ||||||
Windstream Corp. | 22,341 | 280,156 | ||||||
14,363,679 | ||||||||
Internet Retail–0.79% | ||||||||
Amazon.com, Inc.(b) | 16,377 | 2,837,970 | ||||||
Expedia, Inc. | 9,341 | 185,512 | ||||||
Netflix Inc.(b) | 1,982 | 409,620 | ||||||
Priceline.com Inc.(b) | 2,267 | 1,028,946 | ||||||
4,462,048 | ||||||||
Internet Software & Services–1.85% | ||||||||
Akamai Technologies, Inc.(b) | 8,422 | 316,078 | ||||||
eBay Inc.(b) | 52,993 | 1,775,531 | ||||||
Google Inc.–Class A(b) | 11,521 | 7,066,981 | ||||||
VeriSign, Inc. | 7,943 | 280,308 | ||||||
Yahoo! Inc.(b) | 60,209 | 987,428 | ||||||
10,426,326 | ||||||||
Investment Banking & Brokerage–1.24% | ||||||||
Charles Schwab Corp. (The) | 45,807 | 868,959 | ||||||
E*TRADE Financial Corp.(b) | 9,179 | 146,681 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Investment Banking & Brokerage–(continued) | ||||||||
Goldman Sachs Group, Inc. (The) | 23,614 | $ | 3,867,501 | |||||
Morgan Stanley | 69,880 | 2,074,038 | ||||||
6,957,179 | ||||||||
IT Consulting & Other Services–1.95% | ||||||||
Cognizant Technology Solutions Corp.–Class A(b) | 14,017 | 1,077,487 | ||||||
International Business Machines Corp. | 57,385 | 9,289,484 | ||||||
SAIC, Inc.(b) | 13,562 | 221,603 | ||||||
Teradata Corp.(b) | 7,736 | 369,935 | ||||||
10,958,509 | ||||||||
Leisure Products–0.12% | ||||||||
Hasbro, Inc. | 6,283 | 282,107 | ||||||
Mattel, Inc. | 16,573 | 415,319 | ||||||
697,426 | ||||||||
Life & Health Insurance–1.13% | ||||||||
Aflac, Inc. | 21,767 | 1,281,206 | ||||||
Lincoln National Corp. | 14,630 | 464,063 | ||||||
MetLife, Inc. | 41,861 | 1,982,537 | ||||||
Principal Financial Group, Inc. | 14,796 | 506,911 | ||||||
Prudential Financial, Inc. | 22,417 | 1,475,711 | ||||||
Torchmark Corp. | 3,651 | 238,228 | ||||||
Unum Group | 14,648 | 388,611 | ||||||
6,337,267 | ||||||||
Life Sciences Tools & Services–0.47% | ||||||||
Agilent Technologies, Inc.(b) | 15,998 | 673,196 | ||||||
Life Technologies Corp.(b) | 8,624 | 460,263 | ||||||
PerkinElmer, Inc. | 5,432 | 143,948 | ||||||
Thermo Fisher Scientific, Inc.(b) | 18,359 | 1,024,799 | ||||||
Waters Corp.(b) | 4,180 | 347,149 | ||||||
2,649,355 | ||||||||
Managed Health Care–0.94% | ||||||||
Aetna Inc. | 18,480 | 690,413 | ||||||
CIGNA Corp. | 12,513 | 526,422 | ||||||
Coventry Health Care, Inc.(b) | 6,858 | 207,112 | ||||||
Humana Inc.(b) | 7,774 | 505,388 | ||||||
UnitedHealth Group Inc. | 50,806 | 2,163,319 | ||||||
WellPoint Inc. | 18,180 | 1,208,424 | ||||||
5,301,078 | ||||||||
Metal & Glass Containers–0.09% | ||||||||
Ball Corp. | 8,078 | 291,616 | ||||||
Owens-Illinois, Inc.(b) | 7,558 | 230,443 | ||||||
522,059 | ||||||||
Motorcycle Manufacturers–0.08% | ||||||||
Harley-Davidson, Inc. | 10,878 | 444,040 | ||||||
Movies & Entertainment–1.57% | ||||||||
News Corp.–Class A | 105,484 | 1,832,257 | ||||||
Time Warner Inc. | 51,239 | 1,957,330 | ||||||
Viacom Inc.–Class B | 27,923 | 1,247,041 | ||||||
Walt Disney Co. (The) | 87,465 | 3,825,719 | ||||||
8,862,347 | ||||||||
Multi-Line Insurance–0.35% | ||||||||
American International Group, Inc.(b) | 6,663 | 246,931 | ||||||
Assurant, Inc. | 4,893 | 198,803 | ||||||
Genworth Financial Inc.–Class A(b) | 22,613 | 299,170 | ||||||
Hartford Financial Services Group, Inc. (The) | 20,533 | 607,777 | ||||||
Loews Corp. | 14,610 | 631,882 | ||||||
1,984,563 | ||||||||
Multi-Sector Holdings–0.05% | ||||||||
Leucadia National Corp. | 9,102 | 301,549 | ||||||
Multi-Utilities–1.23% | ||||||||
Ameren Corp. | 11,076 | 309,685 | ||||||
CenterPoint Energy, Inc. | 19,546 | 309,999 | ||||||
CMS Energy Corp. | 11,296 | 217,561 | ||||||
Consolidated Edison, Inc. | 13,419 | 670,682 | ||||||
Dominion Resources, Inc. | 26,813 | 1,223,477 | ||||||
DTE Energy Co. | 7,811 | 367,742 | ||||||
Integrys Energy Group, Inc. | 3,536 | 173,158 | ||||||
NiSource Inc. | 12,854 | 246,283 | ||||||
PG&E Corp. | 18,109 | 834,100 | ||||||
Public Service Enterprise Group Inc. | 23,369 | 764,166 | ||||||
SCANA Corp. | 5,206 | 210,739 | ||||||
Sempra Energy | 11,087 | 590,161 | ||||||
TECO Energy, Inc. | 9,918 | 179,615 | ||||||
Wisconsin Energy Corp. | 5,378 | 318,378 | ||||||
Xcel Energy, Inc. | 21,252 | 508,773 | ||||||
6,924,519 | ||||||||
Office Electronics–0.12% | ||||||||
Xerox Corp. | 64,075 | 688,806 | ||||||
Office REIT’s–0.11% | ||||||||
Boston Properties, Inc. | 6,466 | 620,219 | ||||||
Office Services & Supplies–0.08% | ||||||||
Avery Dennison Corp. | 4,960 | 198,003 | ||||||
Pitney Bowes Inc. | 9,392 | 236,491 | ||||||
434,494 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Oil & Gas Drilling–0.31% | ||||||||
Diamond Offshore Drilling, Inc. | 3,257 | $ | 254,795 | |||||
Helmerich & Payne, Inc. | 4,867 | 316,306 | ||||||
Nabors Industries Ltd. (Bermuda)(b) | 13,182 | 375,292 | ||||||
Noble Corp. (Switzerland)(b) | 11,818 | 528,383 | ||||||
Rowan Cos., Inc.(b) | 5,815 | 248,126 | ||||||
1,722,902 | ||||||||
Oil & Gas Equipment & Services–2.13% | ||||||||
Baker Hughes Inc. | 19,920 | 1,415,316 | ||||||
Cameron International Corp.(b) | 11,203 | 662,433 | ||||||
FMC Technologies, Inc.(b) | 5,510 | 518,216 | ||||||
Halliburton Co. | 42,011 | 1,971,996 | ||||||
National Oilwell Varco Inc. | 19,382 | 1,542,226 | ||||||
Schlumberger Ltd. | 63,021 | 5,887,422 | ||||||
11,997,609 | ||||||||
Oil & Gas Exploration & Production–2.20% | ||||||||
Anadarko Petroleum Corp. | 22,891 | 1,873,171 | ||||||
Apache Corp. | 17,652 | 2,199,792 | ||||||
Cabot Oil & Gas Corp. | 4,772 | 217,890 | ||||||
Chesapeake Energy Corp. | 30,204 | 1,075,564 | ||||||
Denbury Resources Inc.(b) | 18,461 | 447,310 | ||||||
Devon Energy Corp. | 19,949 | 1,824,137 | ||||||
EOG Resources, Inc. | 11,733 | 1,317,733 | ||||||
EQT Corp. | 6,888 | 339,578 | ||||||
Newfield Exploration Co.(b) | 6,174 | 449,406 | ||||||
Noble Energy, Inc. | 8,087 | 749,341 | ||||||
Pioneer Natural Resources Co. | 5,341 | 546,598 | ||||||
QEP Resources Inc. | 8,111 | 320,790 | ||||||
Range Resources Corp. | 7,393 | 401,440 | ||||||
Southwestern Energy Co.(b) | 16,017 | 632,351 | ||||||
12,395,101 | ||||||||
Oil & Gas Refining & Marketing–0.20% | ||||||||
Sunoco, Inc. | 5,551 | 232,365 | ||||||
Tesoro Corp.(b) | 6,609 | 157,162 | ||||||
Valero Energy Corp. | 26,153 | 736,991 | ||||||
1,126,518 | ||||||||
Oil & Gas Storage & Transportation–0.40% | ||||||||
El Paso Corp. | 32,524 | 604,946 | ||||||
Spectra Energy Corp. | 29,941 | 800,922 | ||||||
Williams Cos., Inc. (The) | 27,010 | 820,024 | ||||||
2,225,892 | ||||||||
Other Diversified Financial Services–3.80% | ||||||||
Bank of America Corp. | 465,839 | 6,656,839 | ||||||
Citigroup Inc.(b) | 1,341,847 | 6,279,844 | ||||||
JPMorgan Chase & Co. | 180,567 | 8,430,673 | ||||||
21,367,356 | ||||||||
Packaged Foods & Meats–1.50% | ||||||||
Campbell Soup Co. | 8,845 | 297,723 | ||||||
ConAgra Foods, Inc. | 20,310 | 470,380 | ||||||
Dean Foods Co.(b) | 8,414 | 88,852 | ||||||
General Mills, Inc. | 29,575 | 1,098,415 | ||||||
H.J. Heinz Co. | 14,814 | 743,959 | ||||||
Hershey Co. (The) | 7,144 | 373,774 | ||||||
Hormel Foods Corp. | 6,488 | 177,771 | ||||||
J M Smucker Co. (The) | 5,500 | 378,620 | ||||||
Kellogg Co. | 11,735 | 628,527 | ||||||
Kraft Foods Inc.–Class A | 80,684 | 2,568,979 | ||||||
McCormick & Co., Inc. | 6,130 | 292,094 | ||||||
Mead Johnson Nutrition Co. | 9,448 | 565,463 | ||||||
Sara Lee Corp. | 29,527 | 505,502 | ||||||
Tyson Foods, Inc.–Class A | 13,764 | 256,423 | ||||||
8,446,482 | ||||||||
Paper Packaging–0.06% | ||||||||
Bemis Co., Inc. | 4,970 | 163,264 | ||||||
Sealed Air Corp. | 7,375 | 202,960 | ||||||
366,224 | ||||||||
Paper Products–0.14% | ||||||||
International Paper Co. | 20,205 | 561,295 | ||||||
MeadWestvaco Corp. | 7,771 | 228,079 | ||||||
789,374 | ||||||||
Personal Products–0.19% | ||||||||
Avon Products, Inc. | 19,823 | 551,278 | ||||||
Estee Lauder Cos. Inc. (The)–Class A | 5,221 | 492,914 | ||||||
1,044,192 | ||||||||
Pharmaceuticals–5.21% | ||||||||
Abbott Laboratories | 71,401 | 3,434,388 | ||||||
Allergan, Inc. | 14,203 | 1,053,437 | ||||||
Bristol-Myers Squibb Co. | 79,063 | 2,040,616 | ||||||
Eli Lilly and Co. | 46,872 | 1,619,896 | ||||||
Forest Laboratories, Inc.(b) | 13,192 | 427,421 | ||||||
Hospira, Inc.(b) | 7,717 | 407,844 | ||||||
Johnson & Johnson | 126,851 | 7,793,725 | ||||||
Merck & Co., Inc. | 142,308 | 4,634,972 | ||||||
Mylan Inc.(b) | 20,102 | 459,733 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Pharmaceuticals–(continued) | ||||||||
Pfizer Inc. | 369,985 | $ | 7,118,511 | |||||
Watson Pharmaceuticals, Inc.(b) | 5,772 | 323,174 | ||||||
29,313,717 | ||||||||
Property & Casualty Insurance–2.14% | ||||||||
ACE Ltd. (Switzerland) | 15,675 | 991,444 | ||||||
Allstate Corp. (The) | 24,858 | 789,987 | ||||||
Berkshire Hathaway Inc.–Class B(b) | 79,929 | 6,976,203 | ||||||
Chubb Corp. (The) | 14,084 | 854,617 | ||||||
Cincinnati Financial Corp. | 7,516 | 255,920 | ||||||
Progressive Corp. (The) | 30,647 | 638,377 | ||||||
Travelers Cos., Inc. (The) | 20,073 | 1,202,975 | ||||||
XL Group PLC (Ireland) | 14,929 | 348,592 | ||||||
12,058,115 | ||||||||
Publishing–0.15% | ||||||||
Gannett Co., Inc. | 11,035 | 182,188 | ||||||
McGraw-Hill Cos., Inc. (The) | 14,180 | 548,482 | ||||||
Washington Post Co. (The)–Class B | 255 | 110,438 | ||||||
841,108 | ||||||||
Railroads–0.81% | ||||||||
CSX Corp. | 17,283 | 1,290,349 | ||||||
Norfolk Southern Corp. | 16,783 | 1,100,629 | ||||||
Union Pacific Corp. | 22,778 | 2,173,249 | ||||||
4,564,227 | ||||||||
Real Estate Services–0.06% | ||||||||
CB Richard Ellis Group, Inc.–Class A(b) | 13,422 | 336,087 | ||||||
Regional Banks–1.03% | ||||||||
BB&T Corp. | 32,043 | 884,387 | ||||||
Fifth Third Bancorp | 42,389 | 618,879 | ||||||
First Horizon National Corp. | 12,049 | 138,563 | ||||||
Huntington Bancshares Inc. | 39,870 | 272,711 | ||||||
KeyCorp | 40,669 | 371,715 | ||||||
M&T Bank Corp. | 5,494 | 483,747 | ||||||
Marshall & Ilsley Corp. | 24,387 | 189,487 | ||||||
PNC Financial Services Group, Inc. | 24,286 | 1,498,446 | ||||||
Regions Financial Corp. | 58,019 | 443,265 | ||||||
SunTrust Banks, Inc. | 23,093 | 696,716 | ||||||
Zions Bancorp. | 8,219 | 191,996 | ||||||
5,789,912 | ||||||||
Research & Consulting Services–0.07% | ||||||||
Dun & Bradstreet Corp. (The) | 2,334 | 188,587 | ||||||
Equifax Inc. | 5,683 | 203,167 | ||||||
391,754 | ||||||||
Residential REIT’s–0.24% | ||||||||
Apartment Investment & Management Co.–Class A | 5,385 | 138,125 | ||||||
AvalonBay Communities, Inc. | 3,897 | 471,654 | ||||||
Equity Residential | 13,138 | 724,035 | ||||||
1,333,814 | ||||||||
Restaurants–1.10% | ||||||||
Darden Restaurants, Inc. | 6,387 | 301,019 | ||||||
McDonald’s Corp. | 48,800 | 3,693,184 | ||||||
Starbucks Corp. | 34,231 | 1,128,939 | ||||||
Yum! Brands, Inc. | 21,643 | 1,089,292 | ||||||
6,212,434 | ||||||||
Retail REIT’s–0.33% | ||||||||
Kimco Realty Corp. | 18,750 | 363,375 | ||||||
Simon Property Group, Inc. | 13,528 | 1,488,621 | ||||||
1,851,996 | ||||||||
Semiconductor Equipment–0.33% | ||||||||
Applied Materials, Inc. | 61,713 | 1,013,945 | ||||||
KLA-Tencor Corp. | 7,716 | 376,695 | ||||||
MEMC Electronic Materials, Inc.(b) | 10,504 | 142,539 | ||||||
Novellus Systems, Inc.(b) | 4,126 | 164,875 | ||||||
Teradyne, Inc.(b) | 8,378 | 156,082 | ||||||
1,854,136 | ||||||||
Semiconductors–2.23% | ||||||||
Advanced Micro Devices, Inc.(b) | 26,451 | 243,614 | ||||||
Altera Corp. | 14,436 | 604,291 | ||||||
Analog Devices, Inc. | 13,794 | 550,105 | ||||||
Broadcom Corp.–Class A | 21,035 | 867,063 | ||||||
First Solar, Inc.(b) | 2,480 | 365,527 | ||||||
Intel Corp. | 257,651 | 5,531,767 | ||||||
Linear Technology Corp. | 10,410 | 359,769 | ||||||
LSI Corp.(b) | 28,478 | 179,127 | ||||||
Microchip Technology Inc. | 8,629 | 318,496 | ||||||
Micron Technology, Inc.(b) | 39,573 | 440,447 | ||||||
National Semiconductor Corp. | 11,064 | 171,492 | ||||||
NVIDIA Corp.(b) | 26,836 | 608,104 | ||||||
Texas Instruments Inc. | 54,234 | 1,931,273 | ||||||
Xilinx, Inc. | 11,968 | 397,936 | ||||||
12,569,011 | ||||||||
Soft Drinks–2.18% | ||||||||
Coca-Cola Co. (The) | 107,255 | 6,855,740 | ||||||
Coca-Cola Enterprises Inc. | 15,648 | 411,542 | ||||||
Dr Pepper Snapple Group, Inc. | 10,488 | 378,197 | ||||||
PepsiCo, Inc. | 73,204 | 4,642,598 | ||||||
12,288,077 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco S&P 500 Index Fund
Shares | Value | |||||||
Specialized Consumer Services–0.04% | ||||||||
H&R Block, Inc. | 14,249 | $ | 216,442 | |||||
Specialized Finance–0.42% | ||||||||
CME Group Inc. | 3,094 | 963,100 | ||||||
IntercontinentalExchange Inc.(b) | 3,378 | 433,060 | ||||||
Moody’s Corp. | 9,410 | 300,179 | ||||||
NASDAQ OMX Group, Inc. (The)(b) | 6,872 | 196,608 | ||||||
NYSE Euronext | 12,055 | 446,035 | ||||||
2,338,982 | ||||||||
Specialized REIT’s–0.64% | ||||||||
HCP, Inc. | 16,827 | 639,426 | ||||||
Health Care REIT, Inc. | 6,701 | 349,926 | ||||||
Host Hotels & Resorts Inc. | 30,759 | 565,966 | ||||||
Plum Creek Timber Co., Inc. | 7,464 | 313,189 | ||||||
Public Storage | 6,445 | 723,451 | ||||||
Ventas, Inc. | 7,256 | 402,128 | ||||||
Weyerhaeuser Co. | 24,755 | 604,270 | ||||||
3,598,356 | ||||||||
Specialty Chemicals–0.25% | ||||||||
Ecolab Inc. | 10,721 | 521,469 | ||||||
International Flavors & Fragrances Inc. | 3,647 | 207,697 | ||||||
Sherwin-Williams Co. (The) | 4,098 | 336,528 | ||||||
Sigma-Aldrich Corp. | 5,584 | 356,762 | ||||||
1,422,456 | ||||||||
Specialty Stores–0.19% | ||||||||
Staples, Inc. | 33,404 | 711,505 | ||||||
Tiffany & Co. | 5,823 | 358,406 | ||||||
1,069,911 | ||||||||
Steel–0.37% | ||||||||
AK Steel Holding Corp. | 5,055 | 80,779 | ||||||
Allegheny Technologies, Inc. | 4,520 | 303,201 | ||||||
Cliffs Natural Resources Inc. | 6,248 | 606,493 | ||||||
Nucor Corp. | 14,583 | 699,401 | ||||||
United States Steel Corp. | 6,630 | 381,159 | ||||||
2,071,033 | ||||||||
Systems Software–3.03% | ||||||||
BMC Software, Inc.(b) | 8,206 | 406,197 | ||||||
CA, Inc. | 17,723 | 439,176 | ||||||
Microsoft Corp. | 347,763 | 9,243,540 | ||||||
Novell, Inc.(b) | 16,238 | 95,479 | ||||||
Oracle Corp. | 178,798 | 5,882,454 | ||||||
Red Hat, Inc.(b) | 8,802 | 363,347 | ||||||
Symantec Corp.(b) | 35,855 | 646,466 | ||||||
17,076,659 | ||||||||
Thrifts & Mortgage Finance–0.09% | ||||||||
Hudson City Bancorp, Inc. | 24,323 | 279,715 | ||||||
People’s United Financial Inc. | 17,041 | 224,600 | ||||||
504,315 | ||||||||
Tires & Rubber–0.03% | ||||||||
Goodyear Tire & Rubber Co.(b) | 11,219 | 159,085 | ||||||
Tobacco–1.56% | ||||||||
Altria Group, Inc. | 96,437 | 2,446,607 | ||||||
Lorillard, Inc. | 6,910 | 530,481 | ||||||
Philip Morris International Inc. | 83,807 | 5,261,403 | ||||||
Reynolds American Inc. | 15,619 | 536,044 | ||||||
8,774,535 | ||||||||
Trading Companies & Distributors–0.14% | ||||||||
Fastenal Co. | 6,809 | 423,043 | ||||||
W.W. Grainger, Inc. | 2,718 | 362,065 | ||||||
785,108 | ||||||||
Trucking–0.02% | ||||||||
Ryder System, Inc. | 2,389 | 114,266 | ||||||
Wireless Telecommunication Services–0.31% | ||||||||
American Tower Corp.–Class A(b) | 18,433 | 994,645 | ||||||
MetroPCS Communications, Inc.(b) | 12,114 | 174,441 | ||||||
Sprint Nextel Corp.(b) | 137,973 | 602,942 | ||||||
1,772,028 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $413,762,629) | 558,647,452 | |||||||
Money Market Funds–1.20% | ||||||||
Liquid Assets Portfolio–Institutional Class(d) | 3,370,700 | 3,370,700 | ||||||
Premier Portfolio–Institutional Class(d) | 3,370,699 | 3,370,699 | ||||||
Total Money Market Funds (Cost $6,741,399) | 6,741,399 | |||||||
TOTAL INVESTMENTS–100.45% (Cost $420,504,028) | 565,388,851 | |||||||
OTHER ASSETS LESS LIABILITIES–(0.45)% | (2,551,591 | ) | ||||||
NET ASSETS–100.00% | $ | 562,837,260 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco S&P 500 Index Fund
Investment Abbreviation:
REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1I and Note 3. | |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on Net Assets
as of February 28, 2011
Information Technology | 18.5 | % | ||
Financials | 15.8 | |||
Energy | 13.0 | |||
Industrials | 11.1 | |||
Health Care | 10.7 | |||
Consumer Discretionary | 10.5 | |||
Consumer Staples | 10.0 | |||
Materials | 3.7 | |||
Utilities | 3.1 | |||
Telecommunication Services | 2.9 | |||
Money Market Funds Plus Other Assets Less Liabilities | 0.7 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco S&P 500 Index Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $413,762,629) | $ | 558,647,452 | ||
Investments in affiliated money market funds, at value and cost | 6,741,399 | |||
Total investments, at value (Cost $420,504,028) | 565,388,851 | |||
Receivable for: | ||||
Investments sold | 341,349 | |||
Variation margin | 42,068 | |||
Fund shares sold | 232,455 | |||
Dividends | 1,158,529 | |||
Investment for trustee deferred compensation and retirement plans | 1,766 | |||
Other assets | 20,564 | |||
Total assets | 567,185,582 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 1,639,308 | |||
Fund shares reacquired | 2,010,029 | |||
Accrued fees to affiliates | 560,449 | |||
Accrued other operating expenses | 134,370 | |||
Trustee deferred compensation and retirement plans | 4,166 | |||
Total liabilities | 4,348,322 | |||
Net assets applicable to shares outstanding | $ | 562,837,260 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 519,420,758 | ||
Undistributed net investment income | 3,464,943 | |||
Undistributed net realized gain (loss) | (105,033,774 | ) | ||
Unrealized appreciation | 144,985,333 | |||
$ | 562,837,260 | |||
Net Assets: | ||||
Class A | $ | 405,776,484 | ||
Class B | $ | 59,258,571 | ||
Class C | $ | 79,357,451 | ||
Class Y | $ | 18,444,754 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 28,322,260 | |||
Class B | 4,225,273 | |||
Class C | 5,716,472 | |||
Class Y | 1,274,469 | |||
Class A: | ||||
Net asset value per share | $ | 14.33 | ||
Maximum offering price per share | ||||
(Net asset value of $14.33 divided by 94.50%) | $ | 15.16 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 14.02 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 13.88 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 14.47 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco S&P 500 Index Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends | $ | 5,534,059 | ||
Dividends from affiliated money market funds | 3,913 | |||
Interest | 5,606 | |||
Total investment income | 5,543,578 | |||
Expenses: | ||||
Advisory fees | 325,253 | |||
Administrative services fees | 77,217 | |||
Custodian fees | 26,320 | |||
Distribution fees: | ||||
Class A | 475,359 | |||
Class B | 319,779 | |||
Class C | 356,953 | |||
Transfer agent fees | 342,696 | |||
Trustees’ and officers’ fees and benefits | 14,238 | |||
Other | 132,524 | |||
Total expenses | 2,070,339 | |||
Less: Fees waived and expense offset arrangement(s) | (4,290 | ) | ||
Net expenses | 2,066,049 | |||
Net investment income | 3,477,529 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (23,864,339 | ) | ||
Futures contracts | 1,290,708 | |||
(22,573,631 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 148,477,428 | |||
Futures contracts | 177,466 | |||
148,654,894 | ||||
Net realized and unrealized gain | 126,081,263 | |||
Net increase in net assets resulting from operations | $ | 129,558,792 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco S&P 500 Index Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
Six months ended | Year ended | |||||||
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 3,477,529 | $ | 7,024,327 | ||||
Net realized gain (loss) | (22,573,631 | ) | (2,587,089 | ) | ||||
Change in net unrealized appreciation | 148,654,894 | 23,329,673 | ||||||
Net increase in net assets resulting from operations | 129,558,792 | 27,766,911 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (4,314,633 | ) | (7,210,852 | ) | ||||
Class B | (343,807 | ) | (1,207,325 | ) | ||||
Class C | (411,023 | ) | (1,049,628 | ) | ||||
Class Y | (330,849 | ) | (532,217 | ) | ||||
Total distributions from net investment income | (5,400,312 | ) | (10,000,022 | ) | ||||
Share transactions–net: | ||||||||
Class A | (16,144,067 | ) | (23,336,922 | ) | ||||
Class B | (19,990,738 | ) | (51,502,328 | ) | ||||
Class C | (4,780,504 | ) | (9,511,104 | ) | ||||
Class Y | (10,192,091 | ) | (603,618 | ) | ||||
Net increase (decrease) in net assets resulting from share transactions | (51,107,400 | ) | (84,953,972 | ) | ||||
Net increase (decrease) in net assets | 73,051,080 | (67,187,083 | ) | |||||
Net assets: | ||||||||
Beginning of period | 489,786,180 | 556,973,263 | ||||||
End of period (includes undistributed net investment income of $3,464,943 and $5,387,726, respectively) | $ | 562,837,260 | $ | 489,786,180 | ||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco S&P 500 Index Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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 to provide investment results that, before expenses, correspond to the total return (i.e., the combination of capital changes and income) of the Standard & Poor’s® 500 Composite Stock Price Index.
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. 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. 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 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. |
16 Invesco S&P 500 Index Fund
A security listed or traded on an exchange (except convertible bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. | ||
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 |
17 Invesco S&P 500 Index Fund
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 paid annually and recorded on 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 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 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 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. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with 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 Net Assets | Rate | |||
First $2 billion | 0 | .12% | ||
Over $2 billion | 0 | .10% | ||
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 Trimark 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 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C, and Class Y shares to 0.65%, 1.40%, 1.40% and 0.40%, 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.
18 Invesco S&P 500 Index Fund
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $4,086.
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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees.
Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.
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 February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $9,977 in front-end sales commissions from the sale of Class A shares and $64, $18,406 and $2,921 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 Invesco, 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 565,388,851 | $ | — | $ | — | $ | 565,388,851 | ||||||||
Futures* | 100,510 | — | — | 100,510 | ||||||||||||
Total Investments | $ | 565,489,361 | $ | — | $ | — | $ | 565,489,361 | ||||||||
* | Unrealized appreciation (depreciation). |
NOTE 4—Derivative Investments
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their
19 Invesco S&P 500 Index Fund
effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk | ||||||||
Futures contracts(a) | $ | 100,510 | $ | — | ||||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain (Loss) on | ||||
Statement of Operations | ||||
Futures* | ||||
Realized Gain (Loss) | ||||
Equity risk | $ | 1,290,708 | ||
Change in Unrealized Appreciation (Depreciation) | ||||
Equity risk | 177,466 | |||
Total | $ | 1,468,174 | ||
* | The average notional value of futures outstanding during the period was $5,321,977. |
Open Futures Contracts | ||||||||||||||||
Unrealized | ||||||||||||||||
Number of | Month/ | Notional | Appreciation | |||||||||||||
Contract | Contracts | Commitment | Value | (Depreciation) | ||||||||||||
E-Mini S&P 500 Index | 99 | March-2011/Long | $ | 6,564,195 | $ | 100,510 | ||||||||||
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $204.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $1,223 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—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. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Borrowings
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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
20 Invesco S&P 500 Index Fund
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 9—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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund has a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2012 | $ | 20,294,770 | ||
August 31, 2017 | 12,322,416 | |||
August 31, 2018 | 19,847,353 | |||
Total capital loss carryforward | $ | 52,464,539 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
NOTE 10—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 February 28, 2011 was $11,912,590 and $64,161,648, 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 | $ | 162,037,939 | ||
Aggregate unrealized (depreciation) of investment securities | (45,889,093 | ) | ||
Net unrealized appreciation of investment securities | $ | 116,148,846 | ||
Cost of investments for tax purposes is $449,240,005. |
21 Invesco S&P 500 Index Fund
NOTE 11—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 1,458,906 | $ | 19,549,060 | 3,738,277 | $ | 44,680,433 | ||||||||||
Class B | 83,218 | 1,065,406 | 156,856 | 1,823,526 | ||||||||||||
Class C | 183,167 | 2,373,428 | 324,099 | 3,728,918 | ||||||||||||
Class Y | 96,742 | 1,305,964 | 164,078 | 1,976,792 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 296,064 | 3,952,452 | 588,507 | 7,062,080 | ||||||||||||
Class B | 23,301 | 305,005 | 97,614 | 1,150,870 | ||||||||||||
Class C | 28,427 | 368,126 | 87,603 | 1,022,327 | ||||||||||||
Class Y | 24,456 | 329,428 | 43,861 | 531,151 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 983,088 | 13,007,817 | 645,541 | 7,705,077 | ||||||||||||
Class B | (1,005,519 | ) | (13,007,816 | ) | (660,060 | ) | (7,705,077 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (3,949,422 | ) | (52,653,396 | ) | (6,942,030 | ) | (82,784,512 | ) | ||||||||
Class B | (650,092 | ) | (8,353,333 | ) | (3,997,776 | ) | (46,771,647 | ) | ||||||||
Class C | (587,455 | ) | (7,522,058 | ) | (1,229,575 | ) | (14,262,349 | ) | ||||||||
Class Y | (864,424 | ) | (11,827,483 | ) | (257,580 | ) | (3,111,561 | ) | ||||||||
Net increase (decrease) in share activity | (3,879,543 | ) | $ | (51,107,400 | ) | (7,240,585 | ) | $ | (84,953,972 | ) | ||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 77% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
22 Invesco S&P 500 Index Fund
NOTE 12—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||
Net gains | expenses | expenses | ||||||||||||||||||||||||||||||||||||||||||||||
(losses) on | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||
Net asset | securities | Dividends | net assets | assets without | investment | |||||||||||||||||||||||||||||||||||||||||||
value, | Net | (both | Total from | from net | Net asset | Net assets, | with fee waivers | fee waivers | income to | |||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | value, end | Total | end of period | and/or expenses | and/or expenses | average | Portfolio | |||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | of period | return(b) | (000s omitted)(c) | absorbed(d) | absorbed(d) | net assets(d) | turnover(e) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 11.36 | $ | 0.10 | $ | 3.02 | $ | 3.12 | $ | (0.15 | ) | $ | 14.33 | 27.55 | % | $ | 405,776 | 0.59 | %(f) | 0.59 | %(f) | 1.46 | %(f) | 2 | % | |||||||||||||||||||||||
Year ended 08/31/10 | 11.09 | 0.18 | 0.33 | 0.51 | (0.24 | ) | 11.36 | 4.44 | 335,583 | 0.60 | 0.69 | 1.47 | 7 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.94 | 0.21 | (2.83 | ) | (2.62 | ) | (0.23 | ) | 11.09 | (18.43 | ) | 349 | 0.59 | 0.74 | 2.11 | (g) | 7 | |||||||||||||||||||||||||||||||
Year ended 08/31/08 | 16.01 | 0.23 | (2.05 | ) | (1.82 | ) | (0.25 | ) | 13.94 | (11.55 | ) | 444 | 0.59 | 0.66 | 1.50 | (g) | 10 | |||||||||||||||||||||||||||||||
Year ended 08/31/07 | 14.17 | 0.21 | 1.85 | 2.06 | (0.22 | ) | 16.01 | 14.60 | 521 | 0.58 | 0.65 | 1.37 | (g) | 3 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 13.27 | 0.18 | 0.91 | 1.09 | (0.19 | ) | 14.17 | 8.24 | 452 | 0.62 | 0.66 | 1.32 | (g) | 4 | ||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.10 | 0.05 | 2.94 | 2.99 | (0.07 | ) | 14.02 | 26.99 | 59,259 | 1.34 | (f) | 1.34 | (f) | 0.71 | (f) | 2 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.83 | 0.08 | 0.33 | 0.41 | (0.14 | ) | 11.10 | 3.68 | 64,102 | 1.35 | 1.44 | 0.72 | 7 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.54 | 0.13 | (2.73 | ) | (2.60 | ) | (0.11 | ) | 10.83 | (19.06 | ) | 110 | 1.34 | 1.49 | 1.36 | (g) | 7 | |||||||||||||||||||||||||||||||
Year ended 08/31/08 | 15.52 | 0.11 | (1.99 | ) | (1.88 | ) | (0.10 | ) | 13.54 | (12.20 | ) | 217 | 1.34 | 1.41 | 0.75 | (g) | 10 | |||||||||||||||||||||||||||||||
Year ended 08/31/07 | 13.72 | 0.09 | 1.79 | 1.88 | (0.08 | ) | 15.52 | 13.76 | 377 | 1.34 | 1.41 | 0.61 | (g) | 3 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 12.83 | 0.07 | 0.87 | 0.94 | (0.05 | ) | 13.72 | 7.35 | 534 | 1.38 | 1.42 | 0.56 | (g) | 4 | ||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 10.99 | 0.05 | 2.91 | 2.96 | (0.07 | ) | 13.88 | 26.98 | 79,357 | 1.29 | (f) | 1.29 | (f) | 0.76 | (f) | 2 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 10.74 | 0.08 | 0.33 | 0.41 | (0.16 | ) | 10.99 | 3.71 | 66,933 | 1.35 | 1.44 | 0.72 | 7 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.46 | 0.13 | (2.72 | ) | (2.59 | ) | (0.13 | ) | 10.74 | (19.01 | ) | 74 | 1.34 | 1.49 | 1.36 | (g) | 7 | |||||||||||||||||||||||||||||||
Year ended 08/31/08 | 15.46 | 0.11 | (1.98 | ) | (1.87 | ) | (0.13 | ) | 13.46 | (12.21 | ) | 104 | 1.33 | 1.40 | 0.76 | (g) | 10 | |||||||||||||||||||||||||||||||
Year ended 08/31/07 | 13.70 | 0.09 | 1.78 | 1.87 | (0.11 | ) | 15.46 | 13.68 | 132 | 1.33 | 1.40 | 0.62 | (g) | 3 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 12.83 | 0.08 | 0.87 | 0.95 | (0.08 | ) | 13.70 | 7.45 | 132 | 1.34 | 1.38 | 0.60 | (g) | 4 | ||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 11.48 | 0.11 | 3.05 | 3.16 | (0.17 | ) | 14.47 | 27.64 | 18,445 | 0.34 | (f) | 0.34 | (f) | 1.71 | (f) | 2 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 11.20 | 0.21 | 0.33 | 0.54 | (0.26 | ) | 11.48 | 4.72 | 23,168 | 0.35 | 0.44 | 1.72 | 7 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 14.09 | 0.25 | (2.87 | ) | (2.62 | ) | (0.27 | ) | 11.20 | (18.22 | ) | 23 | 0.34 | 0.49 | 2.36 | (g) | 7 | |||||||||||||||||||||||||||||||
Year ended 08/31/08 | 16.17 | 0.27 | (2.06 | ) | (1.79 | ) | (0.29 | ) | 14.09 | (11.28 | ) | 74 | 0.34 | 0.41 | 1.75 | (g) | 10 | |||||||||||||||||||||||||||||||
Year ended 08/31/07 | 14.31 | 0.25 | 1.86 | 2.11 | (0.25 | ) | 16.17 | 14.86 | 96 | 0.34 | 0.41 | 1.61 | (g) | 3 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 13.40 | 0.21 | 0.92 | 1.13 | (0.22 | ) | 14.31 | 8.46 | 99 | 0.38 | 0.42 | 1.56 | (g) | 4 | ||||||||||||||||||||||||||||||||||
(a) | Calculated using averages 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. | |
(c) | Net assets, end of period, for the six months ended February 28, 2011 is stated in thousands. | |
(d) | The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios for all classes was 0.01%, 0.00%, 0.00% and 0.00% for the years ended 2010, 2009, 2008 and 2007, respectively. The rebate was less than 0.005% for the years ended 2009, 2008 and 2007. | |
(e) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(f) | Ratios are annualized and based on average daily net assets (000’s omitted) of $383,438, $64,486, $75,335 and $23,322 for Class A, Class B, Class C and Class Y shares, respectively. | |
(g) | Ratio of net investment income to average net assets without fee waivers and/or expense reimbursements was 2.21%, 1.68%, 1.54%, and 1.52% for the years ended August 31, 2009 through August 31, 2006, respectively. |
23 Invesco S&P 500 Index 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,274.60 | $ | 3.33 | $ | 1,021.87 | $ | 2.96 | 0.59 | % | ||||||||||||||||||
B | 1,000.00 | 1,269.90 | 7.54 | 1,018.15 | 6.71 | 1.34 | ||||||||||||||||||||||||
C | 1,000.00 | 1,269.80 | 7.26 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,276.40 | 1.92 | 1,023.11 | 1.71 | 0.34 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
24 Invesco S&P 500 Index Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
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 U.S. 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.
MS-SPI-SAR-1 | Invesco Distributors, Inc. |
Invesco Select Real Estate Income Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: ASRAX § B: SARBX § C: ASRCX § Y: ASRYX �� Institutional: ASRIX
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: ASRAX § B: SARBX § C: ASRCX § Y: ASRYX �� Institutional: ASRIX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
9 | Financial Statements | |
11 | Notes to Financial Statements | |
17 | Financial Highlights | |
19 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 11.57 | % | ||
Class B Shares | 11.18 | |||
Class C Shares | 11.18 | |||
Class Y Shares | 11.74 | |||
Institutional Class Shares | 11.80 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Custom Select Real Estate Income Index§ (Style-Specific Index) | 14.81 | |||
Lipper Real Estate Funds Index▼ (Peer Group Index) | 18.65 |
▼ | Lipper Inc.; §Invesco, Lipper Inc., Bloomberg L.P. |
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Custom Select Real Estate Income Index, created by Invesco to serve as a benchmark for Invesco Select Real Estate Income Fund, is composed of the following indexes: FTSE NAREIT Equity REIT (50%) and Wachovia Hybrid and Preferred Securities REIT (50%).
The FTSE NAREIT Equity REIT Index is an unmanaged index considered representative of U.S. REITs
The Lipper Real Estate Funds Index is an unmanaged index considered representative of real estate funds tracked by Lipper.
The Wachovia Hybrid and Preferred Securities REIT Index measures the performance of U.S. preferred shares.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Select Real Estate Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (5/31/02) | 9.70 | % | ||||||
5 Years | 2.47 | |||||||
1 Year | 16.16 | |||||||
Class B Shares | ||||||||
Inception | 9.37 | % | ||||||
5 Years | 2.61 | |||||||
1 Year | 16.93 | |||||||
Class C Shares | ||||||||
Inception | 9.37 | % | ||||||
5 Years | 2.77 | |||||||
1 Year | 20.93 | |||||||
Class Y Shares | ||||||||
Inception | 10.45 | % | ||||||
5 Years | 3.70 | |||||||
1 Year | 23.14 | |||||||
Institutional Class Shares | ||||||||
Inception | 10.60 | % | ||||||
5 Years | 3.98 | |||||||
1 Year | 23.31 |
On March 12, 2007, the Fund reorganized from a Closed-End Fund to an Open-End Fund. Performance shown prior to that date is that of the Closed-End Fund’s Common shares and includes the fees applicable to Common shares. The Closed-End Fund’s Common shares performance reflects any applicable fee waivers or expense reimbursements.
Class B shares incepted on March 9, 2007. Performance shown prior to that date is that of Class A shares, restated to reflect the higher 12b-1 fees applicable to Class B shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Class C shares incepted on March 9, 2007. Performance shown prior to that date is that of Class A shares, restated to reflect the higher 12b-1 fees applicable to Class C shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Class Y shares incepted on October 3, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Institutional Class shares incepted on March 9, 2007. Performance shown prior to that date is that of Class A
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (5/31/02) | 9.37 | % | ||||||
5 Years | 3.32 | |||||||
1 Year | 12.10 | |||||||
Class B Shares | ||||||||
Inception | 9.05 | % | ||||||
5 Years | 3.46 | |||||||
1 Year | 12.85 | |||||||
Class C Shares | ||||||||
Inception | 9.05 | % | ||||||
5 Years | 3.62 | |||||||
1 Year | 16.85 | |||||||
Class Y Shares | ||||||||
Inception | 10.13 | % | ||||||
5 Years | 4.57 | |||||||
1 Year | 19.03 | |||||||
Institutional Class Shares | ||||||||
Inception | 10.28 | % | ||||||
5 Years | 4.85 | |||||||
1 Year | 19.20 |
shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions (reinvested at net asset value, except for periods prior to March 12, 2007 where reinvestments were made at the lower of the Closed-End Fund’s net asset value or market price), changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y and Institutional Class shares was 1.40%, 2.15%, 2.15%, 1.15% and 0.95%, respectively. The
expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses. Class Y and Institutional class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
Fund performance was positively impacted by a temporary 2% fee on redemptions that was in effect from March 12, 2007 to March 12, 2008. Without income from this temporary fee, returns would have been lower.
Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.
3 Invesco Select Real Estate Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Select Real Estate Income Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Real Estate Investment Trusts, Common Stocks & Other Equity Interests–52.42% | ||||||||
Apartments–8.02% | ||||||||
Advance Resident Investment (Japan) | 296 | $ | 616,212 | |||||
Canadian Apartment Properties Real Estate Investment Trust (Canada) | 39,200 | 783,435 | ||||||
Essex Property Trust, Inc. | 85,500 | 10,583,190 | ||||||
Getty Realty Corp. | 59,700 | 1,756,374 | ||||||
National Retail Properties Inc. | 263,400 | 6,766,746 | ||||||
Realty Income Corp. | 28,200 | 1,014,354 | ||||||
21,520,311 | ||||||||
Diversified–9.13% | ||||||||
British Land Co. PLC (United Kingdom) | 69,424 | 659,924 | ||||||
Challenger Diversified Property Group (Australia) | 1,951,794 | 993,853 | ||||||
Charter Hall Group (Australia) | 308,878 | 775,064 | ||||||
Cohen & Steers Quality Income Realty Fund, Inc. | 201,773 | 1,981,411 | ||||||
Cominar Real Estate Investment Trust (Canada) | 41,400 | 940,793 | ||||||
Dexus Property Group (Australia) | 671,099 | 586,319 | ||||||
Digital Realty Trust, Inc. | 55,900 | 3,288,038 | ||||||
Dundee Real Estate Investment Trust (Canada) | 54,900 | 1,780,067 | ||||||
Frasers Centrepoint Trust (Singapore) | 508,000 | 604,087 | ||||||
Gecina S.A. (France) | 4,787 | 620,246 | ||||||
GPT Group (Australia) | 189,012 | 598,454 | ||||||
Kenedix Realty Investment Corp. (Japan) | 171 | 807,117 | ||||||
Kiwi Income Property Trust (New Zealand) | 1,571,702 | 1,187,544 | ||||||
Mirvac Group (Australia) | 568,063 | 754,623 | ||||||
Neuberger Berman Real Estate Securities Income Fund Inc. | 12,092 | 50,786 | ||||||
Stockland (Australia) | 190,845 | 740,481 | ||||||
Unibail-Rodamco S.E. (France) | 5,221 | 1,049,994 | ||||||
United Urban Investment Corp. (Japan) | 478 | 626,578 | ||||||
Vornado Realty Trust | 7,588 | 708,188 | ||||||
Washington Real Estate Investment Trust | 183,291 | 5,726,011 | ||||||
24,479,578 | ||||||||
Healthcare–9.37% | ||||||||
Chartwell Senior Housing Real Estate Investment Trust (Canada) | 85,500 | 769,430 | ||||||
Health Care REIT, Inc. | 176,573 | 9,220,642 | ||||||
LTC Properties, Inc. | 46,750 | 1,366,035 | ||||||
Nationwide Health Properties, Inc. | 34,000 | 1,453,160 | ||||||
OMEGA Healthcare Investors, Inc. | 116,000 | 2,780,520 | ||||||
Senior Housing Properties Trust | 388,250 | 9,527,655 | ||||||
25,117,442 | ||||||||
Industrial–4.67% | ||||||||
Ascendas REIT (Singapore) | 583,000 | 916,739 | ||||||
EastGroup Properties, Inc. | 22,800 | 1,038,084 | ||||||
Liberty Property Trust | 313,400 | 10,583,518 | ||||||
12,538,341 | ||||||||
Lodging-Resorts–2.82% | ||||||||
Hospitality Properties Trust | 329,300 | 7,573,900 | ||||||
Office–8.18% | ||||||||
Befimmo S.C.A. Sicafi (Belgium) | 8,429 | 704,239 | ||||||
CapitaCommercial Trust (Singapore) | 547,000 | 594,763 | ||||||
Commonwealth Property Office Fund (Australia) | 792,263 | 692,129 | ||||||
Government Properties Income Trust | 90,150 | 2,449,376 | ||||||
ING Office Fund (Australia) | 1,149,430 | 716,573 | ||||||
Intervest Offices (Belgium) | 28,764 | 952,871 | ||||||
Japan Prime Realty Investment Corp. (Japan) | 223 | 621,657 | ||||||
Mack-Cali Realty Corp. | 204,300 | 6,933,942 | ||||||
Nomura Real Estate Office Fund, Inc. (Japan) | 92 | 624,358 | ||||||
ORIX JREIT Inc. (Japan) | 99 | 571,478 | ||||||
Piedmont Office Realty Trust Inc.–Class A | 305,000 | 6,100,000 | ||||||
Wereldhave N.V. (Netherlands) | 9,492 | 963,532 | ||||||
21,924,918 | ||||||||
Regional Malls–6.63% | ||||||||
CapitaMall Trust (Singapore) | 422,000 | 602,412 | ||||||
CBL & Associates Properties, Inc. | 177,300 | 3,164,805 | ||||||
CFS Retail Property Trust (Australia) | 763,740 | 1,464,802 | ||||||
Corio N.V. (Netherlands) | 9,077 | 602,080 | ||||||
Fortune REIT (Singapore) | 1,365,000 | 691,595 | ||||||
Primaris Retail Real Estate Investment Trust (Canada) | 30,200 | 634,349 | ||||||
Simon Property Group, Inc. | 88,168 | 9,702,007 | ||||||
Starhill Global REIT (Singapore) | 1,826,000 | 911,636 | ||||||
17,773,686 | ||||||||
Shopping Centers–3.60% | ||||||||
Artis Real Estate Investment Trust (Canada) | 125,800 | 1,784,930 | ||||||
Bunnings Warehouse Property Trust (Australia) | 321,015 | 576,852 | ||||||
Bunnings Warehouse Property Trust–Rts (Australia) | 66,325 | 4,053 | ||||||
Charter Hall Retail REIT (Australia) | 339,917 | 1,113,675 | ||||||
Equity One, Inc. | 68,500 | 1,311,090 | ||||||
Eurocommercial Properties N.V. (Netherlands) | 12,827 | 615,341 | ||||||
Inland Real Estate Corp. | 285,050 | 2,685,171 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Select Real Estate Income Fund
Shares | Value | |||||||
Shopping Centers–(continued) | ||||||||
RioCan Real Estate Investment Trust (Canada) | 24,800 | $ | 618,468 | |||||
VastNed Retail N.V. (Netherlands) | 13,296 | 949,666 | ||||||
9,659,246 | ||||||||
Total Real Estate Investment Trusts, Common Stocks & Other Equity Interests (Cost $115,071,156) | 140,587,422 | |||||||
Preferred Stocks–25.24% | ||||||||
Apartments–0.84% | ||||||||
National Retail Properties Inc. Series C, 7.38% Pfd. | 90,450 | 2,247,683 | ||||||
Diversified–5.12% | ||||||||
DuPont Fabros Technology, Inc., Series A, 7.88% Pfd. | 80,000 | 2,032,800 | ||||||
Entertainment Properties Trust, Series E, 9.00% Pfd. | 85,000 | 2,389,350 | ||||||
Vornado Realty Trust, Series E, 7.00% Pfd. | 145,963 | 3,663,671 | ||||||
Series H, 6.75% Pfd. | 91,800 | 2,223,396 | ||||||
Series I, 6.63% Pfd. | 140,900 | 3,412,598 | ||||||
13,721,815 | ||||||||
Healthcare–1.36% | ||||||||
Health Care REIT, Inc., Series F, 7.63% Pfd. | 36,500 | 938,415 | ||||||
Omega Healthcare Investors, Inc., Series D, 8.38% Pfd. | 107,100 | 2,701,062 | ||||||
3,639,477 | ||||||||
Industrial–3.86% | ||||||||
ProLogis, Series C, 8.54% Pfd. | 950 | 52,428 | ||||||
Duke Realty Corp., Series J, 6.63% Pfd. | 4,954 | 115,775 | ||||||
Series L, 6.60% Pfd. | 59,500 | 1,392,895 | ||||||
Series M, 6.95% Pfd. | 25,100 | 623,484 | ||||||
Series N, 7.25% Pfd. | 15,590 | 395,206 | ||||||
Series O, 8.38% Pfd. | 22,600 | 605,002 | ||||||
PS Business Parks, Inc., Series M, 7.20% Pfd. | 123,100 | 3,089,810 | ||||||
Series O, 7.38% Pfd. | 117,985 | 2,973,222 | ||||||
Series R, 6.88% Pfd. | 45,000 | 1,105,200 | ||||||
10,353,022 | ||||||||
Lodging-Resorts–2.84% | ||||||||
Eagle Hospitality Properties Trust Inc., Series A, 8.25% Pfd. | 195,800 | 305,938 | ||||||
Hersha Hospitality Trust, Series A, 8.00% Pfd. | 7,520 | 188,000 | ||||||
Hospitality Properties Trust, Series C, 7.00% Pfd. | 28,800 | 695,808 | ||||||
LaSalle Hotel Properties, Series D, 7.50% Pfd. | 62,833 | 1,541,293 | ||||||
Series G, 7.25% Pfd., | 88,950 | 2,143,144 | ||||||
Series H, 7.50% Pfd. | 50,900 | 1,275,681 | ||||||
Sunstone Hotel Investors, Inc., Series A, 8.00% Pfd. | 60,000 | 1,483,200 | ||||||
7,633,064 | ||||||||
Office–6.21% | ||||||||
Alexandria Real Estate Equities Inc., Series D, 7.00% Conv. Pfd. | 24,100 | 620,575 | ||||||
BioMed Realty Trust, Inc., Series A, 7.38% Pfd. | 79,600 | 1,993,980 | ||||||
Brandywine Realty Trust, Series D, 7.38% Pfd. | 10,355 | 257,840 | ||||||
Corporate Office Properties Trust, Series J, 7.63% Pfd. | 83,470 | 2,100,105 | ||||||
Kilroy Realty Corp., Series E, 7.80% Pfd. | 58,195 | 1,472,333 | ||||||
Series F, 7.50% Pfd. | 202,500 | 5,007,825 | ||||||
SL Green Realty Corp., Series C, 7.63% Pfd. | 151,100 | 3,762,390 | ||||||
Series D, 7.88% Pfd. | 57,400 | 1,441,314 | ||||||
16,656,362 | ||||||||
Regional Malls–2.11% | ||||||||
CBL & Associates Properties, Inc., Series D, 7.38% Pfd. | 185,200 | 4,498,508 | ||||||
Taubman Centers, Inc., Series G, 8.00% Pfd. | 45,900 | 1,166,319 | ||||||
5,664,827 | ||||||||
Self Storage Facilities–2.90% | ||||||||
Public Storage, Series H, 6.95% Pfd. | 34,500 | 871,125 | ||||||
Series I, 7.25% Pfd. | 98,600 | 2,501,482 | ||||||
Series L, 6.75% Pfd. | 62,400 | 1,566,864 | ||||||
Series M, 6.63% Pfd. | 87,300 | 2,238,372 | ||||||
Series O, 6.88% Pfd. | 23,100 | 598,752 | ||||||
7,776,595 | ||||||||
Total Preferred Stocks (Cost $66,514,663) | 67,692,845 | |||||||
Principal | ||||||||
Amount | ||||||||
Asset-Backed Securities–13.73% | ||||||||
Banc of America Large Loan Inc., Series 2005-MIB1, Class C, Floating Rate Pass Through Ctfs., 0.58%, 03/15/22(b)(c) | $ | 1,000,000 | 932,338 | |||||
Series 2006-BIX1, Class B, Floating Rate Pass Through Ctfs., 0.41%, 10/15/19(b)(c) | 1,465,000 | 1,408,794 | ||||||
Series 2006-BIX1, Class E, Floating Rate Pass Through Ctfs., 0.51%, 10/15/19(b)(c) | 1,900,000 | 1,731,644 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Select Real Estate Income Fund
Principal | ||||||||
Amount | Value | |||||||
Asset-Backed Securities–(continued) | ||||||||
Bear Stearns Commercial Mortgage Securities, Series 2005-PWR7, Class AJ, Variable Rate Pass Through Ctfs., 5.17%, 02/11/41(c) | $ | 2,000,000 | $ | 2,045,426 | ||||
Series 2005-PWR8, Class AJ, Pass Through Ctfs., 4.75%, 06/11/41 | 1,000,000 | 1,012,083 | ||||||
Series 2005-T18, Class A2, Variable Rate Pass Through Ctfs., 4.56%, 02/13/42(c) | 71,288 | 72,082 | ||||||
Series 2005-T18, Class AJ, Variable Rate Pass Through Ctfs., 5.01%, 02/13/42(c) | 350,000 | 352,740 | ||||||
Series 2006-T22, Class AJ, Variable Rate Pass Through Ctfs., 5.51%, 04/12/38(c) | 900,000 | 927,824 | ||||||
Citigroup Commercial Mortgage Trust, Series 2005-EMG, Class D, Variable Rate Pass Through Ctfs., 5.03%, 09/20/51(b)(c) | 500,000 | 491,292 | ||||||
Series 2006-C5, Class AMP3, Pass Through Ctfs., 5.50%, 10/15/49(b) | 3,335,879 | 2,939,706 | ||||||
Commercial Mortgage Pass Through Ctfs., Series 2006-FL12, Class AH1, Floating Rate Pass Through Ctfs., 1.02%, 12/15/20(b)(c) | 650,000 | 607,382 | ||||||
Series 2006-FL12, Class AH3, Floating Rate Pass Through Ctfs., 1.22%, 12/15/20(b)(c) | 750,000 | 689,971 | ||||||
Credit Suisse First Boston Mortgage Securities Corp., Series 2003-C3, Class G, Variable Rate Pass Through Ctfs., 4.62%, 05/15/38(b)(c) | 25,000 | 23,334 | ||||||
Series 2004-TF2A, Class J, Floating Rate Pass Through Ctfs., 1.22%, 11/15/19(b)(c) | 1,656,000 | 1,595,722 | ||||||
DLJ Commercial Mortgage Corp.–Series 1998-CG1, Class B4, Variable Rate Pass Through Ctfs., 7.23%, 06/10/31(b)(c) | 340,000 | 369,715 | ||||||
GMAC Commercial Mortgage Securities Inc.–Series 1998-C2, Class F, Pass Through Ctfs., 6.50%, 05/15/35(b) | 190,000 | 197,767 | ||||||
Greenwich Capital Commercial Funding Corp.–Series 2005-GG3, Class AJ, Variable Rate Pass Through Ctfs., 4.86%, 08/10/42(c) | 400,000 | 418,595 | ||||||
GS Mortgage Securities Corp II, Series 2001-GL3A, Class B, Variable Pass Through Ctfs., 6.59%, 08/05/18(b)(c) | 2,000,000 | 2,048,386 | ||||||
Series 2001-GL3A, Class D, Variable Pass Through Ctfs., 6.74%, 08/05/18(b)(c) | 1,850,000 | 1,883,237 | ||||||
Series 2003-C1, Class J, Variable Pass Through Ctfs., 5.31%, 01/10/40(b)(c) | 900,000 | 837,577 | ||||||
JPMorgan Chase Commercial Mortgage Securities Corp.,Series 2002-CIB5, Class S2, Pass Through Ctfs., 8.37%, 10/12/37(b) | 1,925,430 | 1,951,494 | ||||||
LB-UBS Commercial Mortgage Trust, Series 2002-C7, Class B, Pass Through Ctfs., 5.08%, 01/15/36 | 96,000 | 100,797 | ||||||
Series 2005-C1, Class A2, Pass Through Ctfs., 4.31%, 02/15/30 | 80,324 | 80,413 | ||||||
Series 2005-C3, Class AJ, Pass Through Ctfs., 4.84%, 07/15/40 | 4,250,000 | 4,404,612 | ||||||
Series 2006-C4, Class AJ, Variable Rate Pass Through Ctfs., 5.90%, 06/15/38(c) | 3,760,000 | 3,849,820 | ||||||
Merrill Lynch Floating Trust, Series 2006-1, Class B, Floating Rate Pass Through Ctfs., 0.44%, 06/15/22(b)(c) | 1,950,000 | 1,759,352 | ||||||
Series 2006-1, Class D, Floating Rate Pass Through Ctfs., 0.46%, 06/15/22(b)(c) | 1,925,000 | 1,641,936 | ||||||
Merrill Lynch Mortgage Trust–Series 2004-MKB1, Class B, Variable Rate Pass Through Ctfs., 5.28%, 02/12/42(c) | 25,000 | 26,414 | ||||||
Morgan Stanley Capital I–Series 2006-IQ11, Class B, Variable Rate Pass Through Ctfs., 5.73%, 10/15/42(c) | 270,000 | 262,551 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2003-C5, Class B, Pass Through Ctfs., 4.11%, 06/15/35 | 180,000 | 184,018 | ||||||
Series 2004-C15, Class 175C, Variable Pass Through Ctfs., 6.04%, 10/15/41(b)(c) | 396,000 | 370,445 | ||||||
Series 2006-WL7A, Class A2, Floating Rate Pass Through Ctfs., 0.38%, 09/15/21(b)(c) | 1,700,000 | 1,590,994 | ||||||
Total Asset-Backed Securities (Cost $34,927,600) | 36,808,461 | |||||||
Bonds & Notes–4.45% | ||||||||
Healthcare–1.32% | ||||||||
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 01/15/16 | 2,000,000 | 2,070,000 | ||||||
Sr. Unsec. Gtd. Notes, 6.75%, 10/15/22(b) | 1,450,000 | 1,468,125 | ||||||
3,538,125 | ||||||||
Office–0.40% | ||||||||
Reckson Operating Partnership LP, Sr. Unsec. Notes, 6.00%, 03/31/16 | 1,000,000 | 1,058,750 | ||||||
Real Estate Management & Development–1.39% | ||||||||
BR Malls International Finance Ltd. (Brazil), Sr. Unsec. Gtd. Bonds, 8.50%(b)(d) | 1,850,000 | 1,872,606 | ||||||
BR Properties SA (Brazil), Sr. Unsec. Gtd. Notes, 9.00%(b)(d) | 1,850,000 | 1,847,432 | ||||||
3,720,038 | ||||||||
Shopping Centers–0.42% | ||||||||
Developers Diversified Realty Corp., Sr. Unsec. Medium-Term Notes, 7.50%, 07/15/18 | 1,000,000 | 1,127,500 | ||||||
Specialty Properties–0.92% | ||||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 8.63%, 01/15/12 | 1,509,000 | 1,591,995 | ||||||
4.30%, 01/15/16 | 900,000 | 885,937 | ||||||
2,477,932 | ||||||||
Total Bonds & Notes (Cost $11,652,413) | 11,922,345 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Select Real Estate Income Fund
Shares | Value | |||||||
Money Market Funds–1.86% | ||||||||
Liquid Assets Portfolio–Institutional Class(e) | 2,499,501 | $ | 2,499,501 | |||||
Premier Portfolio–Institutional Class(e) | 2,499,501 | 2,499,501 | ||||||
Total Money Market Funds (Cost $4,999,002) | 4,999,002 | |||||||
TOTAL INVESTMENTS–97.70% (Cost $233,164,834) | 262,010,075 | |||||||
OTHER ASSETS LESS LIABILITIES–2.30% | 6,171,662 | |||||||
NET ASSETS–100.00% | $ | 268,181,737 | ||||||
Investment Abbreviations:
Conv. | – Convertible | |
Ctfs. | – Certificates | |
Gtd. | – Guaranteed | |
Pfd. | – Preferred | |
REIT | – Real Estate Investment Trust | |
Rts. | – Rights | |
Sr. | – Senior | |
Unsec. | – Unsecured |
Notes to Schedule of Investments:
(a) | Property type classifications used in this report are generally according to FSTE National Association of Real Estate Investment Trusts (“NAREIT”) Equity REITs Index, which is exclusively owned by NAREIT. | |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $28,259,249, which represented 10.54% of the Fund’s Net Assets. | |
(c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(d) | Perpetual bond with no specified maturity date. | |
(e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By property type, based on Net Assets
as of February 28, 2011
Office | 14.8 | % | ||
Diversified | 14.2 | |||
Asset-Backed Securities | 13.7 | |||
Healthcare | 12.1 | |||
Apartments | 8.9 | |||
Regional Malls | 8.7 | |||
Industrial | 8.5 | |||
Lodging-Resorts | 5.7 | |||
Shopping Centers | 4.0 | |||
Self Storage Facilities | 2.9 | |||
Properties each less than 2.0% of Portfolio | 2.3 | |||
Money Market Funds Plus Other Assets Less Liabilities | 4.2 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Select Real Estate Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $228,165,832) | $ | 257,011,073 | ||
Investments in affiliated money market funds, at value and cost | 4,999,002 | |||
Total investments, at value (Cost $233,164,834) | 262,010,075 | |||
Foreign currencies, at value (Cost $225,398) | 226,235 | |||
Receivable for: | ||||
Investments sold | 12,392,213 | |||
Fund shares sold | 2,709,414 | |||
Dividends and interest | 408,547 | |||
Principal paydowns | 3,140 | |||
Investment for trustee deferred compensation and retirement plans | 25,343 | |||
Other assets | 39,005 | |||
Total assets | 277,813,972 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 8,813,007 | |||
Fund shares reacquired | 490,781 | |||
Accrued fees to affiliates | 192,615 | |||
Accrued other operating expenses | 55,915 | |||
Trustee deferred compensation and retirement plans | 79,917 | |||
Total liabilities | 9,632,235 | |||
Net assets applicable to shares outstanding | $ | 268,181,737 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 258,651,149 | ||
Undistributed net investment income | 1,483,596 | |||
Undistributed net realized gain (loss) | (20,776,932 | ) | ||
Unrealized appreciation | 28,823,924 | |||
$ | 268,181,737 | |||
Net Assets: | ||||
Class A | $ | 178,061,525 | ||
Class B | $ | 1,971,595 | ||
Class C | $ | 22,817,598 | ||
Class Y | $ | 26,171,809 | ||
Institutional Class | $ | 39,159,210 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 20,950,264 | |||
Class B | 232,592 | |||
Class C | 2,691,706 | |||
Class Y | 3,087,316 | |||
Institutional Class | 4,612,519 | |||
Class A: | ||||
Net asset value per share | $ | 8.50 | ||
Maximum offering price per share | ||||
(Net asset value of $8.50 divided by 94.50%) | $ | 8.99 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 8.48 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 8.48 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 8.48 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 8.49 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Select Real Estate Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $5,560) | $ | 5,707,497 | ||
Dividends from affiliated money market funds | 5,362 | |||
Interest | 912,769 | |||
Total investment income | 6,625,628 | |||
Expenses: | ||||
Advisory fees | 906,895 | |||
Administrative services fees | 47,647 | |||
Custodian fees | 7,097 | |||
Distribution fees: | ||||
Class A | 199,619 | |||
Class B | 9,224 | |||
Class C | 95,192 | |||
Transfer agent fees — A, B, C and Y | 191,269 | |||
Transfer agent fees — Institutional | 18,385 | |||
Trustees’ and officers’ fees and benefits | 9,150 | |||
Other | 94,956 | |||
Total expenses | 1,579,434 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (7,012 | ) | ||
Net expenses | 1,572,422 | |||
Net investment income | 5,053,206 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 16,792,644 | |||
Foreign currencies | (42,713 | ) | ||
16,749,931 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 4,850,046 | |||
Foreign currencies | (21,317 | ) | ||
4,828,729 | ||||
Net realized and unrealized gain | 21,578,660 | |||
Net increase in net assets resulting from operations | $ | 26,631,866 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Select Real Estate Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 5,053,206 | $ | 7,657,804 | ||||
Net realized gain | 16,749,931 | 12,627,123 | ||||||
Change in net unrealized appreciation | 4,828,729 | 16,465,933 | ||||||
Net increase in net assets resulting from operations | 26,631,866 | 36,750,860 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (3,060,153 | ) | (4,685,749 | ) | ||||
Class B | (28,904 | ) | (30,709 | ) | ||||
Class C | (288,939 | ) | (317,879 | ) | ||||
Class Y | (513,084 | ) | (484,837 | ) | ||||
Institutional Class | (814,511 | ) | (1,558,748 | ) | ||||
Total distributions from net investment income | (4,705,591 | ) | (7,077,922 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Share transactions–net: | ||||||||
Class A | 15,991,359 | 32,864,761 | ||||||
Class B | 132,854 | 832,365 | ||||||
Class C | 4,393,058 | 10,729,487 | ||||||
Class Y | 1,960,352 | 17,204,765 | ||||||
Institutional Class | (1,916,037 | ) | (2,073,276 | ) | ||||
Net increase in net assets resulting from share transactions | 20,561,586 | 59,558,102 | ||||||
Net increase in net assets | 42,487,861 | 89,231,040 | ||||||
Net assets: | ||||||||
Beginning of period | 225,693,876 | 136,462,836 | ||||||
End of period (includes undistributed net investment income of $1,483,596 and $1,135,981, respectively) | $ | 268,181,737 | $ | 225,693,876 | ||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
Note 1—Significant Accounting Policies
Invesco Select Real Estate Income Fund (the “Fund”) is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust) (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 twenty separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest.
Prior to March 12, 2007, the Fund operated as AIM Select Real Estate Income Fund (the “Closed-End Fund”). The Closed-End Fund was reorganized as an open-end fund at which time the Fund became a new series portfolio of the Trust. The Closed-End Fund was reorganized as an open-end fund on March 12, 2007 (the “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”). Prior to the Reorganization, the Closed-End Fund redeemed Preferred Shares in their entirety. As part of the Reorganization, the Closed-End Fund was restructured from a sole series of AIM Select Real Estate Income Fund to a new series portfolio of the Trust. Upon the closing of the Reorganization, holders of the Closed-End Fund Common Shares received Class A shares of the Fund. Information for the Common Shares of the Closed-End Fund, prior to the Reorganization is included with Class A shares throughout this report.
The Fund’s investment objectives are current income and secondarily, capital appreciation.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Institutional Class. 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 Institutional 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
11 Invesco Select Real Estate Income Fund
distributions in Class B shares until they convert. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 will be used to value debt obligations and Corporate Loans. | ||
Securities for which market quotations are not readily available or are 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. | ||
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. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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. |
12 Invesco Select Real Estate Income Fund
The Fund recharacterizes distributions received from REIT investments based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available timely from the REIT, the recharacterization will be based on available information which may include the previous year’s allocation. If new or additional information becomes available from the REIT at a later date, a recharacterization will be made in the following year. The Fund records as dividend income the amount recharacterized as ordinary income and as realized gain the amount recharacterized as capital gain in the Statement of Operations, and the amount recharacterized as return of capital in the Statement of Changes in Net Assets. These recharacterizations are reflected in the accompanying financial statements. | ||
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 are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 the Institutional Class 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 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. | Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly. | |
The Fund concentrates its assets in the real estate industry, an investment in the fund will be closely linked to the performance of the real estate markets. Property values may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments. |
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 Net Assets | Rate | |||
First $250 million | 0 | .75% | ||
Next $250 million | 0 | .74% | ||
Next $500 million | 0 | .73% | ||
Next $1.5 billion | 0 | .72% | ||
Next $2.5 billion | 0 | .71% | ||
Next $2.5 billion | 0 | .70% | ||
Next $2.5 billion | 0 | .69% | ||
Over $10 billion | 0 | .68% | ||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such
13 Invesco Select Real Estate Income Fund
Affiliated Sub-Adviser(s) that provide 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 December 31, 2011, 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 (excluding certain items discussed below) of Class A, Class B, Class C, Class Y and Institutional Class shares to 2.00%, 2.75%, 2.75%, 1.75% and 1.75% 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on December 31, 2011. 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $6,529.
At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the six months ended February 28, 2011, Invesco Ltd. reimbursed expenses of the Fund in the amount of $133.
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 February 28, 2011, 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 February 28, 2011, 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 Institutional 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 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $18,258 in front-end sales commissions from the sale of Class A shares and $0, $290 and $1,095 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 Invesco, 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 February 28, 2011. 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.
14 Invesco Select Real Estate Income Fund
During the six months ended February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 192,795,607 | $ | 20,479,609 | $ | 4,053 | $ | 213,279,269 | ||||||||
Corporate Debt Securities | — | 11,922,345 | — | 11,922,345 | ||||||||||||
Asset-Backed Securities | — | 36,808,461 | — | 36,808,461 | ||||||||||||
Total Investments | $ | 192,795,607 | $ | 69,210,415 | $ | 4,053 | $ | 262,010,075 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $350.
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $955 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 19,031,688 | ||
August 31, 2018 | 15,791,638 | |||
Total capital loss carryforward | $ | 34,823,326 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
15 Invesco Select Real Estate Income Fund
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 February 28, 2011 was $100,705,511 and $86,563,901, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 29,693,603 | ||
Aggregate unrealized (depreciation) of investment securities | (3,551,899 | ) | ||
Net unrealized appreciation of investment securities | $ | 26,141,704 | ||
Cost of investments for tax purposes is $235,868,371. |
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 4,375,448 | $ | 35,777,956 | 9,908,927 | $ | 71,310,905 | ||||||||||
Class B | 39,863 | 324,985 | 154,695 | 1,133,322 | ||||||||||||
Class C | 783,516 | 6,389,424 | 1,665,745 | 11,927,859 | ||||||||||||
Class Y | 1,023,953 | 8,351,592 | 3,080,777 | 22,003,408 | ||||||||||||
Institutional Class | 596,616 | 4,836,769 | 1,674,481 | 12,079,829 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 280,922 | 2,248,461 | 480,564 | 3,507,569 | ||||||||||||
Class B | 3,085 | 24,658 | 3,704 | 27,078 | ||||||||||||
Class C | 29,571 | 236,414 | 35,013 | 257,127 | ||||||||||||
Class Y | 47,196 | 376,545 | 48,005 | 356,587 | ||||||||||||
Institutional Class | 92,533 | 738,353 | 215,117 | 1,558,340 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 13,515 | 110,952 | 8,015 | 59,246 | ||||||||||||
Class B | (13,543 | ) | (110,952 | ) | (8,029 | ) | (59,246 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (2,712,611 | ) | (22,146,010 | ) | (5,752,142 | ) | (42,012,959 | ) | ||||||||
Class B | (13,055 | ) | (105,837 | ) | (37,046 | ) | (268,789 | ) | ||||||||
Class C | (275,442 | ) | (2,232,780 | ) | (197,317 | ) | (1,455,499 | ) | ||||||||
Class Y | (828,877 | ) | (6,767,785 | ) | (700,975 | ) | (5,155,230 | ) | ||||||||
Institutional Class | (934,351 | ) | (7,491,159 | ) | (2,134,077 | ) | (15,711,445 | ) | ||||||||
Net increase in share activity | 2,508,339 | $ | 20,561,586 | 8,445,457 | $ | 59,558,102 | ||||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 48% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
16 Invesco Select Real Estate Income Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Class A* | ||||||||||||||||||||||||||||
Six months | Eight months | |||||||||||||||||||||||||||
ended | ended | Year ended | ||||||||||||||||||||||||||
February 28, | Year ended August 31, | August 31, | December 31, | |||||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 7.77 | $ | 6.62 | $ | 8.38 | $ | 16.27 | $ | 17.35 | $ | 17.49 | ||||||||||||||||
Net investment income | 0.17 | (a) | 0.28 | (a) | 0.27 | (a) | 0.42 | (a) | 0.44 | (a) | 0.86 | |||||||||||||||||
Net gains (losses) on securities (both realized and unrealized) | 0.72 | 1.14 | (1.75 | ) | (1.54 | ) | (1.54 | ) | 3.88 | |||||||||||||||||||
Less distributions paid to preferred shareholders of Closed-End Fund from net investment income(b) | N/A | N/A | N/A | N/A | N/A | (0.20 | ) | |||||||||||||||||||||
Total from investment operations | 0.89 | 1.42 | (1.48 | ) | (1.12 | ) | (1.10 | ) | 4.54 | |||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.16 | ) | (0.27 | ) | (0.28 | ) | (0.65 | ) | (0.38 | ) | (0.89 | ) | ||||||||||||||||
Distributions from net realized gains | — | — | — | (6.18 | ) | (0.09 | ) | (3.84 | ) | |||||||||||||||||||
Total distributions | (0.16 | ) | (0.27 | ) | (0.28 | ) | (6.83 | ) | (0.47 | ) | (4.73 | ) | ||||||||||||||||
Increase from common shares of Closed-End Fund repurchased | N/A | N/A | N/A | N/A | — | 0.05 | ||||||||||||||||||||||
Redemption fees added to shares of beneficial interest | — | — | — | 0.06 | 0.49 | — | ||||||||||||||||||||||
Net asset value, end of period | $ | 8.50 | $ | 7.77 | $ | 6.62 | $ | 8.38 | $ | 16.27 | $ | 17.35 | ||||||||||||||||
Market value, end of period | N/A | N/A | N/A | N/A | N/A | $ | 16.67 | |||||||||||||||||||||
Total return at net asset value | 11.57 | %(c) | 21.85 | %(c) | (17.12 | )%(c) | (7.47 | )%(c)(d) | (3.59 | )%(c)(d) | 29.15 | %(e) | ||||||||||||||||
Total return at market value | N/A | N/A | N/A | N/A | N/A | 44.88 | % | |||||||||||||||||||||
Ratios/supplemental data: | ||||||||||||||||||||||||||||
Net assets, end of period (000s omitted) | $ | 178,062 | $ | 147,568 | $ | 94,979 | $ | 111,529 | $ | 224,000 | $ | 678,394 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||||||
With fee waivers and/or expense reimbursements | 1.31 | %(f) | 1.37 | % | 1.73 | % | 1.32 | % | 1.08 | %(g) | 0.96 | %(h) | ||||||||||||||||
Without fee waivers and/or expense reimbursements | 1.32 | %(f) | 1.38 | % | 1.74 | % | 1.33 | % | 1.23 | %(g) | 1.33 | %(h) | ||||||||||||||||
Ratio of net investment income to average net assets | 4.17 | %(f) | 3.93 | % | 4.83 | % | 3.91 | % | 3.82 | %(g) | 4.59 | %(h) | ||||||||||||||||
Ratio of distributions to preferred shareholders of Closed-End Fund to average net applicable to common shares of Closed-End Fund | N/A | N/A | N/A | N/A | N/A | 1.30 | %(g) | |||||||||||||||||||||
Portfolio turnover rate(i) | 37 | % | 77 | % | 59 | % | 73 | % | 24 | % | 23 | % | ||||||||||||||||
* | Prior to March 12, 2007, the Fund operated as a Closed-End Fund. On such date, holders of common shares of Closed-End Fund received Class A shares of the Fund equal to the number of Closed-End Fund common shares they owed prior to the Reorganization. |
(a) | Calculated using average shares outstanding. | |
(b) | Based on average number of common shares outstanding of Closed-End Fund. | |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. | |
(d) | Includes the impact of the temporary 2% redemption fee which was effective March 12, 2007 through March 11, 2008. | |
(e) | Net asset value return includes adjustments in accordance with accounting principles generally accepted in the United States of America and measures the changes in common shares’ value of closed-end over the period indicated, taking into account dividends as reinvested. Market value return in computed based upon the New York Stock Exchange market price of the Fund’s common shares and excludes the effects of brokerage commissions. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Closed-End Fund’s dividend reinvestment plan. | |
(f) | Ratios are annualized and based on average daily net assets (000’s omitted) of $161,018. | |
(g) | Annualized. | |
(h) | Ratio do not reflect the effect of dividend payments to preferred shareholders; income ratio reflect income earned on investments made with assets applicable to preferred shares of Closed-End Fund. | |
(i) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
17 Invesco Select Real Estate Income Fund
NOTE 10—Financial Highlights—(continued)
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return(b) | (000s omitted) | absorbed | absorbed | net assets | turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 7.75 | $ | 0.14 | $ | 0.72 | $ | 0.86 | $ | (0.13 | ) | $ | — | $ | (0.13 | ) | $ | 8.48 | 11.18 | % | $ | 1,972 | 2.06 | %(d) | 2.07 | %(d) | 3.42 | %(d) | 37 | % | ||||||||||||||||||||||||||
Year ended 08/31/10 | 6.60 | 0.23 | 1.14 | 1.37 | (0.22 | ) | — | (0.22 | ) | 7.75 | 21.02 | 1,676 | 2.12 | 2.13 | 3.18 | 77 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 8.37 | 0.23 | (1.77 | ) | (1.54 | ) | (0.23 | ) | — | (0.23 | ) | 6.60 | (17.91 | ) | 680 | 2.48 | 2.49 | 4.08 | 59 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 16.23 | 0.28 | (1.40 | )(e) | (1.12 | ) | (0.56 | ) | (6.18 | ) | (6.74 | ) | 8.37 | (8.01 | ) | 1,126 | 2.07 | 2.08 | 3.16 | 73 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07(f) | 17.34 | 0.22 | (1.09 | )(e) | (0.87 | ) | (0.24 | ) | — | (0.24 | ) | 16.23 | (5.10 | ) | 162 | 2.04 | (g) | 2.04 | (g) | 2.86 | (g) | 24 | ||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.75 | 0.14 | 0.72 | 0.86 | (0.13 | ) | — | (0.13 | ) | 8.48 | 11.18 | 22,818 | 2.06 | (d) | 2.07 | (d) | 3.42 | (d) | 37 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.60 | 0.23 | 1.14 | 1.37 | (0.22 | ) | — | (0.22 | ) | 7.75 | 21.02 | 16,692 | 2.12 | 2.13 | 3.18 | 77 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 8.38 | 0.23 | (1.78 | ) | (1.55 | ) | (0.23 | ) | — | (0.23 | ) | 6.60 | (18.00 | ) | 4,296 | 2.48 | 2.49 | 4.08 | 59 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 16.23 | 0.29 | (1.40 | )(e) | (1.11 | ) | (0.56 | ) | (6.18 | ) | (6.74 | ) | 8.38 | (7.90 | ) | 1,932 | 2.07 | 2.08 | 3.16 | 73 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07(f) | 17.34 | 0.22 | (1.09 | )(e) | (0.87 | ) | (0.24 | ) | — | (0.24 | ) | 16.23 | (5.10 | ) | 356 | 2.04 | (g) | 2.04 | (g) | 2.86 | (g) | 24 | ||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.75 | 0.18 | 0.72 | 0.90 | (0.17 | ) | — | (0.17 | ) | 8.48 | 11.74 | 26,172 | 1.06 | (d) | 1.07 | (d) | 4.42 | (d) | 37 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.60 | 0.31 | 1.13 | 1.44 | (0.29 | ) | — | (0.29 | ) | 7.75 | 22.21 | 22,047 | 1.12 | 1.13 | 4.18 | 77 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09(f) | 7.15 | 0.26 | (0.63 | ) | (0.37 | ) | (0.18 | ) | — | (0.18 | ) | 6.60 | (4.23 | ) | 2,755 | 1.53 | (g) | 1.53 | (g) | 5.03 | (g) | 59 | ||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.76 | 0.18 | 0.72 | 0.90 | (0.17 | ) | — | (0.17 | ) | 8.49 | 11.80 | 39,159 | 0.97 | (d) | 0.98 | (d) | 4.51 | (d) | 37 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.62 | 0.32 | 1.13 | 1.45 | (0.31 | ) | — | (0.31 | ) | 7.76 | 22.27 | 37,711 | 0.92 | 0.93 | 4.38 | 77 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 8.39 | 0.31 | (1.77 | ) | (1.46 | ) | (0.31 | ) | — | (0.31 | ) | 6.62 | (16.75 | ) | 33,753 | 1.11 | 1.12 | 5.45 | 59 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 16.27 | 0.37 | (1.37 | )(e) | (1.00 | ) | (0.70 | ) | (6.18 | ) | (6.88 | ) | 8.39 | (6.91 | ) | 12,696 | 0.88 | 0.89 | 4.35 | 73 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07(f) | 17.34 | 0.32 | (1.09 | )(e) | (0.77 | ) | (0.30 | ) | — | (0.30 | ) | 16.27 | (4.53 | ) | 10 | 0.89 | (g) | 0.89 | (g) | 4.01 | (g) | 24 | ||||||||||||||||||||||||||||||||||
(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 $1,860, $19,196, $24,688 and $37,080 for Class B, Class C, Class Y and Institutional Class shares, respectively. | |
(e) | Includes the impact of the temporary 2% redemption fee which was effective March 12, 2007 through March 11, 2008. Redemption fees added to shares of beneficial interest for Class B, Class C and Institutional Class shares were $0.05, $0.05 and $0.04 per share and $0.47, $0.47 and $0.48 per share for the years ended August 31, 2008 and and the eight months ended August 31, 2007, respectively. | |
(f) | Commencement date of March 9, 2007 for Class B, Class C and Institutional Class shares and October 3, 2008 for Class Y shares. | |
(g) | Annualized |
18 Invesco Select Real Estate Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,115.70 | $ | 6.87 | $ | 1,018.30 | $ | 6.56 | 1.31 | % | ||||||||||||||||||
B | 1,000.00 | 1,111.80 | 10.79 | 1,014.58 | 10.29 | 2.06 | ||||||||||||||||||||||||
C | 1,000.00 | 1,111.80 | 10.79 | 1,014.58 | 10.29 | 2.06 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,117.40 | 5.56 | 1,019.54 | 5.31 | 1.06 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,118.00 | 5.09 | 1,019.98 | 4.86 | 0.97 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
19 Invesco Select Real Estate Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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.
SREI-SAR-1 | Invesco Distributors, Inc. |
Invesco Structured Core Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: SCAUX § B: SBCUX § C: SCCUX § R: SCRUX § Y: SCAYX
Investor: SCNUX § Institutional: SCIUX
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: SCAUX § B: SBCUX § C: SCCUX § R: SCRUX § Y: SCAYX
Investor: SCNUX § Institutional: SCIUX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
10 | Notes to Financial Statements | |
18 | Financial Highlights | |
20 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 27.16 | % | ||
Class B Shares | 26.51 | |||
Class C Shares | 26.34 | |||
Class R Shares | 26.85 | |||
Class Y Shares | 27.06 | |||
Investor Class Shares | 26.88 | |||
Institutional Class Shares | 27.22 | |||
S&P 500 Index▼ (Broad Market/Style-Specific Index) | 27.73 | |||
Lipper Large-Cap Core Funds Index▼ (Peer Group Index) | 26.16 |
▼Lipper Inc. |
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Lipper Large-Cap Core Funds Index is an unmanaged index considered representative of large-cap core funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Structured Core Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (3/31/06) | -0.44 | % | ||||||
1 | Year | 10.48 | ||||||
Class B Shares | ||||||||
Inception (3/31/06) | -0.36 | % | ||||||
1 | Year | 10.89 | ||||||
Class C Shares | ||||||||
Inception (3/31/06) | -0.07 | % | ||||||
1 | Year | 14.74 | ||||||
Class R Shares | ||||||||
Inception (3/31/06) | 0.47 | % | ||||||
1 | Year | 16.62 | ||||||
Class Y Shares | ||||||||
Inception | 0.84 | % | ||||||
1 | Year | 17.06 | ||||||
Investor Class Shares | ||||||||
Inception | 0.72 | % | ||||||
1 | Year | 16.89 | ||||||
Institutional Class Shares | ||||||||
Inception (3/31/06) | 0.98 | % | ||||||
1 | Year | 17.21 |
Class Y shares incepted on October 3, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Investor Class shares incepted on April 25, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (3/31/06) | -1.67 | % | ||||||
1 | Year | 2.77 | ||||||
Class B Shares | ||||||||
Inception (3/31/06) | -1.55 | % | ||||||
1 | Year | 2.78 | ||||||
Class C Shares | ||||||||
Inception (3/31/06) | -1.25 | % | ||||||
1 | Year | 6.64 | ||||||
Class R Shares | ||||||||
Inception (3/31/06) | -0.72 | % | ||||||
1 | Year | 8.52 | ||||||
Class Y Shares | ||||||||
Inception | -0.37 | % | ||||||
1 | Year | 8.82 | ||||||
Investor Class Shares | ||||||||
Inception | -0.48 | % | ||||||
1 | Year | 8.67 | ||||||
Institutional Class Shares | ||||||||
Inception (3/31/06) | -0.22 | % | ||||||
1 | Year | 8.97 |
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares was 1.00%, 1.75%, 1.75%, 1.25%, 0.75%, 1.00% and 0.75%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares was 1.31%, 2.06%, 2.06%, 1.56%, 1.06%, 1.31% and 0.91%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class
Y, Investor Class and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least December 31, 2011. See current prospectus for more information. |
3 Invesco Structured Core Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strate-gies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Structured Core Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.45% | ||||||||
Advertising–0.19% | ||||||||
Interpublic Group of Cos., Inc. (The) | 13,300 | $ | 175,560 | |||||
Apparel Retail–0.75% | ||||||||
Limited Brands, Inc. | 21,700 | 694,834 | ||||||
Auto Parts & Equipment–1.74% | ||||||||
Autoliv, Inc. (Sweden) | 4,500 | 337,005 | ||||||
Magna International Inc. (Canada) | 12,600 | 621,936 | ||||||
TRW Automotive Holdings Corp.(b) | 11,700 | 664,560 | ||||||
1,623,501 | ||||||||
Automobile Manufacturers–2.08% | ||||||||
Ford Motor Co.(b) | 128,900 | 1,939,945 | ||||||
Biotechnology–2.08% | ||||||||
Amgen Inc.(b) | 37,800 | 1,940,274 | ||||||
Cable & Satellite–0.58% | ||||||||
Comcast Corp., Class A | 21,100 | 543,536 | ||||||
Catalog Retail–0.67% | ||||||||
Liberty Media Corp.–Interactive–Series A–Tracking Stock(b) | 39,000 | 626,340 | ||||||
Coal & Consumable Fuels–0.78% | ||||||||
Arch Coal, Inc. | 2,100 | 70,413 | ||||||
Peabody Energy Corp. | 10,000 | 654,900 | ||||||
725,313 | ||||||||
Communications Equipment–0.09% | ||||||||
Cisco Systems, Inc. | 4,700 | 87,232 | ||||||
Computer Hardware–6.28% | ||||||||
Apple Inc.(b) | 11,980 | 4,231,456 | ||||||
Dell, Inc.(b) | 102,100 | 1,616,243 | ||||||
5,847,699 | ||||||||
Computer Storage & Peripherals–2.83% | ||||||||
Lexmark International, Inc.–Class A(b) | 31,400 | 1,178,442 | ||||||
SanDisk Corp.(b) | 29,500 | 1,463,200 | ||||||
2,641,642 | ||||||||
Construction & Engineering–0.70% | ||||||||
KBR, Inc. | 19,900 | 652,720 | ||||||
Construction & Farm Machinery & Heavy Trucks–1.19% | ||||||||
Joy Global Inc. | 2,200 | 214,236 | ||||||
Oshkosh Corp.(b) | 25,000 | 891,750 | ||||||
1,105,986 | ||||||||
Consumer Finance–3.37% | ||||||||
American Express Co. | 46,300 | 2,017,291 | ||||||
Capital One Financial Corp. | 22,600 | 1,124,802 | ||||||
3,142,093 | ||||||||
Department Stores–1.80% | ||||||||
Macy’s, Inc. | 70,200 | 1,677,780 | ||||||
Diversified Banks–0.45% | ||||||||
Wells Fargo & Co. | 12,900 | 416,154 | ||||||
Diversified Metals & Mining–2.75% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 34,000 | 1,800,300 | ||||||
Titanium Metals Corp.(b) | 39,900 | 757,701 | ||||||
2,558,001 | ||||||||
Fertilizers & Agricultural Chemicals–0.71% | ||||||||
CF Industries Holdings, Inc. | 4,700 | 664,016 | ||||||
Footwear–0.83% | ||||||||
Crocs, Inc.(b) | 43,800 | 773,070 | ||||||
Gold–0.38% | ||||||||
Newmont Mining Corp. | 6,400 | 353,728 | ||||||
Health Care Distributors–0.61% | ||||||||
Cardinal Health, Inc. | 13,700 | 570,468 | ||||||
Homebuilding–1.15% | ||||||||
D.R. Horton, Inc. | 90,500 | 1,071,520 | ||||||
Household Products–2.19% | ||||||||
Procter & Gamble Co. (The) | 32,300 | 2,036,515 | ||||||
Hypermarkets & Super Centers–2.23% | ||||||||
Wal-Mart Stores, Inc. | 40,000 | 2,079,200 | ||||||
Industrial Conglomerates–3.05% | ||||||||
General Electric Co. | 135,800 | 2,840,936 | ||||||
Industrial Machinery–0.41% | ||||||||
Parker Hannifin Corp. | 4,300 | 383,474 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Structured Core Fund
Shares | Value | |||||||
Integrated Oil & Gas–9.25% | ||||||||
Chevron Corp. | 32,300 | $ | 3,351,125 | |||||
ConocoPhillips | 33,400 | 2,600,858 | ||||||
Exxon Mobil Corp. | 31,200 | 2,668,536 | ||||||
8,620,519 | ||||||||
Integrated Telecommunication Services–5.59% | ||||||||
AT&T Inc. | 105,500 | 2,994,090 | ||||||
Verizon Communications, Inc. | 60,000 | 2,215,200 | ||||||
5,209,290 | ||||||||
Internet Software & Services–0.06% | ||||||||
IAC/InterActiveCorp(b) | 1,700 | 52,819 | ||||||
IT Consulting & Other Services–2.41% | ||||||||
International Business Machines Corp. | 13,900 | 2,250,132 | ||||||
Life & Health Insurance–1.65% | ||||||||
Prudential Financial, Inc. | 23,300 | 1,533,839 | ||||||
Managed Health Care–5.20% | ||||||||
CIGNA Corp. | 23,400 | 984,438 | ||||||
Humana Inc.(b) | 26,500 | 1,722,765 | ||||||
UnitedHealth Group, Inc. | 50,300 | 2,141,774 | ||||||
4,848,977 | ||||||||
Movies & Entertainment–2.24% | ||||||||
Time Warner, Inc. | 54,700 | 2,089,540 | ||||||
Multi-Line Insurance–1.20% | ||||||||
Assurant, Inc. | 18,400 | 747,592 | ||||||
Hartford Financial Services Group, Inc. (The) | 12,600 | 372,960 | ||||||
1,120,552 | ||||||||
Oil & Gas Refining & Marketing–1.91% | ||||||||
Sunoco, Inc. | 7,200 | 301,392 | ||||||
Valero Energy Corp. | 52,300 | 1,473,814 | ||||||
1,775,206 | ||||||||
Other Diversified Financial Services–1.22% | ||||||||
Citigroup, Inc. | 219,200 | 1,025,856 | ||||||
JPMorgan Chase & Co. | 2,300 | 107,387 | ||||||
1,133,243 | ||||||||
Packaged Foods & Meats–0.28% | ||||||||
Tyson Foods, Inc.–Class A | 14,100 | 262,683 | ||||||
Paper Products–1.81% | ||||||||
International Paper Co. | 55,400 | 1,539,012 | ||||||
MeadWestvaco Corp. | 5,000 | 146,750 | ||||||
1,685,762 | ||||||||
Pharmaceuticals–6.28% | ||||||||
Bristol-Myers Squibb Co. | 6,600 | 170,346 | ||||||
Eli Lilly and Co. | 51,800 | 1,790,208 | ||||||
Forest Laboratories, Inc.(b) | 18,500 | 599,400 | ||||||
Johnson & Johnson | 28,600 | 1,757,184 | ||||||
Pfizer, Inc. | 79,900 | 1,537,276 | ||||||
5,854,414 | ||||||||
Property & Casualty Insurance–1.36% | ||||||||
Berkshire Hathaway Inc.–Class B(b) | 13,100 | 1,143,368 | ||||||
Travelers Cos., Inc. (The) | 2,100 | 125,853 | ||||||
1,269,221 | ||||||||
Publishing–2.09% | ||||||||
Gannett Co., Inc. | 102,700 | 1,695,577 | ||||||
McGraw-Hill Cos., Inc. (The) | 6,500 | 251,420 | ||||||
1,946,997 | ||||||||
Regional Banks–3.45% | ||||||||
Fifth Third Bancorp | 103,900 | 1,516,940 | ||||||
Huntington Bancshares Inc. | 90,200 | 616,968 | ||||||
KeyCorp | 118,500 | 1,083,090 | ||||||
3,216,998 | ||||||||
Residential REIT’s–0.20% | ||||||||
Equity Residential | 3,400 | 187,374 | ||||||
Retail REIT’s–0.26% | ||||||||
Simon Property Group, Inc. | 2,200 | 242,088 | ||||||
Semiconductors–3.58% | ||||||||
Intel Corp. | 113,700 | 2,441,139 | ||||||
Micron Technology, Inc.(b) | 80,800 | 899,304 | ||||||
3,340,443 | ||||||||
Systems Software–3.45% | ||||||||
Microsoft Corp. | 120,900 | 3,213,522 | ||||||
Tobacco–3.10% | ||||||||
Altria Group, Inc. | 21,100 | 535,307 | ||||||
Philip Morris International Inc. | 37,500 | 2,354,250 | ||||||
2,889,557 | ||||||||
Wireless Telecommunication Services–0.97% | ||||||||
Sprint Nextel Corp.(b) | 207,700 | 907,649 | ||||||
Total Common Stocks & Other Equity Interests (Cost $75,822,814) | 90,822,362 | |||||||
Principal | ||||||||
Amount | ||||||||
U.S. Treasury Bills–0.32% | ||||||||
0.14% 03/17,11,(Cost $299,982),(c)(d) | $ | 300,000 | 299,982 | |||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Structured Core Fund
Shares | Value | |||||||
Money Market Funds–0.86% | ||||||||
Liquid Assets Portfolio–Institutional Class(e) | 402,620 | $ | 402,620 | |||||
Premier Portfolio–Institutional Class(e) | 402,620 | 402,620 | ||||||
Total Money Market Funds (Cost $805,240) | 805,240 | |||||||
TOTAL INVESTMENTS–98.63% (Cost $76,928,036) | 91,927,584 | |||||||
OTHER ASSETS LESS LIABILITIES–1.37% | 1,273,672 | |||||||
NET ASSETS–100.00% | $ | 93,201,256 | ||||||
Investment Abbreviations:
REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. | |
(d) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1J and Note 4. | |
(e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on Net Assets
as of February 28, 2011
Information Technology | 18.7 | % | ||
Health Care | 14.2 | |||
Consumer Discretionary | 14.1 | |||
Financials | 13.2 | |||
Energy | 11.9 | |||
Consumer Staples | 7.8 | |||
Telecommunication Services | 6.6 | |||
Materials | 5.6 | |||
Industrials | 5.4 | |||
U.S. Treasury Bills, Money Market Funds Plus Other Assets Less Liabilities | 2.5 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Structured Core Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $76,122,796) | $ | 91,122,344 | ||
Investments in affiliated money market funds, at value and cost | 805,240 | |||
Total investments, at value (Cost $76,928,036) | 91,927,584 | |||
Receivable for: | ||||
Investments sold | 9,082,242 | |||
Variation margin on futures | 12,438 | |||
Fund shares sold | 16,532 | |||
Dividends | 231,304 | |||
Fund expenses absorbed | 12,303 | |||
Investment for trustee deferred compensation and retirement plans | 20,767 | |||
Other assets | 48,194 | |||
Total assets | 101,351,364 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 7,780,056 | |||
Fund shares reacquired | 233,808 | |||
Accrued fees to affiliates | 58,480 | |||
Accrued other operating expenses | 37,680 | |||
Trustee deferred compensation and retirement plans | 40,084 | |||
Total liabilities | 8,150,108 | |||
Net assets applicable to shares outstanding | $ | 93,201,256 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 106,226,759 | ||
Undistributed net investment income | 442,755 | |||
Undistributed net realized gain (loss) | (28,548,711 | ) | ||
Unrealized appreciation | 15,080,453 | |||
$ | 93,201,256 | |||
Net Assets: | ||||
Class A | $ | 1,724,227 | ||
Class B | $ | 207,851 | ||
Class C | $ | 198,001 | ||
Class R | $ | 1,399,999 | ||
Class Y | $ | 164,500 | ||
Investor Class | $ | 76,422,674 | ||
Institutional Class | $ | 13,084,004 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 218,088 | |||
Class B | 26,496 | |||
Class C | 25,288 | |||
Class R | 177,712 | |||
Class Y | 20,764 | |||
Investor Class | 9,638,128 | |||
Institutional Class | 1,650,940 | |||
Class A: | ||||
Net asset value per share | $ | 7.91 | ||
Maximum offering price per share (Net asset value of $7.91 divided by 94.50%) | $ | 8.37 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 7.84 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 7.83 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 7.88 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 7.92 | ||
Investor Class: | ||||
Net asset value and offering price per share | $ | 7.93 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 7.93 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Structured Core Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $444) | $ | 934,909 | ||
Dividends from affiliated money market funds | 1,040 | |||
Interest | 1,258 | |||
Total investment income | 937,207 | |||
Expenses: | ||||
Advisory fees | 274,221 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 4,078 | |||
Distribution fees: | ||||
Class A | 1,914 | |||
Class B | 1,016 | |||
Class C | 1,102 | |||
Class R | 3,617 | |||
Investor Class | 93,870 | |||
Transfer agent fees — A,B,C,R, Y and Investor | 59,582 | |||
Transfer agent fees — Institutional | 4,394 | |||
Trustees’ and officers’ fees and benefits | 7,311 | |||
Registration and filing fees | 39,686 | |||
Other | 37,025 | |||
Total expenses | 552,611 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (109,049 | ) | ||
Net expenses | 443,562 | |||
Net investment income | 493,645 | |||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 6,565,942 | |||
Futures contracts | 218,518 | |||
6,784,460 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 14,216,979 | |||
Futures contracts | 154,497 | |||
14,371,476 | ||||
Net realized and unrealized gain | 21,155,936 | |||
Net increase in net assets resulting from operations | $ | 21,649,581 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Structured Core Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
For the six months ended | For the year ended | |||||||
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 493,645 | $ | 1,058,281 | ||||
Net realized gain | 6,784,460 | 3,490,772 | ||||||
Change in net unrealized appreciation (depreciation) | 14,371,476 | (4,027,846 | ) | |||||
Net increase in net assets resulting from operations | 21,649,581 | 521,207 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (18,062 | ) | (34,312 | ) | ||||
Class B | (754 | ) | (1,066 | ) | ||||
Class C | (862 | ) | (1,841 | ) | ||||
Class R | (14,776 | ) | (11,562 | ) | ||||
Class Y | (2,233 | ) | (4,053 | ) | ||||
Investor Class | (849,485 | ) | (1,552,566 | ) | ||||
Institutional Class | (175,166 | ) | (446,319 | ) | ||||
Total distributions from net investment income | (1,061,338 | ) | (2,051,719 | ) | ||||
Share transactions–net: | ||||||||
Class A | 124,983 | (342,045 | ) | |||||
Class B | (11,127 | ) | (35,338 | ) | ||||
Class C | (72,799 | ) | (31,677 | ) | ||||
Class R | (259,029 | ) | 1,396,013 | |||||
Class Y | (12,326 | ) | (67,812 | ) | ||||
Investor Class | (10,146,771 | ) | (17,874,581 | ) | ||||
Institutional Class | (1,572,646 | ) | (10,123,792 | ) | ||||
Net increase (decrease) in net assets resulting from share transactions | (11,949,715 | ) | (27,079,232 | ) | ||||
Net increase (decrease) in net assets | 8,638,528 | (28,609,744 | ) | |||||
Net assets: | ||||||||
Beginning of period | 84,562,728 | 113,172,472 | ||||||
End of period (includes undistributed net investment income of $442,755 and $1,010,448, respectively) | $ | 93,201,256 | $ | 84,562,728 | ||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Structured Core Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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, Investor Class and Institutional 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
10 Invesco Structured Core Fund
CDSC. Class R, Class Y, Investor Class and Institutional 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. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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 |
11 Invesco Structured Core Fund
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 paid annually and recorded on 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 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 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 the Institutional Class 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 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. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. | |
J. | 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. |
12 Invesco Structured Core 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 Net Assets | Rate | |||
First $250 million | 0 | .60% | ||
Next $250 million | 0 | .575% | ||
Next $500 million | 0 | .55% | ||
Next $1.5 billion | 0 | .525% | ||
Next $2.5 billion | 0 | .50% | ||
Next $2.5 billion | 0 | .475% | ||
Next $2.5 billion | 0 | .45% | ||
Over $10 billion | 0 | .425% | ||
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 Trimark 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 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 December 31, 2011, 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 (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares to 1.00%, 1.75%, 1.75%, 1.25%, 0.75%, 1.00% and 0.75% 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 operating expenses after fee waiver 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on December 31, 2011.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees $44,973 and reimbursed class level expenses of $1,155, $153, $166, $1,091, $117, $56,630 and $4,395 of Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares, respectively.
At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the six months ended February 28, 2011, Invesco Ltd. reimbursed expenses of the Fund in the amount of $100.
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 February 28, 2011, 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 February 28, 2011, 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 and Institutional 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, 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, including asset-based sales charges that may be paid by any class of shares of the Fund. For the six months ended February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $274 in front-end sales commissions from the sale of Class A shares and $0, $205 and $0 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 Invesco, IIS and/or IDI.
13 Invesco Structured Core 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 91,627,602 | $ | — | $ | — | $ | 91,627,602 | ||||||||
U.S. Treasury Securities | — | 299,982 | — | 299,982 | ||||||||||||
$ | 91,627,602 | $ | 299,982 | $ | — | $ | 91,927,584 | |||||||||
Futures* | — | 80,905 | — | 80,905 | ||||||||||||
Total Investments | $ | — | $ | 380,887 | $ | — | $ | 92,008,489 | ||||||||
* | Unrealized appreciation (depreciation). |
NOTE 4—Derivative Investments
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/ Derivative Type | Assets | Liabilities | ||||||
Market risk | ||||||||
Futures contracts(a) | $ | 80,905 | $ | — | ||||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain (Loss) on | ||||
Statement of Operations | ||||
Futures* | ||||
Realized Gain | ||||
Market risk | $ | 218,518 | ||
Change in Unrealized Appreciation | ||||
Market risk | $ | 154,497 | ||
Total | $ | 373,015 | ||
* | The average value of futures outstanding during the period was $2,119,803. |
14 Invesco Structured Core Fund
Open Futures Contracts | ||||||||||||||||
Unrealized | ||||||||||||||||
Number of | Month/ | Appreciation | ||||||||||||||
Contract | Contracts | Commitment | Value | (Depreciation) | ||||||||||||
E-Mini S & P 500 Futures | 34 | March-2011/Long | $ | 2,254,370 | $ | 80,905 | ||||||||||
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangements are comprised of (i) transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions, (ii) custodian credits which result from periodic overnight cash balances at the custodian and (iii) a one time custodian fee credit used to offset custodian fees. For the six months ended February 28, 2011, the Fund received credits from these arrangements, which resulted in the reduction of the Fund’s total expenses of $269.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $833 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 9,871,752 | ||
August 31, 2018 | 24,481,668 | |||
Total capital loss carryforward | $ | 34,353,420 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
15 Invesco Structured Core Fund
NOTE 9—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 February 28, 2011 was $38,805,472 and $51,161,716, 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 | $ | 15,491,467 | ||
Aggregate unrealized (depreciation) of investment securities | (957,629 | ) | ||
Net unrealized appreciation of investment securities | $ | 14,533,838 | ||
Cost of investments for tax purposes is $77,393,746. |
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 39,836 | $ | 291,311 | 128,789 | $ | 869,022 | ||||||||||
Class B | 4,994 | 34,440 | 5,802 | 38,360 | ||||||||||||
Class C | 3,140 | 22,658 | 19,734 | 129,647 | ||||||||||||
Class R | 22,322 | 166,553 | 208,043 | 1,443,352 | ||||||||||||
Class Y | 1,830 | 13,152 | 1,829 | 12,203 | ||||||||||||
Investor Class | 507,029 | 3,732,216 | 1,072,097 | 7,343,739 | ||||||||||||
Institutional Class | 30,855 | 225,441 | 176,429 | 1,207,236 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 2,410 | 17,862 | 4,968 | 33,784 | ||||||||||||
Class B | 4 | 17 | 157 | 1,066 | ||||||||||||
Class C | 107 | 788 | 262 | 1,773 | ||||||||||||
Class R | 1,985 | 14,673 | 1,703 | 11,562 | ||||||||||||
Class Y | 280 | 2,075 | 594 | 4,053 | ||||||||||||
Investor Class | 111,078 | 825,308 | 221,069 | 1,509,898 | ||||||||||||
Institutional Class | 23,584 | 174,990 | 65,443 | 446,320 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 1,198 | 8,967 | 2,729 | 18,856 | ||||||||||||
Class B | (1,209 | ) | (8,967 | ) | (2,755 | ) | (18,856 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (26,427 | ) | (193,157 | ) | (185,339 | ) | (1,263,707 | ) | ||||||||
Class B | (5,154 | ) | (36,617 | ) | (8,460 | ) | (55,908 | ) | ||||||||
Class C | (13,175 | ) | (96,245 | ) | (24,579 | ) | (163,097 | ) | ||||||||
Class R | (59,448 | ) | (440,255 | ) | (8,840 | ) | (58,901 | ) | ||||||||
Class Y | (3,866 | ) | (27,553 | ) | (12,379 | ) | (84,068 | ) | ||||||||
Investor Class | (2,005,653 | ) | (14,704,295 | ) | (3,918,195 | ) | (26,728,218 | ) | ||||||||
Institutional Class | (269,022 | ) | (1,973,077 | ) | (1,779,103 | ) | (11,777,348 | ) | ||||||||
Net increase (decrease) in share activity | (1,633,302 | ) | $ | (11,949,715 | ) | (4,030,002 | ) | (27,079,232 | ) | |||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 13% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, 3% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. |
16 Invesco Structured Core Fund
NOTE 11—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Select Equity Fund and Invesco Van Kampen Equity Premium Income Fund (the “Target Funds”) in exchange for shares of the Fund.
The Target Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated shortly thereafter. Upon closing of the reorganization, shareholders of the Target Fund will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Fund and the Target Fund will liquidate and cease operations.
17 Invesco Structured Core Fund
NOTE 12—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income | unrealized) | operations | income | gains | Distributions | of period | return(a) | (000s omitted) | absorbed | absorbed | net assets | turnover(b) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 6.29 | $ | 0.04 | (c) | $ | 1.66 | $ | 1.70 | $ | (0.08 | ) | $ | — | $ | (0.08 | ) | $ | 7.91 | 27.16 | % | $ | 1,724 | 1.00 | %(d) | 1.25 | %(d) | 1.05 | %(d) | 44 | % | |||||||||||||||||||||||||
Year ended 08/31/10 | 6.47 | 0.06 | (c) | (0.12 | ) | (0.06 | ) | (0.12 | ) | — | (0.12 | ) | 6.29 | (1.07 | ) | 1,265 | 1.00 | 1.31 | 0.93 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 9.89 | 0.11 | (c) | (2.16 | ) | (2.05 | ) | (0.07 | ) | (1.30 | ) | (1.37 | ) | 6.47 | (18.66 | ) | 1,618 | 0.66 | 1.29 | 1.85 | 77 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 11.19 | 0.14 | (c) | (1.37 | ) | (1.23 | ) | (0.02 | ) | (0.05 | ) | (0.07 | ) | 9.89 | (11.03 | ) | 951 | 0.75 | 1.93 | 1.34 | 118 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 10.19 | 0.08 | (c) | 1.10 | 1.18 | (0.18 | ) | — | (0.18 | ) | 11.19 | 11.60 | 1,532 | 1.02 | 6.88 | 0.67 | 79 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06(e) | 10.00 | 0.04 | 0.15 | 0.19 | — | — | — | 10.19 | 1.90 | 985 | 1.06 | (f) | 10.44 | (f) | 0.95 | (f) | 25 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 6.22 | 0.01 | (c) | 1.64 | 1.65 | (0.03 | ) | — | (0.03 | ) | 7.84 | 26.51 | 208 | 1.75 | (d) | 2.00 | (d) | 0.30 | (d) | 44 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.37 | 0.01 | (c) | (0.13 | ) | (0.12 | ) | (0.03 | ) | — | (0.03 | ) | 6.22 | (1.85 | ) | 173 | 1.75 | 2.06 | 0.18 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 9.79 | 0.06 | (c) | (2.13 | ) | (2.07 | ) | (0.05 | ) | (1.30 | ) | (1.35 | ) | 6.37 | (19.10 | ) | 211 | 1.41 | 2.04 | 1.10 | 77 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 11.14 | 0.06 | (c) | (1.36 | ) | (1.30 | ) | — | (0.05 | ) | (0.05 | ) | 9.79 | (11.71 | ) | 165 | 1.50 | 2.68 | 0.59 | 118 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 10.16 | (0.01 | )(c) | 1.10 | 1.09 | (0.11 | ) | — | (0.11 | ) | 11.14 | 10.74 | 847 | 1.77 | 7.63 | (0.08 | ) | 79 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06(e) | 10.00 | 0.01 | 0.15 | 0.16 | — | — | — | 10.16 | 1.60 | 640 | 1.81 | (f) | 11.19 | (f) | 0.20 | (f) | 25 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 6.22 | 0.01 | (c) | 1.63 | 1.64 | (0.03 | ) | — | (0.03 | ) | 7.83 | 26.34 | 198 | 1.75 | (d) | 2.00 | (d) | 0.30 | (d) | 44 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.37 | 0.01 | (c) | (0.13 | ) | (0.12 | ) | (0.03 | ) | — | (0.03 | ) | 6.22 | (1.85 | ) | 219 | 1.75 | 2.06 | 0.18 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 9.79 | 0.06 | (c) | (2.13 | ) | (2.07 | ) | (0.05 | ) | (1.30 | ) | (1.35 | ) | 6.37 | (19.10 | ) | 254 | 1.41 | 2.04 | 1.10 | 77 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 11.14 | 0.06 | (c) | (1.36 | ) | (1.30 | ) | — | (0.05 | ) | (0.05 | ) | 9.79 | (11.71 | ) | 249 | 1.50 | 2.68 | 0.59 | 118 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 10.16 | (0.01 | )(c) | 1.10 | 1.09 | (0.11 | ) | — | (0.11 | ) | 11.14 | 10.74 | 1,043 | 1.77 | 7.63 | (0.08 | ) | 79 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06(e) | 10.00 | 0.01 | 0.15 | 0.16 | — | — | — | 10.16 | 1.60 | 625 | 1.81 | (f) | 11.19 | (f) | 0.20 | (f) | 25 | |||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 6.27 | 0.03 | (c) | 1.65 | 1.68 | (0.07 | ) | — | (0.07 | ) | 7.88 | 26.85 | 1,400 | 1.25 | (d) | 1.50 | (d) | 0.80 | (d) | 44 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.45 | 0.05 | (c) | (0.12 | ) | (0.07 | ) | (0.11 | ) | — | (0.11 | ) | 6.27 | (1.30 | ) | 1,335 | 1.25 | 1.56 | 0.68 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 9.86 | 0.10 | (c) | (2.15 | ) | (2.05 | ) | (0.06 | ) | (1.30 | ) | (1.36 | ) | 6.45 | (18.70 | ) | 77 | 0.91 | 1.54 | 1.60 | 77 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 11.17 | 0.11 | (c) | (1.37 | ) | (1.26 | ) | — | (0.05 | ) | (0.05 | ) | 9.86 | (11.32 | ) | 53 | 1.00 | 2.18 | 1.09 | 118 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 10.18 | 0.05 | (c) | 1.10 | 1.15 | (0.16 | ) | — | (0.16 | ) | 11.17 | 11.33 | 684 | 1.27 | 7.13 | 0.42 | 79 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06(e) | 10.00 | 0.03 | 0.15 | 0.18 | — | — | — | 10.18 | 1.80 | 611 | 1.31 | (f) | 10.69 | (f) | 0.70 | (f) | 25 | |||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 6.32 | 0.05 | (c) | 1.65 | 1.70 | (0.10 | ) | — | (0.10 | ) | 7.92 | 27.06 | 165 | 0.75 | (d) | 1.00 | (d) | 1.30 | (d) | 44 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.50 | 0.08 | (c) | (0.13 | ) | (0.05 | ) | (0.13 | ) | — | (0.13 | ) | 6.32 | (0.85 | ) | 142 | 0.75 | 1.06 | 1.18 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09(e) | 8.29 | 0.12 | (c) | (0.54 | ) | (0.42 | ) | (0.07 | ) | (1.30 | ) | (1.37 | ) | 6.50 | (2.50 | ) | 211 | 0.43 | (f) | 1.04 | (f) | 2.08 | (f) | 77 | ||||||||||||||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 6.32 | 0.04 | (c) | 1.65 | 1.69 | (0.08 | ) | — | (0.08 | ) | 7.93 | 26.88 | 76,423 | 1.00 | (d) | 1.25(d | ) | 1.05 | (d) | 44 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.50 | 0.06 | (c) | (0.12 | ) | (0.06 | ) | (0.12 | ) | — | (0.12 | ) | 6.32 | (1.07 | ) | 69,635 | 1.00 | 1.31 | 0.93 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 9.90 | 0.12 | (c) | (2.15 | ) | (2.03 | ) | (0.07 | ) | (1.30 | ) | (1.37 | ) | 6.50 | (18.43 | ) | 88,674 | 0.66 | 1.29 | 1.85 | 77 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08(e) | 10.73 | 0.05 | (0.88 | ) | (0.83 | ) | — | — | — | 9.90 | (7.73 | ) | 136,838 | 0.60 | (f) | 1.10 | (f) | 1.49 | (f) | 118 | ||||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 6.32 | 0.05 | (c) | 1.66 | 1.71 | (0.10 | ) | — | (0.10 | ) | 7.93 | 27.22 | 13,084 | 0.75 | (d) | 0.92 | (d) | 1.30 | (d) | 44 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.50 | 0.08 | (c) | (0.12 | ) | (0.04 | ) | (0.14 | ) | — | (0.14 | ) | 6.32 | (0.83 | ) | 11,793 | 0.75 | 0.91 | 1.18 | 71 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 9.91 | 0.13 | (c) | (2.16 | ) | (2.03 | ) | (0.08 | ) | (1.30 | ) | (1.38 | ) | 6.50 | (18.32 | ) | 22,128 | 0.41 | 0.89 | 2.10 | 77 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 11.21 | 0.16 | (c) | (1.36 | ) | (1.20 | ) | (0.05 | ) | (0.05 | ) | (0.10 | ) | 9.91 | (10.79 | ) | 29,374 | 0.50 | 1.57 | 1.59 | 118 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 10.20 | 0.10 | (c) | 1.10 | 1.20 | (0.19 | ) | — | (0.19 | ) | 11.21 | 11.85 | 942 | 0.77 | 6.55 | 0.92 | 79 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06(e) | 10.00 | 0.05 | 0.15 | 0.20 | — | — | — | 10.20 | 2.00 | 612 | 0.80 | (f) | 10.14 | (f) | 1.21 | (f) | 25 | |||||||||||||||||||||||||||||||||||||||
(a) | 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. | |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(c) | Calculated using average shares outstanding. | |
(d) | Ratios are annualized and based on average daily net assets (000’s) of $1,544, $205, $222, $1,459, $156, $75,718 and $12,860 for Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares, respectively. | |
(e) | Commencement date of March 31, 2006 for Class A, Class B, Class C, Class R and Institutional Class shares. Commencement date of October 3, 2008 and April 25, 2008 for Class Y and Investor Class shares, respectively. | |
(f) | Annualized. |
18 Invesco Structured Core Fund
NOTE 13—Distribution of Settled Enforcement Actions Related to Market Timing
On May 23, 2008, the Securities and Exchange Commission (“SEC”) publicly posted its final approval of the Distribution Plan (“Distribution Plan”) for the distribution of monies placed into Fair Funds created pursuant to a settlement reached on October 8, 2004 between Invesco Funds Group, Inc. (“IFG”) and the SEC. The Fair Funds consists of $325 million, plus interest and any contributions by other settling parties, for distribution to shareholders of certain mutual funds formerly advised by IFG who may have been harmed by market timing and related activity. The Distributions to eligible investors to compensate such investors for injury they may have suffered as a result of market timing in the affected funds has commenced. The Distribution Plan includes a provision for any residual amounts in the Fair Funds to be distributed in the future to the affected funds. At this time, management of Invesco and the Fund are unable to estimate the residual distribution to the Fund, if any.
19 Invesco Structured Core 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,271.60 | $ | 5.63 | $ | 1,019.84 | $ | 5.01 | 1.00 | % | ||||||||||||||||||
B | 1,000.00 | 1,265.10 | 9.83 | 1,016.12 | 8.75 | 1.75 | ||||||||||||||||||||||||
C | 1,000.00 | 1,263.40 | 9.82 | 1,016.12 | 8.75 | 1.75 | ||||||||||||||||||||||||
R | 1,000.00 | 1,268.50 | 7.03 | 1,018.60 | 6.26 | 1.25 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,270.60 | 4.22 | 1,021.08 | 3.76 | 0.75 | ||||||||||||||||||||||||
Investor | 1,000.00 | 1,268.80 | 5.63 | 1,019.84 | 5.01 | 1.00 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,272.20 | 4.23 | 1.,021.08 | 3.76 | 0.75 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
20 Invesco Structured Core Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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.
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 12 months ended June 30, 2010, is available at our website, 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 U.S. 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.
SCOR-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen American Franchise Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: VAFAX § B: VAFBX § C: VAFCX § Y: VAFIX § Institutional: VAFNX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
10 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 30.64 | % | ||
Class B Shares | 30.19 | |||
Class C Shares | 30.40 | |||
Class Y Shares | 30.82 | |||
Institutional Class Shares | 30.96 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Russell 1000 Growth Index▼ (Style-Specific Index) | 31.04 | |||
Lipper Large-Cap Growth Funds Index▼ (Peer Group Index) | 30.03 |
▼ | Lipper Inc. |
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 1000® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Growth Funds Index is an unmanaged index considered representative of large-cap growth funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen American Franchise Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (6/23/05) | 5.70 | % | ||||||
5 | Years | 4.78 | ||||||
1 | Year | 22.63 | ||||||
Class B Shares | ||||||||
Inception (6/23/05) | 5.81 | % | ||||||
5 | Years | 4.85 | ||||||
1 | Year | 23.85 | ||||||
Class C Shares | ||||||||
Inception (6/23/05) | 6.01 | % | ||||||
5 | Years | 5.25 | ||||||
1 | Year | 28.07 | ||||||
Class Y Shares | ||||||||
Inception (6/23/05) | 7.02 | % | ||||||
5 | Years | 6.25 | ||||||
1 | Year | 30.16 | ||||||
Institutional Class Shares | ||||||||
Inception | 6.80 | % | ||||||
5 | Years | 6.03 | ||||||
1 | Year | 30.03 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen American Franchise Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen American Franchise Fund. Share class returns will differ from the predecessor fund because of different expenses.
Institutional Class shares incepted on December 22, 2010. Performance shown prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated.
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (6/23/05) | 4.83 | % | ||||||
5 | Years | 4.36 | ||||||
1 | Year | 14.79 | ||||||
Class B Shares | ||||||||
Inception (6/23/05) | 4.94 | % | ||||||
5 | Years | 4.43 | ||||||
1 | Year | 15.59 | ||||||
Class C Shares | ||||||||
Inception (6/23/05) | 5.15 | % | ||||||
5 | Years | 4.82 | ||||||
1 | Year | 19.73 | ||||||
Class Y Shares | ||||||||
Inception (6/23/05) | 6.17 | % | ||||||
5 | Years | 5.84 | ||||||
1 | Year | 21.82 | ||||||
Institutional Class Shares | ||||||||
Inception | 5.92 | % | ||||||
5 | Years | 5.58 | ||||||
1 | Year | 21.57 |
Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y and Institutional Class shares was 1.31%, 2.06%, 1.94%, 1.06% and 0.91%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year.
The CDSC on Class C shares is 1% for the first year after purchase. Class Y and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Van Kampen American Franchise Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen American Franchise Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.60%(a) | ||||||||
Aerospace & Defense–3.69% | ||||||||
Embraer SA–ADR (Brazil) | 77,064 | $ | 2,624,800 | |||||
Goodrich Corp. | 74,267 | 6,404,043 | ||||||
Honeywell International, Inc. | 61,770 | 3,577,101 | ||||||
12,605,944 | ||||||||
Apparel Retail–1.49% | ||||||||
Limited Brands, Inc. | 158,520 | 5,075,810 | ||||||
Application Software–2.38% | ||||||||
Citrix Systems, Inc.(b) | 69,648 | 4,886,504 | ||||||
Salesforce.com, Inc.(b) | 24,323 | 3,217,203 | ||||||
8,103,707 | ||||||||
Asset Management & Custody Banks–2.14% | ||||||||
Ameriprise Financial, Inc. | 81,502 | 5,160,707 | ||||||
Franklin Resources, Inc. | 17,086 | 2,146,343 | ||||||
7,307,050 | ||||||||
Automobile Manufacturers–0.34% | ||||||||
Ford Motor Co.(b) | 76,548 | 1,152,048 | ||||||
Biotechnology–2.58% | ||||||||
Dendreon Corp.(b) | 69,513 | 2,334,942 | ||||||
Gilead Sciences, Inc.(b) | 100,189 | 3,905,367 | ||||||
United Therapeutics Corp.(b) | 38,055 | 2,566,049 | ||||||
8,806,358 | ||||||||
Cable & Satellite–3.03% | ||||||||
Comcast Corp., Class A | 194,732 | 5,016,296 | ||||||
DIRECTV, Class A(b) | 115,482 | 5,308,708 | ||||||
10,325,004 | ||||||||
Casinos & Gaming–0.99% | ||||||||
Las Vegas Sands Corp.(b) | 72,064 | 3,361,065 | ||||||
Coal & Consumable Fuels–1.23% | ||||||||
Peabody Energy Corp. | 64,009 | 4,191,949 | ||||||
Communications Equipment–2.81% | ||||||||
Juniper Networks, Inc.(b) | 105,024 | 4,621,056 | ||||||
QUALCOMM, Inc. | 83,618 | 4,981,960 | ||||||
9,603,016 | ||||||||
Computer Hardware–9.30% | ||||||||
Apple, Inc.(b) | 74,059 | 26,158,379 | ||||||
Hewlett-Packard Co. | 128,123 | 5,590,007 | ||||||
31,748,386 | ||||||||
Computer Storage & Peripherals–3.63% | ||||||||
EMC Corp.(b) | 325,787 | 8,864,664 | ||||||
SanDisk Corp.(b) | 70,759 | 3,509,647 | ||||||
12,374,311 | ||||||||
Construction & Engineering–1.30% | ||||||||
Foster Wheeler AG (Switzerland)(b) | 122,925 | 4,444,968 | ||||||
Construction, Farm Machinery & Heavy Trucks–1.67% | ||||||||
Cummins, Inc. | 22,398 | 2,264,886 | ||||||
Deere & Co. | 38,176 | 3,441,567 | ||||||
5,706,453 | ||||||||
Data Processing & Outsourced Services–1.21% | ||||||||
Visa, Inc., Class A | 56,567 | 4,132,219 | ||||||
Diversified Banks–0.85% | ||||||||
Comerica, Inc. | 74,952 | 2,915,633 | ||||||
Fertilizers & Agricultural Chemicals–5.57% | ||||||||
CF Industries Holdings, Inc. | 24,123 | 3,408,098 | ||||||
Monsanto Co. | 88,703 | 6,376,859 | ||||||
Potash Corp. of Saskatchewan, Inc. (Canada) | 149,541 | 9,211,726 | ||||||
18,996,683 | ||||||||
Health Care Distributors–1.31% | ||||||||
McKesson Corp. | 56,289 | 4,462,592 | ||||||
Health Care Equipment–1.24% | ||||||||
Baxter International, Inc. | 79,723 | 4,237,278 | ||||||
Health Care Technology–0.90% | ||||||||
Allscripts Healthcare Solutions, Inc.(b) | 143,248 | 3,058,345 | ||||||
Heavy Electrical Equipment–1.04% | ||||||||
ABB Ltd.–ADR (Switzerland) | 144,274 | 3,536,156 | ||||||
Hotels, Resorts & Cruise Lines–0.93% | ||||||||
Starwood Hotels & Resorts Worldwide, Inc. | 51,836 | 3,167,180 | ||||||
Industrial Machinery–1.95% | ||||||||
Danaher Corp. | 56,566 | 2,862,239 | ||||||
Ingersoll-Rand PLC (Ireland) | 83,643 | 3,789,028 | ||||||
6,651,267 | ||||||||
Internet Retail–2.43% | ||||||||
Amazon.com, Inc.(b) | 27,175 | 4,709,156 | ||||||
Netflix, Inc.(b) | 17,411 | 3,598,331 | ||||||
8,307,487 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen American Franchise Fund
Shares | Value | |||||||
Internet Software & Services–5.46% | ||||||||
Baidu, Inc.–ADR (China)(b) | 73,329 | $ | 8,884,541 | |||||
Google Inc., Class A(b) | 15,902 | 9,754,287 | ||||||
18,638,828 | ||||||||
IT Consulting & Other Services–1.70% | ||||||||
Accenture PLC, Class A | 31,307 | 1,611,684 | ||||||
Cognizant Technology Solutions Corp., Class A(b) | 54,257 | 4,170,736 | ||||||
5,782,420 | ||||||||
Life Sciences Tools & Services–1.85% | ||||||||
Agilent Technologies, Inc.(b) | 79,212 | 3,333,241 | ||||||
Illumina, Inc.(b)(c) | 43,075 | 2,989,405 | ||||||
6,322,646 | ||||||||
Managed Health Care–0.74% | ||||||||
UnitedHealth Group, Inc. | 59,363 | 2,527,677 | ||||||
Movies & Entertainment–1.35% | ||||||||
Walt Disney Co. (The) | 105,130 | 4,598,386 | ||||||
Oil & Gas Drilling–1.01% | ||||||||
Transocean Ltd.(b) | 40,800 | 3,452,904 | ||||||
Oil & Gas Equipment & Services–8.24% | ||||||||
Cameron International Corp.(b) | 70,101 | 4,145,072 | ||||||
Halliburton Co. | 106,837 | 5,014,929 | ||||||
National Oilwell Varco, Inc. | 55,317 | 4,401,574 | ||||||
Schlumberger Ltd. | 77,849 | 7,272,654 | ||||||
Weatherford International Ltd.(b) | 301,186 | 7,282,678 | ||||||
28,116,907 | ||||||||
Oil & Gas Exploration & Production–1.42% | ||||||||
EOG Resources, Inc. | 43,220 | 4,854,038 | ||||||
Other Diversified Financial Services–1.70% | ||||||||
JPMorgan Chase & Co. | 124,547 | 5,815,099 | ||||||
Packaged Foods & Meats–1.64% | ||||||||
Mead Johnson Nutrition Co. | 93,656 | 5,605,312 | ||||||
Pharmaceuticals–1.30% | ||||||||
Hospira, Inc.(b) | 83,737 | 4,425,500 | ||||||
Precious Metals & Minerals–2.07% | ||||||||
Silver Wheaton Corp. (Canada) | 166,291 | 7,075,682 | ||||||
Railroads–1.68% | ||||||||
Union Pacific Corp. | 59,970 | 5,721,738 | ||||||
Restaurants–0.48% | ||||||||
Chipotle Mexican Grill, Inc.(b) | 6,683 | 1,637,335 | ||||||
Semiconductors–2.98% | ||||||||
ARM Holdings PLC–ADR (United Kingdom) | 22,712 | 687,492 | ||||||
Atmel Corp.(b) | 120,631 | 1,770,863 | ||||||
Broadcom Corp., Class A | 74,574 | 3,073,940 | ||||||
Micron Technology, Inc.(b) | 185,796 | 2,067,910 | ||||||
Xilinx, Inc. | 77,382 | 2,572,952 | ||||||
10,173,157 | ||||||||
Soft Drinks–0.80% | ||||||||
Hansen Natural Corp.(b) | 47,586 | 2,738,574 | ||||||
Specialized Finance–0.57% | ||||||||
Moody’s Corp. | 61,115 | 1,949,568 | ||||||
Specialty Stores–0.53% | ||||||||
Tiffany & Co. | 29,501 | 1,815,787 | ||||||
Systems Software–5.21% | ||||||||
Oracle Corp. | 161,596 | 5,316,509 | ||||||
Red Hat, Inc.(b) | 56,676 | 2,339,585 | ||||||
Rovi Corp.(b) | 182,765 | 10,128,836 | ||||||
17,784,930 | ||||||||
Trucking–0.80% | ||||||||
J.B. Hunt Transport Services, Inc. | 65,592 | 2,729,283 | ||||||
Wireless Telecommunication Services–2.06% | ||||||||
America Movil S.A.B. de C.V., Series L–ADR (Mexico) | 42,811 | 2,458,208 | ||||||
American Tower Corp., Class A(b) | 84,372 | 4,552,713 | ||||||
7,010,921 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $270,523,574) | 333,047,601 | |||||||
Money Market Funds–1.92% | ||||||||
Liquid Assets Portfolio–Institutional Class(d) | 3,277,171 | 3,277,171 | ||||||
Premier Portfolio–Institutional Class(d) | 3,277,171 | 3,277,171 | ||||||
Total Money Market Funds (Cost $6,554,342) | 6,554,342 | |||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.52% (Cost $277,077,916) | 339,601,943 | |||||||
Investments Purchased with Cash Collateral from Securities on Loan | ||||||||
Money Market Funds–0.21% | ||||||||
Liquid Assets Portfolio–Institutional Class (Cost $732,649)(d)(e) | 732,649 | 732,649 | ||||||
TOTAL INVESTMENTS–99.73% (Cost $277,810,565) | 340,334,592 | |||||||
OTHER ASSETS LESS LIABILITIES–0.27% | 928,029 | |||||||
NET ASSETS–100.00% | $ | 341,262,621 | ||||||
Investment Abbreviation:
ADR | – American Depositary Receipt |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen American Franchise Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | All or a portion of this security was out on loan at February 28, 2011. | |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. | |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J. |
By sector, based on Net Assets
as of February 28, 2011
Information Technology | 35.7 | % | ||
Industrials | 12.1 | |||
Energy | 11.9 | |||
Consumer Discretionary | 11.6 | |||
Health Care | 8.9 | |||
Materials | 7.6 | |||
Financials | 5.3 | |||
Consumer Staples | 2.4 | |||
Telecommunication Services | 2.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.4 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen American Franchise Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $270,523,574)* | $ | 333,047,601 | ||
Investments in affiliated money market funds, at value and cost | 7,286,991 | |||
Total investments, at value (Cost $277,810,565) | 340,334,592 | |||
Receivable for: | ||||
Investments sold | 11,808,992 | |||
Fund shares sold | 3,027,758 | |||
Dividends | 291,257 | |||
Investments for trustee deferred compensation and retirement plans | 1,389 | |||
Other assets | 21,981 | |||
Total assets | 355,485,969 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 12,650,767 | |||
Fund shares reacquired | 515,747 | |||
Collateral upon return of securities loaned | 732,649 | |||
Accrued fees to affiliates | 221,158 | |||
Accrued other operating expenses | 100,492 | |||
Trustee deferred compensation and retirement plans | 2,535 | |||
Total liabilities | 14,223,348 | |||
Net assets applicable to shares outstanding | $ | 341,262,621 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 322,560,098 | ||
Undistributed net investment income (loss) | (509,824 | ) | ||
Undistributed net realized gain (loss) | (43,321,867 | ) | ||
Unrealized appreciation | 62,534,214 | |||
$ | 341,262,621 | |||
Net Assets: | ||||
Class A | $ | 259,009,504 | ||
Class B | $ | 30,827,613 | ||
Class C | $ | 38,199,093 | ||
Class Y | $ | 13,215,806 | ||
Institutional Class | $ | 10,605 | ||
Shares outstanding, $0.01 par value per share, unlimited number of shares authorized: | ||||
Class A | 20,242,770 | |||
Class B | 2,455,835 | |||
Class C | 3,028,878 | |||
Class Y | 1,027,377 | |||
Institutional Class | 828 | |||
Class A: | ||||
Net asset value per share | $ | 12.80 | ||
Maximum offering price per share (Net asset value of $12.80 divided by 94.50%) | $ | 13.54 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 12.55 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 12.61 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 12.86 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 12.81 | ||
* | At February 28, 2011, securities with an aggregate value of $716,139 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen American Franchise Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $5,659) | $ | 1,414,157 | ||
Dividends from affiliated money market funds (includes securities lending income of $338) | 7,169 | |||
Total investment income | 1,421,326 | |||
Expenses: | ||||
Advisory fees | 944,466 | |||
Administrative services fees | 47,827 | |||
Custodian fees | 12,953 | |||
Distribution fees: | ||||
Class A | 259,628 | |||
Class B | 134,075 | |||
Class C | 112,179 | |||
Transfer agent fees | 257,068 | |||
Trustees’ and officers’ fees and benefits | 8,929 | |||
Other | (6,294 | ) | ||
Total expenses | 1,770,831 | |||
Less: Fees waived and expense offset arrangement(s) | (4,755 | ) | ||
Net expenses | 1,766,076 | |||
Net investment income (loss) | (344,750 | ) | ||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 19,690,057 | |||
Foreign currencies | 14,127 | |||
19,704,184 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 48,485,121 | |||
Foreign currencies | (2,133 | ) | ||
48,482,988 | ||||
Net realized and unrealized gain | 68,187,172 | |||
Net increase in net assets resulting from operations | $ | 67,842,422 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen American Franchise Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011 and the year ended August 31, 2010
(Unaudited)
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income (loss) | $ | (344,750 | ) | $ | (76,085 | ) | ||
Net realized gain | 19,704,184 | 45,695,543 | ||||||
Change in net unrealized appreciation (depreciation) | 48,482,988 | (15,933,096 | ) | |||||
Net increase in net assets resulting from operations | 67,842,422 | 29,686,362 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | — | (2,517,727 | ) | |||||
Class B | — | (162,720 | ) | |||||
Class C | — | (152,378 | ) | |||||
Class Y | — | (39,480 | ) | |||||
Total distributions from net investment income | — | (2,872,305 | ) | |||||
Share transactions–net: | ||||||||
Class A | 37,645,452 | (52,924,797 | ) | |||||
Class B | 1,723,745 | (3,593,784 | ) | |||||
Class C | 7,168,275 | (4,023,023 | ) | |||||
Class Y | 9,498,951 | 995,024 | ||||||
Institutional Class | 10,000 | — | ||||||
Net increase (decrease) in net assets resulting from share transactions | 56,046,423 | (59,546,580 | ) | |||||
Net increase (decrease) in net assets | 123,888,845 | (32,732,523 | ) | |||||
Net assets: | ||||||||
Beginning of period | 217,373,776 | 250,106,299 | ||||||
End of period (includes undistributed net investment income (loss) of $(509,824) and $(165,074), respectively) | $ | 341,262,621 | $ | 217,373,776 | ||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen American Franchise Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Van Kampen American Franchise Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Equity Trust II. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).
The Fund’s investment objective is to seek long-term capital appreciation.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Institutional Class shares. 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 Institutional 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. 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. 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 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.
10 Invesco Van Kampen American Franchise Fund
A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. | |
A security listed or traded on an exchange (except convertible bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. | ||
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 |
11 Invesco Van Kampen American Franchise Fund
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 paid annually and recorded on 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 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 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. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to the Reorganization, incremental transfer agency fees which are unique to each class of shares of the Acquired Fund were charged to the operations of such class. | |
G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. | |
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of 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. | 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 fails 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 affiliates 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. |
12 Invesco Van Kampen American Franchise 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 Net Assets | Rate | |||
First $500 million | 0 | .70% | ||
Next $500 million | 0 | .65% | ||
Over $1 billion | 0 | .60% | ||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark 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 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C, and Class Y shares to 1.35%, 2.10%, 2.10%, and 1.10%, 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $4,363.
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 February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $47,928 in front-end sales commissions from the sale of Class A shares and $41, $20,165 and $592 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 Invesco, 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. |
13 Invesco Van Kampen American Franchise Fund
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 340,334,592 | $ | — | $ | — | $ | 340,334,592 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangements are comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $392.
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $966 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
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. 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2016 | $ | 3,318,019 | ||
August 31, 2017 | 35,915,314 | |||
August 31, 2018 | 23,065,984 | |||
Total capital loss carryforward | $ | 62,299,317 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
14 Invesco Van Kampen American Franchise Fund
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 February 28, 2011 was $251,128,970 and $189,020,441, 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 | $ | 63,245,391 | ||
Aggregate unrealized (depreciation) of investment securities | (1,448,098 | ) | ||
Net unrealized appreciation of investment securities | $ | 61,797,293 | ||
Cost of investments for tax purposes is $278,537,299. |
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended | Year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 5,486,732 | (b) | $ | 66,561,318 | (b) | 2,272,877 | (c) | $ | 22,481,196 | (c) | ||||||
Class B | 406,342 | 4,786,611 | 278,730 | 2,757,084 | ||||||||||||
Class C | 846,012 | 10,256,683 | 251,034 | 2,484,206 | ||||||||||||
Class Y | 810,477 | 10,047,981 | 316,694 | 3,116,556 | ||||||||||||
Institutional Class | 828 | 10,000 | — | — | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | — | — | 254,295 | 2,479,382 | ||||||||||||
Class B | — | — | 16,396 | 158,221 | ||||||||||||
Class C | — | — | 14,122 | 136,561 | ||||||||||||
Class Y | — | — | 1,781 | 17,399 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (2,472,080 | ) | (28,915,866 | ) | (7,851,906 | ) | (77,885,375 | ) | ||||||||
Class B | (265,998 | )(b) | (3,062,866 | )(b) | (660,819 | )(c) | (6,509,089 | )(c) | ||||||||
Class C | (268,478 | ) | (3,088,408 | ) | (674,167 | ) | (6,643,790 | ) | ||||||||
Class Y | (46,813 | ) | (549,030 | ) | (217,671 | ) | (2,138,931 | ) | ||||||||
Net increase (decrease) in share activity | 4,497,022 | $ | 56,046,423 | (5,998,634 | ) | $ | (59,546,580 | ) | ||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 59% 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, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. | |
(b) | Includes automatic conversion of 60,864 Class B shares into 59,800 Class A shares at a value of $714,318. | |
(c) | Includes automatic conversion of 46,387 Class B shares into 45,762 Class A shares at a value of $461,494. |
NOTE 10—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Large Cap Growth Fund, Invesco Van Kampen Capital Growth Fund and Invesco Van Kampen Enterprise Fund (the “Target Funds”) in exchange for shares of the Fund.
The Target Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated shortly thereafter. Upon closing of the reorganization, shareholders of the Target Fund will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Fund and the Target Fund will liquidate and cease operations.
15 Invesco Van Kampen American Franchise Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return | (000’s omitted) | absorbed | absorbed | net assets | turnover(b) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 9.79 | $ | (0.01 | ) | $ | 3.02 | $ | 3.01 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 12.80 | 30.75 | %(c) | $ | 259,010 | 1.19 | %(d) | 1.19 | %(d) | (0.13 | )%(d) | 72 | % | |||||||||||||||||||||||||||
Year ended 08/31/10 | 8.87 | 0.01 | 1.03 | 1.04 | (0.12 | ) | 0.00 | (0.12 | ) | 9.79 | 11.75 | (c) | 168,731 | 1.30 | 1.30 | 0.11 | 101 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.23 | 0.13 | (1.33 | ) | (1.20 | ) | (0.16 | ) | 0.00 | (0.16 | ) | 8.87 | (11.40 | )(e) | 200,127 | 1.35 | 1.41 | 1.60 | 105 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 12.19 | 0.13 | (1.20 | ) | (1.07 | ) | (0.31 | ) | (0.58 | ) | (0.89 | ) | 10.23 | (9.31 | )(e) | 241,026 | 1.24 | 1.24 | 1.22 | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 11.41 | 0.36 | 0.52 | 0.88 | (0.10 | ) | 0.00 | (0.10 | ) | 12.19 | 7.75 | (e) | 394,013 | 1.19 | 1.19 | 2.93 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 10.17 | 0.15 | 1.15 | 1.30 | (0.06 | ) | 0.00 | (0.06 | ) | 11.41 | 12.80 | (e) | 173,732 | 1.35 | 1.45 | 1.39 | 17 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 9.64 | (0.05 | ) | 2.96 | 2.91 | 0.00 | 0.00 | 0.00 | 12.55 | 30.19 | (c) | 30,828 | 1.94 | (d) | 1.94 | (d) | (0.88 | )(d) | 72 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.75 | (0.06 | ) | 1.01 | 0.95 | (0.06 | ) | 0.00 | (0.06 | ) | 9.64 | 10.89 | (c) | 22,332 | 2.05 | 2.05 | (0.64 | ) | 101 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.08 | 0.07 | (1.31 | ) | (1.24 | ) | (0.09 | ) | 0.00 | (0.09 | ) | 8.75 | (12.09 | )(f) | 23,466 | 2.10 | 2.16 | 0.86 | 105 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 12.03 | 0.05 | (1.18 | ) | (1.13 | ) | (0.24 | ) | (0.58 | ) | (0.82 | ) | 10.08 | (9.98 | )(f) | 28,330 | 2.00 | 2.00 | 0.45 | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 11.30 | 0.26 | 0.53 | 0.79 | (0.06 | ) | 0.00 | (0.06 | ) | 12.03 | 7.01 | (f) | 38,428 | 1.95 | 1.95 | 2.15 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 10.15 | 0.07 | 1.13 | 1.20 | (0.05 | ) | 0.00 | (0.05 | ) | 11.30 | 11.90 | (f) | 19,538 | 2.10 | 2.20 | 0.65 | 17 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 9.68 | (0.04 | ) | 2.97 | 2.93 | 0.00 | 0.00 | 0.00 | 12.61 | 30.27 | (c)(g) | 38,199 | 1.70 | (d)(g) | 1.70 | (d)(g) | (0.65 | )(d)(g) | 72 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.76 | (0.05 | ) | 1.03 | 0.98 | (0.06 | ) | 0.00 | (0.06 | ) | 9.68 | 11.14 | (c)(g) | 23,718 | 1.93 | (g) | 1.93 | (g) | (0.52 | )(g) | 101 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.10 | 0.06 | (1.30 | ) | (1.24 | ) | (0.10 | ) | 0.00 | (0.10 | ) | 8.76 | (12.11 | )(h) | 25,063 | 2.16 | 2.22 | 0.78 | 105 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 12.02 | 0.06 | (1.18 | ) | (1.12 | ) | (0.22 | ) | (0.58 | ) | (0.80 | ) | 10.10 | (9.89 | )(h)(i) | 26,600 | 1.92 | (i) | 1.92 | (i) | 0.55 | (i) | 18 | |||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 11.30 | 0.26 | 0.53 | 0.79 | (0.07 | ) | 0.00 | (0.07 | ) | 12.02 | 6.99 | (h) | 46,382 | 1.95 | 1.95 | 2.15 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 10.15 | 0.07 | 1.13 | 1.20 | (0.05 | ) | 0.00 | (0.05 | ) | 11.30 | 11.91 | (h) | 24,831 | 2.10 | 2.20 | 0.64 | 17 | |||||||||||||||||||||||||||||||||||||||
Class Y(j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 9.83 | 0.01 | 3.02 | 3.03 | 0.00 | 0.00 | 0.00 | 12.86 | 30.82 | (c) | 13,216 | 0.94 | (d) | 0.94 | (d) | 0.12 | (d) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.91 | 0.04 | 1.02 | 1.06 | (0.14 | ) | 0.00 | (0.14 | ) | 9.83 | 11.95 | (c) | 2,592 | 1.05 | 1.05 | 0.35 | 101 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.27 | 0.14 | (1.31 | ) | (1.17 | ) | (0.19 | ) | 0.00 | (0.19 | ) | 8.91 | (11.07 | )(k) | 1,451 | 1.10 | 1.18 | 1.77 | 105 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 12.23 | 0.18 | (1.22 | ) | (1.04 | ) | (0.34 | ) | (0.58 | ) | (0.92 | ) | 10.27 | (9.05 | )(k) | 108 | 1.00 | 1.00 | 1.65 | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 11.44 | 0.42 | 0.48 | 0.90 | (0.11 | ) | 0.00 | (0.11 | ) | 12.23 | 7.93 | (k) | 1,635 | 0.93 | 0.93 | 3.42 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 10.17 | 0.18 | 1.15 | 1.33 | (0.06 | ) | 0.00 | (0.06 | ) | 11.44 | 13.22 | (k) | 986 | 1.10 | 1.20 | 1.79 | 17 | |||||||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11(l) | 12.07 | 0.02 | 0.72 | 0.74 | 0.00 | 0.00 | 0.00 | 12.81 | 6.13 | (c) | 11 | 0.79 | (d) | 0.80 | (d) | 0.27 | (d) | 72 | ||||||||||||||||||||||||||||||||||||||
(a) | Calculated using average shares outstanding. | |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. | |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $209,551, $27,070, $29,671, $5,788 and $10 for Class A, Class B, Class C, Class Y and Institutional Class shares, respectively. | |
(e) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(f) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(g) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.76% for the six months ended February 28, 2011 and 0.88% for the period ended August 31, 2010. | |
(h) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(i) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of less than 1%. | |
(j) | On June 1, 2010, Class I Shares of the predecessor fund were reorganized into Class Y Shares of the Fund. | |
(k) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. | |
(l) | Commencement date of December 22, 2010. |
16 Invesco Van Kampen American Franchise 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,306.40 | $ | 6.81 | $ | 1,018.89 | $ | 5.96 | 1.19 | % | ||||||||||||||||||
B | 1,000.00 | 1,301.90 | 11.07 | 1,015.17 | 9.69 | 1.94 | ||||||||||||||||||||||||
C | 1,000.00 | 1,304.00 | 9.71 | 1,016.36 | 8.50 | 1.70 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,308.20 | 5.38 | 1,020.13 | 4.71 | 0.94 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,070.20 | 1.57 | 1,020.86 | 3.97 | 0.79 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. For the Institutional Class shares actual expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 70 (as of close of business December 22, 2010 through February 28, 2011)/365. Because the Institutional Class shares have not been in existence for a full six month period, the actual ending account value and expense information shown may not provide a meaningful comparison to fund expense information of classes that show such data for a full six month period and, because the actual ending account value and expense information in the expense example covers a short time period, return and expense data may not be indicative of return and expense data for longer time periods. |
17 Invesco Van Kampen American Franchise Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information forthe predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
VK-AMFR-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen Core Equity Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: VCEAX • B: VCEBX • C: VCECX • R: VCERX • Y: VCEIX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
11 | Financial Highlights | |
16 | Notes to Financial Statements | |
21 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 24.08 | % | ||
Class B Shares | 23.72 | |||
Class C Shares | 23.70 | |||
Class R Shares | 23.93 | |||
Class Y Shares | 24.31 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Russell 1000 Index▼ (Style-Specific Index) | 28.65 | |||
Lipper Large-Cap Core Funds Index▼ (Peer Group Index) | 26.16 | |||
▼ | Lipper Inc. |
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 1000® Index is an unmanaged index considered representative of large-cap stocks. The Russell 1000 Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Core Funds Index is an unmanaged index considered representative of large-cap core funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen Core Equity Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (8/27/07) | –6.06 | % | ||||||
1 | Year | 11.04 | ||||||
Class B Shares | ||||||||
Inception (8/27/07) | –5.98 | % | ||||||
1 | Year | 11.63 | ||||||
Class C Shares | ||||||||
Inception (8/27/07) | –5.22 | % | ||||||
1 | Year | 15.62 | ||||||
Class R Shares | ||||||||
Inception (8/27/07) | –4.81 | % | ||||||
1 | Year | 17.22 | ||||||
Class Y Shares | ||||||||
Inception (8/27/07) | –4.31 | % | ||||||
1 | Year | 17.76 |
Effective June 1, 2010, Class A, Class B, Class C, Class R and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C, Class R and Class Y shares, respectively, of Invesco Van Kampen Core Equity Fund. Returns shown above for Class A, Class B, Class C, Class R and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Core Equity Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R and Class Y shares was 1.20%, 1.95%, 1.95%, 1.45% and 0.95%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (8/27/07) | –7.78 | % | ||||||
1 | Year | 4.47 | ||||||
Class B Shares | ||||||||
Inception (8/27/07) | –7.66 | % | ||||||
1 | Year | 4.62 | ||||||
Class C Shares | ||||||||
Inception (8/27/07) | –6.89 | % | ||||||
1 | Year | 8.61 | ||||||
Class R Shares | ||||||||
Inception (8/27/07) | –6.49 | % | ||||||
1 | Year | 10.08 | ||||||
Class Y Shares | ||||||||
Inception (8/27/07) | –6.00 | % | ||||||
1 | Year | 10.61 |
of the date of this report for Class A, Class B, Class C, Class R and Class Y shares was 1.76%, 2.51%, 2.51%, 2.01% and 1.51%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class R and Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information. |
3 Invesco Van Kampen Core Equity Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen Core Equity Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Number of | ||||||||
Description | Shares | Value | ||||||
Common Stocks–96.9% | ||||||||
Aerospace & Defense–4.1% | ||||||||
General Dynamics Corp. | 9,471 | $ | 720,933 | |||||
Raytheon Co. | 12,558 | 643,095 | ||||||
1,364,028 | ||||||||
Apparel, Accessories & Luxury Goods–0.3% | ||||||||
VF Corp. | 1,029 | 98,444 | ||||||
Apparel Retail–0.5% | ||||||||
Ross Stores, Inc. | 2,297 | 165,476 | ||||||
Asset Management & Custody Banks–2.9% | ||||||||
Federated Investors, Inc., Class B | 20,938 | 577,051 | ||||||
State Street Corp. | 8,269 | 369,790 | ||||||
946,841 | ||||||||
Auto Parts & Equipment–1.9% | ||||||||
Johnson Controls, Inc. | 15,241 | 621,833 | ||||||
Brewers–3.1% | ||||||||
Foster’s Group Ltd. (Australia) | 47,672 | 278,412 | ||||||
Heineken NV (Netherlands) | 14,277 | 736,050 | ||||||
1,014,462 | ||||||||
Building Products–1.9% | ||||||||
Masco Corp. | 45,902 | 623,808 | ||||||
Casinos & Gaming–1.3% | ||||||||
International Game Technology | 26,630 | 438,330 | ||||||
Construction & Farm Machinery & Heavy Trucks–0.6% | ||||||||
Caterpillar, Inc. | 1,995 | 205,345 | ||||||
Consumer Finance–2.3% | ||||||||
Capital One Financial Corp. | 15,029 | 747,993 | ||||||
Data Processing & Outsourced Services–2.3% | ||||||||
Automatic Data Processing, Inc. | 15,454 | 772,700 | ||||||
Department Stores–0.3% | ||||||||
Nordstrom, Inc. | 2,520 | 114,055 | ||||||
Distributors–0.7% | ||||||||
Genuine Parts Co. | 4,400 | 231,836 | ||||||
Diversified Banks–2.5% | ||||||||
Societe Generale (France) | 8,738 | 614,355 | ||||||
U.S. Bancorp | 8,020 | 222,395 | ||||||
836,750 | ||||||||
Diversified Chemicals–1.4% | ||||||||
Du Pont (E.I.) de Nemours & Co. | 8,456 | 463,981 | ||||||
Drug Retail–1.5% | ||||||||
Walgreen Co. | 11,760 | 509,678 | ||||||
Electric Utilities–3.6% | ||||||||
American Electric Power Co., Inc. | 17,977 | 643,217 | ||||||
Entergy Corp. | 3,943 | 280,742 | ||||||
Exelon Corp. | 6,379 | 266,387 | ||||||
1,190,346 | ||||||||
Electrical Components & Equipment–1.4% | ||||||||
Emerson Electric Co. | 7,897 | 471,135 | ||||||
Electronic Components–0.9% | ||||||||
Corning, Inc. | 12,958 | 298,812 | ||||||
Food Distributors–1.6% | ||||||||
Sysco Corp. | 18,582 | 516,394 | ||||||
Gas Utilities–0.8% | ||||||||
AGL Resources, Inc. | 6,905 | 262,459 | ||||||
General Merchandise Stores–1.3% | ||||||||
Target Corp. | 8,080 | 424,604 | ||||||
Health Care Equipment–1.9% | ||||||||
Stryker Corp. | 9,829 | 621,783 | ||||||
Hotels, Resorts & Cruise Lines–1.3% | ||||||||
Accor SA (France) | 5,483 | 258,190 | ||||||
Marriott International, Inc., Class A | 4,662 | 182,797 | ||||||
440,987 | ||||||||
Household Products–4.8% | ||||||||
Kimberly-Clark Corp. | 14,881 | 980,658 | ||||||
Procter & Gamble Co. | 9,820 | 619,151 | ||||||
1,599,809 | ||||||||
Industrial Machinery–4.4% | ||||||||
Eaton Corp. | 1,358 | 150,439 | ||||||
Pentair, Inc. | 17,888 | 663,287 | ||||||
Snap-On, Inc. | 11,222 | 644,480 | ||||||
1,458,206 | ||||||||
Insurance Brokers–0.7% | ||||||||
Marsh & McLennan Cos., Inc. | 7,178 | 218,498 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen Core Equity Fund
Number of | ||||||||
Description | Shares | Value | ||||||
Integrated Oil & Gas–3.7% | ||||||||
ENI SpA (Italy) | 18,935 | $ | 462,071 | |||||
Exxon Mobil Corp. | 4,882 | 417,558 | ||||||
Total SA (France) | 5,565 | 341,442 | ||||||
1,221,071 | ||||||||
Integrated Telecommunication Services–0.8% | ||||||||
AT&T, Inc. | 9,796 | 278,011 | ||||||
Investment Banking & Brokerage–1.6% | ||||||||
Charles Schwab Corp. | 27,859 | 528,485 | ||||||
IT Consulting & Other Services–0.6% | ||||||||
IBM Corp. | 1,142 | 184,867 | ||||||
Life & Health Insurance–1.8% | ||||||||
Lincoln National Corp. | 11,149 | 353,646 | ||||||
StanCorp Financial Group, Inc. | 5,064 | 232,944 | ||||||
586,590 | ||||||||
Motorcycle Manufacturers–1.0% | ||||||||
Harley-Davidson, Inc. | 7,759 | 316,722 | ||||||
Movies & Entertainment–1.6% | ||||||||
Time Warner, Inc. | 14,215 | 543,013 | ||||||
Multi-Utilities–1.2% | ||||||||
Dominion Resources, Inc. | 8,780 | 400,631 | ||||||
Oil & Gas Equipment & Services–1.4% | ||||||||
Baker Hughes, Inc. | 6,389 | 453,938 | ||||||
Oil & Gas Storage & Transportation–0.4% | ||||||||
Southern Union Co. | 4,432 | 126,401 | ||||||
Other Diversified Financial Services–0.3% | ||||||||
JPMorgan Chase & Co. | 1,949 | 90,999 | ||||||
Packaged Foods & Meats–6.1% | ||||||||
Campbell Soup Co. | 11,886 | 400,083 | ||||||
General Mills, Inc. | 20,134 | 747,777 | ||||||
Kraft Foods, Inc., Class A | 18,605 | 592,383 | ||||||
Mead Johnson Nutrition Co. | 4,683 | 280,277 | ||||||
2,020,520 | ||||||||
Paper Products–1.9% | ||||||||
International Paper Co. | 22,717 | 631,078 | ||||||
Pharmaceuticals–5.3% | ||||||||
Bristol-Myers Squibb Co. | 15,845 | 408,959 | ||||||
Eli Lilly & Co. | 11,226 | 387,971 | ||||||
Johnson & Johnson | 9,849 | 605,123 | ||||||
Novartis AG (Switzerland) | 3,870 | 217,336 | ||||||
Pfizer, Inc. | 7,609 | 146,397 | ||||||
1,765,786 | ||||||||
Property & Casualty Insurance–1.2% | ||||||||
Travelers Cos., Inc. | 6,525 | 391,043 | ||||||
Regional Banks–6.0% | ||||||||
Fifth Third Bancorp | 40,606 | 592,848 | ||||||
SunTrust Banks, Inc. | 27,754 | 837,338 | ||||||
Zions Bancorp | 23,757 | 554,963 | ||||||
1,985,149 | ||||||||
Restaurants–1.6% | ||||||||
Brinker International, Inc. | 22,807 | 539,157 | ||||||
Semiconductors–1.2% | ||||||||
Texas Instruments, Inc. | 11,092 | 394,986 | ||||||
Soft Drinks–1.5% | ||||||||
Coca-Cola Co. | 7,665 | 489,947 | ||||||
Specialized Consumer Services–0.7% | ||||||||
H&R Block, Inc. | 16,113 | 244,756 | ||||||
Specialty Chemicals–0.8% | ||||||||
Lubrizol Corp. | 2,277 | 247,897 | ||||||
Systems Software–1.4% | ||||||||
Microsoft Corp. | 11,429 | 303,783 | ||||||
Oracle Corp. | 4,776 | 157,130 | ||||||
460,913 | ||||||||
Thrifts & Mortgage Finance–1.6% | ||||||||
Hudson City Bancorp, Inc. | 45,741 | 526,022 | ||||||
Tobacco–2.9% | ||||||||
Altria Group, Inc. | 19,116 | 484,973 | ||||||
Philip Morris International, Inc. | 7,548 | 473,863 | ||||||
958,836 | ||||||||
Total Common Stocks–96.9% (Cost $26,779,533) | 32,045,411 | |||||||
Money Market Funds–3.5% | ||||||||
Liquid Assets Portfolio–Institutional Class(a) | 577,114 | 577,114 | ||||||
Premier Portfolio–Institutional Class(a) | 577,114 | 577,114 | ||||||
Total Money Market Funds–3.5% (Cost $1,154,228) | 1,154,228 | |||||||
TOTAL INVESTMENTS–100.4% (Cost $27,933,761) | 33,199,639 | |||||||
LIABILITIES IN EXCESS OF OTHER ASSETS–(0.4%) | (123,795 | ) | ||||||
NET ASSETS–100.0% | $ | 33,075,844 | ||||||
Notes to Schedule of Investments:
(a) | The money market fund and the Fund are affiliated by having the same investment adviser. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen Core Equity Fund
By sector based on Net Assets
as of February 28, 2011
Financials | 20.7 | % | ||
Consumer Staples | 20.7 | |||
Consumer Discretionary | 14.6 | |||
Industrials | 10.5 | |||
Health Care | 8.1 | |||
Information Technology | 6.4 | |||
Utilities | 6.0 | |||
Energy | 5.1 | |||
Materials | 4.0 | |||
Telecommunication Services | 0.8 | |||
Money Market Funds Plus Other Assets Less Liabilites | 3.1 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen Core Equity Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $26,779,533) | $ | 32,045,411 | ||
Investments in affiliated money market funds, at value and cost | 1,154,228 | |||
Total Investments (Cost $27,933,761) | 33,199,639 | |||
Receivables: | ||||
Investments sold | 145,162 | |||
Dividends | 73,532 | |||
Fund shares sold | 12,613 | |||
Prepaid expenses | 7,453 | |||
Investment for trustee deferred compensation and retirement plan | 1,126 | |||
Total assets | 33,439,525 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 243,611 | |||
Accrued other operating expenses | 61,689 | |||
Fund shares repurchased | 40,689 | |||
Accrued fees to affiliates | 14,766 | |||
Trustees’ deferred compensation and retirement plans | 2,926 | |||
Total liabilities | 363,681 | |||
Net assets | $ | 33,075,844 | ||
Net assets consist of: | ||||
Capital (par value of $0.01 per share with an unlimited number of shares authorized) | $ | 28,650,055 | ||
Unrealized appreciation | 5,266,044 | |||
Undistributed net investment income | 35,373 | |||
Undistributed net realized gain(loss) | (875,628 | ) | ||
Net assets | $ | 33,075,844 | ||
Maximum offering price per share: | ||||
Class A shares: | ||||
Net asset value and redemption price per share (based on net assets of $7,445,529 and 913,141 shares of beneficial interest issued and outstanding) | $ | 8.15 | ||
Maximum sales charge (5.50% of offering price) | 0.47 | |||
Maximum offering price to public | $ | 8.62 | ||
Class B shares: | ||||
Net asset value and offering price per share (based on net assets of $725,887 and 89,490 shares of beneficial interest issued and outstanding) | $ | 8.11 | ||
Class C shares: | ||||
Net asset value and offering price per share (based on net assets of $1,178,994 and 145,389 shares of beneficial interest issued and outstanding) | $ | 8.11 | ||
Class R shares: | ||||
Net asset value and offering price per share (based on net assets of $15,318 and 1,876 shares of beneficial interest issued and outstanding) | $ | 8.16 | ||
Class Y shares: | ||||
Net asset value and offering price per share (based on net assets of $23,710,116 and 2,902,175 shares of beneficial interest issued and outstanding) | $ | 8.17 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen Core Equity Fund
Statement of Operations
For the six months ended February 28, 2011 (Unaudited)
Six months ended | ||||
February 28, | ||||
2011 | ||||
Investment income: | ||||
Dividends (net of foreign withholding taxes of $4,615) | $ | 460,408 | ||
Dividends from affiliated money market funds | 1,256 | |||
Total income | 461,664 | |||
Expenses: | ||||
Advisory fees | 115,532 | |||
Registration fees | 2,979 | |||
Transfer agent fees | 10,895 | |||
Distribution fees | ||||
Class A | 10,838 | |||
Class B | 3,381 | |||
Class C | 5,320 | |||
Class R | 56 | |||
Reports to shareholders | 13,815 | |||
Administrative services fees | 24,794 | |||
Professional fees | 20,541 | |||
Custodian fees | 4,602 | |||
Trustees’ and officers’ fees and benefits | 6,159 | |||
Other | 121 | |||
Total expenses | 219,033 | |||
Less: Fees waived and/or expenses reimbursed | 31,084 | |||
Net expenses | 187,949 | |||
Net investment income | 273,715 | |||
Realized and unrealized gain (loss): | ||||
Realized gain (loss): | ||||
Investments | 2,441,619 | |||
Foreign currency transactions | 871 | |||
Net realized gain (loss) | 2,442,490 | |||
Unrealized appreciation (depreciation): | ||||
Beginning of the period | 149,446 | |||
End of the period: | ||||
Investments | 5,265,878 | |||
Foreign currency translation | 166 | |||
5,266,044 | ||||
Net unrealized appreciation during the period | 5,116,598 | |||
Net realized and unrealized gain | 7,559,088 | |||
Net increase in net assets from operations | $ | 7,832,803 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen Core Equity Fund
Statements of Changes in Net Assets
For the six months ended February 28, 2011, period April 1, 2010 to August 31, 2010 and
the year ended March 31, 2010 (Unaudited)
Six months ended | Five months ended | Year ended | ||||||||||
February 28, | August 31, | March 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
From investment activities: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 273,715 | $ | 179,298 | $ | 444,357 | ||||||
Net realized gain | 2,442,490 | 3,116,827 | 129,229 | |||||||||
Net unrealized appreciation (depreciation) during the period | 5,116,598 | (7,921,323 | ) | 14,399,435 | ||||||||
Change in net assets from operations | 7,832,803 | (4,625,198 | ) | 14,973,021 | ||||||||
Distributions from net investment income: | ||||||||||||
Class A | (108,138 | ) | -0- | (99,387 | ) | |||||||
Class B | (2,403 | ) | -0- | (4,003 | ) | |||||||
Class C | (3,967 | ) | -0- | (4,806 | ) | |||||||
Class R | (356,070 | ) | -0- | (656 | ) | |||||||
Class Y | (113 | ) | -0- | (419,107 | ) | |||||||
Total distributions | (470,691 | ) | -0- | (527,959 | ) | |||||||
Net change in net assets from investment activities | 7,362,112 | (4,625,198 | ) | 14,445,062 | ||||||||
From capital transactions: | ||||||||||||
Proceeds from shares Sold | 2,015,191 | 2,469,613 | 12,550,339 | |||||||||
Net asset value of shares issued through dividend reinvestment | 461,225 | -0- | 473,462 | |||||||||
Cost of shares repurchased | (11,409,775 | ) | (6,479,983 | ) | (11,783,890 | ) | ||||||
Net change in net assets from capital transactions | (8,933,359 | ) | (4,010,370 | ) | 1,239,911 | |||||||
Total increase(decrease) in net assets | (1,571,247 | ) | (8,635,568 | ) | 15,684,973 | |||||||
Net assets: | ||||||||||||
Beginning of the period | 34,647,091 | 43,282,659 | 27,597,686 | |||||||||
End of the period (including undistributed net investment income of $35,373, $232,349 and $54,446, respectively) | $ | 33,075,844 | $ | 34,647,091 | $ | 43,282,659 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Van Kampen Core Equity Fund
Financial Highlights
(Unaudited)
The following schedules present financial highlights for a share of the Fund outstanding throughout the periods indicated.
Class A shares | ||||||||||||||||||||
August 27, 2007 | ||||||||||||||||||||
(Commencement of | ||||||||||||||||||||
Six months ended | Five months ended | Operations) to | ||||||||||||||||||
February 28, | August 31, | Year ended March 31, | March 31, | |||||||||||||||||
2011 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||
Net asset value, beginning of the period | $ | 6.64 | $ | 7.46 | $ | 4.97 | $ | 8.91 | $ | 10.00 | ||||||||||
Net investment income(a) | 0.05 | 0.03 | 0.07 | 0.09 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.54 | (0.85 | ) | 2.50 | (4.00 | ) | (1.01 | ) | ||||||||||||
Total from investment operations | 1.59 | (0.82 | ) | 2.57 | (3.91 | ) | (0.95 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Distributions from net investment income | 0.08 | -0- | 0.08 | 0.03 | 0.11 | |||||||||||||||
Distributions from net realized gain | -0- | -0- | -0- | -0- | 0.03 | |||||||||||||||
Total distributions | 0.08 | -0- | 0.08 | 0.03 | 0.14 | |||||||||||||||
Net asset value, end of the period | $ | 8.15 | $ | 6.64 | $ | 7.46 | $ | 4.97 | $ | 8.91 | ||||||||||
Total return* | 24.08 | %(b) | (10.99 | )%(b) | 51.84 | %(c) | (43.89 | )%(c) | (9.69 | )%(c)** | ||||||||||
Net assets at end of the period (000’s omitted) | $ | 7,446 | $ | 8,697 | $ | 9,450 | $ | 4,406 | $ | 3,353 | ||||||||||
Ratio of expenses to average net assets* | 1.20 | %(d) | 1.20 | %(f) | 1.20 | % | 1.20 | % | 1.20 | %(f) | ||||||||||
Ratio of net investment income to average net assets* | 1.39 | %(d) | 0.96 | %(f) | 1.00 | % | 1.47 | % | 1.11 | %(f) | ||||||||||
Portfolio turnover(e) | 30 | % | 61 | % | 48 | % | 66 | % | 14 | % | ||||||||||
* If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: | ||||||||||||||||||||
Ratio of expenses to average net assets | 1.37 | %(d) | 1.80 | %(f) | 1.64 | % | 3.34 | % | 4.14 | %(f) | ||||||||||
Ratio of net investment income (loss) to average net assets | 1.22 | %(d) | 0.36 | %(f) | 0.56 | % | (0.67 | )% | (1.83 | )%(f) | ||||||||||
** | Non-annualized |
(a) | Based on 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) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $8,749. | |
(e) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable. | |
(f) | Annualized |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Van Kampen Core Equity Fund
Financial Highlights—(continued)
(Unaudited)
Class B shares | ||||||||||||||||||||
August 27, 2007 | ||||||||||||||||||||
(Commencement of | ||||||||||||||||||||
Six months ended | Five months ended | Operations) to | ||||||||||||||||||
February 28, | August 31, | Year ended March 31, | March 31, | |||||||||||||||||
2011 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||
Net asset value, beginning of the period | $ | 6.58 | $ | 7.42 | $ | 4.95 | $ | 8.92 | $ | 10.00 | ||||||||||
Net investment income(a) | 0.02 | 0.01 | 0.01 | 0.05 | 0.05 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.54 | (0.85 | ) | 2.50 | (4.00 | ) | (1.01 | ) | ||||||||||||
Total from investment operations | 1.56 | (0.84 | ) | 2.51 | (3.95 | ) | (0.96 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Distributions from net investment income | 0.03 | -0- | 0.04 | 0.02 | 0.09 | |||||||||||||||
Distributions from net realized gain | -0- | -0- | -0- | -0- | 0.03 | |||||||||||||||
Total distributions | 0.03 | -0- | 0.04 | 0.02 | 0.12 | |||||||||||||||
Net asset value, end of the period | $ | 8.11 | $ | 6.58 | $ | 7.42 | $ | 4.95 | $ | 8.92 | ||||||||||
Total return* | 23.72 | %(b) | (11.32 | )%(b) | 50.69 | %(c) | (44.35 | )%(c) | (9.79 | )%(c)(d)** | ||||||||||
Net assets at end of the period (000’s omitted) | $ | 726 | $ | 642 | $ | 692 | $ | 504 | $ | 161 | ||||||||||
Ratio of expenses to average net assets* | 1.95 | %(e) | 1.95 | %(g) | 1.96 | % | 1.97 | % | 1.38 | %(d)(g) | ||||||||||
Ratio of net investment income to average net assets* | 0.65 | %(e) | 0.23 | %(g) | 0.23 | % | 0.75 | % | 0.95 | %(d)(g) | ||||||||||
Portfolio turnover(f) | 30 | % | 61 | % | 48 | % | 66 | % | 14 | % | ||||||||||
* If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: | ||||||||||||||||||||
Ratio of expenses to average net assets | 2.12 | %(e) | 2.54 | %(g) | 2.40 | % | 4.13 | % | 4.53 | %(d)(g) | ||||||||||
Ratio of net investment income (loss) to average net assets | 0.48 | %(e) | (0.35 | )%(g) | (0.21 | )% | (1.41 | )% | (2.20 | )%(d)(g) | ||||||||||
** | Non-annualized |
(a) | Based on 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) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(d) | The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net Investment Income(Loss) to Average Net Assets reflect actual 12b-1 fees of less than 1%. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $683. | |
(f) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable. | |
(g) | Annualized |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Van Kampen Core Equity Fund
Financial Highlights—(continued)
(Unaudited)
Class C shares | ||||||||||||||||||||
August 27, 2007 | ||||||||||||||||||||
(Commencement of | ||||||||||||||||||||
Six months ended | Five months ended | Operations) to | ||||||||||||||||||
February 28, | August 31, | Year ended March 31, | March 31, | |||||||||||||||||
2011 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||
Net asset value, beginning of the period | $ | 6.58 | $ | 7.42 | $ | 4.96 | $ | 8.90 | $ | 10.00 | ||||||||||
Net investment income(a) | 0.02 | 0.01 | 0.01 | 0.05 | 0.04 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.54 | (0.85 | ) | 2.49 | (3.99 | ) | (1.02 | ) | ||||||||||||
Total from investment operations | 1.56 | (0.84 | ) | 2.50 | (3.94 | ) | (0.98 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Distributions from net investment income | 0.03 | -0- | 0.04 | -0- | 0.09 | |||||||||||||||
Distributions from net realized gain | -0- | -0- | -0- | -0- | 0.03 | |||||||||||||||
Total distributions | 0.03 | -0- | 0.04 | -0- | 0.12 | |||||||||||||||
Net asset value, end of the period | $ | 8.11 | $ | 6.58 | $ | 7.42 | $ | 4.96 | $ | 8.90 | ||||||||||
Total return* | 23.70 | %(b) | (11.32 | )%(b) | 50.51 | %(c) | (44.27 | )%(c)(d) | (9.96 | )%(c)(d)** | ||||||||||
Net assets at end of the period (000’s omitted) | $ | 1,179 | $ | 902 | $ | 949 | $ | 492 | $ | 385 | ||||||||||
Ratio of expenses to average net assets* | 1.95 | %(e) | 1.95 | %(g) | 2.01 | % | 1.90 | %(d) | 1.74 | %(d)(g) | ||||||||||
Ratio of net investment income to average net assets* | 0.65 | %(e) | 0.21 | %(g) | 0.19 | % | 0.74 | %(d) | 0.66 | %(d)(g) | ||||||||||
Portfolio turnover(f) | 30 | % | 61 | % | 48 | % | 66 | % | 14 | % | ||||||||||
* If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: | ||||||||||||||||||||
Ratio of expenses to average net assets | 2.12 | %(e) | 2.55 | %(g) | 2.45 | % | 4.00 | %(d) | 4.79 | %(d)(g) | ||||||||||
Ratio of net investment income (loss) to average net assets | 0.48 | %(e) | (0.39 | )%(g) | (0.25 | )% | (1.36 | )%(d) | (2.39 | )%(d)(g) | ||||||||||
** | Non-annualized |
(a) | Based on 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) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(d) | The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net Investment Income/Loss to Average Net Assets reflect actual 12b-1 fees of less than 1%. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $1,074. | |
(f) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable. | |
(g) | Annualized |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Van Kampen Core Equity Fund
Financial Highlights—(continued)
(Unaudited)
Class R shares | ||||||||||||||||||||
August 27, 2007 | ||||||||||||||||||||
(Commencement of | ||||||||||||||||||||
Six months ended | Five months ended | Operations) to | ||||||||||||||||||
February 28, | August 31, | Year ended March 31, | March 31, | |||||||||||||||||
2011 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||
Net asset value, beginning of the period | $ | 6.64 | $ | 7.47 | $ | 4.98 | $ | 8.91 | $ | 10.00 | ||||||||||
Net investment income(a) | 0.05 | 0.02 | 0.05 | 0.07 | 0.05 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.53 | (0.85 | ) | 2.51 | (4.00 | ) | (1.01 | ) | ||||||||||||
Total from investment operations | 1.58 | (0.83 | ) | 2.56 | (3.93 | ) | (0.96 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Distributions from net investment income | 0.06 | -0- | 0.07 | -0- | (b) | 0.10 | ||||||||||||||
Distributions from net realized gain | -0- | -0- | -0- | -0- | 0.03 | |||||||||||||||
Total distributions | 0.06 | -0- | 0.07 | -0- | 0.13 | |||||||||||||||
Net asset value, end of the period | $ | 8.16 | $ | 6.64 | $ | 7.47 | $ | 4.98 | $ | 8.91 | ||||||||||
Total return* | 23.93 | %(c) | (11.11 | )%(c) | 51.41 | %(d) | (44.08 | )%(d) | (9.80 | )%(d)** | ||||||||||
Net assets at end of the period (000’s omitted) | $ | 15 | $ | 66 | $ | 75 | $ | 50 | $ | 89 | ||||||||||
Ratio of expenses to average net assets* | 1.45 | %(e) | 1.45 | %(g) | 1.45 | % | 1.45 | % | 1.45 | %(g) | ||||||||||
Ratio of net investment income to average net assets* | 1.34 | %(e) | 0.71 | %(g) | 0.74 | % | 1.03 | % | 0.85 | %(g) | ||||||||||
Portfolio turnover(f) | 30 | % | 61 | % | 48 | % | 66 | % | 14 | % | ||||||||||
* If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: | ||||||||||||||||||||
Ratio of expenses to average net assets | 1.62 | %(e) | 2.05 | %(g) | 1.89 | % | 4.09 | % | 4.61 | %(g) | ||||||||||
Ratio of net investment income (loss) to average net assets | 1.17 | %(e) | 0.11 | %(g) | 0.30 | % | (1.61 | )% | (2.31 | )%(g) | ||||||||||
** | Non-annualized |
(a) | Based on average shares outstanding. | |
(b) | Amount is less than $0.01. | |
(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) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $23. | |
(f) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable. | |
(g) | Annualized |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Van Kampen Core Equity Fund
Financial Highlights—(continued)
(Unaudited)
Class Y sharesˆ | ||||||||||||||||||||
August 27, 2007 | ||||||||||||||||||||
(Commencement of | ||||||||||||||||||||
Six months ended | Five months ended | Operations) to | ||||||||||||||||||
February 28, | August 31, | Year ended March 31, | March 31, | |||||||||||||||||
2011 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||
Net asset value, beginning of the period | $ | 6.66 | $ | 7.47 | $ | 4.98 | $ | 8.92 | $ | 10.00 | ||||||||||
Net investment income(a) | 0.06 | 0.04 | 0.08 | 0.12 | 0.08 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.55 | (0.85 | ) | 2.50 | (4.02 | ) | (1.02 | ) | ||||||||||||
Total from investment operations | 1.61 | (0.81 | ) | 2.58 | (3.90 | ) | (0.94 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Distributions from net investment income | 0.10 | -0- | 0.09 | 0.04 | 0.11 | |||||||||||||||
Distributions from net realized gain | -0- | -0- | -0- | 0 | 0.03 | |||||||||||||||
Total distributions | 0.10 | -0- | 0.09 | 0.04 | 0.14 | |||||||||||||||
Net asset value, end of the period | $ | 8.17 | $ | 6.66 | $ | 7.47 | $ | 4.98 | $ | 8.92 | ||||||||||
Total return* | 24.31 | %(b) | (10.84 | )%(b) | 52.01 | %(c) | (43.75 | )%(c) | (9.57 | )%(c)** | ||||||||||
Net assets at end of the period (000’s omitted) | $ | 23,710 | $ | 24,340 | $ | 32,117 | $ | 22,146 | $ | 8,692 | ||||||||||
Ratio of expenses to average net assets* | 0.95 | %(d) | 0.95 | %(f) | 0.95 | % | 0.95 | % | 0.95 | %(f) | ||||||||||
Ratio of net investment income to average net assets* | 1.65 | %(d) | 1.19 | %(f) | 1.25 | % | 2.02 | % | 1.35 | %(f) | ||||||||||
Portfolio turnover(e) | 30 | % | 61 | % | 48 | % | 66 | % | 14 | % | ||||||||||
* If certain expenses had not been voluntarily assumed by the Adviser, total return would have been lower and the ratios would have been as follows: | ||||||||||||||||||||
Ratio of expenses to average net assets | 1.12 | %(d) | 1.53 | %(f) | 1.39 | % | 2.44 | % | 4.11 | %(f) | ||||||||||
Ratio of net investment income (loss) to average net assets | 1.48 | %(d) | 0.61 | %(f) | 0.81 | % | 0.53 | % | (1.81 | )%(f) | ||||||||||
** | Non-Annualized |
(a) | Based on 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) | Assumes reinvestment of all distributions for the period. These do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $25,315. | |
(e) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable. | |
(f) | Annualized | |
ˆ | On June 1, 2010, the Fund’s former Class I shares were reorganized to Class Y shares. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Van Kampen Core Equity Fund
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen Core Equity Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Van Kampen Core Equity Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Equity Trust. The Acquired Fund was reorganized on June 1, 2010 (The “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C, Class R and Class I shares received Class A, Class B, Class C, Class R and Class Y shares, respectively of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is to seek capital growth and income.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class R 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 R and 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. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. |
16 Invesco Van Kampen Core Equity Fund
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 are 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. | ||
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. | ||
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 paid annually and recorded on 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 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 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 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 |
17 Invesco Van Kampen Core Equity Fund
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. |
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 Net Assets | Rate | |||
First $1 billion | 0 | .65% | ||
Next $1.5 billion | 0 | .60% | ||
Over $2.5 billion | 0 | .55% | ||
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 Trimark 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 provides 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, 2012, 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 and Class Y shares to 1.20%, 1.95%, 1.95%, 1.45% and 0.95% 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 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.
The Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees $31,084.
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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.
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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares, Class C shares and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $2,207 in front-end sales commissions from the sale of Class A shares and $0, $820 and $251 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. For the period June 1, 2010 to August 31, 2010, IDI advised the Fund that IDI retained $646 in front-end sales commissions from the sale of Class A shares and $0, $702 and $54 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 Invesco, IIS and/or IDI.
18 Invesco Van Kampen Core Equity 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 30,291,783 | $ | 2,907,856 | $ | — | $ | 33,199,639 | ||||||||
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $784 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. 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 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 3,306,064 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
19 Invesco Van Kampen Core Equity Fund
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 February 28, 2011 was $9,895,867 and $18,303,547, 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 | $ | 5,386,369 | ||
Aggregate unrealized (depreciation) of investment securities | (132,545 | ) | ||
Net unrealized appreciation of investment securities | $ | 5,253,824 | ||
Cost of investments for tax purposes is $27,945,815. |
NOTE 8—Share Information
For the | For the | For the | ||||||||||||||||||||||
Six months ended | Five months ended | year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | March 31, 2010 | ||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||
Sales: | ||||||||||||||||||||||||
Class A | 167,183 | (b) | $ | 1,276,506 | (b) | 170,238 | (c) | $ | 1,227,440 | (c) | 843,375 | $ | 5,213,461 | |||||||||||
Class B | 10,724 | 81,848 | 20,992 | 149,606 | 71,384 | 466,217 | ||||||||||||||||||
Class C | 18,948 | 140,198 | 17,604 | 131,855 | 61,559 | 417,348 | ||||||||||||||||||
Class R | 129 | 1,000 | -0- | -0- | -0- | -0- | ||||||||||||||||||
Class Y | 69,531 | 515,639 | 133,592 | 960,712 | 1,017,248 | 6,453,313 | ||||||||||||||||||
Total sales | 266,515 | $ | 2,015,191 | 342,426 | $ | 2,469,613 | 1,993,566 | $ | 12,550,339 | |||||||||||||||
Dividend reinvestment: | ||||||||||||||||||||||||
Class A | 13,424 | $ | 102,555 | -0- | $ | -0- | 13,393 | $ | 93,480 | |||||||||||||||
Class B | 309 | 2,354 | -0- | -0- | 512 | 3,564 | ||||||||||||||||||
Class C | 350 | 2,661 | -0- | -0- | 505 | 3,513 | ||||||||||||||||||
Class R | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||
Class Y | 46,229 | 353,655 | -0- | -0- | 53,349 | 372,905 | ||||||||||||||||||
Total dividend reinvestment | 60,312 | $ | 461,225 | -0- | $ | -0- | 67,759 | $ | 473,462 | |||||||||||||||
Repurchases: | ||||||||||||||||||||||||
Class A | (578,023 | ) | $ | (4,453,931 | ) | (127,084 | ) | $ | (906,215 | ) | (475,278 | ) | $ | (3,126,163 | ) | |||||||||
Class B | (19,080 | )(b) | (142,032 | )(b) | (16,763 | )(c) | (115,613 | )(c) | (80,299 | ) | (539,261 | ) | ||||||||||||
Class C | (11,034 | ) | (81,556 | ) | (8,455 | ) | (60,874 | ) | (33,342 | ) | (208,105 | ) | ||||||||||||
Class R | (8,253 | ) | (59,500 | ) | -0- | -0- | -0- | -0- | ||||||||||||||||
Class Y | (869,381 | ) | (6,672,756 | ) | (775,606 | ) | (5,397,281 | ) | (1,219,233 | ) | (7,910,361 | ) | ||||||||||||
Total repurchases | (1,485,771 | ) | $ | (11,409,775 | ) | (927,908 | ) | $ | (6,479,983 | ) | (1,808,152 | ) | $ | (11,783,890 | ) | |||||||||
(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 Trust 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, less than 1% of the outstanding shares of the Fund are owned by Invesco or an investment advisor under common control with Invesco. | ||
(b) | Includes automatic conversion of 4,088 Class B shares into 4,053 Class A shares at a value of $30,193. | |
(c) | Includes automatic conversion of 1,176 Class B shares into 1,167 Class A shares at a value of $7,981. |
NOTE 9—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Diversified Dividend Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in May 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.
In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
20 Invesco Van Kampen 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,240.80 | $ | 6.65 | $ | 1,018.86 | $ | 5.99 | 1.20 | % | ||||||||||||||||||
B | 1,000.00 | 1,237.20 | 10.80 | 1,015.14 | 9.72 | 1.95 | ||||||||||||||||||||||||
C | 1,000.00 | 1,237.00 | 10.80 | 1,015.14 | 9.73 | 1.95 | ||||||||||||||||||||||||
R | 1,000.00 | 1,239.30 | 8.03 | 1,017.62 | 7.23 | 1.45 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,243.10 | 5.27 | 1,020.10 | 4.74 | 0.95 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
21 Invesco Van Kampen Core Equity Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
VK-CEQ-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen Equity and Income Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: ACEIX § B: ACEQX § C: ACERX § R: ACESX § Y: ACETX § Institutional: ACEKX
A: ACEIX § B: ACEQX § C: ACERX § R: ACESX § Y: ACETX § Institutional: ACEKX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
15 | Financial Statements | |
17 | Notes to Financial Statements | |
25 | Financial Highlights | |
27 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 21.33 | % | ||
Class B Shares | 21.08 | |||
Class C Shares | 20.78 | |||
Class R Shares | 20.94 | |||
Class Y Shares | 21.31 | |||
Institutional Class Shares | 21.45 | |||
Russell 1000 Value Index▼ (Broad Market Index) | 26.30 | |||
Barclays Capital U.S. Government/Credit Index▼ (Style-Specific Index) | -1.61 | |||
▼ | Lipper Inc. |
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Barclays Capital U.S. Government/Credit Index includes treasuries and agencies that represent the government portion of the index, and includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity and quality requirements to represent the credit interests.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen Equity and Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (8/3/60) | 10.33 | % | ||||||
10 | Years | 5.10 | ||||||
5 | Years | 3.48 | ||||||
1 | Year | 10.87 | ||||||
Class B Shares | ||||||||
Inception (5/1/92) | 9.79 | % | ||||||
10 | Years | 5.20 | ||||||
5 | Years | 4.03 | ||||||
1 | Year | 12.10 | ||||||
Class C Shares | ||||||||
Inception (7/6/93) | 9.07 | % | ||||||
10 | Years | 4.91 | ||||||
5 | Years | 3.89 | ||||||
1 | Year | 15.33 | ||||||
Class R Shares | ||||||||
Inception (10/1/02) | 8.03 | % | ||||||
5 | Years | 4.37 | ||||||
1 | Year | 16.86 | ||||||
Class Y Shares | ||||||||
Inception (12/22/04) | 5.65 | % | ||||||
5 | Years | 4.91 | ||||||
1 | Year | 17.50 | ||||||
Institutional Class Shares | ||||||||
10 | Years | 5.73 | % | |||||
5 | Years | 4.71 | ||||||
1 | Year | 17.71 |
Effective June 1, 2010, Class A, Class B, Class C, Class I and Class R shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C, Class Y and Class R shares, respectively, of Invesco Van Kampen Equity and Income Fund. Returns shown above for Class A, Class B, Class C, Class R and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Equity and Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
Institutional Class shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (8/3/60) | 10.25 | % | ||||||
10 | Years | 4.23 | ||||||
5 | Years | 2.76 | ||||||
1 | Year | 6.26 | ||||||
Class B Shares | ||||||||
Inception (5/1/92) | 9.57 | % | ||||||
10 | Years | 4.29 | ||||||
5 | Years | 3.31 | ||||||
1 | Year | 7.31 | ||||||
Class C Shares | ||||||||
Inception (7/6/93) | 8.84 | % | ||||||
10 | Years | 4.05 | ||||||
5 | Years | 3.17 | ||||||
1 | Year | 10.59 | ||||||
Class R Shares | ||||||||
Inception (10/1/02) | 7.53 | % | ||||||
5 | Years | 3.67 | ||||||
1 | Year | 12.06 | ||||||
Class Y Shares | ||||||||
Inception (12/22/04) | 4.90 | % | ||||||
5 | Years | 4.18 | ||||||
1 | Year | 12.67 | ||||||
Institutional Class Shares | ||||||||
10 | Years | 4.84 | % | |||||
5 | Years | 3.98 | ||||||
1 | Year | 12.61 |
be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares was 0.78%, 0.91%, 1.52%, 1.03%, 0.53% and 0.45%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Van Kampen Equity and Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. Sincerely,
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen Equity and Income Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–64.95%(a) | ||||||||
Air Freight & Logistics–0.32% | ||||||||
FedEx Corp. | 422,021 | $ | 37,990,330 | |||||
Asset Management & Custody Banks–0.65% | ||||||||
State Street Corp. | 1,744,973 | 78,035,193 | ||||||
Automobile Manufacturers–0.64% | ||||||||
Ford Motor Co.(b) | 2,512,191 | 37,808,475 | ||||||
General Motors Co.(b) | 1,164,418 | 39,042,935 | ||||||
76,851,410 | ||||||||
Cable & Satellite–2.28% | ||||||||
Comcast Corp., Class A | 6,221,134 | 160,256,412 | ||||||
Time Warner Cable, Inc. | 1,573,948 | 113,607,567 | ||||||
273,863,979 | ||||||||
Communications Equipment–0.59% | ||||||||
Cisco Systems, Inc. | 3,818,234 | 70,866,423 | ||||||
Computer Hardware–1.89% | ||||||||
Dell, Inc.(b) | 6,634,432 | 105,023,058 | ||||||
Hewlett-Packard Co. | 2,811,325 | 122,658,110 | ||||||
227,681,168 | ||||||||
Consumer Electronics–0.76% | ||||||||
Sony Corp.–ADR (Japan) | 2,488,117 | 91,662,230 | ||||||
Data Processing & Outsourced Services–0.81% | ||||||||
Western Union Co. | 4,412,938 | 97,040,507 | ||||||
Diversified Banks–1.07% | ||||||||
U.S. Bancorp | 1,861,296 | 51,613,738 | ||||||
Wells Fargo & Co. | 2,390,434 | 77,115,401 | ||||||
128,729,139 | ||||||||
Diversified Chemicals–1.24% | ||||||||
Dow Chemical Co. (The) | 1,991,817 | 74,015,920 | ||||||
PPG Industries, Inc. | 857,054 | 75,746,432 | ||||||
149,762,352 | ||||||||
Diversified Support Services–0.35% | ||||||||
Cintas Corp. | 1,482,620 | 41,691,274 | ||||||
Drug Retail–1.01% | ||||||||
Walgreen Co. | 2,817,021 | 122,089,690 | ||||||
Electric Utilities–2.48% | ||||||||
American Electric Power Co., Inc. | 4,312,110 | 154,287,296 | ||||||
Edison International | 1,225,797 | 45,501,585 | ||||||
Entergy Corp. | 631,578 | 44,968,354 | ||||||
FirstEnergy Corp. | 1,390,065 | 53,239,489 | ||||||
297,996,724 | ||||||||
Food Distributors–0.67% | ||||||||
Sysco Corp. | 2,905,219 | 80,736,036 | ||||||
Health Care Distributors–0.47% | ||||||||
Cardinal Health, Inc. | 1,348,587 | 56,155,163 | ||||||
Health Care Equipment–0.62% | ||||||||
Covidien PLC (Ireland) | 558,653 | 28,742,697 | ||||||
Medtronic, Inc. | 1,149,412 | 45,884,527 | ||||||
74,627,224 | ||||||||
Home Improvement Retail–0.95% | ||||||||
Home Depot, Inc. (The) | 3,055,243 | 114,479,955 | ||||||
Household Products–1.43% | ||||||||
Energizer Holdings, Inc.(b) | 220,485 | 14,735,013 | ||||||
Procter & Gamble Co. (The) | 2,486,167 | 156,752,829 | ||||||
171,487,842 | ||||||||
Human Resource & Employment Services–0.78% | ||||||||
Manpower, Inc. | 833,385 | 52,919,947 | ||||||
Robert Half International, Inc. | 1,290,453 | 41,165,451 | ||||||
94,085,398 | ||||||||
Industrial Conglomerates–4.04% | ||||||||
General Electric Co. | 15,544,206 | 325,184,789 | ||||||
Tyco International Ltd. | 3,539,587 | 160,484,875 | ||||||
485,669,664 | ||||||||
Industrial Machinery–0.98% | ||||||||
Dover Corp. | 556,023 | 35,724,478 | ||||||
Ingersoll-Rand PLC (Ireland) | 1,810,478 | �� | 82,014,653 | |||||
117,739,131 | ||||||||
Insurance Brokers–1.89% | ||||||||
Marsh & McLennan Cos., Inc. | 7,459,323 | 227,061,792 | ||||||
Integrated Oil & Gas–5.61% | ||||||||
ConocoPhillips | 777,803 | 60,567,520 | ||||||
Exxon Mobil Corp. | 1,114,197 | 95,297,269 | ||||||
Hess Corp. | 1,670,222 | 145,359,421 | ||||||
Occidental Petroleum Corp. | 2,019,951 | 205,974,403 | ||||||
Royal Dutch Shell PLC–ADR (United Kingdom) | 2,311,176 | 166,982,466 | ||||||
674,181,079 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen Equity and Income Fund
Shares | Value | |||||||
Integrated Telecommunication Services–0.72% | ||||||||
Verizon Communications, Inc. | 2,341,413 | $ | 86,444,968 | |||||
Internet Software & Services–2.21% | ||||||||
eBay, Inc.(b) | 5,397,443 | 180,841,328 | ||||||
Yahoo!, Inc.(b) | 5,169,091 | 84,773,092 | ||||||
265,614,420 | ||||||||
Investment Banking & Brokerage–2.03% | ||||||||
Charles Schwab Corp. (The) | 6,434,529 | 122,063,015 | ||||||
Morgan Stanley | 4,094,475 | 121,524,018 | ||||||
243,587,033 | ||||||||
IT Consulting & Other Services–0.61% | ||||||||
Amdocs Ltd.(b) | 2,462,248 | 73,473,480 | ||||||
Life & Health Insurance–0.57% | ||||||||
Principal Financial Group, Inc. | 2,005,053 | 68,693,116 | ||||||
Managed Health Care–1.31% | ||||||||
UnitedHealth Group, Inc. | 3,709,173 | 157,936,586 | ||||||
Movies & Entertainment–2.74% | ||||||||
Time Warner, Inc. | 3,575,832 | 136,596,782 | ||||||
Viacom, Inc., Class B | 4,330,897 | 193,417,860 | ||||||
330,014,642 | ||||||||
Office Services & Supplies–0.56% | ||||||||
Avery Dennison Corp. | 1,680,616 | 67,090,191 | ||||||
Oil & Gas Equipment & Services–1.59% | ||||||||
Baker Hughes, Inc. | 250,877 | 17,824,811 | ||||||
Cameron International Corp.(b) | 597,182 | 35,311,372 | ||||||
Schlumberger Ltd. | 1,473,505 | 137,654,837 | ||||||
190,791,020 | ||||||||
Oil & Gas Exploration & Production–2.71% | ||||||||
Anadarko Petroleum Corp. | 2,301,913 | 188,365,541 | ||||||
Devon Energy Corp. | 1,042,203 | 95,299,042 | ||||||
Noble Energy, Inc. | 461,747 | 42,785,477 | ||||||
326,450,060 | ||||||||
Oil & Gas Storage & Transportation–0.34% | ||||||||
Williams Cos., Inc. (The) | 1,349,852 | 40,981,507 | ||||||
Other Diversified Financial Services–5.36% | ||||||||
Bank of America Corp. | 10,990,027 | 157,047,486 | ||||||
Citigroup, Inc. | 21,660,313 | 101,370,265 | ||||||
JPMorgan Chase & Co. | 8,268,858 | 386,072,980 | ||||||
644,490,731 | ||||||||
Packaged Foods & Meats–1.61% | ||||||||
Kraft Foods, Inc., Class A | 3,269,746 | 104,108,713 | ||||||
Unilever N.V.–New York Shares (Netherlands) | 2,954,445 | 89,342,417 | ||||||
193,451,130 | ||||||||
Personal Products–1.02% | ||||||||
Avon Products, Inc. | 4,425,094 | 123,061,864 | ||||||
Pharmaceuticals–3.70% | ||||||||
Abbott Laboratories | 1,060,995 | 51,033,859 | ||||||
Bristol-Myers Squibb Co. | 4,324,965 | 111,627,347 | ||||||
Merck & Co., Inc. | 1,844,441 | 60,073,443 | ||||||
Pfizer, Inc. | 9,031,782 | 173,771,486 | ||||||
Roche Holding AG–ADR (Switzerland) | 1,293,632 | 48,748,711 | ||||||
445,254,846 | ||||||||
Property & Casualty Insurance–0.45% | ||||||||
Chubb Corp. (The) | 897,399 | 54,454,171 | ||||||
Regional Banks–2.19% | ||||||||
BB&T Corp. | 1,680,024 | 46,368,662 | ||||||
Fifth Third Bancorp | 2,968,128 | 43,334,669 | ||||||
PNC Financial Services Group, Inc. | 2,263,612 | 139,664,860 | ||||||
Regions Financial Corp. | 4,446,029 | 33,967,662 | ||||||
263,335,853 | ||||||||
Semiconductors–0.61% | ||||||||
Intel Corp. | 3,393,920 | 72,867,462 | ||||||
Soft Drinks–0.76% | ||||||||
Coca-Cola Co. (The) | 845,824 | 54,065,070 | ||||||
Coca-Cola Enterprises, Inc. | 1,428,223 | 37,562,265 | ||||||
91,627,335 | ||||||||
Specialty Chemicals–0.34% | ||||||||
LyondellBasell Industries N.V., Class A (Netherlands)(b) | 1,075,311 | 40,947,843 | ||||||
Systems Software–0.86% | ||||||||
Microsoft Corp. | 3,898,541 | 103,623,220 | ||||||
Wireless Telecommunication Services–1.13% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 4,734,146 | 135,491,259 | ||||||
Total Common Stocks & Other Equity Interests (Cost $6,685,060,971) | 7,810,166,440 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen Equity and Income Fund
Principal | ||||||||
Amount | Value | |||||||
Bonds & Notes–22.11% | ||||||||
Advertising–0.59% | ||||||||
Interpublic Group of Cos., Inc. (The), Sr. Unsec. Conv. Global Putable Notes, 4.25%, 03/15/12 | $ | 37,739,000 | $ | 45,098,105 | ||||
4.75%, 03/15/13 | 17,229,000 | 22,354,628 | ||||||
WPP Finance (United Kingdom), Sr. Unsec. Gtd. Global Notes, 8.00%, 09/15/14 | 3,125,000 | 3,636,797 | ||||||
71,089,530 | ||||||||
Aerospace & Defense–0.02% | ||||||||
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15 | 2,610,000 | 2,499,324 | ||||||
Agricultural Products–0.05% | ||||||||
Corn Products International, Inc., Sr. Unsec. Notes, | ||||||||
4.63%, 11/01/20 | 1,875,000 | 1,854,675 | ||||||
6.63%, 04/15/37 | 3,530,000 | 3,691,177 | ||||||
5,545,852 | ||||||||
Airlines–0.06% | ||||||||
Continental Airlines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 4.75%, 01/12/21 | 4,355,000 | 4,341,391 | ||||||
Delta Air Lines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 6.20%, 07/02/18 | 3,162,535 | 3,370,076 | ||||||
7,711,467 | ||||||||
Application Software–0.18% | ||||||||
Cadence Design Systems, Inc.–Series B, Sr. Unsec. Conv. Global Notes, 1.50%, 12/15/13 | 22,000,000 | 21,285,000 | ||||||
Asset Management & Custody Banks–0.43% | ||||||||
Affiliated Managers Group, Inc., Sr. Unsec. Conv. Putable Notes, 3.95%, 08/15/13 | 39,246,000 | 45,721,590 | ||||||
Janus Capital Group, Inc., Sr. Unsec. Conv. Notes, 3.25%, 07/15/14 | 5,368,000 | 6,582,510 | ||||||
52,304,100 | ||||||||
Auto Parts & Equipment–0.63% | ||||||||
Borg Warner Automotive, Inc., Sr. Unsec. Conv. Notes, 3.50%, 04/15/12 | 31,810,000 | 76,105,425 | ||||||
Automotive Retail–0.15% | ||||||||
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20 | 8,520,000 | 8,956,650 | ||||||
AutoZone, Inc., Sr. Unsec. Global Notes, 6.50%, 01/15/14 | 5,245,000 | 5,872,117 | ||||||
O’Reilly Automotive, Inc., Sr. Unsec. Gtd. Notes, 4.88%, 01/14/21 | 3,460,000 | 3,429,554 | ||||||
18,258,321 | ||||||||
Biotechnology–1.44% | ||||||||
Cephalon, Inc., Sr. Unsec. Conv. Sub. Notes, 2.50%, 05/01/14 | 44,388,000 | 49,048,740 | ||||||
Dendreon Corp., Sr. Unsec. Conv. Notes, 2.63%, 01/15/16 | 42,972,000 | 42,864,570 | ||||||
Gilead Sciences, Inc., Sr. Conv. Notes, 1.63%, 05/01/16(c) | 75,120,000 | 81,505,200 | ||||||
173,418,510 | ||||||||
Brewers–0.15% | ||||||||
Anheuser-Busch InBev Worldwide, Inc., Sr. Unsec. Gtd. Global Notes, 3.63%, 04/15/15 | 5,510,000 | 5,745,898 | ||||||
Sr. Unsec. Gtd. Notes, 7.20%, 01/15/14(c) | 4,705,000 | 5,380,021 | ||||||
FBG Financial Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(c) | 6,815,000 | 7,249,329 | ||||||
18,375,248 | ||||||||
Broadcasting–0.05% | ||||||||
Cox Communications, Inc., Deb., 7.25%, 11/15/15 | 5,000,000 | 5,845,750 | ||||||
Cable & Satellite–0.21% | ||||||||
Comcast Corp., Sr. Unsec. Gtd. Global Notes, 5.70%, 05/15/18 | 4,535,000 | 4,974,580 | ||||||
Sr. Unsec. Gtd. Notes, 6.45%, 03/15/37 | 2,000,000 | 2,072,876 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16 | 6,540,000 | 7,226,700 | ||||||
Time Warner Cable, Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 02/14/19 | 3,855,000 | 4,858,645 | ||||||
Sr. Unsec. Gtd. Notes, 5.88%, 11/15/40 | 6,500,000 | 6,158,822 | ||||||
25,291,623 | ||||||||
Casinos & Gaming–0.84% | ||||||||
International Game Technology, Sr. Unsec. Conv. Notes, 3.25%, 05/01/14 | 46,844,000 | 53,636,380 | ||||||
MGM Resorts International, Sr. Unsec. Gtd. Conv. Pfd. Notes, 4.25%, 04/15/15(c) | 43,077,000 | 47,277,008 | ||||||
100,913,388 | ||||||||
Communications Equipment–1.17% | ||||||||
Alcatel-Lucent USA, Inc.–Series B, Sr. Unsec. Gtd. Conv. Putable Notes, 2.88%, 06/15/13 | 76,524,000 | 74,802,210 | ||||||
Ciena Corp., Sr. Unsec. Conv. Notes, 0.25%, 05/01/13 | 25,049,000 | 25,362,112 | ||||||
JDS Uniphase Corp., Sr. Unsec. Conv. Putable Notes, 1.00%, 05/15/13(c) | 34,000,000 | 38,420,000 | ||||||
Juniper Networks, Inc., Sr. Unsec. Notes, 4.60%, 03/15/2021 | 1,545,000 | 1,543,007 | ||||||
140,127,329 | ||||||||
Computer Storage & Peripherals–0.78% | ||||||||
SanDisk Corp., Sr. Unsec. Conv. Notes, 1.00%, 05/15/13 | 94,995,000 | 93,451,331 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen Equity and Income Fund
Principal | ||||||||
Amount | Value | |||||||
Construction & Farm Machinery & Heavy Trucks–0.12% | ||||||||
Navistar International Corp., Sr. Unsec. Sub. Conv. Notes, 3.00%, 10/15/14 | $ | 10,546,000 | $ | 14,790,765 | ||||
Construction Materials–0.53% | ||||||||
Cemex S.A.B. de C.V. (Mexico), Unsec. Sub. Conv. Pfd. Notes, 4.88%, 03/15/15(c) | 60,100,000 | 61,527,375 | ||||||
Holcim U.S. Finance Sarl & Cie SCS (Luxembourg), Unsec. Gtd. Notes, 6.00%, 12/30/19(c) | 1,885,000 | 1,978,719 | ||||||
63,506,094 | ||||||||
Consumer Finance–0.19% | ||||||||
American Express Co., Sr. Unsec. Notes, 8.13%, 05/20/19 | 3,380,000 | 4,220,059 | ||||||
American Express Credit Corp.–Series C, Sr. Unsec. Medium-Term Global Notes, 7.30%, 08/20/13 | 7,075,000 | 7,978,370 | ||||||
Capital One Bank USA N.A., Sub. Notes, 8.80%, 07/15/19 | 8,625,000 | 10,932,404 | ||||||
23,130,833 | ||||||||
Department Stores–0.03% | ||||||||
Macy’s Retail Holdings, Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12 | 3,775,000 | 3,907,125 | ||||||
Diversified Banks–1.43% | ||||||||
Abbey National Treasury Services PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 3.88%, 11/10/14(c) | 4,645,000 | 4,637,740 | ||||||
Ally Financial, Inc., Gtd. Notes, 2.20%, 12/19/12 | 11,500,000 | 11,812,586 | ||||||
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13 | 5,955,000 | 6,088,778 | ||||||
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 6.75%, 05/22/19 | 8,290,000 | 9,351,906 | ||||||
Unsec. Sub. Global Notes, 5.14%, 10/14/20 | 4,500,000 | 4,375,912 | ||||||
Commonwealth Bank of Australia (Australia), Sr. Unsec. Notes, 5.00%, 10/15/19(c) | 6,095,000 | 6,296,816 | ||||||
Credit Suisse AG (Switzerland), Sub. Global Notes, 5.40%, 01/14/20 | 1,775,000 | 1,798,197 | ||||||
Unsec. Sub. Global Notes, 6.00%, 02/15/18 | 1,647,000 | 1,761,451 | ||||||
Groupe BPCE S.A. (France), Sr. Unsec. Notes, 2.38%, 10/04/13(c) | 6,290,000 | 6,263,582 | ||||||
HBOS PLC (United Kingdom)–Series G, Unsec. Sub. Medium-Term Notes, 6.75%, 05/21/18(c) | 8,310,000 | 7,852,925 | ||||||
HSBC Bank PLC (United Kingdom), Sr. Notes, 4.13%, 08/12/20(c) | 6,615,000 | 6,423,694 | ||||||
HSBC Finance Corp, Sr. Unsec. Sub. Notes, 6.68%, 01/15/21(c) | 828,000 | 871,217 | ||||||
HSBC Finance Corp., Sr. Unsec. Global Notes, | ||||||||
6.75%, 05/15/11 | 4,430,000 | 4,483,190 | ||||||
6.38%, 10/15/11 | 6,316,000 | 6,538,494 | ||||||
ING Bank N.V. (Netherlands), Sr. Notes, 2.00%, 10/18/13(c) | 4,500,000 | 4,433,242 | ||||||
Korea Development Bank (South Korea), Sr. Unsec. Gtd. Global Notes, 4.38%, 08/10/15 | 3,360,000 | 3,448,599 | ||||||
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/21/16 | 8,745,000 | 8,901,782 | ||||||
Sr. Unsec. Gtd. Medium-Term Notes, 5.80%, 01/13/20(c) | 1,360,000 | 1,355,383 | ||||||
National Australia Bank Ltd. (Australia), Sr. Unsec. Bonds, 3.75%, 03/02/15(c) | 3,250,000 | 3,372,133 | ||||||
Nordea Bank AB (Sweden), Sr. Notes, 4.88%, 01/27/20(c) | 4,395,000 | 4,481,774 | ||||||
Rabobank Nederland N.V. (Netherlands), Sr. Unsec. Notes, 4.75%, 01/15/20(c) | 8,895,000 | 9,132,944 | ||||||
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15 | 7,480,000 | 7,717,632 | ||||||
Santander US Debt SA Unipersonal (Spain), Sr. Unsec. Gtd. Notes, 3.72%, 01/20/15(c) | 3,200,000 | 3,089,120 | ||||||
Societe Generale (France), Sr. Unsec. Notes, 2.50%, 01/15/14(c) | 10,700,000 | 10,650,287 | ||||||
Standard Chartered Bank (United Kingdom), Unsec. Sub. Notes, 6.40%, 09/26/17(c) | 2,310,000 | 2,516,963 | ||||||
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 3.85%, 04/27/15(c) | 3,730,000 | 3,829,814 | ||||||
U.S. Bancorp., Sr. Unsec. Notes, 2.00%, 06/14/13 | 7,955,000 | 8,081,018 | ||||||
U.S. Bank N.A., Sub. Variable Rate Notes, 3.78%, 04/29/20 | 7,200,000 | 7,372,274 | ||||||
Wells Fargo & Co., Sr. Unsec. Notes, 5.63%, 12/11/17 | 7,880,000 | 8,729,393 | ||||||
Westpac Banking Corp. (Australia), Sr. Unsec. Global Notes, 2.10%, 08/02/13 | 6,465,000 | 6,545,627 | ||||||
172,214,473 | ||||||||
Diversified Capital Markets–0.09% | ||||||||
Credit Suisse New York (Switzerland), Sr. Unsec. Medium-Term Global Notes, 5.30%, 08/13/19 | 3,630,000 | 3,820,703 | ||||||
UBS AG (Switzerland), Sr. Unsec. Global Deposit Notes, 3.88%, 01/15/15 | 1,435,000 | 1,477,131 | ||||||
Sr. Unsec. Gtd. Medium-Term Notes, 5.88%, 12/20/17 | 5,100,000 | 5,635,208 | ||||||
10,933,042 | ||||||||
Diversified Metals & Mining–0.16% | ||||||||
Anglo American Capital PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.38%, 04/08/19(c) | 3,085,000 | 4,104,503 | ||||||
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17 | 5,365,000 | 5,946,767 | ||||||
Rio Tinto Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 9.00%, 05/01/19 | 5,115,000 | 6,764,549 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen Equity and Income Fund
Principal | ||||||||
Amount | Value | |||||||
Diversified Metals & Mining–(continued) | ||||||||
Southern Copper Corp., Sr. Unsec. Global Notes, | ||||||||
5.38%, 04/16/20 | $ | 1,145,000 | $ | 1,201,859 | ||||
6.75%, 04/16/40 | 1,655,000 | 1,721,611 | ||||||
19,739,289 | ||||||||
Drug Retail–0.07% | ||||||||
CVS Caremark Corp., Sec. Global Pass-Through Ctfs., 6.04%, 12/10/28 | 7,487,329 | 7,847,409 | ||||||
Electric Utilities–0.09% | ||||||||
Electricite de France S.A. (France), Sr. Unsec. Notes, 4.60%, 01/27/20(c) | 2,100,000 | 2,159,807 | ||||||
Enel Finance International S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 5.13%, 10/07/19(c) | 6,605,000 | 6,643,756 | ||||||
Iberdola Finance Ireland Ltd. (Ireland), Unsec. Gtd. Notes, 3.80%, 09/11/14(c) | 2,100,000 | 2,109,058 | ||||||
10,912,621 | ||||||||
Electronic Components–0.02% | ||||||||
Corning, Inc., Sr. Unsec. Notes, | ||||||||
6.63%, 05/15/19 | 715,000 | 826,907 | ||||||
7.25%, 08/15/36 | 1,160,000 | 1,322,473 | ||||||
2,149,380 | ||||||||
Environmental & Facilities Services–0.05% | ||||||||
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14 | 5,555,000 | 6,009,836 | ||||||
Food Retail–0.20% | ||||||||
Delhaize Group S.A. (Belgium), Sr. Unsec. Gtd. Bonds, 5.88%, 02/01/14 | 3,780,000 | 4,135,794 | ||||||
Kroger Co., Sr. Unsec. Gtd. Global Notes, 6.90%, 04/15/38 | 1,000,000 | 1,138,670 | ||||||
Safeway, Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20 | 8,710,000 | 8,314,309 | ||||||
Wrigley (Wm.) Jr. Co., Sr. Sec. Gtd. Floating Rate Notes, 1.68%, 06/28/11(c) | 10,705,000 | 10,715,915 | ||||||
24,304,688 | ||||||||
General Merchandise Stores–0.05% | ||||||||
Family Dollar Stores Inc., Sr. Unsec. Notes, 5.00%, 02/01/21 | 5,630,000 | 5,561,360 | ||||||
Gold–0.09% | ||||||||
Gold Fields Orogen Holding BVI Ltd. (British Virgin Islands), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20(c) | 10,890,000 | 10,426,627 | ||||||
Health Care Equipment–0.30% | ||||||||
Boston Scientific Corp., Sr. Unsec. Notes, 5.45%, 06/15/14 | 5,896,000 | 6,312,265 | ||||||
CareFusion Corp., Sr. Unsec. Global Notes, 4.13%, 08/01/12 | 4,650,000 | 4,828,781 | ||||||
Teleflex Inc., Sr. Unsec. Sub. Conv. Notes, 3.88%, 08/01/17 | 22,076,000 | 24,863,095 | ||||||
36,004,141 | ||||||||
Health Care Facilities–0.40% | ||||||||
Lifepoint Hospitals Inc., Sr. Unsec. Sub. Conv. Notes, 3.50%, 05/15/14 | 46,059,000 | 48,649,819 | ||||||
Health Care Services–0.42% | ||||||||
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 5.25%, 06/15/12 | 13,930,000 | 14,644,180 | ||||||
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15 | 3,175,000 | 3,158,152 | ||||||
Omnicare Inc., Sr. Conv. Sub. Notes, 3.75%, 12/15/25 | 14,335,000 | 17,918,750 | ||||||
Series OCR, Sr. Unsec. Gtd. Conv. Putable Deb., 3.25%, 12/15/15 | 16,126,000 | 14,956,865 | ||||||
50,677,947 | ||||||||
Home Improvement Retail–0.04% | ||||||||
Home Depot, Inc., Sr. Unsec. Global Notes, 5.88%, 12/16/36 | 4,560,000 | 4,612,704 | ||||||
Hotels, Resorts & Cruise Lines–0.45% | ||||||||
Gaylord Entertainment Co., Sr. Gtd. Conv. Notes, 3.75%, 10/01/14(c) | 31,562,000 | 46,632,855 | ||||||
Wyndham Worldwide Corp., Sr. Unsec. Notes, 5.63%, 03/01/21 | 7,620,000 | 7,629,525 | ||||||
54,262,380 | ||||||||
Hypermarkets & Super Centers–0.01% | ||||||||
Wal-Mart Stores, Inc., Sr. Unsec. Global Notes, 6.50%, 08/15/37 | 710,000 | 816,799 | ||||||
Independent Power Producers & Energy Traders–0.01% | ||||||||
Indianapolis Power & Light Co., Sr. Sec. Notes, 6.30%, 07/01/13(c) | 1,330,000 | 1,450,691 | ||||||
Industrial Conglomerates–0.77% | ||||||||
General Electric Capital Corp., Sr. Unsec. Medium-Term Global Notes, 5.63%, 05/01/18 | 9,325,000 | 10,165,654 | ||||||
5.88%, 01/14/38 | 2,775,000 | 2,779,030 | ||||||
Series G, Sr. Gtd. Medium-Term Global Notes, 2.63%, 12/28/12 | 46,300,000 | 47,887,901 | ||||||
General Electric Co., Sr. Unsec. Global Notes, 5.25%, 12/06/17 | 4,265,000 | 4,687,529 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen Equity and Income Fund
Principal | ||||||||
Amount | Value | |||||||
Industrial Conglomerates–(continued) | ||||||||
NBC Universal Media LLC, Sr. Unsec. Notes, | ||||||||
2.10%, 04/01/14(c) | $ | 3,055,000 | $ | 3,040,050 | ||||
5.95%, 04/01/41(c) | 3,015,000 | 3,027,905 | ||||||
Textron Inc., Sr. Unsec. Conv. Notes, 4.50%, 05/01/13 | 9,876,000 | 21,146,985 | ||||||
92,735,054 | ||||||||
Integrated Oil & Gas–0.04% | ||||||||
Hess Corp., Sr. Unsec. Global Notes, 5.60%, 02/15/41 | 3,250,000 | 3,149,821 | ||||||
Shell International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15 | 1,920,000 | 1,977,279 | ||||||
5,127,100 | ||||||||
Integrated Telecommunication Services–0.26% | ||||||||
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31 | 61,000 | 77,568 | ||||||
AT&T, Inc., Sr. Unsec. Global Notes, 6.15%, 09/15/34 | 3,610,000 | 3,661,717 | ||||||
Sr. Unsec. Notes, 5.35%, 09/01/40(c) | 2,044,000 | 1,865,036 | ||||||
Deutsche Telekom International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Bonds, 8.75%, 06/15/30 | 2,485,000 | 3,261,173 | ||||||
NBC Universal Media LLC, Sr. Unsec. Notes, 5.15%, 04/30/20(c) | 3,280,000 | 3,399,132 | ||||||
Telecom Italia Capital S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, | ||||||||
7.00%, 06/04/18 | 6,160,000 | 6,658,145 | ||||||
7.18%, 06/18/19 | 3,260,000 | 3,547,210 | ||||||
Verizon Communications, Inc., Sr. Unsec. Global Notes, | ||||||||
6.35%, 04/01/19 | 3,930,000 | 4,513,781 | ||||||
8.95%, 03/01/39 | 3,435,000 | 4,785,426 | ||||||
31,769,188 | ||||||||
Internet Retail–0.06% | ||||||||
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20 | 6,935,000 | 7,053,585 | ||||||
Investment Banking & Brokerage–1.30% | ||||||||
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20 | 7,675,000 | 7,799,172 | ||||||
Goldman Sachs Group Inc. (The), Sr. Unsec. Conv. Medium-Term Notes, 1.00%, 03/15/17(c) | 61,461,000 | 61,501,564 | ||||||
Sr. Unsec. Global Notes, 6.15%, 04/01/18 | 15,465,000 | 16,920,343 | ||||||
Unsec. Sub. Global Notes, 6.75%, 10/01/37 | 4,475,000 | 4,580,165 | ||||||
Jefferies Group, Inc., Sr. Unsec. Conv. Putable Notes, 3.88%, 11/01/17 | 28,657,500 | 29,696,334 | ||||||
Sr. Unsec. Notes, 6.88%, 04/15/21 | 5,970,000 | 6,422,481 | ||||||
MF Global Holdings Ltd., Sr. Unsec. Conv. Notes, 1.88%, 02/01/16 | 5,950,000 | 6,284,688 | ||||||
Morgan Stanley, Sr. Unsec. Global Notes, 4.00%, 07/24/15 | 11,695,000 | 11,926,943 | ||||||
Sr. Unsec. Notes, | ||||||||
3.45%, 11/02/15 | 9,000,000 | 8,866,457 | ||||||
5.75%, 01/25/21 | 2,695,000 | 2,775,008 | ||||||
156,773,155 | ||||||||
Life & Health Insurance–0.22% | ||||||||
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15 | 3,000,000 | 3,116,740 | ||||||
MetLife, Inc., Sr. Unsec. Global Notes, 4.75%, 02/08/21 | 3,035,000 | 3,115,236 | ||||||
Series A, Sr. Unsec. Notes, 6.82%, 08/15/18 | 3,070,000 | 3,605,353 | ||||||
Nationwide Financial Services, Sr. Unsec. Notes, 6.25%, 11/15/11 | 3,155,000 | 3,271,208 | ||||||
Pacific LifeCorp., Sr. Notes, 6.00%, 02/10/20(c) | 3,350,000 | 3,558,716 | ||||||
Prudential Financial, Inc., Sr. Unsec. Medium-Term Notes, 4.75%, 09/17/15 | 4,910,000 | 5,269,597 | ||||||
6.63%, 12/01/37 | 3,395,000 | 3,789,397 | ||||||
Series D, Sr. Unsec. Medium-Term Notes, 7.38%, 06/15/19 | 365,000 | 434,823 | ||||||
26,161,070 | ||||||||
Life Sciences Tools & Services–0.44% | ||||||||
Life Technologies Corp., Sr. Unsec. Conv. Putable Notes, 1.50%, 02/15/12 | 45,000,000 | 52,537,500 | ||||||
Managed Health Care–0.12% | ||||||||
Aetna, Inc., Sr. Unsec. Notes, 3.95%, 09/01/20 | 8,940,000 | 8,654,405 | ||||||
WellPoint, Inc., Sr. Unsec. Notes, 4.35%, 08/15/20 | 5,460,000 | 5,474,375 | ||||||
14,128,780 | ||||||||
Movies & Entertainment–0.69% | ||||||||
Liberty Media LLC, Sr. Unsec. Conv. Putable Notes, 3.13%, 03/30/13 | 64,249,000 | 79,508,138 | ||||||
Time Warner, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16 | 2,595,000 | 2,912,826 | ||||||
82,420,964 | ||||||||
Multi-Line Insurance–0.06% | ||||||||
AIG SunAmerica Global Financing VI, Sr. Sec. Notes, 6.30%, 05/10/11(c) | 1,775,000 | 1,795,412 | ||||||
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20 | 4,785,000 | 5,000,094 | ||||||
6,795,506 | ||||||||
Multi-Utilities–0.02% | ||||||||
Nisource Finance Corp., Sr. Unsec. Gtd. Bonds, 6.80%, 01/15/19 | 2,040,000 | 2,350,407 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Van Kampen Equity and Income Fund
Principal | ||||||||
Amount | Value | |||||||
Office REIT’s–0.04% | ||||||||
Digital Realty Trust LP, Sr. Unsec. Gtd. Global Notes, 4.50%, 07/15/15 | $ | 5,075,000 | $ | 5,245,811 | ||||
Oil & Gas Equipment & Services–0.21% | ||||||||
Helix Energy Solutions Group, Inc., Sr. Unsec. Conv. Putable Notes, 3.25%, 12/15/12 | 25,155,000 | 25,123,556 | ||||||
Oil & Gas Exploration & Production–0.05% | ||||||||
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21 | 5,545,000 | 5,607,941 | ||||||
Oil & Gas Storage & Transportation–0.12% | ||||||||
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Global Notes, 5.25%, 01/31/20 | 2,325,000 | 2,414,252 | ||||||
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19 | 4,310,000 | 4,892,142 | ||||||
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 7.50%, 09/15/38 | 2,245,000 | 2,644,319 | ||||||
Texas Eastern Transmission LP, Sr. Unsec. Notes, 7.00%, 07/15/32 | 3,835,000 | 4,517,530 | ||||||
14,468,243 | ||||||||
Other Diversified Financial Services–1.37% | ||||||||
Bank of America Corp., Sr. Unsec. Global Notes, 5.75%, 12/01/17 | 2,575,000 | 2,746,291 | ||||||
Series L, Sr. Unsec. Medium-Term Global Notes, 5.65%, 05/01/18 | 15,855,000 | 16,763,742 | ||||||
Bear Stearns Cos. LLC (The), Sr. Unsec. Global Notes, 7.25%, 02/01/18 | 7,950,000 | 9,368,173 | ||||||
Citibank N.A., Sr. Unsec. Gtd. Notes, 1.75%, 12/28/12 | 18,400,000 | 18,740,706 | ||||||
Citigroup Funding Inc., Unsec. Gtd. Global Notes, 2.25%, 12/10/12 | 69,000,000 | 70,849,083 | ||||||
Citigroup Inc., Sr. Unsec. Global Notes, | ||||||||
6.13%, 11/21/17 | 11,285,000 | 12,404,622 | ||||||
8.50%, 05/22/19 | 4,075,000 | 5,067,761 | ||||||
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.75%, 07/01/13(c) | 4,455,000 | 4,560,896 | ||||||
Unsec. Gtd. Notes, 5.80%, 10/15/12(c) | 1,195,000 | 1,275,353 | ||||||
JPMorgan Chase & Co., Sr. Unsec. Global Notes, 4.40%, 07/22/20 | 5,520,000 | 5,412,974 | ||||||
Sr. Unsec. Notes, 6.00%, 01/15/18 | 7,335,000 | 8,160,117 | ||||||
Merrill Lynch & Co., Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18 | 8,375,000 | 9,410,487 | ||||||
164,760,205 | ||||||||
Packaged Foods & Meats–0.15% | ||||||||
Grupo Bimbo S.A.B. de C.V. (Mexico), Sr. Unsec. Gtd. Notes, 4.88%, 06/30/20(c) | 4,480,000 | 4,435,910 | ||||||
Kraft Foods Inc., Sr. Unsec. Global Notes, | ||||||||
5.38%, 02/10/20 | 2,150,000 | 2,291,495 | ||||||
7.00%, 08/11/37 | 7,025,000 | 7,980,421 | ||||||
6.88%, 02/01/38 | 842,000 | 948,217 | ||||||
Sr. Unsec. Notes, 6.88%, 01/26/39 | 2,030,000 | 2,286,656 | ||||||
17,942,699 | ||||||||
Pharmaceuticals–0.72% | ||||||||
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Sub. Conv. Notes, 1.75%, 04/15/15 | 28,137,000 | 37,422,210 | ||||||
Mylan Labs Inc., Sr. Unsec. Gtd. Conv. Notes, 1.25%, 03/15/12 | 43,618,000 | 49,288,340 | ||||||
86,710,550 | ||||||||
Property & Casualty Insurance–0.02% | ||||||||
Travelers Cos., Inc. (The), Sr. Unsec. Notes, 5.35%, 11/01/40 | 2,905,000 | 2,814,457 | ||||||
Railroads–0.07% | ||||||||
CSX Corp., Sr. Unsec. Global Notes, | ||||||||
6.75%, 03/15/11 | 5,000,000 | 5,011,439 | ||||||
6.15%, 05/01/37 | 1,710,000 | 1,838,207 | ||||||
Sr. Unsec. Notes, 5.50%, 04/15/41 | 1,000,000 | 982,671 | ||||||
7,832,317 | ||||||||
Real Estate Management & Development–0.01% | ||||||||
Brookfield Asset Management, Inc. (Canada), Sr. Unsec. Notes, 7.13%, 06/15/12 | 1,330,000 | 1,406,100 | ||||||
Regional Banks–0.22% | ||||||||
Key Bank NA, Sr. Unsec. Gtd. Global Notes, 3.20%, 06/15/12 | 7,500,000 | 7,770,468 | ||||||
Nationwide Building Society (United Kingdom), Sr. Unsec. Notes, 6.25%, 02/25/20(c) | 8,640,000 | 9,000,694 | ||||||
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 02/08/20 | 5,185,000 | 5,492,951 | ||||||
Sr. Unsec. Gtd. Notes, 6.70%, 06/10/19 | 3,555,000 | 4,155,035 | ||||||
26,419,148 | ||||||||
Restaurants–0.05% | ||||||||
Yum! Brands, Inc., Sr. Unsec. Global Bonds, 6.25%, 03/15/18 | 1,130,000 | 1,278,899 | ||||||
Sr. Unsec. Notes, 5.30%, 09/15/19 | 4,215,000 | 4,506,593 | ||||||
5,785,492 | ||||||||
Retail REIT’s–0.04% | ||||||||
WEA Finance LLC, Sr. Unsec. Gtd. Notes, 6.75%, 09/02/19(c) | 4,725,000 | 5,406,846 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Van Kampen Equity and Income Fund
Principal | ||||||||
Amount | Value | |||||||
Semiconductors–1.20% | ||||||||
Linear Technologies Corp., Sr. Unsec. Conv. Putable Notes, 3.00%, 05/01/14(c) | $ | 36,420,000 | $ | 39,834,375 | ||||
Micron Technology, Inc., Sr. Unsec. Conv. Notes, 1.88%, 06/01/14 | 51,757,000 | 55,638,775 | ||||||
Xilinx, Inc., Jr. Unsec. Conv. Sub. Notes, 3.13%, 03/15/37(c) | 40,978,000 | 48,405,262 | ||||||
143,878,412 | ||||||||
Sovereign Debt–0.22% | ||||||||
Brazilian Government (Brazil), Sr. Unsec. Global Bonds, 6.00%, 01/17/17 | 16,195,000 | 18,162,692 | ||||||
Republic of Italy (Italy), Sr. Unsec. Global Notes, 6.88%, 09/27/23 | 6,235,000 | 6,975,820 | ||||||
Republic of Peru (Peru), Sr. Unsec. Global Notes, 7.13%, 03/30/19 | 1,615,000 | 1,921,446 | ||||||
27,059,958 | ||||||||
Specialized Finance–0.32% | ||||||||
NASDAQ OMX Group Inc. (The), Sr. Unsec. Conv. Notes, 2.50%, 08/15/13 | 33,536,000 | 33,619,840 | ||||||
Sr. Unsec. Notes, 5.55%, 01/15/20 | 4,325,000 | 4,354,049 | ||||||
37,973,889 | ||||||||
Specialized REIT’s–0.05% | ||||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 5,885,000 | 5,793,047 | ||||||
Steel–0.72% | ||||||||
Allegheny Technologies Inc., Sr. Unsec. Conv. Notes, 4.25%, 06/01/14 | 33,735,000 | 59,162,756 | ||||||
ArcelorMittal (Luxembourg), Class A, Sr. Unsec. Medium-Term Global Notes, | ||||||||
5.50%, 03/01/21 | 1,190,000 | 1,182,348 | ||||||
6.75%, 03/01/41 | 1,190,000 | 1,180,194 | ||||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 9.85%, 06/01/19 | 6,840,000 | 8,803,841 | ||||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Notes, 3.75%, 08/05/15 | 8,330,000 | 8,421,908 | ||||||
Vale Overseas Ltd. (Brazil),Sr. Unsec. Gtd. Global Notes, | ||||||||
5.63%, 09/15/19 | 3,570,000 | 3,797,053 | ||||||
6.88%, 11/10/39 | 3,725,000 | 4,042,156 | ||||||
86,590,256 | ||||||||
Systems Software–0.55% | ||||||||
Symantec Corp.–Class B, Sr. Unsec. Conv. Global Notes, 1.00%, 06/15/13 | 54,340,000 | 65,683,475 | ||||||
Thrifts & Mortgage Finance–0.08% | ||||||||
MGIC Investment Corp., Sr. Unsec. Conv. Notes, 5.00%, 05/01/17 | 8,927,000 | 9,775,065 | ||||||
Trucking–0.03% | ||||||||
Ryder System, Inc., Sr. Unsec. Medium-Term Notes, 3.15%, 03/02/15 | 3,600,000 | 3,665,277 | ||||||
Wireless Telecommunication Services–0.39% | ||||||||
American Tower Corp., Sr. Unsec. Global Notes, 4.63%, 04/01/15 | 1,705,000 | 1,780,448 | ||||||
Sr. Unsec. Notes, 4.50%, 01/15/18 | 4,500,000 | 4,463,476 | ||||||
Clearwire Communications LLC/Clearwire Finance, Inc., Sr. Unsec. Gtd. Conv. Pfd. Putable Notes, 8.25%, 12/01/17(c) | 10,100,000 | 10,756,500 | ||||||
SBA Communications Corp., Sr. Unsec. Conv. Notes, 1.88%, 05/01/13 | 25,849,000 | 29,758,661 | ||||||
46,759,085 | ||||||||
Total Bonds & Notes (Cost $2,360,815,561) | 2,658,684,359 | |||||||
U.S. Treasury Securities–5.84% | ||||||||
U.S. Treasury Notes–5.02% | ||||||||
1.75%, 08/15/12 | 4,080,000 | 4,156,819 | ||||||
1.38%, 09/15/12 | 21,200,000 | 21,483,219 | ||||||
1.50%, 12/31/13 | 25,000,000 | 25,289,062 | ||||||
1.75%, 03/31/14 | 9,500,000 | 9,657,344 | ||||||
2.63%, 07/31/14 | 95,125,000 | 99,123,222 | ||||||
2.38%, 10/31/14 | 225,565,000 | 232,543,417 | ||||||
2.13%, 11/30/14 | 75,435,000 | 77,037,994 | ||||||
2.25%, 01/31/15 | 19,180,000 | 19,641,519 | ||||||
3.75%, 11/15/18 | 34,000,000 | 35,880,625 | ||||||
3.63%, 08/15/19 | 56,760,000 | 58,897,369 | ||||||
3.38%, 11/15/19 | 20,000,000 | 20,281,250 | ||||||
603,991,840 | ||||||||
U.S. Treasury Bonds–0.79% | ||||||||
8.00%, 11/15/21 | 3,557,000 | 4,993,694 | ||||||
6.13%, 11/15/27 | 19,000,000 | 23,619,375 | ||||||
3.50%, 02/15/39 | 30,000,000 | 25,228,125 | ||||||
4.25%, 05/15/39 | 9,700,000 | 9,334,734 | ||||||
4.38%, 11/15/39 | 13,000,000 | 12,762,344 | ||||||
4.63%, 02/15/40 | 17,900,000 | 18,308,344 | ||||||
94,246,616 | ||||||||
U.S. Treasury Bills–0.03% | ||||||||
0.17%, 04/28/11 | 3,500,000 | 3,499,060 | ||||||
Total U.S. Treasury Securities (Cost $692,677,766) | 701,737,516 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Van Kampen Equity and Income Fund
Shares | Value | |||||||
Preferred Stocks–2.21% | ||||||||
Agricultural Products–0.37% | ||||||||
Archer-Daniels-Midland Co., Unsec. Conv. Pfd. | 832,350 | $ | 38,363,012 | |||||
Nielsen Holdings N.V. (Netherlands), Sub. Conv. Pfd. | 106,910 | 5,926,823 | ||||||
44,289,835 | ||||||||
Health Care Facilities–0.24% | ||||||||
HealthSouth Corp.–Series A, Conv. Pfd. | 27,000 | 28,491,750 | ||||||
Health Care Services–0.13% | ||||||||
Omnicare Capital Trust II–Series B, Sub. Gtd. Conv. Pfd. | 356,855 | 15,719,463 | ||||||
Household Appliances–0.18% | ||||||||
Stanley Black & Decker, Conv. Pfd. | 180,400 | 21,213,236 | ||||||
Multi-Utilities–0.38% | ||||||||
CenterPoint Energy, Inc., Variable Conv. Pfd. | 1,300,669 | 46,342,836 | ||||||
Oil & Gas Storage & Transportation–0.32% | ||||||||
El Paso Energy Capital Trust I, Sub. Conv. Pfd | 875,900 | 38,416,974 | ||||||
Regional Banks–0.40% | ||||||||
KeyCorp–Series A, Conv. Pfd. | 427,098 | 47,890,499 | ||||||
Trucking–0.19% | ||||||||
2010 Swift Mandatory Common Exchange Security Trust, Conv. Pfd.(c) | 1,674,700 | 23,353,691 | ||||||
Total Preferred Stocks (Cost $232,972,470) | 265,718,284 | |||||||
Principal | ||||||||
Amount | Value | |||||||
U.S. Government Sponsored Agency Securities–1.00% | ||||||||
Federal Home Loan Mortgage Corp. (FHLMC)–0.59% | ||||||||
Federal Home Loan Mortgage Corp., Sr. Unsec. Global Bonds, 6.75%, 03/15/31 | 7,000,000 | 8,949,879 | ||||||
Sr. Unsec. Global Notes, 3.00%, 07/28/14 | 23,700,000 | 24,844,693 | ||||||
Unsec. Global Notes, 4.88%, 06/13/18 | 33,000,000 | 36,807,167 | ||||||
70,601,739 | ||||||||
Federal National Mortgage Association (FNMA)–0.41% | ||||||||
Federal National Mortgage Association, Sr. Unsec. Global Bonds, 6.63%, 11/15/30 | $ | 5,970,000 | $ | 7,505,255 | ||||
Sr. Unsec. Global Notes, 4.38%, 10/15/15 | 37,970,000 | 41,568,463 | ||||||
49,073,718 | ||||||||
Total U.S. Government Sponsored Agency Securities (Cost $119,025,799) | 119,675,457 | |||||||
Municipal Obligations–0.11% | ||||||||
California (State of); Series 2009, Unlimited Tax GO Bonds, 5.95%, 04/01/16 | 2,390,000 | 2,570,756 | ||||||
Georgia (State of) Municipal Electric Authority Series 2010, Build America RB, 6.66%, 04/01/57 | 4,980,000 | 4,958,337 | ||||||
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); Series 2010 A, Taxable Build America RB, 6.64%, 04/01/57 | 2,600,000 | 2,620,800 | ||||||
Texas (State of) Transportation Commission Series 2010 B, Taxable First Tier Build America RB, 5.03%, 04/01/26 | 3,360,000 | 3,324,149 | ||||||
Total Municipal Obligations (Cost $13,402,622) | 13,474,042 | |||||||
Asset-Backed Securities–0.06% | ||||||||
ARI Fleet Lease Trust–Series 2010 A, Floating Rate Pass Through Ctfs., 1.72%, 08/15/18(c) | 2,300,640 | 2,318,487 | ||||||
GE Dealer Floorplan Master Note Trust–Series 2009 2A, Floating Rate Pass Through Ctfs., 1.81%, 10/20/14(c) | 5,075,000 | 5,148,655 | ||||||
Total Asset-Backed Securities (Cost $7,375,640) | 7,467,142 | |||||||
Shares | Value | |||||||
Money Market Funds–3.48% | ||||||||
Liquid Assets Portfolio–Institutional Class(d) | 209,436,350 | $ | 209,436,350 | |||||
Premier Portfolio–Institutional Class(d) | 209,436,350 | 209,436,350 | ||||||
Total Money Market Funds (Cost $418,872,700) | 418,872,700 | |||||||
TOTAL INVESTMENTS–99.76% (Cost $10,530,203,529) | 11,995,795,940 | |||||||
OTHER ASSETS LESS LIABILITIES–0.24% | 28,715,091 | |||||||
NET ASSETS–100.00% | $ | 12,024,511,031 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Van Kampen Equity and Income Fund
Investment Abbreviations:
ADR | – American Depositary Receipt | |
Conv. | – Convertible | |
Ctfs. | – Certificates | |
Deb. | – Debentures | |
FHLMC | – Federal Home Loan Mortgage Corp. | |
FNMA | – Federal National Mortgage Association | |
GO | – General Obligation | |
Gtd. | – Guaranteed | |
Jr. | – Junior | |
Pfd. | – Preferred | |
RB | – Revenue Bonds | |
REIT | – Real Estate Investment Trust | |
Sec. | – Secured | |
Sr. | – Senior | |
Sub. | – Subordinated | |
Unsec. | – Unsecured |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2011 was $635,472,982, which represented 5.28% of the Fund’s net assets. | |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By security type, based on net assets
Common Stocks & Other Equity Interests | 65.0 | % | ||
U.S. Dollar Denominated Bonds & Notes | 22.1 | |||
U.S. Treasury Securities | 5.8 | |||
Preferred Stocks | 2.2 | |||
U.S. Government Sponsored Agency Securities | 1.0 | |||
Asset-Backed Securities | 0.1 | |||
Municipal Obligations | 0.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 3.7 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Van Kampen Equity and Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $10,111,330,829) | $ | 11,576,923,240 | ||
Investments in affiliated money market funds, at value and cost | 418,872,700 | |||
Total investments, at value (Cost $10,530,203,529) | 11,995,795,940 | |||
Receivable for: | ||||
Investments sold | 15,323,713 | |||
Fund shares sold | 18,817,236 | |||
Dividends and interest | 48,741,136 | |||
Fund expenses absorbed | 813,683 | |||
Investment for trustee deferred compensation and retirement plans | 15,845 | |||
Other assets | 281,927 | |||
Total assets | 12,079,789,480 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 15,561,561 | |||
Fund shares reacquired | 30,530,513 | |||
Dividends | 174,150 | |||
Variation margin on futures contracts | 159,303 | |||
Accrued fees to affiliates | 5,585,362 | |||
Accrued other operating expenses | 3,200,314 | |||
Trustee deferred compensation and retirement plans | 67,246 | |||
Total liabilities | 55,278,449 | |||
Net assets applicable to shares outstanding | $ | 12,024,511,031 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 10,902,694,141 | ||
Undistributed net investment income | 32,503,550 | |||
Undistributed net realized gain (loss) | (376,126,334 | ) | ||
Unrealized appreciation | 1,465,439,674 | |||
$ | 12,024,511,031 | |||
Net Assets: | ||||
Class A | $ | 8,537,281,291 | ||
Class B | $ | 1,324,645,021 | ||
Class C | $ | 1,341,079,250 | ||
Class R | $ | 202,009,434 | ||
Class Y | $ | 509,242,242 | ||
Institutional Class | $ | 110,253,793 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 943,593,999 | |||
Class B | 149,228,764 | |||
Class C | 150,494,799 | |||
Class R | 22,236,457 | |||
Class Y | 56,251,358 | |||
Institutional Class | 12,172,311 | |||
Class A: | ||||
Net asset value per share | $ | 9.05 | ||
Maximum offering price per share (Net asset value of $9.05 divided by 94.50%) | $ | 9.58 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 8.88 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 8.91 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 9.08 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 9.05 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 9.06 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Van Kampen Equity and Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $597,331) | $ | 83,467,561 | ||
Dividends from affiliated money market funds | 165,150 | |||
Interest | 62,027,888 | |||
Total investment income | 145,660,599 | |||
Expenses: | ||||
Advisory fees | 20,224,445 | |||
Administrative services fees | 419,704 | |||
Custodian fees | 72,727 | |||
Distribution fees: | ||||
Class A | 10,117,036 | |||
Class B | 2,110,139 | |||
Class C | 6,281,841 | |||
Class R | 470,490 | |||
Transfer agent fees — A, B, C, R and Y | 8,529,580 | |||
Transfer agent fees — Institutional | 4,261 | |||
Trustees’ and officers’ fees and benefits | 154,410 | |||
Other | 1,664,609 | |||
Total expenses | 50,049,242 | |||
Less: fees waived and expense offset arrangement(s) | (191,936 | ) | ||
Net expenses | 49,857,306 | |||
Net investment income | 95,803,293 | |||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 408,650,641 | |||
Futures contracts | 2,302,507 | |||
410,953,148 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 1,676,328,774 | |||
Futures contracts | 7,954,439 | |||
1,684,283,213 | ||||
Net realized and unrealized gain | 2,095,236,361 | |||
Net increase in net assets resulting from operations | $ | 2,191,039,654 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Van Kampen Equity and Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the period January 1, 2010 to August 31, 2010
and the year ended December 31, 2009
and the year ended December 31, 2009
(Unaudited)
Six months ended | Eight months ended | Year ended | ||||||||||
February 28, | August 31, | December 31, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 95,803,293 | $ | 140,787,760 | $ | 233,664,480 | ||||||
Net realized gain | 410,953,148 | 411,639,873 | 124,608,587 | |||||||||
Change in net unrealized appreciation (depreciation) | 1,684,283,213 | (804,353,206 | ) | 1,979,469,250 | ||||||||
Net increase (decrease) in net assets resulting from operations | 2,191,039,654 | (251,925,573 | ) | 2,337,742,317 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (75,598,622 | ) | (78,392,006 | ) | (169,870,784 | ) | ||||||
Class B | (11,592,838 | ) | (13,309,304 | ) | (34,279,040 | ) | ||||||
Class C | (7,380,798 | ) | (7,935,103 | ) | (18,888,668 | ) | ||||||
Class R | (1,526,490 | ) | (1,478,570 | ) | (2,837,918 | ) | ||||||
Class Y | (4,799,809 | ) | (5,662,982 | ) | (10,397,866 | ) | ||||||
Institutional Class | (788,933 | ) | (53 | ) | — | |||||||
Total distributions from net investment income | (101,687,490 | ) | (106,778,018 | ) | (236,274,276 | ) | ||||||
Share transactions–net: | ||||||||||||
Class A | (501,425,317 | ) | (579,858,731 | ) | (1,280,688,241 | ) | ||||||
Class B | (198,134,790 | ) | (274,161,326 | ) | (384,284,389 | ) | ||||||
Class C | (104,854,347 | ) | (122,001,532 | ) | (204,593,156 | ) | ||||||
Class R | (4,315,224 | ) | 8,276,003 | (7,250,141 | ) | |||||||
Class Y | 11,523,536 | (100,424,326 | ) | 85,666,136 | ||||||||
Institutional Class | 32,136,063 | 62,012,587 | — | |||||||||
Net increase (decrease) in net assets resulting from share transactions | (765,070,079 | ) | (1,006,157,325 | ) | (1,791,149,791 | ) | ||||||
Net increase (decrease) in net assets | 1,324,282,085 | (1,364,860,916 | ) | 310,318,250 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 10,700,228,946 | 12,065,089,862 | 11,754,771,612 | |||||||||
End of period (includes undistributed net investment income of $32,503,550, $38,387,747 and $(347,446), respectively) | $ | 12,024,511,031 | $ | 10,700,228,946 | $ | 12,065,089,862 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen Equity and Income Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust) (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 twenty 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.
On August 31, 2010, the Fund’s fiscal year-end changed form December 31 to August 31.
Prior to June 1, 2010, the Fund operated as Van Kampen Equity and Income Fund (the “Acquired Fund”). The Acquired Fund was reorganized on June 1, 2010 (The “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C, Class R and Class I shares received Class A, Class B, Class C, Class R and Class Y shares, respectively, of the Fund.
Information for the Acquired Fund’s Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
17 Invesco Van Kampen Equity and Income Fund
The Fund’s investment objective is to seek the highest possible income consistent with safety of principal. Long-term growth of capital is an important secondary investment objective.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Institutional 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. 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. 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 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. | |
Debt obligations (including convertible bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
A security listed or traded on an exchange (except convertible bonds) 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. | ||
Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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. |
18 Invesco Van Kampen Equity and Income Fund
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 the Institutional Class 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 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 Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in Corporate Loans and Corporate Debt Securities and other portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date. | |
J. | Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date. | |
In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act. |
19 Invesco Van Kampen Equity and Income Fund
Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the Statement of Operations. | ||
At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated. | ||
Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold. | ||
Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure. | ||
K. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. | |
L. | Call Options Written — The Fund may write call options. A call option gives the purchaser of such option the right to buy, and the writer (the Fund) the obligation to sell, the underlying security at the stated exercise price during the option period. Written call options are recorded as a liability in the Statement of Assets and Liabilities. The amount of the liability is subsequently valued to reflect the current market value of the option written. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized gains and losses on these contracts are included in the Statement of Operations. A risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. | |
M. | 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. | ||
N. | 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. |
20 Invesco Van Kampen Equity and Income 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 Net Assets | Rate | |||
First $150 million | 0 | .50% | ||
Next $100 million | 0 | .45% | ||
Next $100 million | 0 | .40% | ||
Over $350 million | 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 Trimark 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares to 0.82%, 1.57%, 1.57%, 1.07%, 0.57% and 0.57% 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 operating expenses after fee waiver 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $183,028.
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 February 28, 2011, 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 February 28, 2011, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares, Class C shares and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will reimburse IDI for any such expenses.
For the six months ended February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $630,541 in front-end sales commissions from the sale of Class A shares and $11,200, $713,628 and $22,330 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 Invesco, 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
21 Invesco Van Kampen Equity and Income Fund
(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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 8,341,893,612 | $ | 152,863,812 | $ | — | $ | 8,494,757,424 | ||||||||
U.S. Treasury Securities | — | 701,737,516 | — | 701,737,516 | ||||||||||||
U.S. Government Sponsored Securities | — | 119,675,457 | — | 119,675,457 | ||||||||||||
Corporate Debt Securities | — | 2,631,624,401 | — | 2,631,624,401 | ||||||||||||
Asset Backed Securities | — | 7,467,142 | — | 7,467,142 | ||||||||||||
Municipal Obligations | — | 13,474,042 | — | 13,474,042 | ||||||||||||
Foreign Government Debt Securities | — | 27,059,958 | — | 27,059,958 | ||||||||||||
$ | 8,341,893,612 | $ | 3,653,902,328 | $ | — | $ | 11,995,795,940 | |||||||||
Futures Contracts* | (152,737 | ) | — | — | (152,737 | ) | ||||||||||
Total Investments | $ | 8,341,740,875 | $ | 3,653,902,328 | $ | — | $ | 11,995,643,203 | ||||||||
* | Unrealized appreciation (depreciation). |
NOTE 4—Derivative Investments
Open Futures Contracts | ||||||||||||||||
Unrealized | ||||||||||||||||
Number of | Month/ | Appreciation | ||||||||||||||
Contract | Contracts | Commitment | Value | (Depreciation) | ||||||||||||
U.S. Treasury 2 Year Notes | 1,338 | June 2011/Long | $ | 292,081,219 | $ | 331,690 | ||||||||||
U.S. Treasury 5 Year Notes | 1,463 | June 2011/Short | 171,079,563 | (357,393 | ) | |||||||||||
U.S. Treasury 10 Year Notes | 956 | June 2011/Short | 113,808,813 | (76,970 | ) | |||||||||||
U.S. Long Bonds | 235 | June 2011/Short | 28,280,781 | (50,064 | ) | |||||||||||
Total | $ | 605,250,376 | $ | (152,737 | ) | |||||||||||
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Interest rate risk | ||||||||
Futures contracts(a) | $ | 331,690 | $ | (484,427 | ) | |||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
22 Invesco Van Kampen Equity and Income Fund
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain (Loss) on | ||||
Statement of Operations | ||||
Futures Contracts* | ||||
Realized Gain | ||||
Interest rate risk | $ | 2,302,507 | ||
Change in Unrealized Appreciation (Depreciation) | ||||
Interest rate risk | 7,954,439 | |||
Total | $ | 10,256,946 | ||
* | The average value of futures contracts outstanding during the period was $693,761,828. |
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $8,908.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $10,921 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2016 | $ | 352,132,679 | ||
August 31, 2017 | 438,538,789 | |||
Total capital loss carryforward | $ | 790,671,468 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
NOTE 9—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 February 28, 2011 was $1,256,112,004 and $2,188,635,942, respectively. During the same period, purchases and sales
23 Invesco Van Kampen Equity and Income Fund
of U.S. Treasury obligations were $0 and $10,000,000. 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 | $ | 1,596,269,998 | ||
Aggregate unrealized (depreciation) of investment securities | (145,743,685 | ) | ||
Net unrealized appreciation of investment securities | $ | 1,450,526,313 | ||
Cost of investments for tax purposes is $10,545,269,627. |
NOTE 10—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Balanced Fund and Invesco Basic Balanced Fund (the “Target Funds”) in exchange for shares of the Fund.
The Target Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated shortly thereafter. Upon closing of the reorganization, shareholders of the Target Fund will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Fund and the Target Fund will liquidate and cease operations.
NOTE 11—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Eight months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | December 31, 2009 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 60,661,336 | (b) | $ | 513,771,095 | (b) | 98,417,827 | (b) | $ | 775,393,804 | (b) | 152,455,661 | $ | 1,019,540,444 | |||||||||||
Class B | 3,417,605 | 27,665,528 | 9,862,974 | 76,560,048 | 17,040,669 | 112,317,617 | ||||||||||||||||||
Class C | 4,308,375 | 35,919,506 | 8,006,841 | 62,607,051 | 14,723,990 | 97,030,036 | ||||||||||||||||||
Class R | 3,249,460 | 27,373,460 | 5,995,073 | 47,243,796 | 7,528,313 | 50,828,631 | ||||||||||||||||||
Class Y | 10,595,777 | 89,259,470 | 13,491,946 | 104,059,515 | 27,440,102 | 185,400,799 | ||||||||||||||||||
Institutional Class | 4,598,825 | 39,477,304 | 8,655,060 | 63,701,549 | — | — | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 8,481,676 | 68,960,819 | 9,608,352 | 74,626,926 | 24,446,316 | 161,015,444 | ||||||||||||||||||
Class B | 1,350,540 | 10,767,300 | 1,636,496 | 12,524,790 | 4,987,667 | 32,122,352 | ||||||||||||||||||
Class C | 810,327 | 6,501,911 | 870,817 | 6,684,401 | 2,469,812 | 15,782,993 | ||||||||||||||||||
Class R | 186,812 | 1,525,365 | 160,236 | 1,249,945 | 346,588 | 2,295,727 | ||||||||||||||||||
Class Y | 569,853 | 4,633,854 | 459,192 | 3,551,289 | 864,221 | 5,807,903 | ||||||||||||||||||
Institutional Class | 96,777 | 788,871 | 7 | 53 | — | — | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (128,979,677 | ) | (1,084,157,231 | ) | (182,005,149 | ) | (1,429,879,461 | ) | (373,158,614 | ) | (2,461,244,129 | ) | ||||||||||||
Class B | (28,601,139 | )(b) | (236,567,618 | )(b) | (46,975,980 | )(b) | (363,246,164 | )(b) | (81,100,246 | ) | (528,724,358 | ) | ||||||||||||
Class C | (17,831,808 | ) | (147,275,764 | ) | (24,667,895 | ) | (191,292,984 | ) | (48,861,338 | ) | (317,406,185 | ) | ||||||||||||
Class R | (3,953,402 | ) | (33,214,049 | ) | (5,083,175 | ) | (40,217,738 | ) | (9,103,508 | ) | (60,374,499 | ) | ||||||||||||
Class Y | (9,857,078 | ) | (82,369,788 | ) | (27,008,434 | ) | (208,035,130 | ) | (15,826,484 | ) | (105,542,566 | ) | ||||||||||||
Institutional Class | (959,829 | ) | (8,130,112 | ) | (218,529 | ) | (1,689,015 | ) | — | — | ||||||||||||||
Net increase (decrease) in share activity | (91,855,570 | ) | $ | (765,070,079 | ) | (128,794,341 | ) | $ | (1,006,157,325 | ) | (275,746,851 | ) | $ | (1,791,149,791 | ) | |||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 35% 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, less than 1% of the shares outstanding of the Fund are owned by Invesco or an investment adviser under common control. | |
(b) | Includes automatic conversion of 12,871,189 Class B shares into 12,627,681 Class A shares at a value of $106,986,936 and 13,997,523 Class B shares into 13,730,129 Class A shares at a value of $107,228,226 for the six months ended February 28, 2011 and the eight months ended August 31, 2010, respectively. |
24 Invesco Van Kampen Equity and Income Fund
NOTE 12—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income | unrealized) | operations | income | gains | Distributions | of period | return | (000s omitted) | absorbed | absorbed | net assets | turnover(a) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 7.53 | $ | 0.07 | (b) | $ | 1.53 | $ | 1.60 | $ | (0.08 | ) | $ | — | $ | (0.08 | ) | $ | 9.05 | 21.33 | %(c) | $ | 8,537,281 | 0.79 | %(d) | 0.79 | %(d) | 1.76 | %(d) | 11 | % | |||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.79 | 0.10 | (b) | (0.28 | ) | (0.18 | ) | (0.08 | ) | — | (0.08 | ) | 7.53 | (2.40 | )(c) | 7,560,462 | 0.78 | 0.78 | 1.89 | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.45 | 0.15 | (b) | 1.34 | 1.49 | (0.15 | ) | — | (0.15 | ) | 7.79 | 23.51 | (e) | 8,395,716 | 0.82 | 0.82 | 2.15 | 78 | ||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.84 | 0.20 | (b) | (2.36 | ) | (2.16 | ) | (0.22 | ) | (0.01 | ) | (0.23 | ) | 6.45 | (24.78 | )(e) | 8,214,093 | 0.79 | 0.79 | 2.59 | 56 | |||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 9.12 | 0.22 | (b) | 0.08 | 0.30 | (0.22 | ) | (0.36 | ) | (0.58 | ) | 8.84 | 3.26 | (e) | 13,332,525 | 0.76 | 0.76 | 2.32 | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 8.68 | 0.20 | (b) | 0.86 | 1.06 | (0.20 | ) | (0.42 | ) | (0.62 | ) | 9.12 | 12.53 | (e) | 12,604,874 | 0.78 | 0.78 | 2.29 | 39 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 8.62 | 0.17 | 0.49 | 0.66 | (0.18 | ) | (0.42 | ) | (0.60 | ) | 8.68 | 7.81 | (e) | 10,376,682 | 0.78 | 0.78 | 1.98 | 38 | ||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.39 | 0.07 | (b) | 1.49 | 1.56 | (0.07 | ) | — | (0.07 | ) | 8.88 | 21.21 | (c)(f) | 1,324,645 | 0.86 | (d)(f) | 0.86 | (d)(f) | 1.69 | (d)(f) | 11 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.64 | 0.09 | (b) | (0.27 | ) | (0.18 | ) | (0.07 | ) | — | (0.07 | ) | 7.39 | (2.40 | )(c)(f) | 1,278,734 | 0.91 | (f) | 0.91 | (f) | 1.76 | (f) | 24 | |||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.33 | 0.14 | (b) | 1.32 | 1.46 | (0.15 | ) | — | (0.15 | ) | 7.64 | 23.48 | (g)(h) | 1,594,135 | 0.82 | (h) | 0.82 | (h) | 2.16 | (h) | 78 | |||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.68 | 0.20 | (b) | (2.32 | ) | (2.12 | ) | (0.22 | ) | (0.01 | ) | (0.23 | ) | 6.33 | (24.78 | )(g)(h) | 1,693,758 | 0.79 | (h) | 0.79 | (h) | 2.59 | (h) | 56 | ||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 8.97 | 0.17 | (b) | 0.08 | 0.25 | (0.18 | ) | (0.36 | ) | (0.54 | ) | 8.68 | 2.71 | (g)(h) | 2,978,302 | 1.25 | (h) | 1.25 | (h) | 1.83 | (h) | 35 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 8.55 | 0.13 | (b) | 0.84 | 0.97 | (0.13 | ) | (0.42 | ) | (0.55 | ) | 8.97 | 11.66 | (g) | 3,270,381 | 1.53 | 1.53 | 1.54 | 39 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 8.49 | 0.11 | 0.49 | 0.60 | (0.12 | ) | (0.42 | ) | (0.54 | ) | 8.55 | 7.15 | (g) | 3,222,147 | 1.53 | 1.53 | 1.22 | 38 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.42 | 0.04 | (b) | 1.50 | 1.54 | (0.05 | ) | — | (0.05 | ) | 8.91 | 20.78 | (c)(i) | 1,341,079 | 1.52 | (d)(i) | 1.52 | (d)(i) | 1.03 | (d)(i) | 11 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.68 | 0.06 | (b) | (0.27 | ) | (0.21 | ) | (0.05 | ) | — | (0.05 | ) | 7.42 | (2.81 | )(c)(i) | 1,211,089 | 1.52 | (i) | 1.52 | (i) | 1.15 | (i) | 24 | |||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.36 | 0.09 | (b) | 1.33 | 1.42 | (0.10 | ) | — | (0.10 | ) | 7.68 | 22.63 | (j)(h) | 1,375,516 | 1.56 | (h) | 1.56 | (h) | 1.40 | (h) | 78 | |||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.72 | 0.14 | (b) | (2.32 | ) | (2.18 | ) | (0.17 | ) | (0.01 | ) | (0.18 | ) | 6.36 | (25.33 | )(j)(h) | 1,340,367 | 1.50 | (h) | 1.50 | (h) | 1.88 | (h) | 56 | ||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 9.01 | 0.14 | (b) | 0.08 | 0.22 | (0.15 | ) | (0.36 | ) | (0.51 | ) | 8.72 | 2.41 | (j) | 2,334,402 | 1.51 | 1.51 | 1.57 | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 8.58 | 0.14 | (b) | 0.84 | 0.98 | (0.13 | ) | (0.42 | ) | (0.55 | ) | 9.01 | 11.73 | (j) | 2,267,416 | 1.53 | 1.53 | 1.54 | 39 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 8.52 | 0.11 | 0.49 | 0.60 | (0.12 | ) | (0.42 | ) | (0.54 | ) | 8.58 | 7.12 | (j) | 1,968,786 | 1.53 | 1.53 | 1.22 | 38 | ||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.57 | 0.06 | (b) | 1.52 | 1.58 | (0.07 | ) | — | (0.07 | ) | 9.08 | 20.94 | (c) | 202,009 | 1.04 | (d) | 1.04 | (d) | 1.51 | (d) | 11 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.83 | 0.09 | (b) | (0.28 | ) | (0.19 | ) | (0.07 | ) | — | (0.07 | ) | 7.57 | (2.51 | )(c) | 172,143 | 1.03 | 1.03 | 1.64 | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.48 | 0.13 | (b) | 1.35 | 1.48 | (0.13 | ) | — | (0.13 | ) | 7.83 | 23.25 | (k) | 169,713 | 1.07 | 1.07 | 1.88 | 78 | ||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.87 | 0.18 | (b) | (2.36 | ) | (2.18 | ) | (0.20 | ) | (0.01 | ) | (0.21 | ) | 6.48 | (24.89 | )(k) | 148,399 | 1.04 | 1.04 | 2.35 | 56 | |||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 9.16 | 0.19 | (b) | 0.08 | 0.27 | (0.20 | ) | (0.36 | ) | (0.56 | ) | 8.87 | 2.87 | (k) | 192,906 | 1.01 | 1.01 | 2.07 | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 8.72 | 0.18 | (b) | 0.86 | 1.04 | (0.18 | ) | (0.42 | ) | (0.60 | ) | 9.16 | 12.20 | (k) | 151,755 | 1.03 | 1.03 | 2.04 | 39 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 8.65 | 0.15 | 0.50 | 0.65 | (0.16 | ) | (0.42 | ) | (0.58 | ) | 8.72 | 7.65 | (k) | 101,768 | 1.03 | 1.03 | 1.73 | 38 | ||||||||||||||||||||||||||||||||||||||
Class Y(m) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.54 | 0.08 | (b) | 1.52 | 1.60 | (0.09 | ) | — | (0.09 | ) | 9.05 | 21.31 | (c) | 509,242 | 0.54 | (d) | 0.54 | (d) | 2.01 | (d) | 11 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.79 | 0.11 | (b) | (0.28 | ) | (0.17 | ) | (0.08 | ) | — | (0.08 | ) | 7.54 | (2.15 | )(c) | 414,203 | 0.53 | 0.53 | 2.15 | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.45 | 0.16 | (b) | 1.35 | 1.51 | (0.17 | ) | — | (0.17 | ) | 7.79 | 23.82 | (l) | 530,010 | 0.57 | 0.57 | 2.34 | 78 | ||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.84 | 0.22 | (b) | (2.36 | ) | (2.14 | ) | (0.24 | ) | (0.01 | ) | (0.25 | ) | 6.45 | (24.60 | )(l) | 358,154 | 0.54 | 0.54 | 2.85 | 56 | |||||||||||||||||||||||||||||||||||
Year ended 12/31/07 | 9.12 | 0.24 | (b) | 0.08 | 0.32 | (0.24 | ) | (0.36 | ) | (0.60 | ) | 8.84 | 3.52 | (l) | 392,848 | 0.51 | 0.51 | 2.57 | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/06 | 8.69 | 0.23 | (b) | 0.84 | 1.07 | (0.22 | ) | (0.42 | ) | (0.64 | ) | 9.12 | 12.68 | (l) | 154,666 | 0.53 | 0.53 | 2.53 | 39 | |||||||||||||||||||||||||||||||||||||
Year ended 12/31/05 | 8.61 | 0.17 | 0.53 | 0.70 | (0.20 | ) | (0.42 | ) | (0.62 | ) | 8.69 | 8.33 | (l) | 58,747 | 0.55 | 0.55 | 2.17 | 38 | ||||||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 7.54 | 0.09 | (b) | 1.52 | 1.61 | (0.09 | ) | — | (0.09 | ) | 9.06 | 21.45 | (c) | 110,254 | 0.40 | (d) | 0.40 | (d) | 2.14 | (d) | 11 | |||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10(n) | 7.59 | 0.03 | (b) | (0.04 | ) | (0.01 | ) | (0.04 | ) | — | (0.04 | ) | 7.54 | (0.13 | )(c) | 63,598 | 0.45 | 0.45 | 1.79 | 24 | ||||||||||||||||||||||||||||||||||||
(a) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(b) | Calculated using average shares outstanding. | |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. | |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $8,172,410, $1,340,466, $1,295,953, $189,790, $465,503 and $81,336 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. | |
(e) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(f) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.32% and 0.38% for the six months ended February 28, 2011 and the eight months ended August 31, 2010, respectively. |
25 Invesco Van Kampen Equity and Income Fund
(g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(h) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of less than 1%. | |
(i) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.98% and 0.99% for the six months ended February 28, 2011 and the eight months ended August 31, 2010, respectively. | |
(j) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(k) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(l) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(m) | On June 1, 2010, the Fund’s former Class I Shares were reorganized into Class Y Shares. | |
(n) | Commencement date of June 1, 2010. |
26 Invesco Van Kampen Equity and Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010, through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,213.30 | $ | 4.34 | $ | 1,020.88 | $ | 3.96 | 0.79 | % | ||||||||||||||||||
B | 1,000.00 | 1,210.80 | 4.71 | 1,020.53 | 4.31 | 0.86 | ||||||||||||||||||||||||
C | 1,000.00 | 1,207.80 | 8.32 | 1,017.26 | 7.60 | 1.52 | ||||||||||||||||||||||||
R | 1,000.00 | 1,209.40 | 5.70 | 1,019.64 | 5.21 | 1.04 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,213.10 | 2.96 | 1,022.12 | 2.71 | 0.54 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,214.50 | 2.20 | 1,022.81 | 2.01 | 0.40 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
27 Invesco Van Kampen Equity and Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
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You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
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 U.S. 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.
VK-EQI-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen Equity Premium Income Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: VEPAX § B: VEPBX § C: VEPCX § Y: VEPIX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
10 | Notes to Financial Statements | |
17 | Financial Highlights | |
21 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 14.85 | % | ||
Class B Shares | 14.38 | |||
Class C Shares | 14.38 | |||
Class Y Shares | 15.07 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Custom Invesco Van Kampen Equity Premium Income Indexn* (Style-Specific Index) | 15.88 | |||
CBOE S&P 500 BuyWrite Indext* (former Style-Specific Index) | 12.11 | |||
Lipper Specialty Diversified Equity Funds Index▼ (Peer Group Index) | 12.02 | |||
▼ | Lipper Inc.; nInvesco, Lipper Inc.; tInvesco, Bloomberg L.P. |
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
* | During the reporting period, the Fund has elected to use the Custom Invesco Van Kampen Equity Premium Income Index as its style-specific benchmark instead of CBOE S&P 500 BuyWrite Index because the Custom Invesco Van Kampen Equity Premium Income Index more appropriately reflects the Fund’s investment style. |
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Custom Invesco Van Kampen Equity Premium Income Index, created by Invesco to serve as a benchmark for Invesco Van Kampen Equity Premium Income Fund, is composed of the following indexes: CBOE S&P 500 BuyWrite Index (75%) and S&P 500 Index (25%).
The CBOE S&P 500 BuyWrite Index is designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index.
The Lipper Specialty Diversified Equity Funds Index is an unmanaged index considered representative of specialty diversified equity funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen Equity Premium Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||
Inception (6/26/06) | 0.64 | % | ||||
1 | Year | 3.31 | ||||
Class B Shares | ||||||
Inception (6/26/06) | 0.75 | % | ||||
1 | Year | 3.55 | ||||
Class C Shares | ||||||
Inception (6/26/06) | 1.10 | % | ||||
1 | Year | 7.55 | ||||
Class Y Shares | ||||||
Inception (6/26/06) | 2.09 | % | ||||
1 | Year | 9.69 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen Equity Premium Income Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Equity Premium Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.18%, 1.93%, 1.93% and 0.93%, respectively. The expense ratios presented above may vary from the expense ratios presented in other
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||
Inception (6/26/06) | -0.03 | % | ||||
1 | Year | 0.02 | ||||
Class B Shares | ||||||
Inception (6/26/06) | 0.10 | % | ||||
1 | Year | -0.02 | ||||
Class C Shares | ||||||
Inception (6/26/06) | 0.48 | % | ||||
1 | Year | 4.10 | ||||
Class Y Shares | ||||||
Inception (6/26/06) | 1.43 | % | ||||
1 | Year | 6.06 |
sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Van Kampen Equity Premium Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen Equity Premium Income Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Number of | ||||||||
Description | Shares | Value | ||||||
Common Stocks–98.1% | ||||||||
Advertising–0.2% | ||||||||
Interpublic Group of Cos., Inc. | 19,800 | $ | 261,360 | |||||
Apparel Retail–0.7% | ||||||||
Limited Brands, Inc. | 31,800 | 1,018,236 | ||||||
Auto Parts & Equipment–1.8% | ||||||||
Autoliv, Inc. | 6,600 | 494,274 | ||||||
Magna International, Inc. (Canada) | 18,500 | 913,160 | ||||||
TRW Automotive Holdings Corp.(a) | 17,200 | 976,960 | ||||||
2,384,394 | ||||||||
Automobile Manufacturers–2.1% | ||||||||
Ford Motor Co.(a) | 189,000 | 2,844,450 | ||||||
Biotechnology–2.1% | ||||||||
Amgen, Inc.(a) | 55,400 | 2,843,682 | ||||||
Cable & Satellite–0.6% | ||||||||
Comcast Corp., Class A | 31,000 | 798,560 | ||||||
Catalog Retail–0.7% | ||||||||
Liberty Media Corp.–Interactive, Class A(a) | 57,200 | 918,632 | ||||||
Coal & Consumable Fuels–0.8% | ||||||||
Arch Coal, Inc. | 3,100 | 103,943 | ||||||
Peabody Energy Corp. | 14,700 | 962,703 | ||||||
1,066,646 | ||||||||
Communications Equipment–0.1% | ||||||||
Cisco Systems, Inc. | 6,900 | 128,064 | ||||||
Computer Hardware–6.3% | ||||||||
Apple, Inc.(a) | 17,560 | 6,202,368 | ||||||
Dell, Inc.(a) | 149,700 | 2,369,751 | ||||||
8,572,119 | ||||||||
Computer Storage & Peripherals–2.8% | ||||||||
Lexmark International, Inc., Class A(a) | 46,000 | 1,726,380 | ||||||
SanDisk Corp.(a) | 43,300 | 2,147,680 | ||||||
3,874,060 | ||||||||
Construction & Engineering–0.7% | ||||||||
KBR, Inc. | 29,200 | 957,760 | ||||||
Construction & Farm Machinery & Heavy Trucks–1.2% | ||||||||
Joy Global, Inc. | 3,200 | 311,616 | ||||||
Oshkosh Corp.(a) | 36,700 | 1,309,089 | ||||||
1,620,705 | ||||||||
Consumer Finance–3.4% | ||||||||
American Express Co. | 67,900 | 2,958,403 | ||||||
Capital One Financial Corp. | 33,100 | 1,647,387 | ||||||
4,605,790 | ||||||||
Department Stores–1.8% | ||||||||
Macy’s, Inc. | 102,900 | 2,459,310 | ||||||
Diversified Banks–0.4% | ||||||||
Wells Fargo & Co. | 18,900 | 609,714 | ||||||
Diversified Metals & Mining–2.8% | ||||||||
Freeport-McMoRan Copper & Gold, Inc. | 49,900 | 2,642,205 | ||||||
Titanium Metals Corp.(a) | 58,500 | 1,110,915 | ||||||
3,753,120 | ||||||||
Fertilizers & Agricultural Chemicals–0.7% | ||||||||
CF Industries Holdings, Inc. | 6,900 | 974,832 | ||||||
Footwear–0.8% | ||||||||
Crocs, Inc.(a) | 64,200 | 1,133,130 | ||||||
Gold–0.4% | ||||||||
Newmont Mining Corp. | 9,400 | 519,538 | ||||||
Health Care Distributors–0.6% | ||||||||
Cardinal Health, Inc. | 20,100 | 836,964 | ||||||
Homebuilding–1.2% | ||||||||
D.R. Horton, Inc. | 132,700 | 1,571,168 | ||||||
Household Products–2.2% | ||||||||
Procter & Gamble Co. | 47,400 | 2,988,570 | ||||||
Hypermarkets & Super Centers–2.2% | ||||||||
Wal-Mart Stores, Inc. | 58,700 | 3,051,226 | ||||||
Industrial Conglomerates–3.1% | ||||||||
General Electric Co. | 199,100 | 4,165,172 | ||||||
Industrial Machinery–0.4% | ||||||||
Parker Hannifin Corp. | 6,300 | 561,834 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen Equity Premium Income Fund
Number of | ||||||||
Description | Shares | Value | ||||||
Integrated Oil & Gas–9.3% | ||||||||
Chevron Corp. | 47,400 | $ | 4,917,750 | |||||
ConocoPhillips | 49,000 | 3,815,630 | ||||||
Exxon Mobil Corp.(d) | 45,700 | 3,908,721 | ||||||
12,642,101 | ||||||||
Integrated Telecommunication Services–5.6% | ||||||||
AT&T, Inc. | 154,700 | 4,390,386 | ||||||
Verizon Communications, Inc. | 88,000 | 3,248,960 | ||||||
7,639,346 | ||||||||
Internet Software & Services–0.1% | ||||||||
IAC/InteractiveCorp(a) | 2,700 | 83,889 | ||||||
IT Consulting & Other Services–2.4% | ||||||||
IBM Corp. | 20,400 | 3,302,352 | ||||||
Life & Health Insurance–1.7% | ||||||||
Prudential Financial, Inc. | 34,200 | 2,251,386 | ||||||
Managed Health Care–5.2% | ||||||||
CIGNA Corp. | 34,300 | 1,443,001 | ||||||
Humana, Inc.(a) | 38,900 | 2,528,889 | ||||||
UnitedHealth Group, Inc. | 73,700 | 3,138,146 | ||||||
7,110,036 | ||||||||
Movies & Entertainment–2.3% | ||||||||
Time Warner, Inc. | 80,200 | 3,063,640 | ||||||
Multi-Line Insurance–1.2% | ||||||||
Assurant, Inc. | 27,000 | 1,097,010 | ||||||
Hartford Financial Services Group, Inc. | 18,300 | 541,680 | ||||||
1,638,690 | ||||||||
Oil & Gas Refining & Marketing–1.9% | ||||||||
Sunoco, Inc. | 10,600 | 443,716 | ||||||
Valero Energy Corp. | 76,700 | 2,161,406 | ||||||
2,605,122 | ||||||||
Other Diversified Financial Services–1.2% | ||||||||
Citigroup, Inc.(a) | 321,400 | 1,504,152 | ||||||
JPMorgan Chase & Co. | 3,300 | 154,077 | ||||||
1,658,229 | ||||||||
Packaged Foods & Meats–0.3% | ||||||||
Tyson Foods, Inc., Class A | 20,400 | 380,052 | ||||||
Paper Products–1.8% | ||||||||
International Paper Co. | 81,200 | 2,255,736 | ||||||
MeadWestvaco Corp. | 7,200 | 211,320 | ||||||
2,467,056 | ||||||||
Pharmaceuticals–6.3% | ||||||||
Bristol-Myers Squibb Co. | 9,700 | 250,357 | ||||||
Eli Lilly & Co. | 76,000 | 2,626,560 | ||||||
Forest Laboratories, Inc.(a) | 27,100 | 878,040 | ||||||
Johnson & Johnson | 41,900 | 2,574,336 | ||||||
Pfizer, Inc. | 117,200 | 2,254,928 | ||||||
8,584,221 | ||||||||
Property & Casualty Insurance–1.4% | ||||||||
Berkshire Hathaway, Inc., Class B(a) | 19,200 | 1,675,776 | ||||||
Travelers Cos., Inc. | 3,100 | 185,783 | ||||||
1,861,559 | ||||||||
Publishing–2.1% | ||||||||
Gannett Co., Inc. | 150,600 | 2,486,406 | ||||||
McGraw-Hill Cos., Inc. | 9,400 | 363,592 | ||||||
2,849,998 | ||||||||
Regional Banks–3.5% | ||||||||
Fifth Third Bancorp | 152,300 | 2,223,580 | ||||||
Huntington Bancshares, Inc. | 132,300 | 904,932 | ||||||
KeyCorp | 173,800 | 1,588,532 | ||||||
4,717,044 | ||||||||
Residential REIT’s–0.2% | ||||||||
Equity Residential (REIT) | 4,900 | 270,039 | ||||||
Retail REIT’s–0.3% | ||||||||
Simon Property Group, Inc. (REIT) | 3,200 | 352,128 | ||||||
Semiconductors–3.6% | ||||||||
Intel Corp. | 166,700 | 3,579,049 | ||||||
Micron Technology, Inc.(a) | 118,500 | 1,318,905 | ||||||
4,897,954 | ||||||||
Systems Software–3.5% | ||||||||
Microsoft Corp. | 177,300 | 4,712,634 | ||||||
Tobacco–3.1% | ||||||||
Altria Group, Inc. | 30,900 | 783,933 | ||||||
Philip Morris International, Inc. | 55,000 | 3,452,900 | ||||||
4,236,833 | ||||||||
Wireless Telecommunication Services–1.0% | ||||||||
Sprint Nextel Corp.(a) | 304,600 | 1,331,102 | ||||||
Total Long-Term Investments(b)–98.1% (Cost $124,045,473) | 133,174,447 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen Equity Premium Income Fund
Number of | ||||||||
Description | Shares | Value | ||||||
Money Market Funds–2.7% | ||||||||
Liquid Assets Portfolio–Institutional Class(c) | 1,848,764 | $ | 1,848,764 | |||||
Premier Portfolio–Institutional Class(c) | 1,848,764 | 1,848,764 | ||||||
Total Money Market Funds 2.7% (Cost $3,697,528) | 3,697,528 | |||||||
TOTAL INVESTMENTS–100.8% (Cost $127,743,001) | 136,871,975 | |||||||
LIABILITIES IN EXCESS OF OTHER ASSETS–(0.4%) | (514,481 | ) | ||||||
WRITTEN OPTIONS–(0.4%) | (626,450 | ) | ||||||
NET ASSETS–100.0% | $ | 135,731,044 | ||||||
Investment Abbreviation:
REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Non-income producing security. | |
(b) | The Fund may designate up to 100% of its common stock investments to cover outstanding call options. | |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. | |
(d) | All or a portion of this security has been physically segregated in connection with open futures contracts. |
Futures contracts outstanding as of February 28, 2011: | ||||||||
Unrealized | ||||||||
Number of | Appreciation | |||||||
Long Contracts | Contracts | (Depreciation) | ||||||
S&P 500 E-Mini Index, March 2011 (Current Notional Value of $66,305 per contract) | 41 | $ | 9,186 | |||||
Written options outstanding as of February 28, 2011: | ||||||||||||||||||||
Exercise | Expiration | Number of | ||||||||||||||||||
Name of Issuer | Price | Date | Contracts | Premium | Value | |||||||||||||||
Call — S&P 500 Index, March 2011 | $ | 1,345.00 | 03/19/11 | 737 | $ | (1,212,838 | ) | $ | (626,450 | ) | ||||||||||
By sector, based on net assets
Information Technology | 18.9 | % | ||
Health Care | 14.3 | |||
Consumer Discretionary | 14.2 | |||
Financials | 13.2 | |||
Energy | 11.3 | |||
Consumer Staples | 7.9 | |||
Telecommunication Services | 6.6 | |||
Materials | 6.4 | |||
Industrials | 5.4 | |||
Money Market Funds Plus Liabilities Less Other Assets | 1.8 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen Equity Premium Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $124,045,473) | $ | 133,174,447 | ||
Investments in affiliated money market, at value and cost | 3,697,528 | |||
Total investments (Cost $127,743,001) | 136,871,975 | |||
Receivables: | ||||
Investments sold | 12,994,004 | |||
Fund shares sold | 63,477 | |||
Dividends | 347,783 | |||
Variation margin on futures | 16,942 | |||
Investment for trustee deferred compensation and retirement plan | 1,287 | |||
Prepaid expenses | 17,333 | |||
Total assets | 150,312,801 | |||
Liabilities: | ||||
Payables: | ||||
Options written, at value (premiums received of $1,212,838) | 626,450 | |||
Fund shares repurchased | 1,114,399 | |||
Investments repurchased | 12,588,522 | |||
Accrued fees to affiliates | 128,588 | |||
Accrued other operating expenses | 121,729 | |||
Trustees’ deferred compensation and retirement plans | 2,069 | |||
Total liabilities | 14,581,757 | |||
Net assets | $ | 135,731,044 | ||
Net assets consist of: | ||||
Capital (par value of $0.01 per share with an unlimited number of shares authorized) | $ | 278,854,367 | ||
Undistributed net investment income | 280,633 | |||
Unrealized appreciation | 9,724,548 | |||
Undistributed net realized gain (loss) | (153,128,504 | ) | ||
$ | 135,731,044 | |||
Maximum offering price per share: | ||||
Class A shares: | ||||
Net asset value and redemption price per share (based on net assets of $65,245,649 and 7,756,632 shares of beneficial interest issued and outstanding) | $ | 8.41 | ||
Maximum sales charge (5.50% of offering price) | 0.49 | |||
Maximum offering price to public | $ | 8.90 | ||
Class B shares: | ||||
Net asset value and offering price per share (based on net assets of $13,450,701 and 1,625,761 shares of beneficial interest issued and outstanding) | $ | 8.27 | ||
Class C shares: | ||||
Net asset value and offering price per share (based on net assets of $53,449,705 and 6,459,519 shares of beneficial interest issued and outstanding) | $ | 8.27 | ||
Class Y shares: | ||||
Net asset value and offering price per share (based on net assets of $3,584,989 and 425,321 shares of beneficial interest issued and outstanding) | $ | 8.43 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen Equity Premium Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends | $ | 1,509,637 | ||
Dividends from affiliated money market funds | 1,077 | |||
Total income | 1,510,714 | |||
Expenses: | ||||
Advisory fees | 518,227 | |||
Distribution fees: | ||||
Class A | 92,834 | |||
Class B | 69,381 | |||
Class C | 283,139 | |||
Transfer agent fees | 89,924 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 13,394 | |||
Trustees’ and officers’ fees and benefits | 8,478 | |||
Other | 34,795 | |||
Total expenses | 1,134,966 | |||
Less: Fees waived and expense offset arrangement(s) | 3,469 | |||
Net expenses | 1,131,497 | |||
Net investment income | 379,217 | |||
Realized and unrealized gain (loss): | ||||
Realized gain (loss): | ||||
Investments | 8,651,075 | |||
Options | (14,231,841 | ) | ||
Futures | 445,568 | |||
Net realized gain (loss) | (5,135,198 | ) | ||
Unrealized appreciation (depreciation): | ||||
Beginning of the period | (15,960,219 | ) | ||
End of the period: | ||||
Investments | 9,128,974 | |||
Options | 586,388 | |||
Futures | 9,186 | |||
9,724,548 | ||||
Net unrealized appreciation during the period | 25,684,767 | |||
Net realized and unrealized gain | 20,549,569 | |||
Net increase in net assets from operations | $ | 20,928,786 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen Equity Premium Income Fund
Statement of Changes in Net Assets
(Unaudited)
For the six months ended | For the year ended | |||||||
February 28, | August 31, | |||||||
2011 | 2010 | |||||||
From investment activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 379,217 | $ | 791,360 | ||||
Net realized gain (loss) | (5,135,198 | ) | (101,394,563 | ) | ||||
Net unrealized appreciation during the period | 25,684,767 | 112,466,001 | ||||||
Change in net assets from operations | 20,928,786 | 11,862,798 | ||||||
Distributions from net investment income: | ||||||||
Class A | (70,327 | ) | (338,335 | ) | ||||
Class B | -0- | (49,125 | ) | |||||
Class C | -0- | (209,194 | ) | |||||
Class Y | (6,044 | ) | (11,329 | ) | ||||
(76,371 | ) | (607,983 | ) | |||||
Return of capital distribution: | ||||||||
Class A | -0- | (4,947,521 | ) | |||||
Class B | -0- | (718,355 | ) | |||||
Class C | -0- | (3,059,076 | ) | |||||
Class Y | -0- | (165,662 | ) | |||||
-0- | (8,890,614 | ) | ||||||
Total distributions | (76,371 | ) | (9,498,597 | ) | ||||
Net change in net assets from investment activities | 20,852,415 | 2,364,201 | ||||||
From capital transactions: | ||||||||
Proceeds from shares sold | 2,816,980 | 16,021,921 | ||||||
Net asset value of shares issued through dividend reinvestment | 68,808 | 8,029,120 | ||||||
Cost of shares repurchased | (46,819,168 | ) | (76,049,890 | ) | ||||
Net change in net assets from capital transactions | (43,933,380 | ) | (51,998,849 | ) | ||||
Total increase (decrease) in net assets | (23,080,965 | ) | (49,634,648 | ) | ||||
Net assets: | ||||||||
Beginning of the period | 158,812,009 | 208,446,657 | ||||||
End of the period (including accumulated undistributed net investment income (loss) of $280,633 and $(22,213), respectively) | $ | 135,731,044 | $ | 158,812,009 | ||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen Equity Premium Income Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust (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 twenty 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.
10 Invesco Van Kampen Equity Premium Income Fund
Prior to June 1, 2010, the Fund operated as Van Kampen Equity Premium Income Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Equity Trust II. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is to seek current income and its secondary investment object is to seek long-term capital appreciation.
The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. As of close of business on September 10, 2010, the Fund limited public sales of its shares to current investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y 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. 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. 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 conversion date will be subject to a CDSC.
As of the close of business on September 10, 2010, the Fund limited public sales of its shares to current investors.
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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. |
11 Invesco Van Kampen Equity Premium Income Fund
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. | ||
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 paid annually and recorded on 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 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 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 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. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. | |
J. | Call Options Written — The Fund may write call options. A call option gives the purchaser of such option the right to buy, and the writer (the Fund) the obligation to sell, the underlying security at the stated exercise price during the option period. Written call options are recorded as a liability in the Statement of Assets and Liabilities. The amount of the liability is subsequently valued to reflect the current market value of the option written. If a |
12 Invesco Van Kampen Equity Premium Income Fund
written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized gains and losses on these contracts are included in the Statement of Operations. A risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. | ||
K. | 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. |
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 Net Assets | Rate | |||
First $500 million | 0 | .70% | ||
Next $500 million | 0 | .65% | ||
Over $1 billion | 0 | .60% | ||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark 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 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, 2012, 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 1.24%, 1.99%, 1.99%, and 0.99%, 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. 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, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $3,316.
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 February 28, 2011, 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 February 28, 2011, the expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $406 in front-end sales commissions from the sale of Class A shares and $108, $23,497 and $1,057 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 Invesco, IIS and/or IDI.
13 Invesco Van Kampen Equity Premium Income 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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 136,871,975 | $ | — | $ | — | $ | 136,871,975 | ||||||||
Futures* | 9,186 | — | — | 9,186 | ||||||||||||
Total Investments in an Asset Position | $ | 136,881,161 | $ | — | $ | — | $ | 136,881,161 | ||||||||
Written Options | 626,450 | — | — | 626,450 | ||||||||||||
Total Investments in a Liability Position | $ | 626,450 | $ | — | $ | — | $ | 626,450 | ||||||||
* | Unrealized appreciation |
NOTE 4—Derivative Investments
The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
Value of Derivative Instruments at Period-End
The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of February 28, 2011:
Value | ||||||||
Risk Exposure/ Derivative Type | Assets | Liabilities | ||||||
Index risk | ||||||||
Options | $ | -0- | $ | (626,450 | ) | |||
Futures contracts(a) | 9,186 | -0- | ||||||
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. |
Effect of Derivative Instruments for the six months ended February 28, 2011
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain (Loss) on | ||||||||
Statement of Operations | ||||||||
Futures* | Options* | |||||||
Realized Gain (Loss) | ||||||||
Index risk | $ | 445,568 | $ | (14,231,841 | ) | |||
Change in Unrealized Appreciation (Depreciation) | ||||||||
Index risk | 57,465 | (966,697 | ) | |||||
503,033 | (15,198,538 | ) | ||||||
* | The average value of futures and options outstanding during the period was $(2,381,349) and $(1,634,910), respectively. |
14 Invesco Van Kampen Equity Premium Income Fund
Transactions During the Period | ||||||||
Call Option Contracts | ||||||||
Number of | Premiums | |||||||
Contracts | Received | |||||||
Beginning of period | 1,106 | $ | 2,675,675 | |||||
Written | 5,189 | 10,341,731 | ||||||
Closed | (196 | ) | (437,386 | ) | ||||
Exercised | (5,362 | ) | (11,367,182 | ) | ||||
Expired | -0- | -0- | ||||||
End of period | 737 | $ | 1,212,838 | |||||
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $153.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $895 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2018 | $ | 71,325,460 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
15 Invesco Van Kampen Equity Premium Income Fund
NOTE 9—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 February 28, 2011 was $82,765,940 and $140,882,231, 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 | $ | 11,847,645 | ||
Aggregate unrealized (depreciation) of investment securities | (2,941,673 | ) | ||
Net unrealized appreciation of investment securities | $ | 8,905,972 | ||
Cost of investments for tax purposes is $127,966,003. |
NOTE 10—Share Information
For the | For the | |||||||||||||||
six months ended | year ended | |||||||||||||||
February 28, 2011(a) | August 31, 2010 | |||||||||||||||
Shares | Value | Shares | Value | |||||||||||||
Sales: | ||||||||||||||||
Class A | 96,800 | (b) | $ | 760,540 | (b) | 1,176,321 | (c) | $ | 9,154,704 | (c) | ||||||
Class B | 13,544 | 102,691 | 79,389 | 610,706 | ||||||||||||
Class C | 58,029 | 446,871 | 461,233 | 3,522,581 | ||||||||||||
Class Y | 186,381 | 1,506,878 | 353,239 | 2,733,930 | ||||||||||||
Total sales | 354,754 | 2,816,980 | 2,070,182 | 16,021,921 | ||||||||||||
Dividend reinvestment: | ||||||||||||||||
Class A | 7,974 | 64,747 | 623,752 | 4,794,997 | ||||||||||||
Class B | -0- | -0- | 81,350 | 616,110 | ||||||||||||
Class C | -0- | -0- | 335,294 | 2,540,171 | ||||||||||||
Class Y | 499 | 4,061 | 10,115 | 77,842 | ||||||||||||
Total Dividend Reinvestment | 8,473 | 68,808 | 1,050,511 | 8,029,120 | ||||||||||||
Repurchases: | ||||||||||||||||
Class A | (3,578,702 | ) | (28,564,717 | ) | (5,860,510 | ) | (45,379,804 | ) | ||||||||
Class B | (388,072 | )(b) | (3,028,684 | )(b) | (601,851 | )(c) | (4,588,082 | )(c) | ||||||||
Class C | (1,763,431 | ) | (13,866,767 | ) | (3,240,660 | ) | (24,724,806 | ) | ||||||||
Class Y | (170,971 | ) | (1,359,000 | ) | (173,137 | ) | (1,357,198 | ) | ||||||||
Total Repurchases | (5,901,176 | ) | $ | (46,819,168 | ) | (9,876,158 | ) | $ | (76,049,890 | ) | ||||||
(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 Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. | |
(b) | Includes automatic conversion of 18,940 Class B shares into 18,651 Class A shares at a value of $148,246. | |
(c) | Includes automatic conversion of 17,258 Class B shares into 17,017 Class A shares at a value of $129,076. |
16 Invesco Van Kampen Equity Premium Income Fund
NOTE 11—Financial Highlights
The following schedules present financial highlights for a share of the Fund outstanding throughout the periods indicated.
Class A shares | ||||||||||||||||||||||||
June 26, 2006 | ||||||||||||||||||||||||
(Commencement | ||||||||||||||||||||||||
Six months ended | of Operations) to | |||||||||||||||||||||||
February 28, | Year ended August 31, | August 31, | ||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net asset value, beginning of the period | $ | 7.33 | $ | 7.34 | $ | 9.06 | $ | 10.71 | $ | 10.29 | $ | 10.00 | ||||||||||||
Net investment income(a) | 0.03 | 0.06 | 0.07 | 0.06 | 0.04 | 0.01 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 1.06 | 0.34 | (1.39 | ) | (1.02 | ) | 1.11 | 0.36 | ||||||||||||||||
Total from investment operations | 1.09 | 0.40 | (1.32 | ) | (0.96 | ) | 1.15 | 0.37 | ||||||||||||||||
Less: | ||||||||||||||||||||||||
Distributions from net investment income | 0.01 | 0.03 | 0.06 | 0.05 | 0.03 | 0.01 | ||||||||||||||||||
Distributions from net realized gain | -0- | -0- | 0.25 | 0.64 | 0.70 | 0.07 | ||||||||||||||||||
Return of capital distributions | -0- | 0.38 | 0.09 | -0- | -0- | -0- | ||||||||||||||||||
Total distributions | 0.01 | 0.41 | 0.40 | 0.69 | 0.73 | 0.08 | ||||||||||||||||||
Net asset value, end of the period | $ | 8.41 | $ | 7.33 | $ | 7.34 | $ | 9.06 | $ | 10.71 | $ | 10.29 | ||||||||||||
Total return* | 14.85 | %(b) | 5.26 | %(b) | (13.90 | )%(c) | (9.31 | )%(c) | 11.31 | %(c) | 3.75 | %**(c) | ||||||||||||
Net assets at end of the period (000’ omitted) | $ | 65,246 | $ | 82,314 | $ | 112,262 | $ | 229,957 | $ | 290,658 | $ | 31,182 | ||||||||||||
Ratio of expenses to average net assets* | 1.18 | %(e) | 1.19 | % | 1.24 | % | 1.14 | % | 1.25 | %(d) | 1.24 | %(g) | ||||||||||||
Ratio of net investment income to average net assets* | 0.85 | %(e) | 0.75 | % | 1.11 | % | 0.56 | % | 0.40 | % | 1.32 | %(g) | ||||||||||||
Portfolio turnover(f) | 57 | % | 131 | % | 13 | % | 80 | % | 73 | % | 26 | % | ||||||||||||
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows: | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 1.18 | %(e) | 1.19 | % | 1.40 | % | N/A | 1.29 | %(d) | 4.35 | %(g) | |||||||||||||
Ratio of net investment income (loss) to average net assets | 0.85 | %(e) | 0.75 | % | 0.95 | % | N/A | 0.36 | % | (1.79 | )%(g) | |||||||||||||
** | Non-Annualized | |
(a) | Based on 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) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(d) | The ratio of expenses to average net assets does not reflect credits earned on cash balances. If these credits were reflected as a reduction of expenses, the ratios would decrease by 0.01% for the year ended August 31, 2007. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $74,985. | |
(f) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. | |
(g) | Annualized. |
N/A=Not Applicable
17 Invesco Van Kampen Equity Premium Income Fund
NOTE 11—Financial Highlights—(continued)
Class B shares | ||||||||||||||||||||||||
June 26, 2006 | ||||||||||||||||||||||||
(Commencement | ||||||||||||||||||||||||
Six months ended | of Operations) to | |||||||||||||||||||||||
February 28, | Year ended August 31, | August 31, | ||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net asset value, beginning of the period | $ | 7.23 | $ | 7.25 | $ | 8.97 | $ | 10.64 | $ | 10.28 | $ | 10.00 | ||||||||||||
Net investment income (loss)(a) | 0.00 | (b) | 0.00 | (b) | 0.02 | (0.02 | ) | (0.04 | ) | 0.01 | ||||||||||||||
Net realized and unrealized gain (loss) | 1.04 | 0.33 | (1.37 | ) | (1.00 | ) | 1.10 | 0.34 | ||||||||||||||||
Total from investment operations | 1.04 | 0.33 | (1.35 | ) | (1.02 | ) | 1.06 | 0.35 | ||||||||||||||||
Less: | ||||||||||||||||||||||||
Distributions from net investment income | -0- | 0.02 | 0.03 | 0.01 | 0.00 | (b) | 0.00 | (b) | ||||||||||||||||
Distributions from net realized gain | -0- | -0- | 0.25 | 0.64 | 0.70 | 0.07 | ||||||||||||||||||
Return of capital distributions | -0- | 0.33 | 0.09 | -0- | -0- | -0- | ||||||||||||||||||
Total distributions | -0- | 0.35 | 0.37 | 0.65 | 0.70 | 0.07 | ||||||||||||||||||
Net asset value, end of the period | $ | 8.27 | $ | 7.23 | $ | 7.25 | $ | 8.97 | $ | 10.64 | $ | 10.28 | ||||||||||||
Total return* | 14.38 | %(c) | 4.40 | %(c) | (14.47 | )%(d) | (9.93 | )%(d) | 10.45 | %(d) | 3.56 | %**(d) | ||||||||||||
Net assets at end of the period (000’s omitted) | $ | 13,451 | $ | 14,460 | $ | 17,690 | $ | 26,221 | $ | 31,790 | $ | 5,506 | ||||||||||||
Ratio of expenses to average net assets* | 1.93 | %(f) | 1.94 | % | 1.99 | % | 1.89 | % | 2.00 | %(e) | 1.99 | %(h) | ||||||||||||
Ratio of net investment income (loss) to average net assets* | 0.12 | %(f) | 0.00 | % | 0.36 | % | (0.19 | )% | (0.35 | )% | 0.37 | %(h) | ||||||||||||
Portfolio turnover(g) | 57 | % | 131 | % | 13 | % | 80 | % | 73 | % | 26 | % | ||||||||||||
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows: | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 1.93 | %(f) | 1.94 | % | 2.16 | % | N/A | 2.04 | %(e) | 5.10 | %(h) | |||||||||||||
Ratio of net investment income (loss) to average net assets | 0.12 | %(f) | 0.00 | % | 0.19 | % | N/A | (0.39 | )% | (2.74 | )%(h) | |||||||||||||
** | Non-Annualized | |
(a) | Based on average shares outstanding. | |
(b) | Amount is less than $0.01 per share. | |
(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) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(e) | The ratio of expenses to average net assets does not reflect credits earned on cash balances. If these credits were reflected as a reduction of expenses, the ratios would decrease by 0.01% for the year ended August 31, 2007. | |
(f) | Ratios are annualized and based on average daily net assets (000’s omitted) of $14,006. | |
(g) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. | |
(h) | Annualized. |
N/A=Not Applicable
18 Invesco Van Kampen Equity Premium Income Fund
NOTE 11—Financial Highlights—(continued)
Class C shares | ||||||||||||||||||||||||
June 26, 2006 | ||||||||||||||||||||||||
(Commencement | ||||||||||||||||||||||||
Six months ended | of Operations) to | |||||||||||||||||||||||
February 28, | Year ended August 31, | August 31, | ||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net asset value, beginning of the period | $ | 7.23 | $ | 7.25 | $ | 8.97 | $ | 10.64 | $ | 10.28 | $ | 10.00 | ||||||||||||
Net investment income (loss)(a) | 0.00 | (b) | 0.00 | (b) | 0.02 | (0.02 | ) | (0.04 | ) | 0.01 | ||||||||||||||
Net realized and unrealized gain (loss) | 1.04 | 0.33 | (1.37 | ) | (1.00 | ) | 1.10 | 0.35 | ||||||||||||||||
Total from investment operations | 1.04 | 0.33 | (1.35 | ) | (1.02 | ) | 1.06 | 0.36 | ||||||||||||||||
Less: | ||||||||||||||||||||||||
Distributions from net investment income | -0- | 0.02 | 0.03 | 0.01 | 0.00 | (b) | 0.01 | |||||||||||||||||
Distributions from net realized gain | -0- | -0- | 0.25 | 0.64 | 0.70 | 0.07 | ||||||||||||||||||
Return of capital distributions | -0- | 0.33 | 0.09 | -0- | -0- | -0- | ||||||||||||||||||
Total distributions | -0- | 0.35 | 0.37 | 0.65 | 0.70 | 0.08 | ||||||||||||||||||
Net asset value, end of the period | $ | 8.27 | $ | 7.23 | $ | 7.25 | $ | 8.97 | $ | 10.64 | $ | 10.28 | ||||||||||||
Total return* | 14.38 | %(c) | 4.40 | %(c) | (14.47 | )%(d) | (9.93 | )%(d) | 10.45 | %(d) | 3.57 | %(d)** | ||||||||||||
Net assets at end of the period (000’s omitted) | $ | 53,450 | $ | 59,031 | $ | 76,882 | $ | 137,120 | $ | 154,627 | $ | 13,024 | ||||||||||||
Ratio of expenses to average net assets* | 1.93 | %(f) | 1.94 | % | 1.99 | % | 1.89 | % | 2.00 | %(e) | 1.99 | %(h) | ||||||||||||
Ratio of net investment income (loss) to average net assets* | 0.12 | %(f) | 0.00 | % | 0.36 | % | (0.19 | )% | (0.35 | )% | 0.46 | %(h) | ||||||||||||
Portfolio turnover(g) | 57 | % | 131 | % | 13 | % | 80 | % | 73 | % | 26 | % | ||||||||||||
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows: | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 1.93 | %(f) | 1.94 | % | 2.15 | % | N/A | 2.04 | %(e) | 5.10 | %(h) | |||||||||||||
Ratio of net investment income (loss) to average net assets | 0.12 | %(f) | 0.00 | % | 0.20 | % | N/A | (0.39 | )% | (2.65 | )%(h) | |||||||||||||
** | Non-Annualized | |
(a) | Based on average shares outstanding. | |
(b) | Amount is less than $0.01 per share. | |
(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) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and services fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(e) | The ratio of expenses to average net assets does not reflect credits earned on cash balances. If these credits were reflected as a reduction of expenses, the ratios would decrease by 0.01% for the year ended August 31, 2007. | |
(f) | Ratios are annualized and based on average daily net assets (000’s omitted) of $57,163. | |
(g) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. | |
(h) | Annualized. |
N/A=Not Applicable
19 Invesco Van Kampen Equity Premium Income Fund
NOTE 11—Financial Highlights—(continued)
Class Y sharesˆ | ||||||||||||||||||||||||
June 26, 2006 | ||||||||||||||||||||||||
(Commencement | ||||||||||||||||||||||||
Six months ended | of Operations) to | |||||||||||||||||||||||
February 28, | Year ended August 31, | August 31, | ||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net asset value, beginning of the period | $ | 7.34 | $ | 7.36 | $ | 9.07 | $ | 10.71 | $ | 10.29 | $ | 10.00 | ||||||||||||
Net investment income(a) | 0.05 | 0.08 | 0.10 | 0.08 | 0.07 | 0.02 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 1.06 | 0.32 | (1.40 | ) | (1.01 | ) | 1.09 | 0.35 | ||||||||||||||||
Total from investment operations | 1.11 | 0.40 | (1.30 | ) | (0.93 | ) | 1.16 | 0.37 | ||||||||||||||||
Less: | ||||||||||||||||||||||||
Distributions from net investment income | 0.02 | 0.03 | 0.07 | 0.07 | 0.04 | 0.01 | ||||||||||||||||||
Distributions from net realized gain | -0- | -0- | 0.25 | 0.64 | 0.70 | 0.07 | ||||||||||||||||||
Return of capital distributions | -0- | 0.39 | 0.09 | -0- | -0- | -0- | ||||||||||||||||||
Total distributions | 0.02 | 0.42 | 0.41 | 0.71 | 0.74 | 0.08 | ||||||||||||||||||
Net asset value, end of the period | $ | 8.43 | $ | 7.34 | $ | 7.36 | $ | 9.07 | $ | 10.71 | $ | 10.29 | ||||||||||||
Total return* | 15.07 | %(b) | 5.37 | %(b) | (13.63 | )%(c) | (9.04 | )%(c) | 11.44 | %(c) | 3.77 | %(c)** | ||||||||||||
Net assets at end of the period (000’s omitted) | $ | 3,585 | $ | 3,006 | $ | 1,612 | $ | 4,071 | $ | 2,687 | $ | 2,699 | ||||||||||||
Ratio of expenses to average net assets* | 0.93 | %(e) | 0.94 | % | 0.99 | % | 0.89 | % | 1.00 | %(d) | 0.99 | %(g) | ||||||||||||
Ratio of net investment income to average net assets* | 1.16 | %(e) | 1.02 | % | 1.51 | % | 0.81 | % | 0.65 | % | 1.33 | %(g) | ||||||||||||
Portfolio turnover(f) | 57 | % | 131 | % | 13 | % | 80 | % | 73 | % | 26 | % | ||||||||||||
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows: | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 0.93 | %(e) | 0.94 | % | 1.12 | % | N/A | 1.04 | %(d) | 4.10 | %(g) | |||||||||||||
Ratio of net investment income (loss) to average net assets | 1.16 | %(e) | 1.02 | % | 1.38 | % | N/A | 0.61 | % | (1.78 | )%(g) | |||||||||||||
** | Non-Annualized | |
(a) | Based on 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) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(d) | The ratio of expenses to average net assets does not reflect credits earned on cash balances. If these credits were reflected as a reduction of expenses, the ratios would decrease by 0.01% for the year ended August 31, 2007. | |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $3,138. | |
(f) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. | |
(g) | Annualized. |
N/A=Not Applicable
ˆ | On June 1, 2010 the fund’s former Class I Shares were reorganized into Class Y Shares. |
NOTE 12—Subsequent Event
The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Structured Core Fund (the “Acquiring Fund”).
The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in May 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.
In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.
20 Invesco Van Kampen Equity Premium Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,148.50 | $ | 6.29 | 1,018.94 | $ | 5.91 | 1.18 | % | |||||||||||||||||||
B | 1,000.00 | 1,143.80 | 10.26 | 1,015.22 | 9.64 | 1.93 | ||||||||||||||||||||||||
C | 1,000.00 | 1,143.80 | 10.26 | 1,015.22 | 9.64 | 1.93 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,150.70 | 4.96 | 1,020.18 | 4.66 | 0.93 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
21 Invesco Van Kampen Equity Premium Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
VK-EQPI-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen Growth and Income Fund
Semiannual Report to Shareholders § February 28, 2011
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: ACGIX § B: ACGJX § C: ACGKX § R: ACGLX § Y: ACGMX § Institutional: ACGQX
A: ACGIX § B: ACGJX § C: ACGKX § R: ACGLX § Y: ACGMX § Institutional: ACGQX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
8 | Financial Statements | |
10 | Notes to Financial Statements | |
16 | Financial Highlights | |
18 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 28.33 | % | ||
Class B Shares | 28.28 | |||
Class C Shares | 27.88 | |||
Class R Shares | 28.16 | |||
Class Y Shares | 28.45 | |||
Institutional Class Shares | 28.58 | |||
Russell 1000 Value Index▼ (Style-Specific Index) | 26.30 | |||
Lipper Large-Cap Value Funds Index▼ (Peer Group Index) | 26.47 | |||
S&P500 Index▼ (Broad Market Index) | 27.73 | |||
▼Lipper Inc. |
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen Growth and Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable
sales charges
sales charges
Class A Shares | ||||
Inception (8/1/46) | 9.40 | % | ||
10 Years | 4.40 | |||
5 Years | 2.21 | |||
1 Year | 12.72 | |||
Class B Shares | ||||
Inception (8/2/93) | 9.38 | % | ||
10 Years | 4.59 | |||
5 Years | 3.00 | |||
1 Year | 14.09 | |||
Class C Shares | ||||
Inception (8/2/93) | 8.96 | % | ||
10 Years | 4.23 | |||
5 Years | 2.63 | |||
1 Year | 17.44 | |||
Class R Shares | ||||
Inception (10/1/02) | 8.43 | % | ||
5 Years | 3.11 | |||
1 Year | 19.02 | |||
Class Y Shares | ||||
Inception (10/19/04) | 6.51 | % | ||
5 Years | 3.63 | |||
1 Year | 19.60 | |||
Institutional Class Shares | ||||
10 Years | 5.02 | % | ||
5 Years | 3.44 | |||
1 Year | 19.64 | |||
Effective June 1, 2010, Class A, Class B, Class C, Class R and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C, Class R and Class Y shares, respectively, of Invesco Van Kampen Growth and Income Fund. Returns shown above for Class A, Class B, Class C, Class R and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Growth and Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
Institutional Class shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||
Inception (8/1/46) | 9.31 | % | ||
10 Years | 3.17 | |||
5 Years | 1.30 | |||
1 Year | 6.43 | |||
Class B Shares | ||||
Inception (8/2/93) | 9.07 | % | ||
10 Years | 3.35 | |||
5 Years | 2.07 | |||
1 Year | 7.44 | |||
Class C Shares | ||||
Inception (8/2/93) | 8.65 | % | ||
10 Years | 3.00 | |||
5 Years | 1.71 | |||
1 Year | 10.80 | |||
Class R Shares | ||||
Inception (10/1/02) | 7.76 | % | ||
5 Years | 2.20 | |||
1 Year | 12.37 | |||
Class Y Shares | ||||
Inception (10/19/04) | 5.57 | % | ||
5 Years | 2.72 | |||
1 Year | 12.92 | |||
Institutional Class Shares | ||||
10 Years | 3.78 | % | ||
5 Years | 2.52 | |||
1 Year | 12.97 | |||
be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares was 0.75%, 0.90%, 1.50%, 1.00%, 0.50% and 0.45%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y and Institutional Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Van Kampen Growth and Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen Growth and Income Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–95.84% | ||||||||
Air Freight & Logistics–0.47% | ||||||||
FedEx Corp. | 391,348 | $ | 35,229,147 | |||||
Asset Management & Custody Banks–0.98% | ||||||||
State Street Corp. | 1,650,379 | 73,804,949 | ||||||
Automobile Manufacturers–0.95% | ||||||||
Ford Motor Co.(b) | 2,337,359 | 35,177,253 | ||||||
General Motors Co.(b) | 1,073,447 | 35,992,678 | ||||||
71,169,931 | ||||||||
Cable & Satellite–3.32% | ||||||||
Comcast Corp.–Class A | 5,685,675 | 146,462,988 | ||||||
Time Warner Cable Inc. | 1,433,755 | 103,488,436 | ||||||
249,951,424 | ||||||||
Communications Equipment–0.87% | ||||||||
Cisco Systems, Inc.(b) | 3,545,450 | 65,803,552 | ||||||
Computer Hardware–2.77% | ||||||||
Dell Inc.(b) | 6,196,449 | 98,089,788 | ||||||
Hewlett-Packard Co. | 2,530,169 | 110,391,273 | ||||||
208,481,061 | ||||||||
Consumer Electronics–1.11% | ||||||||
Sony Corp.–ADR (Japan) | 2,263,992 | 83,405,465 | ||||||
Data Processing & Outsourced Services–1.18% | ||||||||
Western Union Co. | 4,034,603 | 88,720,920 | ||||||
Diversified Banks–1.55% | ||||||||
U.S. Bancorp | 1,701,387 | 47,179,462 | ||||||
Wells Fargo & Co. | 2,154,813 | 69,514,267 | ||||||
116,693,729 | ||||||||
Diversified Chemicals–1.85% | ||||||||
Dow Chemical Co. (The) | 1,888,466 | 70,175,396 | ||||||
PPG Industries, Inc. | 777,397 | 68,706,347 | ||||||
138,881,743 | ||||||||
Diversified Support Services–0.51% | ||||||||
Cintas Corp. | 1,355,012 | 38,102,938 | ||||||
Drug Retail–1.54% | ||||||||
Walgreen Co. | 2,681,136 | 116,200,434 | ||||||
Electric Utilities–3.67% | ||||||||
American Electric Power Co., Inc. | 3,942,062 | 141,046,978 | ||||||
Edison International | 1,112,172 | 41,283,825 | ||||||
Entergy Corp. | 601,537 | 42,829,434 | ||||||
FirstEnergy Corp. | 1,323,946 | 50,707,132 | ||||||
275,867,369 | ||||||||
Food Distributors–0.99% | ||||||||
Sysco Corp. | 2,672,017 | 74,255,353 | ||||||
Health Care Distributors–0.68% | ||||||||
Cardinal Health, Inc. | 1,232,520 | 51,322,133 | ||||||
Health Care Equipment–0.93% | ||||||||
Covidien PLC (Ireland) | 515,792 | 26,537,498 | ||||||
Medtronic, Inc. | 1,068,642 | 42,660,189 | ||||||
69,197,687 | ||||||||
Home Improvement Retail–1.38% | ||||||||
Home Depot, Inc. (The) | 2,772,488 | 103,885,125 | ||||||
Household Products–2.10% | ||||||||
Energizer Holdings, Inc.(b) | 205,728 | 13,748,802 | ||||||
Procter & Gamble Co. (The) | 2,291,249 | 144,463,250 | ||||||
158,212,052 | ||||||||
Human Resource & Employment Services–1.14% | ||||||||
Manpower Inc. | 761,666 | 48,365,791 | ||||||
Robert Half International, Inc. | 1,179,391 | 37,622,573 | ||||||
85,988,364 | ||||||||
Industrial Conglomerates–6.12% | ||||||||
General Electric Co. | 14,726,416 | 308,076,623 | ||||||
Tyco International Ltd. | 3,363,477 | 152,500,047 | ||||||
460,576,670 | ||||||||
Industrial Machinery–1.47% | ||||||||
Dover Corp. | 510,268 | 32,784,719 | ||||||
Ingersoll-Rand PLC (Ireland) | 1,724,390 | 78,114,867 | ||||||
110,899,586 | ||||||||
Insurance Brokers–2.77% | ||||||||
Marsh & McLennan Cos., Inc. | 6,845,135 | 208,365,909 | ||||||
Integrated Oil & Gas–8.25% | ||||||||
ConocoPhillips | 733,007 | 57,079,255 | ||||||
Exxon Mobil Corp. | 1,018,312 | 87,096,225 | ||||||
Hess Corp. | 1,567,268 | 136,399,334 | ||||||
Occidental Petroleum Corp. | 1,846,061 | 188,242,840 | ||||||
Royal Dutch Shell PLC–ADR (United Kingdom) | 2,103,015 | 151,942,834 | ||||||
620,760,488 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen Growth and Income Fund
Shares | Value | |||||||
Integrated Telecommunication Services–1.07% | ||||||||
Verizon Communications Inc. | 2,172,777 | $ | 80,218,927 | |||||
Internet Software & Services–3.25% | ||||||||
eBay Inc.(b) | 4,957,537 | 166,102,277 | ||||||
Yahoo! Inc.(b) | 4,769,339 | 78,217,160 | ||||||
244,319,437 | ||||||||
Investment Banking & Brokerage–3.00% | ||||||||
Charles Schwab Corp. (The) | 5,956,526 | 112,995,298 | ||||||
Morgan Stanley | 3,809,573 | 113,068,127 | ||||||
226,063,425 | ||||||||
IT Consulting & Other Services–0.89% | ||||||||
Amdocs Ltd.(b) | 2,252,476 | 67,213,884 | ||||||
Life & Health Insurance–0.83% | ||||||||
Principal Financial Group, Inc. | 1,823,017 | 62,456,562 | ||||||
Managed Health Care–2.00% | ||||||||
UnitedHealth Group Inc. | 3,542,927 | 150,857,832 | ||||||
Movies & Entertainment–4.02% | ||||||||
Time Warner Inc. | 3,281,404 | 125,349,633 | ||||||
Viacom Inc.–Class B | 3,974,298 | 177,492,149 | ||||||
302,841,782 | ||||||||
Office Services & Supplies–0.58% | ||||||||
Avery Dennison Corp. | 1,087,965 | 43,431,563 | ||||||
Oil & Gas Equipment & Services–2.37% | ||||||||
Baker Hughes Inc. | 234,974 | 16,694,903 | ||||||
Cameron International Corp.(b) | 524,958 | 31,040,766 | ||||||
Schlumberger Ltd. | 1,401,412 | 130,919,909 | ||||||
178,655,578 | ||||||||
Oil & Gas Exploration & Production–3.99% | ||||||||
Anadarko Petroleum Corp. | 2,104,032 | 172,172,938 | ||||||
Devon Energy Corp. | 952,516 | 87,098,063 | ||||||
Noble Energy, Inc. | 441,404 | 40,900,495 | ||||||
300,171,496 | ||||||||
Oil & Gas Storage & Transportation–0.51% | ||||||||
Williams Cos., Inc. (The) | 1,257,037 | 38,163,643 | ||||||
Other Diversified Financial Services–7.92% | ||||||||
Bank of America Corp. | 10,045,853 | 143,555,239 | ||||||
Citigroup Inc.(b) | 20,126,507 | 94,192,053 | ||||||
JPMorgan Chase & Co. | 7,673,311 | 358,266,891 | ||||||
596,014,183 | ||||||||
Packaged Foods & Meats–2.44% | ||||||||
Kraft Foods Inc.–Class A | 3,098,709 | 98,662,894 | ||||||
Unilever NV–New York Shares (Netherlands) | 2,799,899 | 84,668,946 | ||||||
183,331,840 | ||||||||
Personal Products–1.50% | ||||||||
Avon Products, Inc. | 4,067,238 | 113,109,889 | ||||||
Pharmaceuticals–5.49% | ||||||||
Abbott Laboratories | 969,632 | 46,639,299 | ||||||
Bristol-Myers Squibb Co. | 4,100,552 | 105,835,247 | ||||||
Merck & Co., Inc. | 1,746,311 | 56,877,349 | ||||||
Pfizer Inc. | 8,290,089 | 159,501,313 | ||||||
Roche Holding AG–ADR (Switzerland) | 1,184,043 | 44,619,003 | ||||||
413,472,211 | ||||||||
Property & Casualty Insurance–0.68% | ||||||||
Chubb Corp. (The) | 843,393 | 51,177,087 | ||||||
Regional Banks–3.22% | ||||||||
BB&T Corp. | 1,488,917 | 41,094,109 | ||||||
Fifth Third Bancorp | 2,723,782 | 39,767,217 | ||||||
PNC Financial Services Group, Inc. | 2,100,579 | 129,605,725 | ||||||
Regions Financial Corp. | 4,156,911 | 31,758,800 | ||||||
242,225,851 | ||||||||
Semiconductors–0.89% | ||||||||
Intel Corp. | 3,129,992 | 67,200,928 | ||||||
Soft Drinks–1.16% | ||||||||
Coca-Cola Co. (The) | 805,957 | 51,516,771 | ||||||
Coca-Cola Enterprises Inc. | 1,360,909 | 35,791,907 | ||||||
87,308,678 | ||||||||
Specialty Chemicals–0.50% | ||||||||
LyondellBasell Industries N.V.–Class A (Netherlands)(b) | 988,351 | 37,636,406 | ||||||
Systems Software–1.26% | ||||||||
Microsoft Corp. | 3,576,609 | 95,066,267 | ||||||
Wireless Telecommunication Services–1.67% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 4,393,178 | 125,732,754 | ||||||
Total Common Stocks & Other Equity Interests (Cost $6,046,881,403) | 7,212,446,252 | |||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen Growth and Income Fund
Shares | Value | |||||||
Money Market Funds–3.96% | ||||||||
Liquid Assets Portfolio–Institutional Class(c) | 149,161,813 | $ | 149,161,813 | |||||
Premier Portfolio–Institutional Class(c) | 149,161,813 | 149,161,813 | ||||||
Total Money Market Funds (Cost $298,323,626) | 298,323,626 | |||||||
TOTAL INVESTMENTS–99.80% (Cost $6,345,205,029) | 7,510,769,878 | |||||||
OTHER ASSETS LESS LIABILITIES–0.20% | 14,854,180 | |||||||
NET ASSETS–100.00% | $ | 7,525,624,058 | ||||||
Investment Abbreviation:
ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
By sector, based on net assets
as of February 28, 2011
Financials | 21.0 | % | ||
Energy | 15.1 | |||
Information Technology | 11.1 | |||
Consumer Discretionary | 10.8 | |||
Industrials | 10.3 | |||
Consumer Staples | 9.7 | |||
Health Care | 9.1 | |||
Utilities | 3.7 | |||
Telecommunication Services | 2.7 | |||
Materials | 2.3 | |||
Money Market Funds Plus Other Assets Less Liabilities | 4.2 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen Growth and Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $6,046,881,403) | $ | 7,212,446,252 | ||
Investments in affiliated money market funds, at value and cost | 298,323,626 | |||
Total investments, at value (Cost $6,345,205,029) | 7,510,769,878 | |||
Receivable for: | ||||
Investments sold | 15,518,791 | |||
Fund shares sold | 16,528,811 | |||
Dividends | 16,861,105 | |||
Fund expenses absorbed | 180,863 | |||
Investment for trustee deferred compensation and retirement plans | 9,529 | |||
Other assets | 49,627 | |||
Total assets | 7,559,918,604 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 2,562,776 | |||
Fund shares reacquired | 26,845,946 | |||
Accrued fees to affiliates | 4,310,857 | |||
Accrued other operating expenses | 536,502 | |||
Trustee deferred compensation and retirement plans | 38,465 | |||
Total liabilities | 34,294,546 | |||
Net assets applicable to shares outstanding | $ | 7,525,624,058 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 6,883,554,701 | ||
Undistributed net investment income | 13,023,403 | |||
Undistributed net realized gain (loss) | (536,518,895 | ) | ||
Unrealized appreciation | 1,165,564,849 | |||
$ | 7,525,624,058 | |||
Net Assets: | ||||
Class A | $ | 4,945,425,345 | ||
Class B | $ | 244,494,037 | ||
Class C | $ | 313,406,713 | ||
Class R | $ | 159,014,272 | ||
Class Y | $ | 1,708,407,620 | ||
Institutional Class | $ | 154,876,071 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 241,234,312 | |||
Class B | 12,017,109 | |||
Class C | 15,435,419 | |||
Class R | 7,754,540 | |||
Class Y | 83,268,061 | |||
Institutional Class | 7,539,305 | |||
Class A: | ||||
Net asset value per share | $ | 20.50 | ||
Maximum offering price per share | ||||
(Net asset value of $20.50 divided by 94.25%) | $ | 21.75 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 20.35 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 20.30 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 20.51 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 20.52 | ||
Institutional Class: | ||||
Net asset value and offering price per share | $ | 20.54 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen Growth and Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $532,310) | $ | 68,392,954 | ||
Dividends from affiliated money market funds | 192,352 | |||
Total investment income | 68,585,306 | |||
Expenses: | ||||
Advisory fees | 12,199,166 | |||
Administrative services fees | 350,916 | |||
Custodian fees | 83,012 | |||
Distribution fees: | ||||
Class A | 5,742,605 | |||
Class B | 341,512 | |||
Class C | 1,470,914 | |||
Class R | 358,287 | |||
Transfer agent fees — A, B, C, R and Y | 7,424,726 | |||
Transfer agent fees — Institutional | 2,770 | |||
Trustees’ and officers’ fees and benefits | 87,283 | |||
Other | 5,400 | |||
Total expenses | 28,066,591 | |||
Less: Fees waived and expense offset arrangement(s) | (226,189 | ) | ||
Net expenses | 27,840,402 | |||
Net investment income | 40,744,904 | |||
Net realized gain from investment securities | 207,593,729 | |||
Change in net unrealized appreciation of investment securities | 1,435,002,166 | |||
Net realized and unrealized gain | 1,642,595,895 | |||
Net increase in net assets resulting from operations | $ | 1,683,340,799 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen Growth and Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the nine months ended August 31, 2010 and the year ended November 30, 2009
(Unaudited)
For the | For the | For the | ||||||||||
six months ended | nine months ended | year ended | ||||||||||
February 28, | August 31, | November 30, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 40,744,904 | $ | 66,058,781 | $ | 87,509,634 | ||||||
Net realized gain (loss) | 207,593,729 | 227,794,122 | (393,154,825 | ) | ||||||||
Change in net unrealized appreciation (depreciation) | 1,435,002,166 | (655,291,184 | ) | 1,496,446,937 | ||||||||
Net increase (decrease) in net assets resulting from operations | 1,683,340,799 | (361,438,281 | ) | 1,190,801,746 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (24,141,296 | ) | (46,288,757 | ) | (70,464,829 | ) | ||||||
Class B | (1,138,394 | ) | (2,797,501 | ) | (5,807,436 | ) | ||||||
Class C | (505,750 | ) | (1,469,851 | ) | (3,052,534 | ) | ||||||
Class R | (572,537 | ) | (966,152 | ) | (1,240,399 | ) | ||||||
Class Y | (9,220,263 | ) | (14,834,399 | ) | (16,453,885 | ) | ||||||
Institutional Class | (398,507 | ) | (7,403 | ) | — | |||||||
Total distributions from net investment income | (35,976,747 | ) | (66,364,063 | ) | (97,019,083 | ) | ||||||
Share transactions–net: | ||||||||||||
Class A | (286,817,669 | ) | (79,552,064 | ) | (678,175,907 | ) | ||||||
Class B | (46,428,347 | ) | (73,657,762 | ) | (106,688,362 | ) | ||||||
Class C | (26,882,743 | ) | (28,153,841 | ) | (45,428,209 | ) | ||||||
Class R | 2,607,780 | 23,921,215 | 8,022,019 | |||||||||
Class Y | 147,700,343 | 200,227,325 | 59,355,169 | |||||||||
Institutional Class | 94,356,258 | 42,659,039 | — | |||||||||
Net increase (decrease) in net assets resulting from share transactions | (115,464,378 | ) | 85,443,912 | (762,915,290 | ) | |||||||
Net increase (decrease) in net assets | 1,531,899,674 | (342,358,432 | ) | 330,867,373 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 5,993,724,384 | 6,336,082,816 | 6,005,215,443 | |||||||||
End of period (includes undistributed net investment income of $13,023,403, $8,255,246 and $8,560,528, respectively) | $ | 7,525,624,058 | $ | 5,993,724,384 | $ | 6,336,082,816 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen Growth and Income Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust) (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Van Kampen Growth and Income Fund (the “Acquired Fund”). The Acquired Fund was reorganized on June 1, 2010 (The “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C, Class R and Class I shares received Class A, Class B, Class C, Class R and Class Y shares, respectively, of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is income and long-term growth of capital.
10 Invesco Van Kampen Growth and Income Fund
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Institutional 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. 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. 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 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 bonds) 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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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 |
11 Invesco Van Kampen Growth and Income Fund
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 are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 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 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 the Institutional Class 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 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. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. | |
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. |
12 Invesco Van Kampen Growth and Income Fund
The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. |
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 Net Assets | Rate | |||
First $150 million | 0 | .50% | ||
Next $100 million | 0 | .45% | ||
Next $100 million | 0 | .40% | ||
Over $350 million | 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 Trimark 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 provides 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares to 0.88%, 1.63%, 1.63%, 1.13%, 0.63% and 0.63% of average daily net assets, respectively. 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 operating expenses after fee waiver 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $221,585.
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 February 28, 2011, expenses incurred under these agreements 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 February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares, Class C shares and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended February 28, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the six months ended February 28, 2011, IDI advised the Fund that IDI retained $160,244 in front-end sales commissions from the sale of Class A shares and $378, $114,155 and $9,286 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 Invesco, 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
13 Invesco Van Kampen Growth and Income Fund
(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 February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 7,466,150,875 | $ | 44,619,003 | $ | — | $ | 7,510,769,878 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $4,604.
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $6,616 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 731,993,141 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
14 Invesco Van Kampen Growth and Income Fund
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 February 28, 2011 was $827,193,480 and $991,736,304, 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 | $ | 1,235,467,762 | ||
Aggregate unrealized (depreciation) of investment securities | (82,022,396 | ) | ||
Net unrealized appreciation of investment securities | $ | 1,153,445,366 | ||
Cost of investments for tax purposes is $6,357,324,512. |
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Nine months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | November 30, 2009 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 19,371,561 | (b) | $ | 363,777,997 | (b) | 40,694,820 | (c) | $ | 707,176,618 | (c) | 57,927,682 | $ | 807,430,785 | |||||||||||
Class B | 322,857 | 5,838,544 | 934,228 | 16,167,953 | 2,148,011 | 29,667,060 | ||||||||||||||||||
Class C | 540,391 | 10,128,706 | 1,252,711 | 21,780,200 | 2,037,857 | 28,300,443 | ||||||||||||||||||
Class R | 1,132,038 | 21,077,250 | 2,423,181 | 42,296,238 | 2,343,353 | 33,092,151 | ||||||||||||||||||
Class Y | 18,875,607 | 351,894,763 | 29,182,798 | 503,102,992 | 27,202,880 | 396,177,523 | ||||||||||||||||||
Institutional Class | 6,898,314 | 128,768,603 | 2,638,781 | 43,251,096 | — | — | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 1,263,180 | 22,496,725 | 2,544,181 | 43,649,414 | 4,949,122 | 66,221,754 | ||||||||||||||||||
Class B | 59,892 | 1,056,519 | 154,168 | 2,633,398 | 411,733 | 5,438,004 | ||||||||||||||||||
Class C | 25,575 | 449,336 | 69,351 | 1,190,861 | 192,064 | 2,487,495 | ||||||||||||||||||
Class R | 32,076 | 571,748 | 50,681 | 870,627 | 82,308 | 1,099,777 | ||||||||||||||||||
Class Y | 490,807 | 8,759,106 | 714,655 | 12,230,024 | 956,393 | 12,847,279 | ||||||||||||||||||
Institutional Class | 22,114 | 398,471 | 3 | 38 | — | — | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (36,058,266 | ) | (673,092,391 | ) | (48,110,313 | ) | (830,378,096 | ) | (119,809,171 | ) | (1,551,828,446 | ) | ||||||||||||
Class B | (2,876,603 | )(b) | (53,323,410 | )(b) | (5,374,410 | )(c) | (92,459,113 | )(c) | (10,314,145 | ) | (141,793,426 | ) | ||||||||||||
Class C | (2,039,955 | ) | (37,460,785 | ) | (2,985,220 | ) | (51,124,902 | ) | (5,586,391 | ) | (76,216,147 | ) | ||||||||||||
Class R | (1,014,756 | ) | (19,041,218 | ) | (1,113,115 | ) | (19,245,650 | ) | (1,842,190 | ) | (26,169,909 | ) | ||||||||||||
Class Y | (11,159,573 | ) | (212,953,526 | ) | (18,516,612 | ) | (315,105,691 | ) | (25,304,022 | ) | (349,669,633 | ) | ||||||||||||
Institutional Class | (1,984,713 | ) | (34,810,816 | ) | (35,194 | ) | (592,095 | ) | — | — | ||||||||||||||
Net increase (decrease) in share activity | (6,099,454 | ) | $ | (115,464,378 | ) | 4,524,694 | $ | 85,443,912 | (64,604,516 | ) | $ | (762,915,290 | ) | |||||||||||
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 21% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, 1% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. | |
(b) | Includes automatic conversion of 1,450,822 Class B shares into 1,439,377 Class A shares at a value of $27,024,808. | |
(c) | Includes automatic conversion of 1,668,282 Class B shares into 1,654,934 Class A shares at a value of $28,323,179. |
15 Invesco Van Kampen Growth and Income Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | Ratio of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | expenses | expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(losses) on | to average | to average net | Ratio of net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | securities | Dividends | Distributions | net assets | assets without | investment | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | fee waivers | income | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | and/or expenses | to average | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | gains | Distributions | of period | return | (000s omitted) | absorbed | absorbed | net assets | turnover(b) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 16.06 | $ | 0.11 | $ | 4.43 | $ | 4.54 | $ | (0.10 | ) | $ | — | $ | (0.10 | ) | $ | 20.50 | 28.33 | %(c) | $ | 4,945,425 | 0.83 | %(d) | 0.84 | %(d) | 1.17 | %(d) | 13 | % | ||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.19 | 0.18 | (1.13 | ) | (0.95 | ) | (0.18 | ) | — | (0.18 | ) | 16.06 | (5.60 | )(c) | 4,122,779 | 0.74 | 0.74 | 1.36 | 23 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.87 | 0.23 | 3.34 | 3.57 | (0.25 | ) | — | (0.25 | ) | 17.19 | 26.24 | (e) | 4,496,159 | 0.88 | 0.88 | 1.58 | 51 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 22.72 | 0.33 | (7.86 | ) | (7.53 | ) | (0.37 | ) | (0.95 | ) | (1.32 | ) | 13.87 | (35.05 | )(e) | 4,416,052 | 0.79 | 0.79 | 1.78 | 42 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 22.62 | 0.36 | 1.21 | 1.57 | (0.39 | ) | (1.08 | ) | (1.47 | ) | 22.72 | 7.26 | (e) | 7,793,361 | 0.77 | 0.77 | 1.58 | 26 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 21.72 | 0.35 | 2.43 | 2.78 | (0.31 | ) | (1.57 | ) | (1.88 | ) | 22.62 | 13.76 | (e) | 7,711,863 | 0.79 | 0.79 | 1.66 | 30 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 19.55 | 0.26 | 2.38 | 2.64 | (0.25 | ) | (0.22 | ) | (0.47 | ) | 21.72 | 13.74 | (e) | 6,439,404 | 0.80 | 0.80 | 1.27 | 43 | ||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 15.93 | 0.10 | 4.40 | 4.50 | (0.08 | ) | — | (0.08 | ) | 20.35 | 28.34 | (c)(f) | 244,494 | 0.86 | (d)(f) | 0.87 | (d)(f) | 1.14 | (d)(f) | 13 | ||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.05 | 0.16 | (1.12 | ) | (0.96 | ) | (0.16 | ) | — | (0.16 | ) | 15.93 | (5.69 | )(c)(f) | 231,193 | 0.89 | (f) | 0.89 | (f) | 1.21 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.76 | 0.22 | 3.32 | 3.54 | (0.25 | ) | — | (0.25 | ) | 17.05 | 26.32 | (g)(h) | 320,577 | 0.89 | (h) | 0.89 | (h) | 1.59 | (h) | 51 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 22.57 | 0.32 | (7.81 | ) | (7.49 | ) | (0.37 | ) | (0.95 | ) | (1.32 | ) | 13.76 | (35.09 | )(g)(h) | 365,277 | 0.84 | (h) | 0.84 | (h) | 1.72 | (h) | 42 | |||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 22.47 | 0.34 | 1.20 | 1.54 | (0.36 | ) | (1.08 | ) | (1.44 | ) | 22.57 | 7.18 | (g)(h) | 77,759 | 0.85 | (h) | 0.85 | (h) | 1.50 | (h) | 26 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 21.52 | 0.34 | 2.41 | 2.75 | (0.23 | ) | (1.57 | ) | (1.80 | ) | 22.47 | 13.70 | (g)(h) | 869,869 | 0.84 | (h) | 0.84 | (h) | 1.60 | (h) | 30 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 19.37 | 0.10 | 2.37 | 2.47 | (0.10 | ) | (0.22 | ) | (0.32 | ) | 21.52 | 12.93 | (g) | 916,588 | 1.56 | 1.56 | 0.50 | 43 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 15.91 | 0.04 | 4.38 | 4.42 | (0.03 | ) | — | (0.03 | ) | 20.30 | 27.82 | (c) | 313,407 | 1.58 | (d) | 1.59 | (d) | 0.42 | (d) | 13 | ||||||||||||||||||||||||||||||||||||
Nine month ended 08/31/10 | 17.03 | 0.08 | (1.12 | ) | (1.04 | ) | (0.08 | ) | — | (0.08 | ) | 15.91 | (6.13 | )(c) | 269,051 | 1.49 | 1.49 | 0.61 | 23 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.74 | 0.12 | 3.32 | 3.44 | (0.15 | ) | — | (0.15 | ) | 17.03 | 25.36 | (h)(i) | 316,283 | 1.62 | (h) | 1.62 | (h) | 0.84 | (h) | 51 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 22.53 | 0.20 | (7.81 | ) | (7.61 | ) | (0.23 | ) | (0.95 | ) | (1.18 | ) | 13.74 | (35.54 | )(h)(i) | 301,306 | 1.51 | (h) | 1.51 | (h) | 1.06 | (h) | 42 | |||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 22.43 | 0.20 | 1.21 | 1.41 | (0.23 | ) | (1.08 | ) | (1.31 | ) | 22.53 | 6.53 | (h)(i) | 591,037 | 1.48 | (h) | 1.48 | (h) | 0.87 | (h) | 26 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 21.56 | 0.19 | 2.41 | 2.60 | (0.16 | ) | (1.57 | ) | (1.73 | ) | 22.43 | 12.88 | (i) | 620,565 | 1.54 | 1.54 | 0.91 | 30 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 19.41 | 0.10 | 2.37 | 2.47 | (0.10 | ) | (0.22 | ) | (0.32 | ) | 21.56 | 12.90 | (i) | 557,234 | 1.56 | 1.56 | 0.51 | 43 | ||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 16.07 | 0.08 | 4.43 | 4.51 | (0.07 | ) | — | (0.07 | ) | 20.51 | 28.16 | (c) | 159,014 | 1.08 | (d) | 1.09 | (d) | 0.91 | (d) | 13 | ||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.19 | 0.14 | (1.11 | ) | (0.97 | ) | (0.15 | ) | — | (0.15 | ) | 16.07 | (5.72 | )(c) | 122,188 | 0.99 | 0.99 | 1.11 | 23 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.87 | 0.18 | 3.35 | 3.53 | (0.21 | ) | — | (0.21 | ) | 17.19 | 26.00 | (j) | 107,371 | 1.13 | 1.13 | 1.29 | 51 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 22.73 | 0.29 | (7.88 | ) | (7.59 | ) | (0.32 | ) | (0.95 | ) | (1.27 | ) | 13.87 | (35.25 | )(j) | 78,522 | 1.04 | 1.04 | 1.53 | 42 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 22.62 | 0.30 | 1.22 | 1.52 | (0.33 | ) | (1.08 | ) | (1.41 | ) | 22.73 | 7.03 | (j) | 140,227 | 1.02 | 1.02 | 1.33 | 26 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 21.72 | 0.31 | 2.42 | 2.73 | (0.26 | ) | (1.57 | ) | (1.83 | ) | 22.62 | 13.48 | (j) | 128,511 | 1.04 | 1.04 | 1.46 | 30 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 19.55 | 0.21 | 2.38 | 2.59 | (0.20 | ) | (0.22 | ) | (0.42 | ) | 21.72 | 13.46 | (j) | 45,135 | 1.05 | 1.05 | 1.02 | 43 | ||||||||||||||||||||||||||||||||||||||
Class Yˆ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 16.08 | 0.13 | 4.43 | 4.56 | (0.12 | ) | — | (0.12 | ) | 20.52 | 28.45 | (c) | 1,708,408 | 0.58 | (d) | 0.59 | (d) | 1.41 | (d) | 13 | ||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.21 | 0.21 | (1.13 | ) | (0.92 | ) | (0.21 | ) | — | (0.21 | ) | 16.08 | (5.41 | )(c) | 1,206,652 | 0.49 | 0.49 | 1.61 | 23 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 13.88 | 0.26 | 3.35 | 3.61 | (0.28 | ) | — | (0.28 | ) | 17.21 | 26.60 | (k) | 1,095,692 | 0.63 | 0.63 | 1.81 | 51 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/08 | 22.74 | 0.38 | (7.87 | ) | (7.49 | ) | (0.42 | ) | (0.95 | ) | (1.37 | ) | 13.88 | (34.90 | )(k) | 844,058 | 0.54 | 0.54 | 2.04 | 42 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/07 | 22.63 | 0.41 | 1.23 | 1.64 | (0.45 | ) | (1.08 | ) | (1.53 | ) | 22.74 | 7.57 | (k) | 1,185,286 | 0.52 | 0.52 | 1.83 | 26 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/06 | 21.73 | 0.41 | 2.43 | 2.84 | (0.37 | ) | (1.57 | ) | (1.94 | ) | 22.63 | 13.98 | (k) | 881,182 | 0.54 | 0.54 | 1.92 | 30 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/05 | 19.55 | 0.28 | 2.42 | 2.70 | (0.30 | ) | (0.22 | ) | (0.52 | ) | 21.73 | 14.11 | (k) | 781,610 | 0.57 | 0.57 | 1.41 | 43 | ||||||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 16.08 | 0.15 | 4.43 | 4.58 | (0.12 | ) | — | (0.12 | ) | 20.54 | 28.58 | (c) | 154,876 | 0.37 | (d) | 0.38 | (d) | 1.63 | (d) | 13 | ||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10(l) | 16.48 | 0.05 | (0.39 | ) | (0.34 | ) | (0.06 | ) | — | (0.06 | ) | 16.08 | (2.05 | )(c) | 41,861 | 0.45 | 0.45 | 1.31 | 23 | |||||||||||||||||||||||||||||||||||||
(a) | Calculated using average shares outstanding. | |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(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. | |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $4,639,229, $247,128, $296,900, $144,516, $1,506,869 and $86,937 for Class A, Class B, Class C, Class R, Class Y and Institutional Class, respectively. | |
(e) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of the Fund shares. | |
(f) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.28% and 0.40% for the six months ended February 28, 2011 and nine months ended August 31, 2010, respectively. |
16 Invesco Van Kampen Growth and Income Fund
(g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(h) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of less than 1%. | |
(i) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(j) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(k) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(l) | Commencement date of June 1, 2010. | |
ˆ | On June 1, 2010, the Fund’s former Class I shares were reorganized into Class Y shares. |
17 Invesco Van Kampen Growth and Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010, through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,283.30 | $ | 4.70 | $ | 1,020.68 | $ | 4.16 | 0.83 | % | ||||||||||||||||||
B | 1,000.00 | 1,282.80 | 4.87 | 1,020.53 | 4.31 | 0.86 | ||||||||||||||||||||||||
C | 1,000.00 | 1,278.80 | 8.93 | 1,016.96 | 7.90 | 1.58 | ||||||||||||||||||||||||
R | 1,000.00 | 1,281.60 | 6.11 | 1,019.44 | 5.41 | 1.08 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,284.50 | 3.29 | 1,021.92 | 2.91 | 0.58 | ||||||||||||||||||||||||
Institutional | 1,000.00 | 1,285.80 | 2.10 | 1,022.96 | 1.86 | 0.37 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
18 Invesco Van Kampen Growth and Income Fund
Invesco mailing information
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You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
VK-GRI-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen Pennsylvania Tax Free Income Fund
Nasdaq:
A: VKMPX § B: VKPAX § C: VKPCX § Y: VKPYX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
10 | Financial Statements | |
12 | Notes to Financial Statements | |
18 | Financial Highlights | |
19 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | -3.98 | % | ||
Class B Shares | -4.28 | |||
Class C Shares | -4.34 | |||
Class Y Shares | -3.92 | |||
Barclays Capital Municipal Bond Index▼ (Broad Market Index) | -3.51 | |||
Barclays Capital Pennsylvania Municipal Indexn (Style-Specific Index) | -3.20 | |||
▼Lipper Inc.; nInvesco, IDC via FactSet Research |
The Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.
The Barclays Capital Pennsylvania Municipal Index tracks the performance of Pennsylvania issued municipal bonds rated at least Baa or BBB by Moody’s or S&P, respectively, with maturities greater than two years.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
After Taxes | ||||||||||||||||
on Distributions | ||||||||||||||||
Before | After Taxes on | and Sale of | ||||||||||||||
Taxes | Distributions | Fund Shares | ||||||||||||||
Class A Shares | ||||||||||||||||
Inception (5/1/87) | 5.65 | % | 5.63 | % | 5.67 | % | ||||||||||
10 | Years | 3.00 | 2.98 | 3.19 | ||||||||||||
5 | Years | 1.07 | 1.05 | 1.54 | ||||||||||||
1 | Year | -3.27 | -3.27 | -0.60 | ||||||||||||
Class B Shares | ||||||||||||||||
Inception (5/3/93) | 3.86 | % | 3.85 | % | 3.96 | % | ||||||||||
10 | Years | 2.90 | 2.88 | 3.05 | ||||||||||||
5 | Years | 1.17 | 1.15 | 1.57 | ||||||||||||
1 | Year | -4.00 | -4.00 | -1.21 | ||||||||||||
Class C Shares | ||||||||||||||||
Inception (8/13/93) | 3.30 | % | 3.29 | % | 3.40 | % | ||||||||||
10 | Years | 2.75 | 2.73 | 2.89 | ||||||||||||
5 | Years | 1.30 | 1.27 | 1.64 | ||||||||||||
1 | Year | -0.21 | -0.21 | 1.19 | ||||||||||||
Class Y Shares | ||||||||||||||||
10 | Years | 3.52 | % | 3.50 | % | 3.66 | % | |||||||||
5 | Years | 2.10 | 2.08 | 2.44 | ||||||||||||
1 | Year | 1.77 | 1.77 | 2.82 |
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
After Taxes | ||||||||||||||||
on Distributions | ||||||||||||||||
Before | After Taxes on | and Sale of | ||||||||||||||
Taxes | Distributions | Fund Shares | ||||||||||||||
Class A Shares | ||||||||||||||||
Inception (5/1/87) | 5.68 | % | 5.67 | % | 5.70 | % | ||||||||||
10 | Years | 3.06 | 3.04 | 3.24 | ||||||||||||
5 | Years | 1.30 | 1.28 | 1.73 | ||||||||||||
1 | Year | -1.82 | -1.82 | 0.38 | ||||||||||||
Class B Shares | ||||||||||||||||
Inception (5/3/93) | 3.90 | % | 3.88 | % | 3.98 | % | ||||||||||
10 | Years | 2.98 | 2.96 | 3.11 | ||||||||||||
5 | Years | 1.39 | 1.36 | 1.75 | ||||||||||||
1 | Year | -2.43 | -2.43 | -0.13 | ||||||||||||
Class C Shares | ||||||||||||||||
Inception (8/13/93) | 3.34 | % | 3.33 | % | 3.44 | % | ||||||||||
10 | Years | 2.82 | 2.80 | 2.95 | ||||||||||||
5 | Years | 1.53 | 1.51 | 1.84 | ||||||||||||
1 | Year | 1.39 | 1.39 | 2.27 | ||||||||||||
Class Y Shares | ||||||||||||||||
10 | Years | 3.59 | % | 3.56 | % | 3.71 | % | |||||||||
5 | Years | 2.33 | 2.30 | 2.63 | ||||||||||||
1 | Year | 3.30 | 3.30 | 3.84 |
Effective June 1, 2010, Class A, Class B and Class C shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B and Class C shares, respectively, of Invesco Van Kampen Pennsylvania Tax Free Income Fund. Returns shown above for Class A, Class B and Class C shares are blended returns of the predecessor fund and Invesco Van Kampen Pennsylvania Tax Free Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class Y shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A shares performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum
sales charge unless otherwise stated. Before tax performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.08%, 1.57%, 1.83% and 0.83%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 4% at the time of purchase to 0% at the beginning of the seventh year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time
of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.
3 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”
Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Schedule of Investments
February 28, 2011
(Unaudited)
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Municipal Obligations–100.21% | ||||||||||||||||
Pennsylvania–92.25% | ||||||||||||||||
Allegheny (County of) Higher Education Building Authority (Duquesne University); | ||||||||||||||||
Series 1998, Ref. University RB (INS–AMBAC)(a) | 5.50 | % | 03/01/20 | $ | 1,750 | $ | 1,889,195 | |||||||||
Series 2011 A, University RB | 5.50 | % | 03/01/31 | 550 | 555,478 | |||||||||||
Allegheny (County of) Higher Education Building Authority (Robert Morris University); Series 2008 A, University RB | 6.00 | % | 10/15/38 | 1,000 | 942,220 | |||||||||||
Allegheny (County of) Hospital Development Authority (Ohio Valley General Hospital); Series 2005 A, RB | 5.00 | % | 04/01/25 | 1,600 | 1,349,152 | |||||||||||
Allegheny (County of) Hospital Development Authority (University of Pittsburgh Medical); Series 2009, RB | 5.63 | % | 08/15/39 | 1,250 | 1,221,362 | |||||||||||
Allegheny (County of) Hospital Development Authority (West Pennsylvania Health System); Series 2007 A, RB | 5.38 | % | 11/15/40 | 150 | 96,663 | |||||||||||
Allegheny (County of) Industrial Development Authority (AFCO Cargo PIT, LLC); Series 1999, Cargo Facilities Lease RB(b) | 6.63 | % | 09/01/24 | 980 | 829,864 | |||||||||||
Allegheny (County of) Industrial Development Authority (Residential, Inc.); Series 2006, Lease RB | 5.10 | % | 09/01/26 | 980 | 842,898 | |||||||||||
Allegheny (County of) Redevelopment Authority (Pittsburgh Mills); Series 2004, Tax Allocation RB | 5.60 | % | 07/01/23 | 1,220 | 1,099,854 | |||||||||||
Allegheny (County of) Residential Finance Authority; Series 2006 TT, Single Family Mortgage RB (INS–GNMA/FNMA)(a)(b) | 5.00 | % | 05/01/35 | 1,130 | 1,062,042 | |||||||||||
Allegheny (County of); Series 2008 C 61, Unlimited Tax GO Bonds (INS–AGL)(a) | 5.00 | % | 12/01/33 | 1,000 | 995,210 | |||||||||||
Allegheny Valley Joint School District; Series 2004 A, Unlimited Tax GO Bonds (INS–NATL)(a) | 5.00 | % | 11/01/28 | 1,500 | 1,515,435 | |||||||||||
Beaver (County of) Pennsylvania; Series 2009, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.55 | % | 11/15/31 | 1,390 | 1,439,039 | |||||||||||
Berks (County of) Industrial Development Authority (One Douglassville); Series 2007 A, Ref. First Mortgage RB(b) | 6.13 | % | 11/01/34 | 480 | 382,445 | |||||||||||
Berks (County of) Municipal Authority (Albright College); Series 2004, College RB | 5.50 | % | 10/01/18 | 1,895 | 1,835,535 | |||||||||||
Bethlehem Area School District; Series 2010, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.25 | % | 01/15/26 | 1,000 | 1,024,180 | |||||||||||
Bucks (County of) Industrial Development Authority (Ann’s Choice, Inc. Facility); | ||||||||||||||||
Series 2005 A, Retirement Community RB | 5.90 | % | 01/01/27 | 1,000 | 917,960 | |||||||||||
Series 2005 A, Retirement Community RB | 6.13 | % | 01/01/25 | 1,500 | 1,431,900 | |||||||||||
Bucks (County of) Industrial Development Authority (Lutheran Community Telford Center); Series 2007, RB | 5.75 | % | 01/01/37 | 2,000 | 1,521,880 | |||||||||||
Centre (County of) Hospital Authority (Mount Nittany Medical Center); Series 2009, Hospital RB (INS–AGL)(a) | 6.13 | % | 11/15/39 | 1,000 | 1,016,140 | |||||||||||
Chartiers Valley Industrial & Commercial Development Authority (Asbury Health Center); | ||||||||||||||||
Series 2006, Ref. First Mortgage RB | 5.25 | % | 12/01/15 | 500 | 479,245 | |||||||||||
Series 2006, Ref. First Mortgage RB | 5.75 | % | 12/01/22 | 900 | 851,004 | |||||||||||
Cumberland (County of) Municipal Authority (Asbury Pennsylvania Obligated Group); Series 2010, RB | 6.00 | % | 01/01/40 | 800 | 687,336 | |||||||||||
Cumberland (County of) Municipal Authority (Diakon Lutheran Ministries); Series 2007, RB | 5.00 | % | 01/01/36 | 1,000 | 820,490 | |||||||||||
Cumberland (County of) Municipal Authority (Messiah Village); Series 2008 A, RB | 5.63 | % | 07/01/28 | 1,000 | 873,930 | |||||||||||
Dauphin (County of) General Authority (Pinnacle Health System); Series 2009 A, Health System RB | 6.00 | % | 06/01/36 | 2,215 | 2,109,810 | |||||||||||
Dauphin (County of) General Authority (Riverfront Office); Series 1998, Office & Package RB | 6.00 | % | 01/01/25 | 1,155 | 900,149 | |||||||||||
Delaware (City of) River Port Authority; Series 2010 D, RB | 5.00 | % | 01/01/40 | 1,000 | 971,670 | |||||||||||
Delaware (County of) Authority (Cabrini College); Series 1999, Unrefunded Balance College RB (INS–RADIAN)(a) | 5.75 | % | 07/01/23 | 220 | 220,020 | |||||||||||
Delaware (County of) Authority (Neumann College); | ||||||||||||||||
Series 2001, Ref. College RB(c)(d) | 6.00 | % | 10/01/11 | 1,500 | 1,549,635 | |||||||||||
Series 2008, College RB | 6.25 | % | 10/01/38 | 500 | 491,575 | |||||||||||
Delaware (County of) Industrial Development Authority (Aqua Pennsylvania, Inc.); Series 2005 A, Water Facilities RB (INS–NATL/FGIC)(a)(b) | 5.00 | % | 11/01/38 | 1,500 | 1,369,110 | |||||||||||
Delaware (County of) Industrial Development Authority (Philadelphia Suburban Water); Series 2001, Water Facilities RB (INS–AMBAC)(a)(b) | 5.35 | % | 10/01/31 | 2,500 | 2,485,975 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Pennsylvania–(continued) | ||||||||||||||||
Delaware Valley Regional Financial Authority; | ||||||||||||||||
Series 2002, Local Government RB | 5.75 | % | 07/01/17 | $ | 3,535 | $ | 3,910,806 | |||||||||
Series 2002, Local Government RB | 5.75 | % | 07/01/32 | 2,000 | 1,988,880 | |||||||||||
Erie Higher Education Building Authority (Mercyhurst College); | ||||||||||||||||
Series 2004 B, Ref. College RB | 5.00 | % | 03/15/23 | 1,000 | 1,005,580 | |||||||||||
Series 2008, College RB | 5.50 | % | 03/15/38 | 500 | 471,190 | |||||||||||
Franklin (County of) Industrial Development Authority (Chambersburg Hospital); Series 2010, RB | 5.38 | % | 07/01/42 | 1,000 | 914,700 | |||||||||||
Greensburg Salem School District; Series 2002, Ref. Unlimited Tax GO Bonds (INS–NATL/FGIC)(a) | 5.38 | % | 09/15/17 | 1,415 | 1,501,386 | |||||||||||
Harrisburg Authority; Series 2008, Ref. Water RB | 5.25 | % | 07/15/31 | 1,000 | 814,220 | |||||||||||
Lancaster (County of) Hospital Authority (St. Anne’s Home); Series 1999, Health Center RB | 6.60 | % | 04/01/24 | 1,000 | 913,560 | |||||||||||
Lebanon (County of) Good Samaritan Hospital Authority (Pleasant View Retirement); Series 2005 A, Health Center RB | 5.30 | % | 12/15/26 | 1,000 | 857,220 | |||||||||||
Lehigh (County of) General Purpose Authority (KidsPeace Obligated Group); Series 1998, RB | 6.00 | % | 11/01/23 | 1,760 | 1,299,760 | |||||||||||
Lehigh (County of) General Purpose Authority (St. Luke’s Bethlehem); Series 2003, Hospital RB(c)(d) | 5.25 | % | 08/15/13 | 980 | 1,084,027 | |||||||||||
Lehigh (County of) Industrial Development Authority (Lifepath, Inc.); Series 1998, Health Facilities RB | 6.30 | % | 06/01/28 | 1,085 | 800,220 | |||||||||||
Lycoming (County of) Authority (Susquehanna Health System); Series 2009 A, Health System RB | 5.75 | % | 07/01/39 | 1,250 | 1,150,325 | |||||||||||
Mercer (County of) Pennsylvania; Series 2001, Unlimited Tax GO Bonds (INS–NATL/FGIC)(a) | 5.50 | % | 10/01/17 | 1,095 | 1,125,463 | |||||||||||
Monroe (County of) Hospital Authority (Pocono Medical Center); | ||||||||||||||||
Series 2003, Hospital RB(c)(d) | 6.00 | % | 01/01/14 | 1,000 | 1,138,360 | |||||||||||
Series 2007, Hospital RB | 5.13 | % | 01/01/37 | 1,500 | 1,321,470 | |||||||||||
Montgomery (County of) Higher Education & Health Authority (Abington Memorial Hospital); Series 2002 A, Hospital RB | 5.13 | % | 06/01/32 | 2,100 | 1,979,229 | |||||||||||
Montgomery (County of) Higher Education & Health Authority (Holy Redeemer Health); Series 1997 A, Health Care RB (INS–AMBAC)(a) | 5.25 | % | 10/01/17 | 1,000 | 999,980 | |||||||||||
Montgomery (County of) Industrial Development Authority (Acts Retirement-Life Community); Series 2009 A 1, Retirement Community RB | 6.25 | % | 11/15/29 | 1,000 | 1,013,280 | |||||||||||
Montgomery (County of) Industrial Development Authority (Philadelphia Presbytery Homes, Inc.); Series 2010, RB | 6.63 | % | 12/01/30 | 1,500 | 1,482,720 | |||||||||||
Montgomery (County of) Industrial Development Authority (Whitemarsh Community); Series 2008, Mortgage RB | 7.00 | % | 02/01/36 | 500 | 444,835 | |||||||||||
Montgomery (County of) Industrial Development Authority (Whitemarsh Continuing Care); | ||||||||||||||||
Series 2005, Mortgage RB | 6.13 | % | 02/01/28 | 1,100 | 932,965 | |||||||||||
Series 2005, Mortgage RB | 6.25 | % | 02/01/35 | 750 | 608,970 | |||||||||||
Mt. Lebanon Hospital Authority (St. Clair Memorial Hospital); Series 2002 A, RB | 5.63 | % | 07/01/32 | 2,000 | 1,950,120 | |||||||||||
Northampton (County of) General Purpose Authority (Lehigh University); Series 2009, Higher Education RB | 5.50 | % | 11/15/33 | 1,000 | 1,040,440 | |||||||||||
Northampton (County of) General Purpose Authority (St. Luke’s Hospital); | ||||||||||||||||
Series 2008 A, Hospital RB | 5.50 | % | 08/15/35 | 1,000 | 921,850 | |||||||||||
Series 2010 C, Hospital RB(d)(e) | 4.50 | % | 08/15/16 | 500 | 504,330 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Allegheny Energy Supply Co.); Series 2009, Variable Exempt Facilities RB | 7.00 | % | 07/15/39 | 1,830 | 1,970,196 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Colver); Series 2005 G, Ref. Sub. Resource Recovery RB(b) | 5.13 | % | 12/01/15 | 700 | 657,559 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Philadelphia Biosolids Facility); Series 2009, Sewage Sludge Disposal RB | 6.25 | % | 01/01/32 | 1,000 | 1,010,710 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Reliant Energy); Series 2002 B, Convertible Exempt Facilities RB(b)(c)(d) | 6.75 | % | 06/01/11 | 1,250 | 1,305,075 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Waste Management, Inc.); Series 2005 A, Solid Waste Disposal RB (LOC–Bank of America N.A.)(b)(f) | 5.10 | % | 10/01/27 | 1,150 | 1,070,811 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Trustees University of Pennsylvania); Series 2005 C, RB(g) | 5.00 | % | 07/15/38 | 4,700 | 4,728,200 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Edinboro University Foundation); Series 2010, RB | 6.00 | % | 07/01/43 | 500 | 470,830 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Pennsylvania–(continued) | ||||||||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (La Salle University); Series 2003, RB | 5.50 | % | 05/01/34 | $ | 1,500 | $ | 1,399,530 | |||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (St. Joseph’s University); Series 2010 A, RB | 5.00 | % | 11/01/40 | 500 | 452,785 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Thomas Jefferson University); | ||||||||||||||||
Series 2002, Unrefunded Balance RB | 5.38 | % | 01/01/25 | 645 | 654,656 | |||||||||||
Series 2002, Unrefunded Balance RB | 5.50 | % | 01/01/19 | 355 | 368,504 | |||||||||||
Pennsylvania (State of) Turnpike Commission; | ||||||||||||||||
Series 2008 B 1, Sub. Turnpike RB | 5.50 | % | 06/01/33 | 1,000 | 1,007,640 | |||||||||||
Series 2009 C, Sub. Turnpike RB (INS–AGM)(a)(h) | 6.25 | % | 06/01/33 | 2,000 | 1,546,200 | |||||||||||
Series 2009 E, Sub. Turnpike RB(h) | 6.38 | % | 12/01/38 | 1,435 | 966,171 | |||||||||||
Series 2010 A 1, Motor License Fund Special Turnpike RB | 5.00 | % | 12/01/38 | 500 | 485,355 | |||||||||||
Series 2010 A 2, Motor License Special Turnpike RB(h) | 5.50 | % | 12/01/34 | 750 | 547,208 | |||||||||||
Series 2010 B 2, Turnpike RB(h) | 5.00 | % | 12/01/30 | 625 | 458,975 | |||||||||||
Series 2010 B 2, Turnpike RB(h) | 5.13 | % | 12/01/35 | 500 | 338,055 | |||||||||||
Philadelphia (City of) Hospitals & Higher Education Facilities Authority (Chester Jefferson Health System); Series 2010 B, RB | 5.00 | % | 05/15/40 | 1,500 | 1,383,285 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Mast Charter School); Series 2010, RB | 6.00 | % | 08/01/35 | 700 | 688,513 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Please Touch Museum); | ||||||||||||||||
Series 2006, RB | 5.25 | % | 09/01/31 | 2,750 | 2,237,867 | |||||||||||
Series 2006, RB | 5.25 | % | 09/01/36 | 375 | 292,676 | |||||||||||
Philadelphia (City of) Industrial Development Authority; | ||||||||||||||||
Series 1990, Commercial Development Remarketing RB(b) | 7.75 | % | 12/01/17 | 2,505 | 2,506,478 | |||||||||||
Series 2007 A, RB | 5.50 | % | 09/15/37 | 1,235 | 963,918 | |||||||||||
Philadelphia (City of) Municipal Authority (Municipal Services Building Lease); | ||||||||||||||||
Series 1990, CAB RB (INS–AGM)(a)(i) | 0.00 | % | 03/15/11 | 3,750 | 3,748,125 | |||||||||||
Series 1990, CAB RB (INS–AGM)(a)(i) | 0.00 | % | 03/15/12 | 3,775 | 3,722,074 | |||||||||||
Series 1990, CAB RB (INS–AGM)(a)(i) | 0.00 | % | 03/15/13 | 4,400 | 4,228,268 | |||||||||||
Philadelphia (City of) School District; Series 2008 E, Limited Tax GO Bonds (INS–BHAC)(a) | 5.13 | % | 09/01/23 | 1,500 | 1,573,785 | |||||||||||
Philadelphia (City of); | ||||||||||||||||
Series 2005 A, Airport RB (INS–NATL)(a)(b) | 5.00 | % | 06/15/25 | 1,000 | 946,600 | |||||||||||
Series 2009 A, Ref. Unlimited Tax GO Bonds (INS–AGL)(a) | 5.50 | % | 08/01/24 | 2,000 | 2,149,320 | |||||||||||
Series 2010 9th, Gas Works RB | 5.25 | % | 08/01/40 | 1,500 | 1,371,345 | |||||||||||
Series 2010 C, Water & Wastewater RB (INS–AGM)(a) | 5.00 | % | 08/01/35 | 1,250 | 1,213,913 | |||||||||||
Pittsburgh (City of) & Allegheny (County of) Sports & Exhibition Authority (Regional Asset District); Series 2010, Ref. Sales Tax RB (INS–AGM)(a) | 5.00 | % | 02/01/31 | 1,000 | 1,001,450 | |||||||||||
State Public School Building Authority (Harrisburg School District); Series 2009 A, School RB (INS–AGL)(a) | 5.00 | % | 11/15/33 | 1,000 | 995,220 | |||||||||||
Susquehanna Area Regional Airport Authority; | ||||||||||||||||
Series 2003 A, Airport System RB (INS–AMBAC)(a)(b) | 5.50 | % | 01/01/19 | 2,500 | 2,529,225 | |||||||||||
Series 2003 D, Sub. Airport System RB | 5.38 | % | 01/01/18 | 2,350 | 2,116,057 | |||||||||||
Upper St. Clair Township School District; Series 2002, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.38 | % | 07/15/17 | 1,200 | 1,262,844 | |||||||||||
Washington (County of) Industrial Development Authority (Washington Jefferson College); Series 2010, RB | 5.25 | % | 11/01/30 | 500 | 501,045 | |||||||||||
Washington (County of) Pennsylvania; | ||||||||||||||||
Series 2002 A, Unlimited Tax GO Bonds(c)(d) | 5.13 | % | 09/01/12 | 350 | 374,157 | |||||||||||
Series 2002 A, Unlimited Tax GO Bonds (INS–AMBAC)(a) | 5.13 | % | 09/01/27 | 1,650 | 1,655,560 | |||||||||||
Washington (County of) Redevelopment Authority (Victory Centre Tanger Outlet Development); Series 2006 A, Tax Allocation RB(d)(e) | 5.45 | % | 07/01/17 | 1,495 | 1,213,940 | |||||||||||
West Shore Area Authority (Holy Spirit Hospital); Series 2001, RB | 6.25 | % | 01/01/32 | 2,045 | 2,047,761 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Principal | ||||||||||||||||
Interest | Maturity | Amount | ||||||||||||||
Rate | Date | (000) | Value | |||||||||||||
Pennsylvania–(continued) | ||||||||||||||||
Westmoreland (County of) Industrial Development Authority (Redstone Presbyterian Senior Care Obligated Group); | ||||||||||||||||
Series 2005 A, RB | 5.75 | % | 01/01/26 | $ | 2,500 | $ | 2,172,475 | |||||||||
Series 2005 A, RB | 5.88 | % | 01/01/32 | 900 | 729,162 | |||||||||||
Wilkes Barre Finance Authority (University of Scranton); Series 2010, RB | 5.00 | % | 11/01/40 | 850 | 782,298 | |||||||||||
131,800,108 | ||||||||||||||||
Guam–1.44% | ||||||||||||||||
Guam (Territory of) (Section 30); Series 2009 A, Limited Obligation RB | 5.75 | % | 12/01/34 | 1,250 | 1,221,387 | |||||||||||
Guam (Territory of) Government Waterworks Authority; Series 2010, Water & Wastewater System RB | 5.63 | % | 07/01/40 | 515 | 455,626 | |||||||||||
Guam (Territory of) Power Authority; Series 2010 A, RB | 5.50 | % | 10/01/40 | 410 | 378,036 | |||||||||||
2,055,049 | ||||||||||||||||
Puerto Rico–4.76% | ||||||||||||||||
Puerto Rico (Commonwealth of) Aqueduct & Sewer Authority; Series 2008 A, Sr. Lien RB | 6.00 | % | 07/01/38 | 1,000 | 937,560 | |||||||||||
Puerto Rico (Commonwealth of) Electric Power Authority; | ||||||||||||||||
Series 2008 WW, Power RB | 5.25 | % | 07/01/33 | 1,500 | 1,357,305 | |||||||||||
Series 2008 WW, Power RB | 5.50 | % | 07/01/21 | 1,000 | 1,049,440 | |||||||||||
Series 2010 XX, Power RB | 5.75 | % | 07/01/36 | 1,000 | 953,810 | |||||||||||
Puerto Rico (Commonwealth of) Infrastructure Financing Authority; Series 2005 C, Ref. Special Tax RB (INS–AMBAC)(a) | 5.50 | % | 07/01/27 | 600 | 577,434 | |||||||||||
Puerto Rico (Commonwealth of) Sales Tax Financing Corp.; | ||||||||||||||||
Series 2010 A, First Sub. Sales Tax RB | 5.38 | % | 08/01/39 | 470 | 434,948 | |||||||||||
Series 2010, First Sub. Sales Tax RB(h) | 6.25 | % | 08/01/33 | 1,065 | 726,809 | |||||||||||
Series 2010 A, Sales Tax Capital Appreciation Bond RB(i) | 0.00 | % | 08/01/34 | 3,500 | 762,930 | |||||||||||
6,800,236 | ||||||||||||||||
Virgin Islands–1.76% | ||||||||||||||||
Virgin Islands (Government of) Public Finance Authority (Virgin Islands Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 750 | 771,128 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Virgin Islands Matching Fund Loan Note); Series 2010 A, Sr. Lien/Working Capital RB | 5.00 | % | 10/01/29 | 500 | 471,095 | |||||||||||
Virgin Islands (Government of) Water & Power Authority; Series 2007 A, Electric System RB | 5.00 | % | 07/01/25 | 1,335 | 1,276,927 | |||||||||||
2,519,150 | ||||||||||||||||
TOTAL INVESTMENTS(j)–100.21% (Cost $147,977,045) | 143,174,543 | |||||||||||||||
FLOATING RATE NOTE OBLIGATION–(2.19)%(k) | ||||||||||||||||
Note with an interest rate of 0.26% at 02/28/2011 and contractual maturity of collateral of 07/15/38 (See Note 1J) | (3,135,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–1.98% | 2,836,617 | |||||||||||||||
NET ASSETS–100.00% | $ | 142,876,160 | ||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Investment Abbreviations:
AGL | – Assured Guaranty Ltd. | |
AGM | – Assured Guaranty Municipal Corp. | |
AMBAC | – American Municipal Bond Assurance Corp. (AMBAC filed for bankruptcy on November 8, 2010) | |
BHAC | – Berkshire Hathaway Assurance Corp. | |
CAB | – Capital Appreciation Bond | |
FGIC | – Financial Guaranty Insurance Co. | |
FNMA | – Federal National Mortgage Association | |
GNMA | – Government National Mortgage Association | |
GO | – General Obligation | |
INS | – Insurer | |
LOC | – Letter of Credit | |
NATL | – National Public Finance Guarantee Corp. | |
RADIAN | – Radian Asset Assurance | |
RB | – Revenue Bonds | |
Ref | – Refunding | |
Sr. | – Senior | |
Sub. | – Subordinated |
Notes to Schedule of Investments:
(a) | Principal and/or interest payments are secured by the bond insurance company listed. | |
(b) | Security subject to the alternative minimum tax. | |
(c) | Advance refunded. | |
(d) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. | |
(e) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2011. | |
(f) | Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary. | |
(g) | Underlying security related to Dealer Trusts entered into by the Fund. See Note 1J. | |
(h) | Step coupon bond. The interest rate represents the coupon rate at which the bond will accrue at a specified future date. | |
(i) | Zero coupon bond issued at a discount. | |
(j) | This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed, or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations. |
Entities | Percentage | |||
Assured Guaranty Municipal Corp. | 13.40 | % | ||
American Municipal Bond Assurance Corp. | 7.08 | |||
(k) | Floating rate note obligation related to a security held. The interest rate shown reflects the rate in effect at February 28, 2011. At February 28, 2011, the Fund’s investment with a value of $4,728,200 is held by the Dealer Trusts and serves as collateral for the $3,135,000 in the floating rate note obligation outstanding at that date. |
Top Five Fixed Income Holdings | ||||||||
Philadelphia (City of) Municipal Authority (Municipal Services Building Lease) | $ | 11,698,467 | 8.2 | % | ||||
Delaware Valley Regional Financial Authority | 5,899,686 | 4.1 | ||||||
Philadelphia (City of) | 5,681,178 | 4.0 | ||||||
Pennsylvania (State of) Turnpike Commission | 5,349,604 | 3.7 | ||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Trustees University of Pennsylvania) | 4,728,200 | 3.3 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $147,977,045) | $ | 143,174,543 | ||
Receivable for: | ||||
Investments sold | 2,020,000 | |||
Fund shares sold | 6,479 | |||
Interest | 1,872,962 | |||
Fund expenses absorbed | 9,507 | |||
Investment for trustee deferred compensation and retirement plans | 1,280 | |||
Other assets | 333 | |||
Total assets | 147,085,104 | |||
Liabilities: | ||||
Floating rate note obligations | 3,135,000 | |||
Payable for: | ||||
Fund shares reacquired | 324,811 | |||
Amount due custodian | 501,350 | |||
Dividends | 106,186 | |||
Accrued fees to affiliates | 53,610 | |||
Accrued other operating expenses | 86,011 | |||
Trustee deferred compensation and retirement plans | 1,976 | |||
Total liabilities | 4,208,944 | |||
Net assets applicable to shares outstanding | $ | 142,876,160 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 154,304,904 | ||
Undistributed net investment income | 189,395 | |||
Undistributed net realized gain (loss) | (6,815,637 | ) | ||
Unrealized appreciation (depreciation) | (4,802,502 | ) | ||
$ | 142,876,160 | |||
Net Assets: | ||||
Class A | $ | 129,483,724 | ||
Class B | $ | 3,532,687 | ||
Class C | $ | 9,701,809 | ||
Class Y | $ | 157,940 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 8,458,493 | |||
Class B | 230,886 | |||
Class C | 632,771 | |||
Class Y | 10,315 | |||
Class A: | ||||
Net asset value per share | $ | 15.31 | ||
Maximum offering price per share (Net asset value of $15.31 divided by 95.25%) | $ | 16.07 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 15.30 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 15.33 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 15.31 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Interest | $ | 4,098,003 | ||
Expenses: | ||||
Advisory fees | 448,614 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 3,009 | |||
Distribution fees: | ||||
Class A | 168,018 | |||
Class B | 5,742 | |||
Class C | 53,329 | |||
Interest, facilities and maintenance fees | 14,697 | |||
Transfer agent fees | 42,798 | |||
Trustees’ and officers’ fees and benefits | 8,620 | |||
Other | 35,423 | |||
Total expenses | 805,045 | |||
Less: Expense offset arrangement(s) | (108 | ) | ||
Net expenses | 804,937 | |||
Net investment income | 3,293,066 | |||
Net realized gain from investment securities | 267,566 | |||
Change in net unrealized appreciation (depreciation) of investment securities | (9,930,668 | ) | ||
Net realized and unrealized gain (loss) | (9,663,102 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (6,370,036 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Statements of Changes in Net Assets
For the six months ended February 28, 2011, the eleven months ended August 31, 2010 and the year ended September 30, 2009
(Unaudited)
For the | For the | For the | ||||||||||
six months ended | eleven months ended | year ended | ||||||||||
February 28, | August 31, | September 30, | ||||||||||
2011 | 2010 | 2009 | ||||||||||
Operations: | ||||||||||||
Net investment income | $ | 3,293,066 | $ | 6,308,398 | $ | 6,953,806 | ||||||
Net realized gain (loss) | 267,566 | 911,918 | (1,875,518 | ) | ||||||||
Change in net unrealized appreciation (depreciation) | (9,930,668 | ) | 2,799,644 | 12,908,584 | ||||||||
Net increase (decrease) in net assets resulting from operations | (6,370,036 | ) | 10,019,960 | 17,986,872 | ||||||||
Distributions to shareholders from net investment income: | ||||||||||||
Class A | (2,909,964 | ) | (5,990,320 | ) | (6,597,361 | ) | ||||||
Class B | (76,661 | ) | (198,854 | ) | (267,886 | ) | ||||||
Class C | (189,395 | ) | (325,653 | ) | (216,276 | ) | ||||||
Class Y | (3,668 | ) | (1,373 | ) | — | |||||||
Total distributions from net investment income | (3,179,688 | ) | (6,516,200 | ) | (7,081,523 | ) | ||||||
Share transactions–net: | ||||||||||||
Class A | (3,324,167 | ) | (2,903,142 | ) | (6,276,311 | ) | ||||||
Class B | (899,645 | ) | (773,253 | ) | (1,180,437 | ) | ||||||
Class C | (689,751 | ) | 4,017,339 | 1,739,449 | ||||||||
Class Y | 874 | 163,817 | — | |||||||||
Net increase (decrease) in net assets resulting from share transactions | (4,912,689 | ) | 504,761 | (5,717,299 | ) | |||||||
Net increase (decrease) in net assets | (14,462,413 | ) | 4,008,521 | 5,188,050 | ||||||||
Net assets: | ||||||||||||
Beginning of the period | 157,338,573 | 153,330,052 | 148,142,002 | |||||||||
End of the period (includes undistributed net investment income of $189,395, $76,017 and $275,568, respectively) | $ | 142,876,160 | $ | 157,338,573 | $ | 153,330,052 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen Pennsylvania Tax Free Income Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust) (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Van Kampen Pennsylvania Tax Free Income Fund (the “Acquired Fund”). The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B and Class C shares received Class A, Class B and Class C shares, respectively, of the Fund.
The Fund’s investment objective is to provide only Pennsylvania investors with a high level of current income exempt from federal and Pennsylvania state income taxes and, where possible under local law, local income and personal property taxes, through investment primarily in a varied portfolio of medium- and lower-grade municipal securities.
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.
12 Invesco Van Kampen Pennsylvania Tax Free Income Fund
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. 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 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. | |
Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. 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, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments. | ||
Securities for which market quotations either are not readily available or are 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. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances. | ||
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. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
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 realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares 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 are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on 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 necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt 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. | |
In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code. | ||
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 |
13 Invesco Van Kampen Pennsylvania Tax Free Income Fund
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 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 Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date. | |
J. | Floating Rate Note Obligations — The Fund invests in inverse floating rate securities, such as Residual Interest Bonds (“RIBs”) or Tender Option Bonds (“TOBs”) for investment purposes and to enhance the yield of the Fund. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Such transactions may be purchased in the secondary market without first owning the underlying bond or by the sale of fixed rate bonds by the Fund to Special Purpose Trusts established by a broker dealer (“Dealer Trusts”) in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The Dealer Trusts finance the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. | |
TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities. | ||
The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption Floating rate note obligations on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption Interest and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts as a component Interest, facilities and maintenance fees on the Statement of Operations. | ||
The Fund generally invest in inverse floating rate securities that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The primary risks associated with inverse floating rate securities are varying degrees of liquidity and the changes in the value of such securities in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate securities. In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation. | ||
K. | Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located. | |
Since, many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities. | ||
There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service. | ||
L. | Interest, Facilities and Maintenance Fees — Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate note obligations, if any. |
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 Net Assets | Rate | |||
First $500 million | 0 | .60% | ||
Over $500 million | 0 | .50% | ||
14 Invesco Van Kampen Pennsylvania Tax Free Income Fund
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 Trimark 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 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 June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 1.13%, 1.88%, 1.88% and 0.88% of average daily net assets, respectively. 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 net annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest, facilities and maintenance fees; (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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $0.
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 February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, 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 February 28, 2011, IDI advised the Fund that IDI retained $5,407 in front-end sales commissions from the sale of Class A shares and $307, $3,224 and $2,461 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 Invesco, 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. |
15 Invesco Van Kampen Pennsylvania Tax Free Income Fund
The following is a summary of the tiered valuation input levels, as of February 28, 2011. 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 February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Municipal Obligations | $ | — | $ | 143,174,543 | $ | — | $ | 143,174,543 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $108.
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $889 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6—Cash Balances and Borrowings
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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.
Inverse floating rate obligations resulting from the transfer of bonds to Dealer Trusts are accounted for as secured borrowings. The average floating rate notes outstanding and average annual interest and fees related to inverse floating rate note obligations during the period August 31, 2010 to February 28, 2011 were $3,135,000 and 0.95%, respectively.
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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2016 | $ | 113,623 | ||
August 31, 2017 | 5,935,990 | |||
August 31, 2018 | 1,085,533 | |||
Total capital loss carryforward | $ | 7,135,146 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
16 Invesco Van Kampen Pennsylvania Tax Free Income Fund
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 February 28, 2011 was $10,945,348 and $15,844,849, 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 | $ | 2,448,665 | ||
Aggregate unrealized (depreciation) of investment securities | (7,315,701 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (4,867,036 | ) | |
Cost of investments for tax purposes is $148,041,579. |
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
For the six months | For the eleven months | For the year ended | ||||||||||||||||||||||
ended February 28, | ended August 31, | September 30, | ||||||||||||||||||||||
2011(a) | 2010 | 2009 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 260,849(b | ) | $ | 4,145,895(b | ) | 462,492(c | ) | $ | 7,292,351(c | ) | 624,550 | $ | 9,069,094 | |||||||||||
Class B | 4,778 | 74,628 | 42,501 | 666,876 | 63,620 | 900,403 | ||||||||||||||||||
Class C | 55,452 | 883,196 | 275,203 | 4,345,188 | 163,118 | 2,375,341 | ||||||||||||||||||
Class Y | — | — | 10,234 | 163,408 | — | — | ||||||||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||||||||||
Class A | 117,040 | 1,832,398 | 293,314 | 4,635,383 | 349,405 | 5,048,650 | ||||||||||||||||||
Class B | 2,969 | 46,370 | 10,806 | 170,137 | 15,260 | 219,136 | ||||||||||||||||||
Class C | 8,171 | 128,330 | 15,684 | 248,771 | 10,533 | 153,108 | ||||||||||||||||||
Class Y | 56 | 874 | 25 | 409 | — | — | ||||||||||||||||||
Reacquired: | ||||||||||||||||||||||||
Class A | (599,574 | ) | (9,302,460 | ) | (938,577 | ) | (14,830,876 | ) | (1,424,586 | ) | (20,394,055 | ) | ||||||||||||
Class B | (65,288 | )(b) | (1,020,643 | )(b) | (102,344 | )(c) | (1,610,266 | )(c) | (159,949 | ) | (2,299,976 | ) | ||||||||||||
Class C | (110,188 | ) | (1,701,277 | ) | (36,252 | ) | (576,620 | ) | (56,561 | ) | (789,000 | ) | ||||||||||||
Net increase (decrease) in share activity | (325,735 | ) | $ | (4,912,689 | ) | 33,086 | $ | 504,761 | (414,610 | ) | $ | (5,717,299 | ) | |||||||||||
(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, 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, less than 1% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. | |
(b) | Includes automatic conversion of 36,365 Class B shares into 36,232 Class A shares at a value of $567,376. | |
(c) | Includes automatic conversion of 42,014 Class B shares into 41,896 Class A shares at a value of $663,119. |
17 Invesco Van Kampen Pennsylvania Tax Free Income Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Supplemental | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ratio: Ratio of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of | expenses to | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | average net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | to average | Ratio of net | assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | (losses) on | Dividends | Distributions | net assets | investment | (excluding | ||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | securities (both | Total from | from net | from net | Net asset | Net assets, | with fee waivers | income to | interest, | ||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | realized | Total | value, end | Total | end of period | and/or expenses | average | facilities and | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
of period | income | unrealized) | operations | income | gains | Distributions | of period | return | (000’s omitted) | absorbed | net assets | maintenance fees)(l) | turnover(a) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 16.29 | $ | 0.35 | (b) | $ | (0.99 | ) | $ | (0.64 | ) | $ | (0.34 | ) | $ | 0.00 | $ | (0.34 | ) | $ | 15.31 | (3.98 | )%(c) | $ | 129,484 | 1.02 | %(d) | 4.46 | %(d) | 1.00 | %(d) | 7 | % | |||||||||||||||||||||||
Period ended 08/31/10 | 15.93 | 0.66 | (b) | 0.38 | 1.04 | (0.68 | ) | 0.00 | (0.68 | ) | 16.29 | 6.74 | (c) | 141,406 | 1.14 | 4.54 | 1.10 | 15 | ||||||||||||||||||||||||||||||||||||||
Year ended 09/30/09 | 14.76 | 0.73 | (b) | 1.18 | 1.91 | (0.74 | ) | 0.00 | (0.74 | ) | 15.93 | 13.60 | (e) | 141,191 | 1.21 | 5.05 | 1.13 | 17 | ||||||||||||||||||||||||||||||||||||||
Year ended 09/30/08 | 16.84 | 0.72 | (b) | (2.03 | ) | (1.31 | ) | (0.73 | ) | (0.04 | ) | (0.77 | ) | 14.76 | (8.02 | )(e) | 137,435 | 1.32 | 4.43 | 1.06 | 25 | |||||||||||||||||||||||||||||||||||
Year ended 09/30/07 | 17.43 | 0.70 | (b) | (0.53 | ) | 0.17 | (0.68 | ) | (0.08 | ) | (0.76 | ) | 16.84 | 0.95 | (e) | 160,539 | 1.44 | 4.08 | 1.08 | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/06 | 17.44 | 0.69 | (b) | 0.04 | 0.73 | (0.68 | ) | (0.06 | ) | (0.74 | ) | 17.43 | 4.39 | (e) | 170,102 | 1.06 | 4.02 | 1.06 | 28 | |||||||||||||||||||||||||||||||||||||
Year ended 09/30/05 | 17.41 | 0.70 | 0.04 | 0.74 | (0.71 | ) | 0.00 | (0.71 | ) | 17.44 | 4.30 | (e) | 176,330 | 1.09 | 3.98 | 1.09 | 24 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 16.23 | 0.34 | (b) | (0.98 | ) | (0.64 | ) | (0.29 | ) | 0.00 | (0.29 | ) | 15.30 | (3.96 | )(c)(f) | 3,533 | 1.05 | (d)(f) | 4.43 | (d)(f) | 1.03 | (d)(f) | 7 | |||||||||||||||||||||||||||||||||
Period ended 08/31/10 | 15.89 | 0.59 | (b) | 0.38 | 0.97 | (0.63 | ) | 0.00 | (0.63 | ) | 16.23 | 6.27 | (c)(f) | 4,682 | 1.64 | (f) | 4.05 | (f) | 1.60 | (f) | 15 | |||||||||||||||||||||||||||||||||||
Year ended 09/30/09 | 14.72 | 0.68 | (b) | 1.18 | 1.86 | (0.69 | ) | 0.00 | (0.69 | ) | 15.89 | 13.21 | (g)(h) | 5,364 | 1.57 | (h) | 4.70 | (h) | 1.49 | (h) | 17 | |||||||||||||||||||||||||||||||||||
Year ended 09/30/08 | 16.78 | 0.63 | (b) | (2.01 | ) | (1.38 | ) | (0.64 | ) | (0.04 | ) | (0.68 | ) | 14.72 | (8.46 | )(g)(h) | 6,161 | 1.81 | (h) | 3.94 | (h) | 1.55 | (h) | 25 | ||||||||||||||||||||||||||||||||
Year ended 09/30/07 | 17.38 | 0.57 | (b) | (0.54 | ) | 0.03 | (0.55 | ) | (0.08 | ) | (0.63 | ) | 16.78 | 0.20 | (g) | 8,919 | 2.19 | 3.32 | 1.83 | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/06 | 17.38 | 0.57 | (b) | 0.05 | 0.62 | (0.56 | ) | (0.06 | ) | (0.62 | ) | 17.38 | 3.63 | (g) | 12,180 | 1.81 | 3.26 | 1.81 | 28 | |||||||||||||||||||||||||||||||||||||
Year ended 09/30/05 | 17.36 | 0.55 | 0.05 | 0.60 | (0.58 | ) | 0.00 | (0.58 | ) | 17.38 | 3.50 | (g) | 15,840 | 1.83 | 3.23 | 1.83 | 24 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 16.31 | 0.29 | (b) | (0.99 | ) | (0.70 | ) | (0.28 | ) | 0.00 | (0.28 | ) | 15.33 | (4.34 | )(c) | 9,702 | 1.77 | (d) | 3.71 | (d) | 1.75 | (d) | 7 | |||||||||||||||||||||||||||||||||
Period ended 08/31/10 | 15.95 | 0.55 | (b) | 0.38 | 0.93 | (0.57 | ) | 0.00 | (0.57 | ) | 16.31 | 6.01 | (c) | 11,083 | 1.89 | 3.79 | 1.85 | 15 | ||||||||||||||||||||||||||||||||||||||
Year ended 09/30/09 | 14.78 | 0.62 | (b) | 1.18 | 1.80 | (0.63 | ) | 0.00 | (0.63 | ) | 15.95 | 12.74 | (i) | 6,776 | 1.96 | 4.28 | 1.89 | 17 | ||||||||||||||||||||||||||||||||||||||
Year ended 09/30/08 | 16.86 | 0.59 | (b) | (2.02 | ) | (1.43 | ) | (0.61 | ) | (0.04 | ) | (0.65 | ) | 14.78 | (8.71 | )(i) | 4,546 | 2.07 | 3.68 | 1.81 | 25 | |||||||||||||||||||||||||||||||||||
Year ended 09/30/07 | 17.45 | 0.58 | (b) | (0.54 | ) | 0.04 | (0.55 | ) | (0.08 | ) | (0.63 | ) | 16.86 | 0.19 | (i) | 4,793 | 2.19 | 3.33 | 1.83 | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/06 | 17.45 | 0.57 | (b) | 0.05 | 0.62 | (0.56 | ) | (0.06 | ) | (0.62 | ) | 17.45 | 3.68 | (h)(i) | 5,185 | 1.80 | (h) | 3.27 | (h) | 1.80 | (h) | 28 | ||||||||||||||||||||||||||||||||||
Year ended 09/30/05 | 17.41 | 0.58 | 0.04 | 0.62 | (0.58 | ) | 0.00 | (0.58 | ) | 17.45 | 3.60 | (h)(i) | 5,228 | 1.75 | (h) | 3.31 | (h) | 1.75 | (h) | 24 | ||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 16.30 | 0.37 | (b) | (1.00 | ) | (0.63 | ) | (0.36 | ) | 0.00 | (0.36 | ) | 15.31 | (3.92 | )(c) | 158 | 0.77 | (d) | 4.71 | (d) | 0.75 | (d) | 7 | |||||||||||||||||||||||||||||||||
Period ended 08/31/10(j) | 15.94 | 0.19 | (b) | 0.36 | 0.55 | (0.19 | ) | 0.00 | (0.19 | ) | 16.30 | 3.49 | (c) | 167 | 0.85(k | ) | 4.75(k | ) | 0.81(k | ) | 15 | |||||||||||||||||||||||||||||||||||
(a) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. | |
(b) | Calculated using average shares outstanding. | |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. | |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $135,745, $4,122, $10,749 and $162 for Class A, Class B, Class C and Class Y shares, respectively. | |
(e) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 4.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(f) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.28% for the six months ended February 28, 2011 and 0.74% for the period ended August 31, 2010. | |
(g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(h) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of less than 1%. | |
(i) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(j) | Commencement date of June 1, 2010. | |
(k) | Annualized. | |
(l) | For the years ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees. |
18 Invesco Van Kampen Pennsylvania Tax Free Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, 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 September 1, 2010, through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 960.20 | $ | 4.86 | $ | 1,019.84 | $ | 5.01 | 1.00 | % | ||||||||||||||||||
B | 1,000.00 | 957.20 | 5.00 | 1,019.69 | 5.16 | 1.03 | ||||||||||||||||||||||||
C | 1,000.00 | 956.60 | 8.49 | 1,016.12 | 8.75 | 1.75 | ||||||||||||||||||||||||
Y | 1,000.00 | 960.80 | 3.65 | 1,021.08 | 3.76 | 0.75 | ||||||||||||||||||||||||
1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2010 through February 28, 2011, 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. |
19 Invesco Van Kampen Pennsylvania Tax Fee Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
VK-PTFI-SAR-1 | Invesco Distributors, Inc. |
Invesco Van Kampen Small Cap Growth Fund
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: VASCX § B: VBSCX § C: VCSCX § Y: VISCX
Semiannual Report to Shareholders § February 28, 2011
Nasdaq:
A: VASCX § B: VBSCX § C: VCSCX § Y: VISCX
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
9 | Financial Statements | |
11 | Notes to Financial Statements | |
17 | Financial Highlights | |
18 | 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
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/10 to 2/28/11, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 37.07 | % | ||
Class B Shares | 37.16 | |||
Class C Shares | 36.54 | |||
Class Y Shares | 37.33 | |||
S&P 500 Index▼ (Broad Market Index) | 27.73 | |||
Russell 2000 Growth Index▼ (Style-Specific Index) | 40.76 | |||
Lipper Small-Cap Growth Funds Index▼ (Peer Group Index) | 37.82 |
▼ | Lipper Inc. |
The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.
The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.
The Russell 2000® Growth Index is an unmanaged index considered representative of small-cap growth stocks. The Russell 2000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Russell 2000® Growth Index is an unmanaged index considered representative of small-cap growth stocks. The Russell 2000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Small-Cap Growth Funds Index is an unmanaged index considered representative of small-cap funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Van Kampen Small Cap Growth Fund
Average Annual Total Returns
As of 2/28/11, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (11/27/00) | 1.82 | % | ||||||
10 | Years | 4.06 | ||||||
5 | Years | 3.59 | ||||||
1 | Year | 26.37 | ||||||
Class B Shares | ||||||||
Inception (11/27/00) | 1.81 | % | ||||||
10 | Years | 4.04 | ||||||
5 | Years | 3.94 | ||||||
1 | Year | 28.41 | ||||||
Class C Shares | ||||||||
Inception (11/27/00) | 1.62 | % | ||||||
10 | Years | 3.88 | ||||||
5 | Years | 3.98 | ||||||
1 | Year | 31.61 | ||||||
Class Y Shares | ||||||||
Inception (2/2/06) | 5.14 | % | ||||||
5 | Years | 5.05 | ||||||
1 | Year | 34.00 |
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen Small Cap Growth Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Small Cap Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
Average Annual Total Returns
As of 12/31/10, the most recent calendar quarter-end, including maximum applicable sales charges
Class A Shares | ||||||||
Inception (11/27/00) | 1.07 | % | ||||||
10 | Years | 0.31 | ||||||
5 | Years | 3.86 | ||||||
1 | Year | 17.11 | ||||||
Class B Shares | ||||||||
Inception (11/27/00) | 1.06 | % | ||||||
10 | Years | 0.31 | ||||||
5 | Years | 4.16 | ||||||
1 | Year | 18.72 | ||||||
Class C Shares | ||||||||
Inception (11/27/00) | 0.88 | % | ||||||
10 | Years | 0.14 | ||||||
5 | Years | 4.26 | ||||||
1 | Year | 21.90 | ||||||
Class Y Shares | ||||||||
Inception (2/2/06) | 3.68 | % | ||||||
1 | Year | 24.20 | ||||||
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.38%, 1.66%, 2.13% and 1.13%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.39%, 1.67%, 2.14% and 1.14%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for
the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.
A redemption fee of 2% will be imposed on certain redemptions or exchanges out of the Fund within 31 days of purchase. Exceptions to the redemption fee are listed in the Fund’s prospectus.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information. |
3 Invesco Van Kampen Small Cap Growth Fund
Letters to Shareholders
Bruce Crockett
Dear Fellow Shareholders:
With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.
Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.
I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.” Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.” Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”1 These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.
I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.
Let me close by wishing you a happy and prosperous new year. As always, you’re welcome to contact me at bruce@brucecrockett.com with any questions or concerns you have. We look forward to representing you and serving you in the new year.
Sincerely,
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
Bruce L. Crockett, Independent Chair, Invesco Funds Board of Trustees
1 | Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.” |
Philip Taylor
Dear Shareholders:
Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.
The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.
This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.
If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor, Senior Managing Director, Invesco Ltd.
Philip Taylor, Senior Managing Director, Invesco Ltd.
4 Invesco Van Kampen Small Cap Growth Fund
Schedule of Investments(a)
February 28, 2011
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–95.19% | ||||||||
Advertising–0.52% | ||||||||
National CineMedia, Inc. | 370,043 | $ | 6,990,112 | |||||
Aerospace & Defense–2.09% | ||||||||
Aerovironment, Inc.(b) | 236,510 | 6,861,155 | ||||||
Esterline Technologies Corp(b) | 199,949 | 14,310,350 | ||||||
TransDigm Group, Inc.(b) | 85,722 | 6,890,334 | ||||||
28,061,839 | ||||||||
Air Freight & Logistics–0.65% | ||||||||
UTi Worldwide, Inc. | 440,165 | 8,759,284 | ||||||
Alternative Carriers–0.78% | ||||||||
AboveNet, Inc.(b) | 160,780 | 10,433,014 | ||||||
Apparel Retail–1.20% | ||||||||
DSW Inc.–Class A(b)(c) | 219,281 | 8,905,001 | ||||||
Foot Locker, Inc. | 367,354 | 7,299,324 | ||||||
16,204,325 | ||||||||
Apparel, Accessories & Luxury Goods–1.39% | ||||||||
Maidenform Brands, Inc.(b) | 437,948 | 11,885,909 | ||||||
Warnaco Group, Inc. (The)(b) | 115,788 | 6,797,913 | ||||||
18,683,822 | ||||||||
Application Software–6.94% | ||||||||
AsiaInfo-Linkage Inc.(b) | 234,707 | 4,776,287 | ||||||
Bottomline Technologies, Inc.(b) | 336,734 | 7,445,189 | ||||||
Cadence Design Systems, Inc.(b) | 1,031,880 | 10,267,206 | ||||||
Compuware Corp.(b) | 933,194 | 10,507,764 | ||||||
Informatica Corp.(b) | 189,984 | 8,931,148 | ||||||
Netscout Systems, Inc.(b) | 409,352 | 10,229,707 | ||||||
Parametric Technology Corp.(b) | 436,739 | 10,350,714 | ||||||
SS&C Techonologies Holdings, Inc.(b) | 291,181 | 5,704,236 | ||||||
SuccessFactors, Inc.(b) | 192,758 | 6,921,940 | ||||||
Taleo Corp.–Class A(b) | 211,594 | 6,832,370 | ||||||
TIBCO Software Inc.(b) | 462,164 | 11,378,478 | ||||||
93,345,039 | ||||||||
Asset Management & Custody Banks–0.79% | ||||||||
Affiliated Managers Group, Inc.(b) | 99,099 | 10,578,818 | ||||||
Auto Parts & Equipment–1.09% | ||||||||
Modine Manufacturing Co.(b) | 322,147 | 4,767,776 | ||||||
TRW Automotive Holdings Corp.(b) | 174,152 | 9,891,833 | ||||||
14,659,609 | ||||||||
Automotive Retail–0.65% | ||||||||
Asbury Automotive Group, Inc.(b) | 470,448 | 8,679,766 | ||||||
Biotechnology–2.38% | ||||||||
Acorda Therapeutics, Inc.(b) | 217,238 | 4,555,481 | ||||||
BioMarin Pharmaceutical Inc.(b) | 385,566 | 9,430,944 | ||||||
Incyte Corp.(b) | 489,009 | 6,689,643 | ||||||
United Therapeutics Corp.(b) | 167,411 | 11,288,524 | ||||||
31,964,592 | ||||||||
Building Products–0.76% | ||||||||
Owens Corning(b) | 284,699 | 10,172,295 | ||||||
Coal & Consumable Fuels–0.39% | ||||||||
International Coal Group, Inc.(b) | 528,582 | 5,217,104 | ||||||
Communications Equipment–3.40% | ||||||||
Acme Packet, Inc.(b) | 92,249 | 6,940,815 | ||||||
Aruba Networks, Inc.(b) | 227,442 | 6,925,609 | ||||||
Ciena Corp.(b) | 420,635 | 11,596,907 | ||||||
Finisar Corp.(b) | 249,120 | 10,218,902 | ||||||
Polycom, Inc.(b) | 211,214 | 10,096,029 | ||||||
45,778,262 | ||||||||
Computer & Electronics Retail–0.76% | ||||||||
hhgregg, Inc.(b)(c) | 251,634 | 3,734,248 | ||||||
RadioShack Corp. | 438,247 | 6,486,056 | ||||||
10,220,304 | ||||||||
Construction & Farm Machinery & Heavy Trucks–1.62% | ||||||||
AGCO Corp.(b) | 191,628 | 10,497,382 | ||||||
ArvinMeritor, Inc.(b) | 628,801 | 11,268,114 | ||||||
21,765,496 | ||||||||
Data Processing & Outsourced Services–1.92% | ||||||||
Cardtronics, Inc.(b) | 370,085 | 7,013,111 | ||||||
VeriFone Systems, Inc.(b) | 189,305 | 8,602,019 | ||||||
Wright Express Corp.(b) | 199,671 | 10,183,221 | ||||||
25,798,351 | ||||||||
Distributors–0.62% | ||||||||
LKQ Corp.(b) | 351,682 | 8,355,964 | ||||||
Diversified Chemicals–0.47% | ||||||||
Solutia Inc.(b) | 272,075 | 6,314,861 | ||||||
Electric Utilities–0.71% | ||||||||
ITC Holdings Corp. | 138,614 | 9,501,990 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Van Kampen Small Cap Growth Fund
Shares | Value | |||||||
Electrical Components & Equipment–2.33% | ||||||||
EnerSys(b) | 198,721 | $ | 7,054,596 | |||||
Fushi Copperweld, Inc.(b)(c) | 499,106 | 4,856,301 | ||||||
GrafTech International Ltd.(b) | 387,332 | 7,750,513 | ||||||
Regal-Beloit Corp. | 159,611 | 11,643,623 | ||||||
31,305,033 | ||||||||
Electronic Equipment & Instruments–1.77% | ||||||||
Checkpoint Systems, Inc.(b) | 451,113 | 9,825,241 | ||||||
Coherent, Inc.(b) | 226,794 | 14,004,530 | ||||||
23,829,771 | ||||||||
Electronic Manufacturing Services–0.87% | ||||||||
Fabrinet(b)(c) | 169,791 | 4,962,991 | ||||||
Plexus Corp.(b) | 213,301 | 6,704,050 | ||||||
11,667,041 | ||||||||
Environmental & Facilities Services–1.39% | ||||||||
IESI-BFC, Ltd. (Canada) | 289,962 | 7,214,254 | ||||||
Waste Connections, Inc. | 396,607 | 11,497,637 | ||||||
18,711,891 | ||||||||
Fertilizers & Agricultural Chemicals–0.65% | ||||||||
Intrepid Potash, Inc.(b)(c) | 226,183 | 8,730,664 | ||||||
Footwear–1.39% | ||||||||
Deckers Outdoor Corp.(b) | 82,188 | 7,250,625 | ||||||
Steven Madden, Ltd.(b) | 266,653 | 11,503,411 | ||||||
18,754,036 | ||||||||
General Merchandise Stores–0.50% | ||||||||
Fred’s, Inc. | 490,871 | 6,764,202 | ||||||
Health Care Distributors–0.75% | ||||||||
PSS World Medical, Inc.(b) | 390,161 | 10,151,989 | ||||||
Health Care Equipment–5.57% | ||||||||
American Medical Systems Holdings, Inc.(b) | 612,042 | 13,409,840 | ||||||
Arthrocare Corp.(b) | 339,513 | 11,709,803 | ||||||
Conceptus Inc.(b) | 187,287 | 2,633,255 | ||||||
HeartWare International Inc.(b) | 51,732 | 4,349,627 | ||||||
Masimo Corp.(b) | 150,376 | 4,532,333 | ||||||
NuVasive, Inc.(b)(c) | 232,125 | 6,204,701 | ||||||
Sirona Dental Systems, Inc.(b) | 198,044 | 9,993,300 | ||||||
Thoratec Corp.(b) | 271,526 | 7,570,145 | ||||||
Tornier N.V. (Netherlands)(b)(c) | 371,396 | 6,822,545 | ||||||
Volcano Corp.(b) | 294,682 | 7,732,456 | ||||||
74,958,005 | ||||||||
Health Care Facilities–1.87% | ||||||||
Brookdale Senior Living, Inc.(b) | 492,317 | 13,238,404 | ||||||
Health Management Associates, Inc.–Class A(b) | 1,195,052 | 11,950,520 | ||||||
25,188,924 | ||||||||
Health Care Services–2.12% | ||||||||
ExamWorks Group, Inc.(b) | 293,422 | 6,182,401 | ||||||
Gentiva Health Services, Inc.(b) | 342,081 | 9,656,947 | ||||||
HMS Holdings Corp.(b) | 131,460 | 9,933,118 | ||||||
MEDNAX, Inc.(b) | 43,285 | 2,810,495 | ||||||
28,582,961 | ||||||||
Health Care Supplies–1.15% | ||||||||
Align Technology, Inc.(b) | 507,107 | 10,573,181 | ||||||
Cooper Cos., Inc. (The) | 78,537 | 4,855,157 | ||||||
15,428,338 | ||||||||
Health Care Technology–0.11% | ||||||||
MedAssets, Inc.(b) | 105,405 | 1,493,589 | ||||||
Homebuilding–0.67% | ||||||||
Meritage Homes Corp.(b) | 351,656 | 9,076,241 | ||||||
Housewares & Specialties–1.61% | ||||||||
Jarden Corp. | 345,213 | 11,347,151 | ||||||
Tupperware Brands Corp. | 191,491 | 10,273,492 | ||||||
21,620,643 | ||||||||
Human Resource & Employment Services–0.67% | ||||||||
SFN Group, Inc.(b) | 650,855 | 9,001,325 | ||||||
Industrial Machinery–1.73% | ||||||||
Actuant Corp.–Class A | 396,207 | 11,212,658 | ||||||
Albany International Corp. | 38,871 | 946,898 | ||||||
CLARCOR, Inc. | 271,228 | 11,158,320 | ||||||
23,317,876 | ||||||||
Internet Retail–0.51% | ||||||||
Shutterfly, Inc.(b) | 162,176 | 6,924,915 | ||||||
Internet Software & Services–2.01% | ||||||||
comScore Inc.(b) | 238,888 | 6,576,587 | ||||||
Open Text Corp. (Canada)(b) | 134,692 | 7,936,052 | ||||||
SAVVIS, Inc.(b) | 308,741 | 10,030,995 | ||||||
Velti PLC (Ireland)(b)(c) | 186,124 | 2,520,119 | ||||||
27,063,753 | ||||||||
Investment Banking & Brokerage–1.33% | ||||||||
Knight Capital Group, Inc., Class A(b) | 483,240 | 6,770,193 | ||||||
Stifel Financial Corp.(b) | 155,491 | 11,154,924 | ||||||
17,925,117 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Van Kampen Small Cap Growth Fund
Shares | Value | |||||||
IT Consulting & Other Services–1.13% | ||||||||
Acxiom Corp.(b) | 595,631 | $ | 10,209,115 | |||||
Sapient Corp.(b) | 418,870 | 4,963,610 | ||||||
15,172,725 | ||||||||
Life Sciences Tools & Services–1.74% | ||||||||
Bruker Corp.(b) | 630,379 | 12,096,973 | ||||||
Parexel International Corp.(b) | 484,598 | 11,373,515 | ||||||
23,470,488 | ||||||||
Managed Health Care–0.74% | ||||||||
Health Net Inc.(b) | 339,059 | 9,975,116 | ||||||
Marine–0.55% | ||||||||
Kirby Corp.(b) | 134,452 | 7,440,574 | ||||||
Metal & Glass Containers–0.76% | ||||||||
Greif, Inc.–Class A | 159,057 | 10,284,626 | ||||||
Office Services & Supplies–0.09% | ||||||||
Interface, Inc.–Class A | 73,822 | 1,230,613 | ||||||
Oil & Gas Drilling–0.53% | ||||||||
Atwood Oceanics, Inc.(b) | 157,279 | 7,159,340 | ||||||
Oil & Gas Equipment & Services–1.63% | ||||||||
Oil States International, Inc.(b) | 157,813 | 11,487,208 | ||||||
Superior Energy Services, Inc.(b) | 271,825 | 10,413,616 | ||||||
21,900,824 | ||||||||
Oil & Gas Exploration & Production–3.16% | ||||||||
Approach Resources Inc.(b) | 163,640 | 5,326,482 | ||||||
Brigham Exploration Co.(b) | 290,142 | 10,613,394 | ||||||
Gulfport Energy Corp.(b) | 180,522 | 5,341,646 | ||||||
Kodiak Oil & Gas Corp. (Canada)(b)(c) | 929,831 | 7,038,821 | ||||||
Rosetta Resources, Inc.(b) | 164,864 | 7,478,231 | ||||||
Whiting Petroleum Corp.(b) | 102,620 | 6,705,191 | ||||||
42,503,765 | ||||||||
Oil & Gas Refining & Marketing–1.36% | ||||||||
Holly Corp.(c) | 120,822 | 6,903,769 | ||||||
World Fuel Services Corp. | 276,126 | 11,442,662 | ||||||
18,346,431 | ||||||||
Packaged Foods & Meats–0.63% | ||||||||
Diamond Foods, Inc.(c) | 165,118 | 8,412,762 | ||||||
Paper Packaging–1.23% | ||||||||
Packaging Corp. of America | 343,127 | 9,878,626 | ||||||
Rock-Tenn Co., Class A(c) | 96,394 | 6,617,448 | ||||||
16,496,074 | ||||||||
Paper Products–0.24% | ||||||||
Domtar Corp.(b) | 37,239 | 3,254,689 | ||||||
Personal Products–0.97% | ||||||||
Elizabeth Arden, Inc.(b) | 338,541 | 9,848,158 | ||||||
Inter Parfums, Inc. | 178,413 | 3,223,923 | ||||||
13,072,081 | ||||||||
Pharmaceuticals–1.73% | ||||||||
Auxilium Pharmaceuticals, Inc.(b)(c) | 276,438 | 6,211,562 | ||||||
Medicis Pharmaceutical Corp.–Class A | 366,753 | 11,769,104 | ||||||
Salix Pharmaceuticals Ltd.(b) | 158,596 | 5,287,590 | ||||||
23,268,256 | ||||||||
Precious Metals & Minerals–0.37% | ||||||||
Stillwater Mining Co.(b) | 208,512 | 4,977,181 | ||||||
Property & Casualty Insurance–0.79% | ||||||||
ProAssurance Corp.(b) | 166,938 | 10,572,184 | ||||||
Regional Banks–0.98% | ||||||||
SVB Financial Group(b) | 243,532 | 13,194,564 | ||||||
Research & Consulting Services–0.68% | ||||||||
Resources Connection, Inc. | 476,386 | 9,189,486 | ||||||
Restaurants–1.27% | ||||||||
BJ’s Restaurants, Inc.(b)(c) | 191,491 | 6,884,101 | ||||||
Buffalo Wild Wings Inc.(b) | 192,397 | 10,195,117 | ||||||
17,079,218 | ||||||||
Semiconductor Equipment–1.65% | ||||||||
Cymer, Inc.(b) | 208,260 | 10,537,956 | ||||||
Teradyne, Inc.(b) | 622,162 | 11,590,878 | ||||||
22,128,834 | ||||||||
Semiconductors–5.71% | ||||||||
Atmel Corp.(b) | 441,396 | 6,479,693 | ||||||
Cavium Networks, Inc.(b) | 159,404 | 6,883,065 | ||||||
Cirrus Logic, Inc.(b) | 374,872 | 8,753,261 | ||||||
Cypress Semiconductor Corp.(b) | 463,455 | 9,714,017 | ||||||
Microsemi Corp.(b) | 514,841 | 11,341,947 | ||||||
Netlogic Microsystems Inc.(b) | 221,756 | 9,178,481 | ||||||
OmniVision Technologies, Inc.(b) | 184,453 | 5,647,951 | ||||||
RF Micro Devices, Inc.(b) | 1,305,655 | 9,792,412 | ||||||
TriQuint Semiconductor, Inc.(b) | 632,474 | 9,012,755 | ||||||
76,803,582 | ||||||||
Specialty Chemicals–2.06% | ||||||||
Cytec Industries, Inc. | 205,433 | 11,674,757 | ||||||
Rockwood Holdings, Inc.(b) | 249,159 | 11,598,352 | ||||||
Stepan Co. | 62,590 | 4,393,192 | ||||||
27,666,301 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Van Kampen Small Cap Growth Fund
Shares | Value | |||||||
Specialty Stores–1.96% | ||||||||
Signet Jewelers Ltd. (Bermuda)(b) | 199,347 | $ | 8,745,353 | |||||
Tractor Supply Co. | 196,082 | 10,209,990 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc.(b) | 177,427 | 7,404,028 | ||||||
26,359,371 | ||||||||
Systems Software–3.24% | ||||||||
Ariba Inc.(b) | 231,546 | 7,166,349 | ||||||
CommVault Systems, Inc.(b) | 288,406 | 10,535,471 | ||||||
Fortinet, Inc.(b) | 118,654 | 4,845,830 | ||||||
MICROS Systems, Inc.(b) | 217,791 | 10,375,563 | ||||||
Rovi Corp.(b) | 191,110 | 10,591,316 | ||||||
43,514,529 | ||||||||
Tires & Rubber–0.50% | ||||||||
Cooper Tire & Rubber Co. | 287,355 | 6,741,348 | ||||||
Trucking–1.36% | ||||||||
Landstar System, Inc. | 262,915 | 11,691,830 | ||||||
Werner Enterprises, Inc. | 280,894 | 6,615,054 | ||||||
18,306,884 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $991,102,803) | 1,280,503,007 | |||||||
Money Market Funds–5.30% | ||||||||
Liquid Assets Portfolio–Institutional Class(d) | 35,653,651 | 35,653,651 | ||||||
Premier Portfolio–Institutional Class(d) | 35,653,652 | 35,653,652 | ||||||
Total Money Market Funds (Cost $71,307,303) | 71,307,303 | |||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.49% (Cost $1,062,410,106) | 1,351,810,310 | |||||||
Investments Purchased with Cash Collateral from Securities on Loan | ||||||||
Money Market Funds–2.98% | ||||||||
Liquid Assets Portfolio–Institutional Class(d)(e) (Cost $40,034,635) | 40,034,635 | 40,034,635 | ||||||
TOTAL INVESTMENTS–103.47% (Cost $1,102,444,741) | 1,391,844,945 | |||||||
OTHER ASSETS LESS LIABILITIES–(3.47)% | (46,633,560 | ) | ||||||
NET ASSETS–100.00% | $ | 1,345,211,385 | ||||||
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
(b) | Non-income producing security. | |
(c) | All or a portion of this security was out on loan at February 28, 2011. | |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. | |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J. |
By sector, based on net assets as of February 28, 2011
Information Technology | 28.1 | % | ||
Health Care | 18.2 | |||
Consumer Discretionary | 14.6 | |||
Industrials | 13.9 | |||
Energy | 7.1 | |||
Materials | 5.8 | |||
Financials | 4.4 | |||
Consumer Staples | 1.6 | |||
Telecommunication Services | 0.8 | |||
Utilities | 0.7 | |||
Money Market Funds Plus Other Assets Less Liabilities | 4.8 | |||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Van Kampen Small Cap Growth Fund
Statement of Assets and Liabilities
February 28, 2011
(Unaudited)
Assets: | ||||
Investments, at value (Cost $991,102,803)* | $ | 1,280,503,007 | ||
Investments in affiliated money market funds, at value and cost | 111,341,938 | |||
Total investments, at value (Cost $1,102,444,741) | 1,391,844,945 | |||
Receivable for: | ||||
Investments sold | 14,854,444 | |||
Fund shares sold | 4,316,657 | |||
Dividends | 144,230 | |||
Fund expenses absorbed | 9,871 | |||
Investment for trustee deferred compensation and retirement plans | 2,474 | |||
Other assets | 40,683 | |||
Total assets | 1,411,213,304 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 20,893,858 | |||
Fund shares reacquired | 3,831,037 | |||
Collateral upon return of securities loaned | 40,034,635 | |||
Accrued fees to affiliates | 1,114,890 | |||
Accrued other operating expenses | 120,260 | |||
Trustee deferred compensation and retirement plans | 7,239 | |||
Total liabilities | 66,001,919 | |||
Net assets applicable to shares outstanding | $ | 1,345,211,385 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 1,016,954,804 | ||
Undistributed net investment income (loss) | (5,569,127 | ) | ||
Undistributed net realized gain | 44,425,504 | |||
Unrealized appreciation | 289,400,204 | |||
$ | 1,345,211,385 | |||
Net Assets: | ||||
Class A | $ | 946,665,172 | ||
Class B | $ | 23,154,239 | ||
Class C | $ | 65,849,148 | ||
Class Y | $ | 309,542,826 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 79,045,433 | |||
Class B | 2,064,338 | |||
Class C | 5,949,956 | |||
Class Y | 25,495,476 | |||
Class A: | ||||
Net asset value per share | $ | 11.98 | ||
Maximum offering price per share | ||||
(Net asset value of $11.98 divided by 5.50%) | $ | 12.68 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.22 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 11.07 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 12.14 | ||
* | At February 28, 2011, securities with an aggregate value of $39,114,881 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Van Kampen Small Cap Growth Fund
Statement of Operations
For the six months ended February 28, 2011
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $17,009) | $ | 2,196,013 | ||
Dividends from affiliated money market funds (includes securities lending income of $77,566) | 132,720 | |||
Total investment income | 2,328,733 | |||
Expenses: | ||||
Advisory fees | 4,497,834 | |||
Administrative services fees | 150,443 | |||
Custodian fees | 17,829 | |||
Distribution fees: | ||||
Class A | 1,050,437 | |||
Class B | 35,794 | |||
Class C | 283,179 | |||
Transfer agent fees | 1,790,618 | |||
Trustees’ and officers’ fees and benefits | 20,004 | |||
Other | 118,036 | |||
Total expenses | 7,964,174 | |||
Less: Fees waived and/or expenses reimbursed | (66,314 | ) | ||
Net expenses | 7,897,860 | |||
Net investment income (loss) | (5,569,127 | ) | ||
Net realized gain from investment securities | 82,446,497 | |||
Change in net unrealized appreciation of investment securities | 284,261,049 | |||
Net realized and unrealized gain | 366,707,546 | |||
Net increase in net assets resulting from operations | $ | 361,138,419 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Van Kampen Small Cap Growth Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2011, the five months ended August 31, 2010 and the year ended March 31, 2010
(Unaudited)
For the | For the | For the | ||||||||||
six months ended | five months ended | year ended | ||||||||||
February 28, | August 31, | March 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Operations: | ||||||||||||
Net investment income (loss) | $ | (5,569,127 | ) | $ | (4,614,297 | ) | $ | (8,825,452 | ) | |||
Net realized gain | 82,446,497 | 69,715,541 | 92,171,919 | |||||||||
Change in net unrealized appreciation (depreciation) | 284,261,049 | (165,915,054 | ) | 192,170,825 | ||||||||
Net increase (decrease) in net assets resulting from operations | 361,138,419 | (100,813,810 | ) | 275,517,292 | ||||||||
Share transactions–net: | ||||||||||||
Class A | (2,726,578 | ) | 13,649,587 | 153,506,328 | ||||||||
Class B | (2,922,955 | ) | (1,894,281 | ) | (6,353,547 | ) | ||||||
Class C | (6,463,930 | ) | (3,031,745 | ) | 6,844,322 | |||||||
Class Y | 32,204,962 | (46,191,056 | ) | 117,434,920 | ||||||||
Net increase (decrease) in net assets resulting from share transactions | 20,091,499 | (37,467,495 | ) | 271,432,023 | ||||||||
Net increase (decrease) in net assets | 381,229,918 | (138,281,305 | ) | 546,949,315 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 963,981,467 | 1,102,262,772 | 555,313,457 | |||||||||
End of period (includes undistributed net investment income (loss) of $(5,569,127), $0, and $(231,253) respectively) | $ | 1,345,211,385 | $ | 963,981,467 | $ | 1,102,262,772 | ||||||
Notes to Financial Statements
February 28, 2011
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Van Kampen Small Cap Growth Fund (the “Fund”), is a series portfolio of AIM Counselor Series Trust (Invesco Counselor Series Trust) (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 twenty 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.
Prior to June 1, 2010, the Fund operated as Van Kampen Small Cap Growth Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Equity Trust. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”).
Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.
Information for the Acquired Fund’s — Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.
The Fund’s investment objective is capital appreciation.
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. 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. 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 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 bonds) 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 |
11 Invesco Van Kampen Small Cap Growth Fund
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 bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
Foreign securities (including foreign exchange contracts) 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 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 economical 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 are 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. | ||
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. | ||
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 paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
12 Invesco Van Kampen Small Cap Growth Fund
E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of 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 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 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. | Redemption Fees — The Fund has a 2% redemption fee that is to be retained by the Fund to offset transaction costs and other expenses associated with short-term redemptions and exchanges. The fee, subject to certain exceptions, is imposed on certain redemptions or exchanges of shares within 31 days of purchase. The redemption fee is recorded as an increase in shareholder capital and is allocated among the share classes based on the relative net assets of each class. | |
J. | Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated 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 fails 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 affiliates 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. | |
K. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at 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. |
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 Net Assets | Rate | |||
First $500 million | 0 | .80% | ||
Next $500 million | 0 | .75% | ||
Over $1.0 billion | 0 | .70% | ||
13 Invesco Van Kampen Small Cap Growth Fund
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 Trimark 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 provides 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, 2012, 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 (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 1.38%, 2.13%, 2.13% and 1.13%, 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 operating expenses after fee waiver 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 the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.
Further, the Adviser has contractually agreed, through at least June 30, 2011, 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 February 28, 2011, the Adviser waived advisory fees of $65,436.
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 February 28, 2011, 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 February 28, 2011, the expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2011, IDI advised the Fund that IDI retained $22,800 in front-end sales commissions from the sale of Class A shares and $1,953, $14,910 and $2,876 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 Invesco, 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 February 28, 2011. 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.
14 Invesco Van Kampen Small Cap Growth Fund
During the six months ended February 28, 2011, there were no significant transfers between investment levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 1,391,844,945 | $ | — | $ | — | $ | 1,391,844,945 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $878.
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 are eligible to participate in a retirement plan that provides 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.
During the six months ended February 28, 2011, the Fund paid legal fees of $1,713 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. 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 generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $36,401,316 of capital loss carryforward in the fiscal year ending August 31, 2011.
The Fund had a capital loss carryforward as of August 31, 2010 which expires as follows:
Capital Loss | ||||
Expiration | Carryforward* | |||
August 31, 2017 | $ | 36,401,316 | ||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
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 February 28, 2011 was $687,329,517 and $681,249,194, 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 | $ | 300,946,565 | ||
Aggregate unrealized (depreciation) of investment securities | (13,166,038 | ) | ||
Net unrealized appreciation of investment securities | $ | 287,780,527 | ||
Cost of investments for tax purposes is $1,104,064,418. |
15 Invesco Van Kampen Small Cap Growth Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||||||||||
Six months ended | Five months ended | Year ended | ||||||||||||||||||||||
February 28, 2011(a) | August 31, 2010 | March 31, 2010 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Sold: | ||||||||||||||||||||||||
Class A | 13,153,267 | (b) | $ | 141,583,173 | (b) | 12,491,916 | (b) | $ | 117,534,320 | (b) | 46,177,393 | $ | 374,644,838 | |||||||||||
Class B | 80,517 | 772,039 | 160,701 | 1,436,516 | 600,025 | 4,541,319 | ||||||||||||||||||
Class C | 415,836 | 4,160,321 | 417,676 | 3,715,035 | 2,604,739 | 19,506,872 | ||||||||||||||||||
Class Y | 5,139,594 | 55,912,547 | 2,430,630 | 23,295,049 | 21,184,423 | 175,208,673 | ||||||||||||||||||
Reacquired:(c) | ||||||||||||||||||||||||
Class A | (13,262,436 | ) | (144,309,751 | ) | (11,170,029 | ) | (103,884,733 | ) | (26,403,632 | ) | (221,138,510 | ) | ||||||||||||
Class B | (368,171 | )(b) | (3,694,994 | )(b) | (375,529 | )(b) | (3,330,797 | )(b) | (1,417,790 | ) | (10,894,866 | ) | ||||||||||||
Class C | (1,092,384 | ) | (10,624,251 | ) | (775,941 | ) | (6,746,780 | ) | (1,630,764 | ) | (12,662,550 | ) | ||||||||||||
Class Y | (2,212,421 | ) | (23,707,585 | ) | (7,352,354 | ) | (69,486,105 | ) | (6,790,411 | ) | (57,773,753 | ) | ||||||||||||
Net increase (decrease) in share activity | 1,853,802 | $ | 20,091,499 | (4,172,930 | ) | $ | (37,467,495 | ) | 34,323,983 | $ | 271,432,023 | |||||||||||||
(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 Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. | |
(b) | Includes automatic conversion of 140,297 Class B shares into 131,434 Class A shares at a value of $1,425,998 for the period ended February 28, 2011 and automatic conversion of 225,007 Class B shares into 210,988 Class A shares at a value of $1,929,978 for the period ended August 31, 2010. | |
(c) | Net of redemption fees of $12,945 and $7,585 allocated among the classes based on relative net assets of each class for periods ended February 28, 2011 and August 31, 2010, respectively. |
16 Invesco Van Kampen Small Cap Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Ratio of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of | investment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | Ratio of | income to | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
to average | expenses | average | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gains | net assets | to average net | net assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(losses) on | with fee | assets without | Ratio of net | without fee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset | securities | Dividends | waivers | fee waivers | investment | waivers | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
value, | Net | (both | Total from | from net | Distributions | Net asset | Net assets, | and/or | and/or | income to | and/or | |||||||||||||||||||||||||||||||||||||||||||||||||
beginning | investment | realized and | investment | investment | from net | Total | value, end | Total | end of period | expenses | expenses | average | expenses | Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||
of period | income(a) | unrealized) | operations | income | realized gains | Distributions | of period | return | (000s omitted) | absorbed | absorbed | net assets | absorbed | turnover(d) | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | $ | 8.74 | $ | (0.05 | ) | $ | 3.29 | $ | 3.24 | $ | — | $ | — | $ | — | $ | 11.98 | 37.07 | %(b) | $ | 946,665 | 1.36 | %(c) | 1.37 | %(c) | (0.96 | )%(c) | (0.97 | )%(c) | 62 | % | |||||||||||||||||||||||||||||
Five months ended 08/31/10 | 9.62 | (0.04 | ) | (0.84 | ) | (0.88 | ) | — | — | — | 8.74 | (9.15 | )(b) | 691,433 | 1.34 | 1.34 | (1.04 | ) | (1.04 | ) | 63 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.93 | (0.09 | ) | 2.78 | 2.69 | — | — | — | 9.62 | 38.82 | (e) | 748,998 | 1.39 | 1.39 | (1.04 | ) | (1.04 | ) | 234 | |||||||||||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 10.15 | (0.09 | ) | (3.13 | ) | (3.22 | ) | — | — | — | 6.93 | (31.72 | )(e) | 402,611 | 1.40 | 1.40 | (1.00 | ) | (1.00 | ) | 219 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/08 | 10.70 | (0.10 | ) | 0.29 | 0.19 | — | (0.74 | ) | (0.74 | ) | 10.15 | 0.79 | (e) | 317,560 | 1.38 | 1.38 | (0.92 | ) | (0.92 | ) | 194 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/07 | 10.80 | �� | (0.09 | ) | (0.01 | ) | (0.10 | ) | — | — | — | 10.70 | (0.83 | )(e) | 226,581 | 1.47 | 1.47 | (0.92 | ) | (0.92 | ) | 321 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/06 | 7.98 | (0.10 | ) | 2.92 | 2.82 | — | — | — | 10.80 | 35.21 | (e) | 146,934 | 1.61 | (f) | 1.63 | (f) | (1.06 | ) | (1.09 | ) | 277 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 8.18 | (0.05 | ) | 3.09 | 3.04 | — | — | — | 11.22 | 37.16 | (b)(h) | 23,154 | 1.43 | (c)(h) | 1.44 | (c)(h) | (1.04 | )(c)(h) | (1.05 | )%(c)(h) | 62 | |||||||||||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 9.03 | (0.05 | ) | (0.80 | ) | (0.85 | ) | — | — | — | 8.18 | (9.14 | )(b)(h) | 19,249 | 1.63 | (h) | 1.63 | (h) | (1.33 | )(h) | (1.33 | )(h) | 63 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.51 | (0.09 | ) | 2.61 | 2.52 | — | — | — | 9.03 | 38.71 | (g)(i) | 23,169 | 1.53 | (i) | 1.53 | (i) | (1.19 | )(i) | (1.19 | )(i) | 234 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 9.59 | (0.14 | ) | (2.94 | ) | (3.08 | ) | — | — | — | 6.51 | (32.12 | )(g)(i) | 22,044 | 2.04 | (i) | 2.04 | (i) | (1.65 | )(i) | (1.65 | )(i) | 219 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/08 | 10.22 | (0.18 | ) | 0.29 | 0.11 | — | (0.74 | ) | (0.74 | ) | 9.59 | 0.03 | (g) | 42,722 | 2.14 | 2.14 | (1.68 | ) | (1.68 | ) | 194 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/07 | 10.39 | (0.16 | ) | (0.01 | ) | (0.17 | ) | — | — | — | 10.22 | (1.64 | )(g) | 50,593 | 2.22 | 2.22 | (1.68 | ) | (1.68 | ) | 321 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/06 | 7.74 | (0.16 | ) | 2.81 | 2.65 | — | — | — | 10.39 | 34.24 | (g) | 59,106 | 2.36 | (f) | 2.39 | (f) | (1.83 | ) | (1.86 | ) | 277 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 8.10 | (0.08 | ) | 3.05 | 2.97 | — | — | — | 11.07 | 36.67 | (b)(l) | 65,849 | 2.04 | (c)(l) | 2.05 | (c)(l) | (1.65 | )(c)(l) | (1.66 | )%(c)(l) | 62 | |||||||||||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 8.95 | (0.07 | ) | (0.78 | ) | (0.85 | ) | — | — | — | 8.10 | (9.50 | )(b) | 53,673 | 2.09 | 2.09 | (1.79 | ) | (1.79 | ) | 63 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.50 | (0.14 | ) | 2.59 | 2.45 | — | — | — | 8.95 | 37.69 | (j) | 62,523 | 2.14 | 2.14 | (1.79 | ) | (1.79 | ) | 234 | |||||||||||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 9.58 | (0.14 | ) | (2.94 | ) | (3.08 | ) | — | — | — | 6.50 | (32.15 | )(j) | 39,064 | 2.14 | 2.14 | (1.75 | ) | (1.75 | ) | 219 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/08 | 10.21 | (0.18 | ) | 0.29 | 0.11 | — | (0.74 | ) | (0.74 | ) | 9.58 | 0.03 | (j) | 42,395 | 2.14 | 2.14 | (1.67 | ) | (1.67 | ) | 194 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/07 | 10.38 | (0.16 | ) | (0.01 | ) | (0.17 | ) | — | — | — | 10.21 | (1.64 | )(j) | 31,672 | 2.22 | 2.22 | (1.68 | ) | (1.68 | ) | 321 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/06 | 7.73 | (0.16 | ) | 2.81 | 2.65 | — | — | — | 10.38 | 34.28 | (j) | 27,995 | 2.36 | (f) | 2.39 | (f) | (1.83 | ) | (1.86 | ) | 277 | |||||||||||||||||||||||||||||||||||||||
Class Yˆ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/11 | 8.84 | (0.04 | ) | 3.34 | 3.30 | — | — | — | 12.14 | 37.33 | (b) | 309,543 | 1.11 | (c) | 1.12 | (c) | (0.71 | )(c) | (0.72 | )%(c) | 62 | |||||||||||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 9.73 | (0.03 | ) | (0.86 | ) | (0.89 | ) | — | — | — | 8.84 | (9.15 | )(b) | 199,603 | 1.09 | 1.09 | (0.80 | ) | (0.80 | ) | 63 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.99 | (0.06 | ) | 2.80 | 2.74 | — | — | — | 9.73 | 39.20 | (k) | 267,593 | 1.14 | 1.14 | (0.76 | ) | (0.76 | ) | 234 | |||||||||||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 10.20 | (0.07 | ) | (3.14 | ) | (3.21 | ) | — | — | — | 6.99 | (31.47 | )(k) | 91,594 | 1.15 | 1.15 | (0.75 | ) | (0.75 | ) | 219 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/08 | 10.74 | (0.07 | ) | 0.27 | 0.20 | — | (0.74 | ) | (0.74 | ) | 10.20 | 0.88 | (k) | 81,038 | 1.14 | 1.14 | (0.63 | ) | (0.63 | ) | 194 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/07 | 10.80 | (0.07 | ) | 0.01 | (0.06 | ) | — | — | — | 10.74 | (0.56 | )(k) | 15,477 | 1.22 | 1.22 | (0.67 | ) | (0.67 | ) | 321 | ||||||||||||||||||||||||||||||||||||||||
Year ended 03/31/06 | 10.00 | (0.01 | ) | 0.81 | 0.80 | — | — | — | 10.80 | 8.00 | (k) | 64 | 1.36 | (f) | 1.42 | (f) | (0.68 | ) | (0.75 | ) | 277 | |||||||||||||||||||||||||||||||||||||||
(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. | |
(c) | Ratios are annualized and based on average daily net assets (000’s omitted) of $847,680, $22,186, $61,145, and $257,592 for Class A, Class B, Class C and Class Y shares, respectively. | |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable | |
(e) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(f) | The ratio of expenses to average net assets does not reflect credits earned on cash balances. If these credits were reflected as a reduction of expenses, the ratios would decrease by 0.01% for the year ended March 31, 2006. | |
(g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(h) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.32% and 0.54% for the six months ended February 28, 2011 and the five months ended August 31, 2010, respectively. | |
(i) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fess of less than 1%. | |
(j) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(k) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. | |
(l) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.93% for the six months ended February 28, 2011. | |
ˆ | On June 1, 2010, the Fund’s former Class I shares were reorganized into Class Y Shares. |
17 Invesco Van Kampen Small 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, and redemption fees, 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 September 1, 2010 through February 28, 2011.
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, contingent deferred sales charges on redemptions, and redemption fees, 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.
HYPOTHETICAL | ||||||||||||||||||||||||||||||
(5% annual return before | ||||||||||||||||||||||||||||||
ACTUAL | expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Ending | Expenses | Annualized | |||||||||||||||||||||||||
Account Value | Account Value | Paid During | Account Value | Paid During | Expense | |||||||||||||||||||||||||
Class | (09/01/10) | (02/28/11)1 | Period2 | (02/28/11) | Period2 | Ratio | ||||||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,370.70 | $ | 7.99 | $ | 1,018.05 | $ | 6.80 | 1.36 | % | ||||||||||||||||||
B | 1,000.00 | 1,371.60 | 8.41 | 1,017.70 | 7.15 | 1.43 | ||||||||||||||||||||||||
C | 1,000.00 | 1,365.40 | 11.96 | 1,014.68 | 10.19 | 2.04 | ||||||||||||||||||||||||
Y | 1,000.00 | 1,373.30 | 6.53 | 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 September 1, 2010 through February 28, 2011, 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. |
18 Invesco Van Kampen Small Cap Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.
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 811-09913 and 333-36074.
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 period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.
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 U.S. 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.
VK-SCG-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 March 21, 2011, 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 March 21, 2011, 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 Counselor Series Trust (Invesco Counselor Series Trust)
By: | /s/ Philip A. Taylor | |||
Principal Executive Officer | ||||
Date: May 9, 2011 |
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 | |||
Principal Executive Officer | ||||
Date: May 9, 2011 | ||||
By: | /s/ Sheri Morris Principal Financial Officer | |||
Date: May 9, 2011 |
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. |