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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09913
AIM Counselor Series Trust
(Invesco Counselor Series Trust)
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Name and address of agent for service)
Registrant’s telephone number, including area code: (713) 626-1919
Date of fiscal year end: 8/31
Date of reporting period: 2/28/14
Item 1. Report to Stockholders.
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco California Tax-Free Income Fund
Nasdaq:
A: CLFAX n B: CLFBX n C: CLFCX n Y: CLFDX
| 2 | Fund Performance |
| 4 | Letters to Shareholders |
| 5 | Schedule of Investments |
| 12 | Financial Statements |
| 14 | Notes to Financial Statements |
| 20 | 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 6.99 | % | |||
| Class B Shares | 7.22 | ||||
| Class C Shares | 6.78 | ||||
| Class Y Shares | 7.19 | ||||
| S&P Municipal Bond Index‚ (Broad Market Index)* | 6.09 | ||||
| Barclays California Municipal Indexn (Former Broad Market/Style-Specific Index)* | 6.81 | ||||
| Lipper California Municipal Debt Funds Index¨ (Peer Group Index) | 7.43 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.;
nBarclays via FactSet Research Systems Inc.; ¨Lipper Inc.
| * | The Fund has elected to use the S&P Municipal Bond Index to represent its broad-based securities market benchmark rather than the Barclays California Municipal Index because the S&P Municipal Bond Index more closely reflects the performance of the broad US municipal bond market. The Barclays California Municipal Index will serve only as the Fund’s style-specific benchmark. |
The S&P Municipal Bond Index is a broad, market value-weighted index that seeks to measure the performance of the US municipal bond market.
The Barclays California Municipal Index is an unmanaged index considered representative of California investment-grade municipal bonds.
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 indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco California Tax-Free Income Fund
| Average Annual Total Returns | |||||
As of 2/28/14, including maximum applicable sales charges |
| ||||
| Class A Shares | |||||
| Inception (7/28/97) | 4.16 | % | |||
| 10 Years | 3.44 | ||||
| 5 Years | 5.37 | ||||
| 1 Year | –5.47 | ||||
| Class B Shares | |||||
| Inception (7/11/84) | 6.21 | % | |||
| 10 Years | 3.94 | ||||
| 5 Years | 6.01 | ||||
| 1 Year | –5.76 | ||||
| Class C Shares | |||||
| Inception (7/28/97) | 3.93 | % | |||
| 10 Years | 3.37 | ||||
| 5 Years | 5.77 | ||||
| 1 Year | –2.60 | ||||
| Class Y Shares | |||||
| Inception (7/28/97) | 4.70 | % | |||
| 10 Years | 4.15 | ||||
| 5 Years | 6.56 | ||||
| 1 Year | –0.93 | ||||
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund, Morgan Stanley California Tax-Free Income 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. 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 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges |
| ||||
| Class A Shares | |||||
| Inception (7/28/97) | 3.97 | % | |||
| 10 Years | 3.27 | ||||
| 5 Years | 5.82 | ||||
| 1 Year | –7.83 | ||||
| Class B Shares | |||||
| Inception (7/11/84) | 6.11 | % | |||
| 10 Years | 3.78 | ||||
| 5 Years | 6.48 | ||||
| 1 Year | –8.15 | ||||
| Class C Shares | |||||
| Inception (7/28/97) | 3.74 | % | |||
| 10 Years | 3.20 | ||||
| 5 Years | 6.21 | ||||
| 1 Year | –5.16 | ||||
| Class Y Shares | |||||
| Inception (7/28/97) | 4.50 | % | |||
| 10 Years | 3.98 | ||||
| 5 Years | 7.01 | ||||
| 1 Year | –3.54 | ||||
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 0.89%, 0.93%, 1.40% and 0.65%, 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 4.25% 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 California Tax-Free Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the | ||||||||
additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our | ||||||||
investment leaders, market strategists, economists and retirement experts on the go.
Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco California Tax-Free Income Fund
Schedule of Investments
February 28, 2014
(Unaudited)
Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
Municipal Obligations–106.57% |
| |||||||||||||||
| California–102.27% | ||||||||||||||||
ABAG Finance Authority for Non-profit Corps. (Sharp Healthcare); Series 2012 A, RB | 5.00 | % | 08/01/28 | $ | 900 | $ | 973,278 | |||||||||
ABAG Finance Authority For Nonprofit Corps. (Sharp HealthCare); Series 2014 A, RB | 5.00 | % | 08/01/43 | 500 | 519,795 | |||||||||||
Adelanto (City of) Public Utility Authority (Utility System); Series 2009 A, Ref. RB | 6.75 | % | 07/01/39 | 2,300 | 2,437,287 | |||||||||||
Alhambra (City of) (Atherton Baptist Homes); Series 2010 A, RB | 7.63 | % | 01/01/40 | 1,575 | 1,633,889 | |||||||||||
Alhambra Unified School District (Election of 1999); Series 1999 A, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(b) | 0.00 | % | 09/01/20 | 1,925 | 1,627,068 | |||||||||||
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 | 4,399,840 | |||||||||||
Anaheim (City of) Public Financing Authority (Electric System Distribution Facilities); Series 2011 A, RB | 5.38 | % | 10/01/36 | 2,500 | 2,835,350 | |||||||||||
Arcadia Unified School District (Election of 2006); Series 2007 A, Unlimited Tax GO Bonds | 5.00 | % | 08/01/37 | 1,500 | 1,623,900 | |||||||||||
Bakersfield (City of); Series 2007 A, Wastewater RB (INS–AGM)(a) | 5.00 | % | 09/15/32 | 2,215 | 2,395,943 | |||||||||||
Bay Area Governments Association (California Capital); Series 2001 A, Lease RB | 5.25 | % | 07/01/17 | 1,430 | 1,514,785 | |||||||||||
Bay Area Governments Association (West Sacramento); Series 2004 A, Lease RB(c)(d) | 5.00 | % | 09/01/14 | 2,735 | 2,802,773 | |||||||||||
Bay Area Toll Authority (San Francisco Bay Area); | ||||||||||||||||
Series 2008 F-1, Toll Bridge RB(e) | 5.00 | % | 04/01/39 | 1,250 | 1,348,550 | |||||||||||
Series 2008 F-1, Toll Bridge RB | 5.00 | % | 04/01/39 | 2,500 | 2,697,100 | |||||||||||
Series 2009 F-1, Toll Bridge RB(e) | 5.25 | % | 04/01/26 | 4,685 | 5,402,695 | |||||||||||
Series 2009 F-1, Toll Bridge RB(e) | 5.25 | % | 04/01/29 | 5,205 | 5,965,711 | |||||||||||
Series 2009 F-1, Toll Bridge RB(e) | 5.13 | % | 04/01/39 | 1,500 | 1,639,500 | |||||||||||
Bay Area Water Supply & Conservation Agency; Series 2013 A, RB | 5.00 | % | 10/01/34 | 1,500 | 1,652,385 | |||||||||||
Beverly Hills Unified School District (Election of 2008); | ||||||||||||||||
Series 2009, Unlimited Tax CAB GO Bonds(b) | 0.00 | % | 08/01/26 | 1,465 | 927,755 | |||||||||||
Series 2009, Unlimited Tax CAB GO Bonds(b) | 0.00 | % | 08/01/32 | 3,045 | 1,333,984 | |||||||||||
Bonita Unified School District (Election of 2004); Series 2004 A, Unlimited Tax GO Bonds(c)(d) | 5.00 | % | 08/01/14 | 1,000 | 1,020,790 | |||||||||||
Brea Olinda Unified School District; Series 2002 A, Ref. COP (INS–AGM)(a) | 5.50 | % | 08/01/18 | 1,850 | 1,858,528 | |||||||||||
California (State of) Educational Facilities Authority (California College of the Arts); Series 2005, RB | 5.00 | % | 06/01/35 | 2,000 | 1,976,620 | |||||||||||
California (State of) Educational Facilities Authority (Claremont McKenna College); Series 2007, RB(e) | 5.00 | % | 01/01/38 | 2,100 | 2,205,651 | |||||||||||
California (State of) Educational Facilities Authority (Pitzer College); | ||||||||||||||||
Series 2005 A, RB | 5.00 | % | 04/01/35 | 2,000 | 2,027,180 | |||||||||||
Series 2009, RB | 6.00 | % | 04/01/40 | 2,000 | 2,247,020 | |||||||||||
California (State of) Educational Facilities Authority (University of Southern California); Series 2009 B, RB(e) | 5.25 | % | 10/01/39 | 1,800 | 2,020,068 | |||||||||||
California (State of) Health Facilities Financing Authority (Adventist Health System West); Series 2009 A, RB | 5.75 | % | 09/01/39 | 500 | 558,250 | |||||||||||
California (State of) Health Facilities Financing Authority (Catholic Healthcare West); | ||||||||||||||||
Series 2009 A, RB | 6.00 | % | 07/01/39 | 500 | 549,780 | |||||||||||
Series 2011 A, RB | 5.25 | % | 03/01/41 | 2,500 | 2,600,950 | |||||||||||
California (State of) Health Facilities Financing Authority (Cedars-Sinai Medical Center); Series 2009, RB | 5.00 | % | 08/15/39 | 1,050 | 1,075,673 | |||||||||||
California (State of) Health Facilities Financing Authority (Children’s Hospital Los Angeles); Series 2010, RB (INS–AGM)(a) | 5.25 | % | 07/01/38 | 2,950 | 3,041,155 | |||||||||||
California (State of) Health Facilities Financing Authority (Kaiser Permanente); Series 2006 A, RB | 5.25 | % | 04/01/39 | 2,000 | 2,031,940 | |||||||||||
California (State of) Health Facilities Financing Authority (Providence Health & Services); | ||||||||||||||||
Series 2008, RB(c)(d) | 6.50 | % | 10/01/18 | 20 | 25,057 | |||||||||||
Series 2008, RB | 6.50 | % | 10/01/38 | 980 | 1,139,779 | |||||||||||
California (State of) Health Facilities Financing Authority (Scripps Health); Series 2010 A, RB | 5.00 | % | 11/15/36 | 4,000 | 4,217,320 | |||||||||||
California (State of) Health Facilities Financing Authority (St. Joseph Health System); | ||||||||||||||||
Series 2011 D, VRD RB (LOC–Wells Fargo Bank, N.A.)(f)(g) | 0.02 | % | 07/01/41 | 2,500 | 2,500,000 | |||||||||||
Series 2013 A, RB | 5.00 | % | 07/01/37 | 1,000 | 1,052,940 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco California Tax-Free Income Fund
Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| California–(continued) | ||||||||||||||||
California (State of) Health Facilities Financing Authority (Stanford Hospital); Series 2008 A-2, Ref. RB | 5.25 | % | 11/15/40 | $ | 2,000 | $ | 2,174,780 | |||||||||
California (State of) Health Facilities Financing Authority (Sutter Health); Series 2011 B, RB | 5.50 | % | 08/15/26 | 1,000 | 1,145,420 | |||||||||||
California (State of) Municipal Finance Authority (American Heritage Education Foundation); Series 2006 A, Education RB | 5.25 | % | 06/01/26 | 1,000 | 886,090 | |||||||||||
California (State of) Municipal Finance Authority (Caritas); Series 2012 A, Mobile Home Park RB | 5.50 | % | 08/15/47 | 1,500 | 1,535,070 | |||||||||||
California (State of) Municipal Finance Authority (Community Hospitals of Central California Obligated Group); | ||||||||||||||||
Series 2007, COP | 5.00 | % | 02/01/20 | 2,385 | 2,527,289 | |||||||||||
Series 2007, COP | 5.25 | % | 02/01/37 | 500 | 501,860 | |||||||||||
California (State of) Municipal Finance Authority (Eisenhower Medical Center); | ||||||||||||||||
Series 2010 A, RB | 5.50 | % | 07/01/30 | 1,000 | 1,036,710 | |||||||||||
Series 2010 A, RB | 5.75 | % | 07/01/40 | 1,500 | 1,557,495 | |||||||||||
California (State of) Municipal Finance Authority (Emerson College); Series 2011, RB | 5.75 | % | 01/01/33 | 1,315 | 1,468,986 | |||||||||||
California (State of) Municipal Finance Authority (University of La Verne); Series 2010 A, RB | 6.13 | % | 06/01/30 | 1,000 | 1,104,610 | |||||||||||
California (State of) Pollution Control Finance Authority; Series 2012, Water Furnishing RB(h)(i) | 5.00 | % | 07/01/37 | 2,500 | 2,482,800 | |||||||||||
California (State of) Pollution Control Financing Authority (Waste Management Inc.); Series 2002 A, Ref. Solid Waste Disposal RB(h) | 5.00 | % | 01/01/22 | 2,000 | 2,132,860 | |||||||||||
California (State of) Public Works Board (Various Capital); Series 2011 A, Lease RB | 5.13 | % | 10/01/31 | 2,000 | 2,167,100 | |||||||||||
California (State of) Public Works Board (Various State Universities); Series 2013 H, Lease RB | 5.00 | % | 09/01/38 | 1,000 | 1,057,760 | |||||||||||
California (State of) School Finance Authority (Alliance for College-Ready Public Schools); Series 2013 A, School Facility RB | 6.30 | % | 07/01/43 | 840 | 864,755 | |||||||||||
California (State of) Statewide Communities Development Authority (Adventist Health System/West); Series 2005 A, Health Facility RB | 5.00 | % | 03/01/30 | 5,000 | 5,043,000 | |||||||||||
California (State of) Statewide Communities Development Authority (Alliance for College-Ready Public Schools); Series 2012, School Facility RB | 6.10 | % | 07/01/32 | 820 | 834,465 | |||||||||||
California (State of) Statewide Communities Development Authority (American Baptist Homes of the West); Series 2010, RB | 6.25 | % | 10/01/39 | 2,000 | 2,110,560 | |||||||||||
California (State of) Statewide Communities Development Authority (California Baptist University); | ||||||||||||||||
Series 2007 A, RB | 5.40 | % | 11/01/27 | 1,785 | 1,736,109 | |||||||||||
Series 2014 A, RB | 5.13 | % | 11/01/23 | 715 | 721,735 | |||||||||||
California (State of) Statewide Communities Development Authority (Cottage Health System Obligated Group); Series 2010, RB | 5.25 | % | 11/01/30 | 1,675 | 1,782,367 | |||||||||||
California (State of) Statewide Communities Development Authority (Methodist Hospital); Series 2009, RB (CEP–FHA) | 6.75 | % | 02/01/38 | 445 | 525,056 | |||||||||||
California (State of) Statewide Communities Development Authority (Southern California Presbyterian Homes); | ||||||||||||||||
Series 2009, Senior Living RB | 6.25 | % | 11/15/19 | 2,000 | 2,229,420 | |||||||||||
Series 2009, Senior Living RB | 7.25 | % | 11/15/41 | 500 | 551,870 | |||||||||||
California (State of) Statewide Communities Development Authority (Terraces at San Joaquin Garden); Series 2012, RB | 5.63 | % | 10/01/32 | 1,000 | 986,340 | |||||||||||
California (State of) Statewide Communities Development Authority (University of California–Irvine East Campus Apartments); Series 2012, Ref. Student Housing RB | 5.38 | % | 05/15/38 | 2,000 | 2,052,100 | |||||||||||
California (State of) Statewide Communities Development Finance Authority (Henry Mayo Newhall Memorial Hospital); Series 2014 A, RB (INS–AGM)(a) | 5.25 | % | 10/01/43 | 600 | 622,188 | |||||||||||
California (State of); | ||||||||||||||||
Series 2004 A1, VRD Unlimited Tax GO Bonds (LOC–Citibank, N.A.)(f)(g) | 0.02 | % | 05/01/34 | 200 | 200,000 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 5.75 | % | 04/01/31 | 5,000 | 5,770,950 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 6.00 | % | 11/01/35 | 1,750 | 2,067,555 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 6.00 | % | 04/01/38 | 1,250 | 1,455,638 | |||||||||||
Series 2010, Unlimited Tax GO Bonds | 5.25 | % | 11/01/40 | 3,000 | 3,256,950 | |||||||||||
Series 2011, Various Purpose Unlimited Tax GO Bonds | 5.00 | % | 09/01/32 | 2,450 | 2,686,572 | |||||||||||
Series 2011, Various Purpose Unlimited Tax GO Bonds | 5.00 | % | 10/01/41 | 2,500 | 2,637,900 | |||||||||||
Series 2012, Ref. Unlimited Tax GO Bonds | 5.25 | % | 02/01/30 | 1,000 | 1,128,660 | |||||||||||
California Infrastructure & Economic Development Bank (Broad Museum); Series 2011 A, RB | 5.00 | % | 06/01/21 | 2,000 | 2,438,080 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco California Tax-Free Income Fund
Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| California–(continued) | ||||||||||||||||
California Infrastructure & Economic Development Bank (Pacific Gas & Electric Co.); Series 2009 B, Ref. VRD RB (LOC–Mizuho Corporate Bank)(f)(g) | 0.03 | % | 11/01/26 | $ | 1,400 | $ | 1,400,000 | |||||||||
California State University; Series 2009 A, Systemwide RB (INS–AGC)(a) | 5.25 | % | 11/01/38 | 1,000 | 1,120,750 | |||||||||||
Chino Basin Regional Financing Authority (Inland Empire Utilities Agency); Series 2008 A, RB (INS–AMBAC)(a) | 5.00 | % | 11/01/33 | 725 | 785,480 | |||||||||||
Clovis Unified School District (Election of 2004); Series 2004 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(b) | 0.00 | % | 08/01/29 | 735 | 361,701 | |||||||||||
Desert Community College District (Election of 2004); Series 2007 C, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 08/01/37 | 2,500 | 2,708,500 | |||||||||||
East Bay Municipal Utility District; Series 2010 A, Ref. Sub. Water System RB | 5.00 | % | 06/01/36 | 2,000 | 2,202,140 | |||||||||||
Eden (Township of) Healthcare District; Series 2010, COP | 6.13 | % | 06/01/34 | 1,000 | 1,046,610 | |||||||||||
El Dorado (County of) Irrigation District; Series 2009 A, COP(c)(d) | 5.75 | % | 08/01/14 | 1,000 | 1,023,830 | |||||||||||
El Monte Union High School District (Election of 2008); Series 2009 A, Unlimited Tax GO Bonds (INS–AGC)(a) | 5.50 | % | 06/01/34 | 1,000 | 1,087,480 | |||||||||||
El Segundo Unified School District (Election of 2008); Series 2009 A, Unlimited Tax CAB GO Bonds(b) | 0.00 | % | 08/01/33 | 4,430 | 1,652,966 | |||||||||||
Fairfield (City of) Community Facilities District No. 3 (North Cordelia General Improvements); Series 2008, Special Tax RB | 6.00 | % | 09/01/32 | 1,800 | 1,929,132 | |||||||||||
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 | 1,502,310 | |||||||||||
Fontana (City of) Redevelopment Agency (Downtown Redevelopment); Series 2000, Ref. Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 09/01/21 | 1,480 | 1,481,243 | |||||||||||
Foothill-Eastern Transportation Corridor Agency; Subseries 2014 B-1, Ref. Toll Road RB(c) | 5.00 | % | 01/15/18 | 2,000 | 2,190,140 | |||||||||||
Fullerton (City of) Community Facilities District No. 1 (Amerige Heights); | ||||||||||||||||
Series 2012, Ref. Special Tax RB | 5.00 | % | 09/01/26 | 1,960 | 2,130,853 | |||||||||||
Series 2012, Ref. Special Tax RB | 5.00 | % | 09/01/32 | 1,090 | 1,138,745 | |||||||||||
Gilroy Unified School District (Election of 2008); | ||||||||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds(b)(d) | 0.00 | % | 08/01/29 | 615 | 364,504 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds(b)(d) | 0.00 | % | 08/01/31 | 2,235 | 1,187,970 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(b) | 0.00 | % | 08/01/29 | 4,735 | 2,267,781 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(b) | 0.00 | % | 08/01/31 | 1,415 | 596,423 | |||||||||||
Glendora (City of) Public Finance Authority; Series 2003 A, Project No. One Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 09/01/24 | 2,425 | 2,435,112 | |||||||||||
Golden State Tobacco Securitization Corp.; Series 2013 A, Enhanced Tobacco Settlement Asset-Backed RB | 5.00 | % | 06/01/30 | 2,000 | 2,127,080 | |||||||||||
Hanford Joint Union High School District (Election of 1998); Series 2004 C, Unlimited Tax GO Bonds (INS–NATL)(a) | 5.70 | % | 08/01/28 | 2,230 | 2,255,578 | |||||||||||
Inglewood (City of) Redevelopment Agency (Merged Redevelopment); Series 1998 A, Ref. Tax Allocation RB (INS–AMBAC)(a) | 5.25 | % | 05/01/23 | 1,000 | 1,061,520 | |||||||||||
Irvine (City of) (Reassessment District No. 12-1); Series 2012, Limited Obligation Improvement Bonds | 4.00 | % | 09/02/22 | 2,150 | 2,287,363 | |||||||||||
Irvine Unified School District (Community Facilities District No. 06-1-Portola Springs); Series 2010, Special Tax RB | 6.70 | % | 09/01/35 | 515 | 566,423 | |||||||||||
Kern (County of) (Capital Improvments); Series 2009 A, COP (INS–AGC)(a) | 5.75 | % | 08/01/35 | 1,000 | 1,122,370 | |||||||||||
Kern (County of) Water Agency Improvement District No. 4; Series 2008 A, COP (INS–AGC)(a) | 5.00 | % | 05/01/28 | 1,700 | 1,804,618 | |||||||||||
Lodi (City of); Series 2007 A, Wastewater System Revenue COP (INS–AGM)(a) | 5.00 | % | 10/01/37 | 1,000 | 1,031,930 | |||||||||||
Long Beach (City of) Bond Finance Authority (Aquarium of the Pacific); Series 2012, Ref. RB | 5.00 | % | 11/01/29 | 2,000 | 2,150,780 | |||||||||||
Long Beach (City of) Financing Authority; Series 1992, RB (INS–AMBAC)(a) | 6.00 | % | 11/01/17 | 12,415 | 13,168,715 | |||||||||||
Long Beach (City of); Series 2010 A, Sr. Airport RB | 5.00 | % | 06/01/40 | 2,500 | 2,554,350 | |||||||||||
Los Angeles (City of) (FHA Insured Mortgage Loans–Section 8 Assisted); Series 1997 A, Ref. Mortgage RB (INS–NATL)(a) | 6.10 | % | 07/01/25 | 440 | 440,832 | |||||||||||
Los Angeles (City of) Department of Airports (Los Angeles International Airport); | ||||||||||||||||
Series 2010 A, Sr. RB | 5.00 | % | 05/15/35 | 2,500 | 2,665,225 | |||||||||||
Series 2010 B, Sub. RB | 5.00 | % | 05/15/40 | 1,000 | 1,053,070 | |||||||||||
Series 2013, RB(h) | 5.00 | % | 05/15/43 | 3,000 | 3,129,180 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco California Tax-Free Income Fund
Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| California–(continued) | ||||||||||||||||
Los Angeles (City of) Department of Water & Power; | ||||||||||||||||
Series 2004 C, Water System RB(c)(d) | 5.00 | % | 07/01/14 | $ | 1,000 | $ | 1,016,720 | |||||||||
Series 2011 A, Power System RB(e) | 5.00 | % | 07/01/22 | 1,800 | 2,154,132 | |||||||||||
Series 2011 A, Water System RB | 5.25 | % | 07/01/39 | 1,500 | 1,631,295 | |||||||||||
Subseries 2006 A-1, Water System RB (INS–AMBAC)(a) | 5.00 | % | 07/01/36 | 1,485 | 1,593,643 | |||||||||||
Subseries 2007 A-1, Power System RB (INS–AMBAC)(a) | 5.00 | % | 07/01/37 | 1,000 | 1,083,180 | |||||||||||
Subseries 2008 A-1, Power System RB | 5.25 | % | 07/01/38 | 2,000 | 2,234,080 | |||||||||||
Los Angeles (County of) Metropolitan Transportation Authority; Series 2005 A, Proposition A First Tier Sr. Sales Tax RB (INS–AMBAC)(a) | 5.00 | % | 07/01/35 | 1,000 | 1,047,950 | |||||||||||
Los Angeles Community College District (Election of 2003); Series 2008 F-1, Unlimited Tax GO | 5.00 | % | 08/01/33 | 2,000 | 2,196,400 | |||||||||||
Los Angeles County Schools Regionalized Business Services Corp. (Los Angeles County Schools Pooled Financing Program); Series 1999 A, CAB COP (INS–AMBAC)(a)(b) | 0.00 | % | 08/01/24 | 1,265 | 749,449 | |||||||||||
Los Angeles Unified School District (Election of 2004); | ||||||||||||||||
Series 2007 H, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 07/01/32 | 1,000 | 1,092,420 | |||||||||||
Series 2009 I, Unlimited Tax GO Bonds (INS–AGC)(a) | 5.00 | % | 01/01/34 | 3,000 | 3,282,060 | |||||||||||
Madera (County of) (Valley Children’s Hospital); Series 1995, COP (INS–NATL)(a) | 6.50 | % | 03/15/15 | 1,695 | 1,737,612 | |||||||||||
Menifee Union School District (Election of 2008); Series 2009 C, Unlimited Tax CAB GO Bonds | 0.00 | % | 08/01/35 | 940 | 301,091 | |||||||||||
Montclair (City of) Redevelopment Agency (Montclair Redevelopment Project No. V); Series 2001, Ref. Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 10/01/20 | 1,495 | 1,498,184 | |||||||||||
Montebello Unified School District (Election of 2004); Series 2009 A-1, Unlimited Tax GO Bonds | 5.25 | % | 08/01/34 | 1,000 | 1,063,140 | |||||||||||
Moorpark Unified School District (Election of 2008); Series 2009 A, Unlimited Tax CAB GO Bonds | 0.00 | % | 08/01/31 | 840 | 363,518 | |||||||||||
Morongo Band of Mission Indians (The) (Enterprise Casino); Series 2008 B, RB(i) | 6.50 | % | 03/01/28 | 1,000 | 1,090,770 | |||||||||||
Mountain View (City of) Shoreline Regional Park Community; Series 2001 A, Tax Allocation RB | 5.25 | % | 08/01/16 | 1,570 | 1,575,558 | |||||||||||
National City (City of) Community Development Commission (National City Redevelopment); Series 2011, Tax Allocation RB | 7.00 | % | 08/01/32 | 1,500 | 1,794,540 | |||||||||||
Norco (City of) Financing Authority; Series 2009, Ref. Enterprise RB (INS–AGM)(a) | 5.63 | % | 10/01/34 | 1,000 | 1,081,440 | |||||||||||
Palomar Pomerado Health; Series 2009, COP | 6.75 | % | 11/01/39 | 2,000 | 2,061,340 | |||||||||||
Panama-Buena Vista Union School District (School Construction); Series 2006, COP (INS–NATL)(a) | 5.00 | % | 09/01/30 | 1,045 | 1,072,086 | |||||||||||
Paramount Unified School District (Election of 2006); Series 2007, Unlimited Tax GO Bonds | 5.25 | % | 08/01/30 | 1,600 | 1,682,464 | |||||||||||
Pittsburg Unified School District (Election of 2006); Series 2009 B, Unlimited Tax GO Bonds | 5.50 | % | 08/01/31 | 1,000 | 1,120,760 | |||||||||||
Pomona (City of) Public Financing Authority (Merged Redevelopment); | ||||||||||||||||
Series 2001 AD, Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 02/01/15 | 2,020 | 2,027,555 | |||||||||||
Series 2001 AD, Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 02/01/16 | 1,110 | 1,114,052 | |||||||||||
Series 2007 AW, Sub. RB | 5.13 | % | 02/01/33 | 1,075 | 997,482 | |||||||||||
Port Hueneme (City of) (Capital Improvement Program); Series 1992, Ref. COP (INS–NATL)(a) | 6.00 | % | 04/01/19 | 1,195 | 1,337,611 | |||||||||||
Rancho Cordova (City of) Community Facilities District No. 2003-1 (Sunridge Anatolia); Series 2012, Ref. Special Tax RB | 5.00 | % | 09/01/27 | 1,000 | 1,047,490 | |||||||||||
Rancho Cucamonga (City of) Redevelopment Agency (Rancho Redevelopment Housing Set Aside) Series 2007 A, Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 09/01/34 | 1,000 | 1,015,250 | |||||||||||
Rancho Cucamonga (City of) Redevelopment Agency (Rancho Redevelopment); Series 2001, Tax Allocation RB (INS–NATL)(a) | 5.38 | % | 09/01/25 | 3,000 | 3,002,550 | |||||||||||
Redding (City of) Redevelopment Agency (Canby-HilltoP-Cypress Redevelopment); Series 2003 A, Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 09/01/23 | 1,400 | 1,404,522 | |||||||||||
Regents of the University of California; | ||||||||||||||||
Series 2009 E, Medical Center Pooled RB | 5.50 | % | 05/15/27 | 2,500 | 2,812,875 | |||||||||||
Series 2009 O, General RB(e) | 5.75 | % | 05/15/23 | 705 | 839,373 | |||||||||||
Series 2009 O, General RB(e) | 5.75 | % | 05/15/25 | 1,050 | 1,250,130 | |||||||||||
Series 2009 Q, General RB(e)(j) | 5.00 | % | 05/15/34 | 920 | 1,012,718 | |||||||||||
Riverside (City of); | ||||||||||||||||
Series 2008 B, Water RB (INS–AGM)(a) | 5.00 | % | 10/01/33 | 1,000 | 1,061,560 | |||||||||||
Series 2008 D, Electric RB (INS–AGM)(a) | 5.00 | % | 10/01/38 | 1,800 | 1,891,332 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco California Tax-Free Income Fund
Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| California–(continued) | ||||||||||||||||
Riverside (County of) Transportation Commission; Series 2010 A, Limited Sales Tax RB | 5.00 | % | 06/01/32 | $ | 1,500 | $ | 1,628,475 | |||||||||
Sacramento (County of) Sanitation Districts Financing Authority (Sacramento Regional County Sanitation District); Series 2006, RB (INS–NATL)(a) | 5.00 | % | 12/01/29 | 2,000 | 2,161,520 | |||||||||||
Sacramento (County of); | ||||||||||||||||
Series 2008 A, Sr. Airport System RB (INS–AGM)(a) | 5.00 | % | 07/01/32 | 1,000 | 1,062,950 | |||||||||||
Series 2008 A, Sr. Airport System RB (INS–AGM)(a) | 5.00 | % | 07/01/41 | 1,015 | 1,049,835 | |||||||||||
Series 2010, Sr. Airport System RB | 5.00 | % | 07/01/40 | 2,200 | 2,261,798 | |||||||||||
San Buenaventura (City of) (Community Memorial Health System); Series 2011, RB | 7.50 | % | 12/01/41 | 2,000 | 2,258,380 | |||||||||||
San Diego (City of) Public Facilities Financing Authority (Southcrest & Central Imperial Redevelopment); Series 2007 B, Pooled Financing Tax Allocation RB (INS–Radian)(a) | 5.25 | % | 10/01/27 | 2,535 | 2,552,593 | |||||||||||
San Diego (City of) Public Facilities Financing Authority; Subseries 2012 A, Ref. Water RB | 5.00 | % | 08/01/32 | 2,215 | 2,451,296 | |||||||||||
San Diego Community College District (Election of 2002); Series 2009, Unlimited Tax GO Bonds(e) | 5.25 | % | 08/01/33 | 1,500 | 1,696,725 | |||||||||||
San Diego Community College District (Election of 2006); Series 2011, Unlimited Tax GO Bonds | 5.00 | % | 08/01/31 | 2,500 | 2,768,250 | |||||||||||
San Francisco (City & County of) Airport Commission (San Francisco International Airport); | ||||||||||||||||
Series 2009 E, Second Series RB | 6.00 | % | 05/01/39 | 1,000 | 1,160,900 | |||||||||||
Series 2011 C, Ref. Second Series RB(h) | 5.00 | % | 05/01/23 | 5,000 | 5,656,700 | |||||||||||
Series 2011 G, Second Series RB | 5.25 | % | 05/01/28 | 2,000 | 2,219,620 | |||||||||||
San Francisco (City & County of) Public Utilities Commission (Water System Improvement Program); Subseries 2011 A, Water RB | 5.00 | % | 11/01/36 | 4,000 | 4,315,360 | |||||||||||
San Francisco (City & County of) Redevelopment Financing Authority (Mission Bay North Redevelopment); Series 2011 C, Tax Allocation RB | 6.75 | % | 08/01/41 | 1,000 | 1,149,820 | |||||||||||
San Francisco (City & County of) Redevelopment Financing Authority (Mission Bay South Redevelopment); Series 2011 D, Tax Allocation RB | 7.00 | % | 08/01/33 | 500 | 550,685 | |||||||||||
San Francisco (City & County of) Successor Agency to the Redevelopment Agency (Mission Bay South Redevelopment); Series 2014 A, Tax Allocation RB | 5.00 | % | 08/01/43 | 1,060 | 1,075,889 | |||||||||||
San Francisco (City & County of) Successor Agency to the Redevelopment Agency Community Facilities District No. 6 (Mission Bay South Public Improvements); Series 2013 A, Ref. Special | 5.00 | % | 08/01/33 | 500 | 516,735 | |||||||||||
San Francisco (City of) Bay Area Rapid Transit District; Series 2012 A, RB | 5.00 | % | 07/01/36 | 1,000 | 1,088,410 | |||||||||||
San Jose Evergreen Community College District (Election of 2004); Series 2008 B, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(b) | 0.00 | % | 09/01/31 | 3,110 | 1,376,486 | |||||||||||
San Luis Obispo (County of) Financing Authority (Lopez Dam Improvement); Series 2011 A, Ref. RB (INS–AGM)(a) | 5.00 | % | 08/01/30 | 1,500 | 1,602,945 | |||||||||||
Santa Clara (County of) Financing Authority (Multiple Facilities); Series 2008 L, Ref. Lease RB | 5.25 | % | 05/15/36 | 3,000 | 3,325,140 | |||||||||||
Santa Margarita Water District (Community Facilities District No. 2013-1); | ||||||||||||||||
Series 2013, Special Tax RB | 5.63 | % | 09/01/36 | 1,000 | 1,045,550 | |||||||||||
Series 2013, Special Tax RB | 5.63 | % | 09/01/43 | 1,000 | 1,037,640 | |||||||||||
Santaluz Community Facilities District No. 2 (Improvement Area No. 1); | ||||||||||||||||
Series 2011 A, Ref. Special Tax RB(d) | 5.00 | % | 09/01/28 | 825 | 879,425 | |||||||||||
Series 2011 A, Ref. Special Tax RB(d) | 5.00 | % | 09/01/29 | 715 | 755,512 | |||||||||||
Series 2011 A, Ref. Special Tax RB(d) | 5.10 | % | 09/01/30 | 465 | 491,249 | |||||||||||
Sierra View Local Health Care District; Series 2007, RB | 5.25 | % | 07/01/32 | 1,500 | 1,530,255 | |||||||||||
Simi Valley Unified School District (Election of 2004); | ||||||||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(b) | 0.00 | % | 08/01/28 | 3,480 | 1,828,844 | |||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(b) | 0.00 | % | 08/01/30 | 2,765 | 1,254,481 | |||||||||||
South Gate (City of) Public Financing Authority (South Gate Redevelopment Project No. 1); Series 2002, Tax Allocation RB (INS–SGI)(a) | 5.75 | % | 09/01/22 | 1,000 | 1,009,750 | |||||||||||
South Orange (County of) Public Financing Authority (Ladera Ranch); | ||||||||||||||||
Series 2014 A, Ref. Sr. Lien Special Tax RB | 5.00 | % | 08/15/21 | 750 | 881,445 | |||||||||||
Series 2014 A, Ref. Sr. Lien Special Tax RB | 5.00 | % | 08/15/34 | 445 | 466,707 | |||||||||||
Southern California Metropolitan Water District; | ||||||||||||||||
Series 2005 A, RB (INS–AGM)(a) | 5.00 | % | 07/01/35 | 1,520 | 1,597,277 | |||||||||||
Series 2009 B, Ref. RB(e) | 5.00 | % | 07/01/27 | 8,585 | 9,892,839 | |||||||||||
Southern California Public Power Authority (Mead-Adelanto); Series 1994 A, RB (INS–AMBAC)(a)(k) | 9.68 | % | 07/01/15 | 3,500 | 3,736,180 | |||||||||||
Southern California Public Power Authority (Mead-Phoenix); Series 1994 A, RB (INS–AMBAC)(a)(k) | 9.68 | % | 07/01/15 | 2,500 | 2,670,850 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco California Tax-Free Income Fund
Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| California–(continued) | ||||||||||||||||
Southern California Public Power Authority (Milford Wind Corridor Phase II); | ||||||||||||||||
Series 2011 1, RB(e) | 5.25 | % | 07/01/31 | $ | 2,100 | $ | 2,339,610 | |||||||||
Series 2011-1, RB(e) | 5.25 | % | 07/01/29 | 2,100 | 2,362,773 | |||||||||||
Tejon Ranch Public Facilities Financing Authority Community Facilities District No. 2008-1 (Tejon Industrial Complex Public Improvements–East); Series 2012 B, Special Tax RB | 5.00 | % | 09/01/32 | 750 | 756,308 | |||||||||||
Temecula (City of) Redevelopment Agency (Temecula Redevelopment Project No. 1); Series 2002, Tax Allocation RB (INS–NATL)(a) | 5.13 | % | 08/01/27 | 2,150 | 2,169,930 | |||||||||||
Tustin (City of) Public Financing Authority; Series 2011 A, Water RB | 5.00 | % | 04/01/41 | 1,000 | 1,057,070 | |||||||||||
Twin Rivers Unified School District; Series 2009, Unlimited Tax CAB GO BAN(b) | 0.00 | % | 04/01/14 | 1,700 | 1,699,694 | |||||||||||
Val Verde Unified School District; Series 2009 A, Ref. COP (INS–AGC)(a) | 5.13 | % | 03/01/36 | 1,475 | 1,526,286 | |||||||||||
Walnut (City of) Energy Center Authority; Series 2010 A, Ref. RB | 5.00 | % | 01/01/35 | 3,000 | 3,139,620 | |||||||||||
West Contra Costa Unified School District; Series 2005, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(b) | 0.00 | % | 08/01/25 | 2,500 | 1,489,125 | |||||||||||
Western Riverside (County of) Water & Wastewater Financing Authority (Eastern Municipal Water District Improvement); Series 2009, RB (INS–AGC)(a) | 5.63 | % | 09/01/39 | 1,000 | 1,070,190 | |||||||||||
Yosemite Community College District (Election of 2004); Series 2008 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(b) | 0.00 | % | 08/01/24 | 4,685 | 3,190,860 | |||||||||||
| 356,542,407 | ||||||||||||||||
| Guam–1.25% | ||||||||||||||||
Guam (Territory of) (Section 30); | ||||||||||||||||
Series 2009 A, Limited Obligation RB | 5.38 | % | 12/01/24 | 1,000 | 1,062,490 | |||||||||||
Series 2009 A, Limited Obligation RB | 5.63 | % | 12/01/29 | 660 | 700,511 | |||||||||||
Guam (Territory of) International Airport Authority; Series 2013 C, General RB(h) | 6.25 | % | 10/01/34 | 1,000 | 1,061,000 | |||||||||||
Guam (Territory of); Series 2011 A, Business Privilege Tax RB | 5.13 | % | 01/01/42 | 1,500 | 1,524,090 | |||||||||||
| 4,348,091 | ||||||||||||||||
| Puerto Rico–2.03% | ||||||||||||||||
Puerto Rico (Commonwealth of) Public Buildings Authority; Series 2002 D, RB(c)(d) | 5.45 | % | 07/01/17 | 3,680 | 4,266,261 | |||||||||||
Puerto Rico Sales Tax Financing Corp.; | ||||||||||||||||
First Subseries 2010 C, RB | 5.00 | % | 08/01/35 | 1,500 | 1,125,090 | |||||||||||
Series 2011 C, RB | 5.25 | % | 08/01/40 | 2,000 | 1,679,620 | |||||||||||
| 7,070,971 | ||||||||||||||||
| Virgin Islands–1.02% | ||||||||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 1,675 | 1,850,021 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note); Series 2010 A, Sr. Lien RB | 5.00 | % | 10/01/25 | 1,600 | 1,712,656 | |||||||||||
| 3,562,677 | ||||||||||||||||
TOTAL INVESTMENTS(l)–106.57% (Cost $345,919,346) | 371,524,146 | |||||||||||||||
FLOATING RATE NOTE OBLIGATIONS–(7.06)% | ||||||||||||||||
Notes with interest and fee rates ranging from 0.55% to 0.58% at 02/28/14 and contractual maturities of collateral ranging from 07/01/22 to 10/01/39 (See Note 1K)(m) | (24,620,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–0.49% | 1,708,611 | |||||||||||||||
NET ASSETS–100.00% | $ | 348,612,757 | ||||||||||||||
Investment Abbreviations:
| AGC | – Assured Guaranty Corp. | |
| AGM | – Assured Guaranty Municipal Corp. | |
| AMBAC | – American Municipal Bond Assurance Corp. | |
| BAN | – Bond Anticipation Notes | |
| CAB | – Capital Appreciation Bonds | |
| CEP | – Credit Enhancement Provider | |
| COP | – Certificates of Participation | |
| FHA | – Federal Housing Administration | |
| GO | – General Obligation | |
| INS | – Insurer |
| LOC | – Letter of Credit | |
| NATL | – National Public Finance Guarantee Corp. | |
| Radian | – Radian Asset Assurance, Inc. | |
| RB | – Revenue Bonds | |
| Ref. | – Refunding | |
| SGI | – Syncora Guarantee, Inc. | |
| Sr. | – Senior | |
| Sub. | – Subordinated | |
| VRD | – Variable Rate Demand |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco California 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 has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
| (d) | Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral. |
| (e) | Underlying security related to Dealer Trusts entered into by the Fund. See Note 1K. |
| (f) | 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, 2014. |
| (g) | Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary. |
| (h) | Security subject to the alternative minimum tax. |
| (i) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). 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, 2014 was $3,573,570, which represented 1.03% of the Fund’s 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) | Current coupon rate for inverse floating rate municipal obligations. This rate resets periodically as the rate on the related security changes. Positions in inverse floating rate municipal obligations have a total value of $6,407,030, which represented 1.84% of the Fund’s Net Assets. |
| (l) | 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. | 10.8 | % | ||
American Municipal Bond Assurance Corp. | 7.8 | |||
National Public Finance Guarantee Corp. | 7.7 | |||
| (m) | Floating rate note obligations related to securities held. The interest and fee rates shown reflect the rates in effect at February 28, 2014. At February 28, 2014, the Fund’s investments with a value of $42,326,875 are held by Dealer Trusts and serve as collateral for the $24,620,000 in the floating rate note obligations outstanding at that date. |
Portfolio Composition
By credit sector, based on Total Investments
as of February 28, 2014
Revenue Bonds | 78.5 | % | ||
General Obligation Bonds | 16.7 | |||
Pre-refunded Bonds | 3.7 | |||
Other | 1.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco California Tax-Free Income Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $345,919,346) | $ | 371,524,146 | ||
Receivable for: | ||||
Investments sold | 1,590,000 | |||
Fund shares sold | 345,301 | |||
Interest | 4,856,215 | |||
Investment for trustee deferred compensation and retirement plans | 52,079 | |||
Other assets | 5,921 | |||
Total assets | 378,373,662 | |||
Liabilities: | ||||
Floating rate note obligations | 24,620,000 | |||
Payable for: | ||||
Investments purchased | 1,779,208 | |||
Fund shares reacquired | 305,435 | |||
Amount due custodian | 2,237,509 | |||
Dividends | 499,829 | |||
Accrued fees to affiliates | 153,893 | |||
Accrued trustees’ and officers’ fees and benefits | 3,598 | |||
Accrued other operating expenses | 42,139 | |||
Trustee deferred compensation and retirement plans | 119,294 | |||
Total liabilities | 29,760,905 | |||
Net assets applicable to shares outstanding | $ | 348,612,757 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 355,284,622 | ||
Undistributed net investment income | 1,202,991 | |||
Undistributed net realized gain (loss) | (33,479,656 | ) | ||
Net unrealized appreciation | 25,604,800 | |||
| $ | 348,612,757 | |||
Net Assets: |
| |||
Class A | $ | 287,592,087 | ||
Class B | $ | 20,900,392 | ||
Class C | $ | 19,731,721 | ||
Class Y | $ | 20,388,557 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 24,514,985 | |||
Class B | 1,764,761 | |||
Class C | 1,671,100 | |||
Class Y | 1,731,187 | |||
Class A: | ||||
Net asset value per share | $ | 11.73 | ||
Maximum offering price per share | ||||
(Net asset value of $11.73 ¸ 95.75%) | $ | 12.25 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.84 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 11.81 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 11.78 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco California Tax-Free Income Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Interest | $ | 9,172,498 | ||
Expenses: | ||||
Advisory fees | 817,800 | |||
Administrative services fees | 47,458 | |||
Custodian fees | 5,650 | |||
Distribution fees: | ||||
Class A | 276,821 | |||
Class B | 97,669 | |||
Class C | 75,898 | |||
Interest, facilities and maintenance fees | 67,250 | |||
Transfer agent fees | 130,361 | |||
Trustees’ and officers’ fees and benefits | 24,612 | |||
Other | 102,558 | |||
Total expenses | 1,646,077 | |||
Net investment income | 7,526,421 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from investment securities (includes net gains (losses) from securities sold to affiliates of $(98,050)) | (3,517,346 | ) | ||
Change in net unrealized appreciation of investment securities | 19,805,181 | |||
Net realized and unrealized gain | 16,287,835 | |||
Net increase in net assets resulting from operations | $ | 23,814,256 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco California Tax-Free Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 7,526,421 | $ | 16,549,433 | ||||
Net realized gain (loss) | (3,517,346 | ) | 763,454 | |||||
Change in net unrealized appreciation (depreciation) | 19,805,181 | (37,091,954 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 23,814,256 | (19,779,067 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (4,927,117 | ) | (7,115,529 | ) | ||||
Class B | (1,739,121 | ) | (7,488,596 | ) | ||||
Class C | (387,802 | ) | (843,990 | ) | ||||
Class Y | (463,718 | ) | (1,028,342 | ) | ||||
Total distributions from net investment income | (7,517,758 | ) | (16,476,457 | ) | ||||
Share transactions–net: | ||||||||
Class A | 111,622,419 | 18,657,510 | ||||||
Class B | (138,591,096 | ) | (46,199,280 | ) | ||||
Class C | (2,768,356 | ) | (3,584,104 | ) | ||||
Class Y | (1,116,159 | ) | (2,122,326 | ) | ||||
Net increase (decrease) in net assets resulting from share transactions | (30,853,192 | ) | (33,248,200 | ) | ||||
Net increase (decrease) in net assets | (14,556,694 | ) | (69,503,724 | ) | ||||
Net assets: | ||||||||
Beginning of period | 363,169,451 | 432,673,175 | ||||||
End of period (includes undistributed net investment income of $1,202,991 and $1,194,328, respectively) | $ | 348,612,757 | $ | 363,169,451 | ||||
Notes to Financial Statements
February 28, 2014
(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) (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 twelve 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 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. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to 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, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Securities for which market quotations either are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be
14 Invesco California Tax-Free Income Fund
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.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income, 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 declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable 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. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
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. | 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. |
| H. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| I. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
15 Invesco California Tax-Free Income Fund
| 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. | 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 interests 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. |
Recently published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”) prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, “covered funds.” These rules may preclude banking entities from sponsoring and/or providing services for existing TOB trust programs. There can be no assurances that TOB trusts can be restructured substantially similar to their present form, that new sponsors of TOB trusts would begin providing these services, or that alternative forms of leverage will be available to the Trust in order to maintain current levels of leverage. Any alternative forms of leverage may be less advantageous to the Trust, and may adversely affect the Trust’s net asset value, distribution rate and ability to achieve its investment objective. The ultimate impact of these rules on the TOBs market and the municipal market generally is not yet certain.
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 (the “1933 Act”), 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.
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
First $500 million | 0 | .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 between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
16 Invesco California Tax-Free Income Fund
The Adviser has contractually agreed, through at least June 30, 2014, 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 1.50%, 2.00%, 2.00% and 1.25% 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, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), 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 0.75% of the average daily net assets of Class B shares; and (3) Class C — up to 0.75%.
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, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $6,913 in front-end sales commissions from the sale of Class A shares and $5,651 and $1,687 from Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
As of February 28, 2014, all of the securities in this Fund were valued based on Level 2 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 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 year ended February 28, 2014 the Fund engaged in securities sales of $969,409, which resulted in net realized gains (losses) of $(98,050).
17 Invesco California Tax-Free Income Fund
NOTE 5—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 6—Cash Balances and Borrowings
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
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 fee rate related to inverse floating rate note obligations during the six months ended February 28, 2014 were $24,635,000 and 0.55%, 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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2015 | $ | 803,875 | $ | — | $ | 803,875 | ||||||
August 31, 2016 | 4,399,730 | — | 4,399,730 | |||||||||
August 31, 2017 | 9,460,903 | — | 9,460,903 | |||||||||
August 31, 2018 | 6,678,872 | — | 6,678,872 | |||||||||
August 31, 2019 | 1,906,728 | — | 1,906,728 | |||||||||
Not subject to expiration | 266,902 | 5,047,952 | 5,314,854 | |||||||||
| $ | 23,517,010 | $ | 5,047,952 | $ | 28,564,962 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended February 28, 2014 was $15,062,858 and $46,871,295, 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 | $ | 26,594,361 | ||
Aggregate unrealized (depreciation) of investment securities | (740,072 | ) | ||
Net unrealized appreciation of investment securities | $ | 25,854,289 | ||
Cost of investments for tax purposes is $345,669,857.
18 Invesco California Tax-Free Income Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 12,032,663 | $ | 137,473,545 | 2,224,815 | $ | 27,215,833 | ||||||||||
Class B | 5 | 53 | 6,140 | 76,451 | ||||||||||||
Class C | 101,820 | 1,175,256 | 501,900 | 6,196,506 | ||||||||||||
Class Y | 163,505 | 1,882,374 | 333,425 | 4,091,272 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 252,471 | 2,910,209 | 359,160 | 4,327,235 | ||||||||||||
Class B | 63,649 | 736,681 | 299,001 | 3,622,292 | ||||||||||||
Class C | 16,089 | 186,467 | 32,695 | 394,972 | ||||||||||||
Class Y | 17,440 | 201,557 | 36,081 | 434,393 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 84,734 | 971,778 | 2,053,203 | 25,178,400 | ||||||||||||
Class B | (84,023 | ) | (971,778 | ) | (2,038,370 | ) | (25,178,400 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (2,601,446 | ) | (29,733,113 | ) | (3,169,198 | ) | (38,063,958 | ) | ||||||||
Class B | (12,037,238 | ) | (138,356,052 | ) | (2,031,233 | ) | (24,719,623 | ) | ||||||||
Class C | (359,648 | ) | (4,130,079 | ) | (838,544 | ) | (10,175,582 | ) | ||||||||
Class Y | (279,551 | ) | (3,200,090 | ) | (547,077 | ) | (6,647,991 | ) | ||||||||
Net increase (decrease) in share activity | (2,629,530 | ) | $ | (30,853,192 | ) | (2,778,002 | ) | $ | (33,248,200 | ) | ||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 69% 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. |
19 Invesco California 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.
Net asset value, beginning of period | Net investment income | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(a) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/ absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Supplemental ratio of expenses to average net assets (excluding interest, facilities and maintenance fees)(b) | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 11.20 | $ | 0.25 | (d) | $ | 0.53 | $ | 0.78 | $ | (0.25 | ) | $ | — | $ | (0.25 | ) | $ | 11.73 | 6.99 | % | $ | 287,592 | 0.93 | %(e) | 0.93 | %(e) | 0.89 | %(e) | 4.34 | %(e) | 4 | % | ||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.28 | 0.49 | (d) | (1.08 | ) | (0.59 | ) | (0.49 | ) | — | (0.49 | ) | 11.20 | (5.06 | ) | 165,142 | 0.89 | 0.89 | 0.84 | 4.02 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.34 | 0.50 | (d) | 0.94 | 1.44 | (0.50 | ) | — | (0.50 | ) | 12.28 | 12.91 | 163,047 | 0.87 | 0.87 | 0.82 | 4.21 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.75 | 0.52 | (d) | (0.41 | ) | 0.11 | (0.52 | ) | — | (0.52 | ) | 11.34 | 1.13 | 148,884 | 0.90 | 0.90 | 0.85 | 4.66 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 11.28 | 0.25 | (d) | 0.56 | 0.81 | (0.25 | ) | — | (0.25 | ) | 11.84 | 7.22 | (g) | 20,900 | 0.93 | (e)(g) | 0.93 | (e)(g) | 0.89 | (e)(g) | 4.34 | (e)(g) | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.37 | 0.49 | (d) | (1.09 | ) | (0.60 | ) | (0.49 | ) | — | (0.49 | ) | 11.28 | (5.11 | )(g) | 155,900 | 0.93 | (g) | 0.93 | (g) | 0.88 | (g) | 3.98 | (g) | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.42 | 0.50 | (d) | 0.95 | 1.45 | (0.50 | ) | — | (0.50 | ) | 12.37 | 12.93 | (g) | 217,489 | 0.88 | (g) | 0.88 | (g) | 0.83 | (g) | 4.20 | (g) | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.83 | 0.52 | (d) | (0.41 | ) | 0.11 | (0.52 | ) | — | (0.52 | ) | 11.42 | 1.16 | (g) | 220,478 | 0.89 | (g) | 0.89 | (g) | 0.84 | (g) | 4.67 | (g) | 25 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 11.27 | 0.22 | (d) | 0.54 | 0.76 | (0.22 | ) | — | (0.22 | ) | 11.81 | 6.78 | 19,732 | 1.44 | (e) | 1.44 | (e) | 1.40 | (e) | 3.83 | (e) | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.36 | 0.43 | (d) | (1.09 | ) | (0.66 | ) | (0.43 | ) | — | (0.43 | ) | 11.27 | (5.57 | ) | 21,558 | 1.40 | 1.40 | 1.35 | 3.51 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.41 | 0.44 | (d) | 0.95 | 1.39 | (0.44 | ) | — | (0.44 | ) | 12.36 | 12.37 | 27,394 | 1.38 | 1.38 | 1.33 | 3.70 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.82 | 0.46 | (d) | (0.40 | ) | 0.06 | (0.47 | ) | — | (0.47 | ) | 11.41 | 0.65 | 21,800 | 1.40 | 1.40 | 1.35 | 4.16 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class Y | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 11.24 | 0.26 | (d) | 0.54 | 0.80 | (0.26 | ) | — | (0.26 | ) | 11.78 | 7.19 | 20,389 | 0.69 | (e) | 0.69 | (e) | 0.65 | (e) | 4.58 | (e) | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.33 | 0.52 | (d) | (1.09 | ) | (0.57 | ) | (0.52 | ) | — | (0.52 | ) | 11.24 | (4.88 | ) | 20,569 | 0.65 | 0.65 | 0.60 | 4.26 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.38 | 0.53 | (d) | 0.95 | 1.48 | (0.53 | ) | — | (0.53 | ) | 12.33 | 13.24 | 24,742 | 0.63 | 0.63 | 0.58 | 4.45 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.79 | 0.55 | (d) | (0.41 | ) | 0.14 | (0.55 | ) | — | (0.55 | ) | 11.38 | 1.40 | 24,195 | 0.65 | 0.65 | 0.60 | 4.91 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (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 years ended August 31, 2011 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. For the period ending August 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $139,542,348 and sold of $13,399,363 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen California Insured Tax Free Income Fund into the Fund. |
| (d) | Calculated using average shares outstanding. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $229,286, $80,793, $20,407 and $20,398 for Class A, Class B, Class C and Class Y shares, respectively. |
| (f) | Annualized. |
| (g) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25%, 0.27%, 0.25% and 0.25% for the six months ended February 28, 2014 and the years ended August 31, 2013, 2012 and 2011, respectively. |
20 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,069.90 | $ | 4.77 | $ | 1,020.18 | $ | 4.66 | 0.93 | % | ||||||||||||
B | 1,000.00 | 1,072.20 | 4.78 | 1,020.18 | 4.66 | 0.93 | ||||||||||||||||||
C | 1,000.00 | 1,067.80 | 7.38 | 1,017.65 | 7.20 | 1.44 | ||||||||||||||||||
Y | 1,000.00 | 1,071.90 | 3.54 | 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, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
21 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.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.
| Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | MS-CTFI-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco Core Plus Bond Fund
Nasdaq:
A: ACPSX n B: CPBBX n C: CPCFX n R: CPBRX n Y: CPBYX n R5: CPIIX
n R6: CPBFX
| 2 | Fund Performance |
| 4 | Letters to Shareholders |
| 5 | Schedule of Investments |
| 24 | Financial Statements |
| 26 | Notes to Financial Statements |
| 37 | Financial Highlights |
| 38 | 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 5.50 | % | ||
Class B Shares | 5.11 | |||
Class C Shares | 5.11 | |||
Class R Shares | 5.37 | |||
Class Y Shares | 5.63 | |||
Class R5 Shares | 5.54 | |||
Class R6 Shares | 5.54 | |||
Barclays U.S. Aggregate Indexq (Broad Market/Style-Specific Index) | 2.84 | |||
Lipper Core Plus Bond Funds Indexn (Peer Group Index)* | 3.44 |
Source(s): qInvesco, Barclays via FactSet Research Systems Inc.; nLipper Inc.
| * | The Fund has elected to use the Lipper Core Plus Bonds Funds Index as its peer group index rather than the Lipper Intermediate Investment Grade Debt Funds Index because the Lipper Core Plus Bond Funds Index more clearly reflects the performance of the types of securities in which the Fund invests. |
The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market.
The Lipper Core Plus Bonds Funds Index is an unmanaged index consisting of funds that invest at least 65% in domestic investment-grade debt issues (rated in the top four grades) with any remaining investment in non-benchmark sectors such as high-yield, global and emerging market debt. These funds maintain dollar-weighted average maturities of five to 10 years.
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 indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Core Plus Bond Fund
| Average Annual Total Returns | ||||
As of 2/28/14, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (6/3/09) | 4.98 | % | ||
1 Year | -2.40 | |||
Class B Shares | ||||
Inception (6/3/09) | 4.79 | % | ||
1 Year | -3.70 | |||
Class C Shares | ||||
Inception (6/3/09) | 5.14 | % | ||
1 Year | 0.23 | |||
Class R Shares | ||||
Inception (6/3/09) | 5.67 | % | ||
1 Year | 1.71 | |||
Class Y Shares | ||||
Inception (6/3/09) | 6.22 | % | ||
1 Year | 2.32 | |||
Class R5 Shares | ||||
Inception (6/3/09) | 6.18 | % | ||
1 Year | 2.22 | |||
Class R6 Shares | ||||
Inception | 6.01 | % | ||
1 Year | 2.22 | |||
Class R6 shares incepted on September 24, 2012. 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 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, Class R5
| Average Annual Total Returns | ||||
As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (6/3/09) | 4.60 | % | ||
1 Year | -4.66 | |||
Class B Shares | ||||
Inception (6/3/09) | 4.43 | % | ||
1 Year | -5.97 | |||
Class C Shares | ||||
Inception (6/3/09) | 4.80 | % | ||
1 Year | -2.12 | |||
Class R Shares | ||||
Inception (6/3/09) | 5.33 | % | ||
1 Year | -0.67 | |||
Class Y Shares | ||||
Inception (6/3/09) | 5.87 | % | ||
1 Year | -0.16 | |||
Class R5 Shares | ||||
Inception (6/3/09) | 5.83 | % | ||
1 Year | -0.26 | |||
Class R6 Shares | ||||
Inception | 5.66 | % | ||
1 Year | -0.26 | |||
and Class R6 shares was 0.84%, 1.59%, 1.59%, 1.09%, 0.59%, 0.56% and 0.54%, 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, Class R5 and Class R6 shares was 1.01%, 1.76%, 1.76%, 1.26%, 0.76%, 0.58% and 0.56%, 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 4.25% 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/ or reimbursed expenses on Class A, Class B, Class C, Class R and Class Y shares, performance would have been lower. Had the adviser not waived fees and/or reimbursed expenses on Class R5 and R6 shares in the past, 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, 2014. See current prospectus for more information. |
3 Invesco Core Plus Bond Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can | |
access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Core Plus Bond Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Principal Amount | Value | |||||||
U.S. Dollar Denominated Bonds and Notes–58.24% |
| |||||||
| Advertising–0.10% | ||||||||
Omnicom Group Inc., Sr. Unsec. Gtd. Global Notes, 3.63%, 05/01/22 | $ | 550,000 | $ | 549,731 | ||||
| Aerospace & Defense–0.14% | ||||||||
Alliant Techsystems Inc., Sr. Unsec. Gtd. Notes, 5.25%, 10/01/21(b) | 59,000 | 60,623 | ||||||
B/E Aerospace Inc., Sr. Unsec. Notes, 5.25%, 04/01/22 | 90,000 | 93,375 | ||||||
Bombardier Inc. (Canada), | 115,000 | 117,012 | ||||||
7.75%, 03/15/20(b) | 108,000 | 120,690 | ||||||
DigitalGlobe Inc., Sr. Unsec. Gtd. Bonds, 5.25%, 02/01/21 | 61,000 | 61,457 | ||||||
GenCorp Inc., Sec. Gtd. Global Notes, 7.13%, 03/15/21 | 204,000 | 221,340 | ||||||
TransDigm Inc., Sr. Unsec. Gtd. Sub. | 75,000 | 76,125 | ||||||
7.50%, 07/15/21 | 50,000 | 55,250 | ||||||
| 805,872 | ||||||||
| Agricultural Products–0.32% | ||||||||
Ingredion Inc., | 1,030,000 | 1,019,690 | ||||||
Sr. Unsec. Notes, 6.63%, 04/15/37 | 635,000 | 752,784 | ||||||
| 1,772,474 | ||||||||
| Air Freight & Logistics–0.32% | ||||||||
FedEx Corp., Sr. Unsec. Gtd. Notes, 5.10%, 01/15/44 | 1,730,000 | 1,794,416 | ||||||
| Airlines–0.76% | ||||||||
Air Canada Pass Through Trust (Canada), Series 2013-1, Class B, Sec. Pass Through Ctfs., 5.38%, 05/15/21(b) | 35,000 | 35,403 | ||||||
American Airlines Pass Through Trust, Series 2011-1, Class A, Sr. Sec. Pass Through Ctfs., 5.25%, 01/31/21 | 938,022 | 1,020,686 | ||||||
Series 2011-1, Class B, Sec. Pass Through Ctfs., 7.00%, 01/31/18(b) | 307,748 | 335,445 | ||||||
Continental Airlines Pass Through Trust, Series 2009-1, Sr. Sec. Pass Through Ctfs., 9.00%, 07/08/16 | 1,092,717 | 1,256,625 | ||||||
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17 | 3,048 | 3,424 | ||||||
Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.00%, 01/12/19 | 20,173 | 21,226 | ||||||
Series 2012-1, Class A, Sr. Sec. Pass Through Ctfs., 4.15%, 04/11/24 | 487,695 | 504,460 | ||||||
Series 2012-3, Class C, Sec. Pass Through Ctfs., 6.13%, 04/29/18 | 134,000 | 142,710 | ||||||
| Principal Amount | Value | |||||||
| Airlines–(continued) | ||||||||
United Airlines Pass Through Trust, Series 2013-1, Class A, Sr. Sec. Pass Through Ctfs., 4.30%, 08/15/25 | $ | 675,000 | $ | 698,203 | ||||
United Continental Holdings Inc., Sr. Unsec. Gtd. Notes, 6.38%, 06/01/18 | 145,000 | 155,875 | ||||||
US Airways Pass Through Trust, Series 1998-1, Class C, Sec. Pass Through Ctfs., 6.82%, 01/30/15 | 11,345 | 11,403 | ||||||
Series 2012-1, Class B, Sec. Pass Through Ctfs., 8.00%, 10/01/19 | 9,583 | 10,829 | ||||||
Series 2012-1, Class C, Sec. Pass Through Ctfs., 9.13%, 10/01/15 | 8,420 | 8,946 | ||||||
Virgin Australia Pass Through Trust (Australia), Series 2013-1, Class B, Sec. Gtd. Pass Through Ctfs., 6.00%, 10/23/20(b) | 67,000 | 70,620 | ||||||
| 4,275,855 | ||||||||
| Alternative Carriers–0.09% | ||||||||
Level 3 Communications Inc., Sr. Unsec. Global Notes, 8.88%, 06/01/19 | 30,000 | 33,150 | ||||||
Level 3 Financing Inc., | 364,000 | 397,215 | ||||||
Sr. Unsec. Gtd. Floating Rate Notes, 3.85%, 01/15/18(b)(c) | 29,000 | 29,580 | ||||||
Sr. Unsec. Gtd. Notes, 6.13%, 01/15/21(b) | 45,000 | 47,812 | ||||||
| 507,757 | ||||||||
| Apparel Retail–0.07% | ||||||||
Hot Topic, Inc., Sr. Sec. Gtd. Notes, 9.25%, 06/15/21(b) | 141,000 | 151,223 | ||||||
L Brands Inc., | 5,000 | 6,119 | ||||||
Sr. Unsec. Gtd. Notes, 6.63%, 04/01/21 | 170,000 | 191,462 | ||||||
Neiman Marcus Group LTD LLC., | 43,000 | 46,655 | ||||||
| 395,459 | ||||||||
| Apparel, Accessories & Luxury Goods–0.07% | ||||||||
Levi Strauss & Co., Sr. Unsec. Global Notes, | 151,000 | 166,478 | ||||||
7.63%, 05/15/20 | 100,000 | 109,500 | ||||||
PVH Corp., Sr. Unsec. Global Notes, 4.50%, 12/15/22 | 120,000 | 118,950 | ||||||
William Carter Co. (The), Sr. Unsec. Gtd. Notes, 5.25%, 08/15/21(b) | 16,000 | 16,440 | ||||||
| 411,368 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Application Software–0.02% | ||||||||
Nuance Communications Inc., Sr. Unsec. Gtd. Notes, 5.38%, 08/15/20(b) | $ | 113,000 | $ | 113,283 | ||||
| Asset Management & Custody Banks–1.00% | ||||||||
Affiliated Managers Group, Inc., | 2,865,000 | 2,894,710 | ||||||
Blackstone Holdings Finance Co. LLC, | 1,070,000 | 1,247,449 | ||||||
Carlyle Holdings II Finance LLC, Sr. Sec. Gtd. Notes, 5.63%, 03/30/43(b) | 1,430,000 | 1,490,945 | ||||||
| 5,633,104 | ||||||||
| Auto Parts & Equipment–0.61% | ||||||||
American Axle & Manufacturing Inc., | 120,000 | 129,300 | ||||||
Dana Holding Corp., Sr. Unsec. Notes, 5.38%, 09/15/21 | 40,000 | 41,300 | ||||||
Stackpole International Intermediate Co. S.A./Stackpole International Powder Metal (Canada), Sr. Sec. Gtd. Notes, 7.75%, 10/15/21(b) | 134,000 | 143,380 | ||||||
TRW Automotive Inc., Sr. Unsec. Gtd. Notes, 4.50%, 03/01/21(b) | 3,000,000 | 3,105,000 | ||||||
| 3,418,980 | ||||||||
| Automobile Manufacturers–1.61% | ||||||||
Ford Motor Credit Co. LLC, | 2,300,000 | 2,447,102 | ||||||
4.25%, 09/20/22 | 2,700,000 | 2,787,582 | ||||||
General Motors Co., Sr. Unsec. Notes, 3.50%, 10/02/18(b) | 2,355,000 | 2,449,200 | ||||||
Hyundai Capital America (South Korea), Sr. Unsec. Notes, 2.88%, 08/09/18(b) | 1,349,000 | 1,371,485 | ||||||
| 9,055,369 | ||||||||
| Brewers–0.24% | ||||||||
Heineken NV (Netherlands), Sr. Unsec. Notes, 1.40%, 10/01/17(b) | 1,360,000 | 1,355,120 | ||||||
| Broadcasting–0.31% | ||||||||
Clear Channel Worldwide Holdings Inc., Series B, Sr. Unsec. Gtd. Global Notes, 6.50%, 11/15/22 | 40,000 | 42,800 | ||||||
Series B, Sr. Unsec. Gtd. Sub. Global Notes, 7.63%, 03/15/20 | 75,000 | 81,563 | ||||||
Discovery Communications LLC, | 1,275,000 | 1,485,172 | ||||||
LIN Television Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 01/15/21 | 105,000 | 111,825 | ||||||
Starz LLC/Starz Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.00%, 09/15/19 | 5,000 | 5,225 | ||||||
| 1,726,585 | ||||||||
| Principal Amount | Value | |||||||
| Building Products–0.24% | ||||||||
Builders FirstSource Inc., Sr. Sec. Notes, 7.63%, 06/01/21(b) | $ | 215,000 | $ | 231,662 | ||||
Building Materials Holding Corp., Sr. Sec. Notes, 9.00%, 09/15/18(b) | 100,000 | 110,500 | ||||||
Gibraltar Industries Inc., Sr. Unsec. Gtd. Sub. Global Notes, 6.25%, 02/01/21 | 180,000 | 190,800 | ||||||
Griffon Corp., Sr. Unsec. Gtd. Notes, 5.25%, 03/01/22(b) | 91,000 | 91,228 | ||||||
Norbord Inc. (Canada), Sr. Sec. Notes, 5.38%, 12/01/20(b) | 61,000 | 61,560 | ||||||
Nortek Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 04/15/21 | 211,000 | 237,375 | ||||||
10.00%, 12/01/18 | 125,000 | 138,750 | ||||||
USG Corp., | 24,000 | 25,680 | ||||||
7.88%, 03/30/20(b) | 60,000 | 67,950 | ||||||
Sr. Unsec. Notes, 9.75%, 01/15/18 | 155,000 | 188,712 | ||||||
| 1,344,217 | ||||||||
| Cable & Satellite–1.05% | ||||||||
British Sky Broadcasting Group PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.50%, 11/15/18(b) | 25,000 | 32,880 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp., Sr. Unsec. Gtd. Notes, 5.25%, 03/15/21(b) | 100,000 | 101,500 | ||||||
6.50%, 04/30/21 | 79,000 | 84,728 | ||||||
Comcast Corp., | 20,000 | 21,037 | ||||||
Sr. Unsec. Gtd. Notes, 6.45%, 03/15/37 | 80,000 | 98,506 | ||||||
COX Communications Inc., | 1,220,000 | 1,552,701 | ||||||
9.38%, 01/15/19(b) | 25,000 | 32,007 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 2.40%, 03/15/17 | 620,000 | 637,693 | ||||||
DISH DBS Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 05/01/20 | 264,000 | 274,560 | ||||||
Hughes Satellite Systems Corp., | 66,000 | 72,765 | ||||||
Sr. Unsec. Gtd. Global Notes, 7.63%, 06/15/21 | 59,000 | 66,965 | ||||||
Intelsat Jackson Holdings S.A. (Luxembourg), | 150,000 | 159,000 | ||||||
Sr. Unsec. Gtd. Global Notes, 7.25%, 10/15/20 | 30,000 | 32,850 | ||||||
7.50%, 04/01/21 | 115,000 | 127,362 | ||||||
Intelsat Luxembourg S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 7.75%, 06/01/21(b) | 70,000 | 75,513 | ||||||
8.13%, 06/01/23(b) | 60,000 | 65,400 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Cable & Satellite–(continued) | ||||||||
Nara Cable Funding Ltd. (Spain), Sr. Sec. Gtd. Notes, 8.88%, 12/01/18(b) | $ | 200,000 | $ | 218,000 | ||||
NBCUniversal Media LLC, Sr. Unsec. Gtd. Global Notes, | 350,000 | 400,754 | ||||||
5.95%, 04/01/41 | 740,000 | 874,225 | ||||||
Time Warner Cable, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 02/01/20 | 680,000 | 749,409 | ||||||
ViaSat Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 06/15/20 | 210,000 | 223,650 | ||||||
| 5,901,505 | ||||||||
| Casinos & Gaming–0.26% | ||||||||
Boyd Gaming Corp., Sr. Unsec. Gtd. Global Notes, | 155,000 | 170,500 | ||||||
9.13%, 12/01/18 | 20,000 | 21,850 | ||||||
Caesars Entertainment Operating Co. Inc., | 61,000 | 50,554 | ||||||
Sr. Sec. Gtd. Global Notes, 9.00%, 02/15/20 | 70,000 | 68,600 | ||||||
9.00%, 02/15/20 | 50,000 | 49,000 | ||||||
Caesars Entertainment Resort Properties LLC, | 98,000 | 103,757 | ||||||
Sr. Sec. Notes, 8.00%, 10/01/20(b) | 105,000 | 111,169 | ||||||
MCE Finance Ltd. (Macau), Sr. Unsec. Gtd. Notes, 5.00%, 02/15/21(b) | 200,000 | 200,000 | ||||||
MGM Resorts International, | 245,000 | 271,337 | ||||||
Sr. Unsec. Gtd. Notes, 7.75%, 03/15/22 | 172,000 | 198,230 | ||||||
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 04/15/21 | 85,000 | 92,863 | ||||||
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sr. Unsec. Global Notes, 5.38%, 03/15/22 | 55,000 | 57,647 | ||||||
7.75%, 08/15/20 | 85,000 | 95,200 | ||||||
| 1,490,707 | ||||||||
| Catalog Retail–0.73% | ||||||||
QVC Inc., Sr. Sec. Notes, 7.50%, 10/01/19(b) | 3,825,000 | 4,095,141 | ||||||
| Coal & Consumable Fuels–0.16% | ||||||||
Arch Coal Inc., Sec. Gtd. Notes, 8.00%, 01/15/19(b) | 78,000 | 79,950 | ||||||
Cloud Peak Energy Resources LLC/Cloud Peak Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.38%, 03/15/24 | 39,000 | 40,462 | ||||||
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes, | 37,000 | 39,128 | ||||||
8.25%, 04/01/20 | 145,000 | 158,412 | ||||||
Indo Energy Finance II B.V. (Indonesia), Sr. Sec. Gtd. Notes, 6.38%, 01/24/23(b) | 450,000 | 373,500 | ||||||
| Principal Amount | Value | |||||||
| Coal & Consumable Fuels–(continued) | ||||||||
Peabody Energy Corp., Sr. Unsec. Gtd. Notes, 6.50%, 09/15/20 | $ | 200,000 | $ | 213,500 | ||||
| 904,952 | ||||||||
| Commercial Printing–0.02% | ||||||||
RR Donnelley & Sons Co., Sr. Unsec. Global Notes, 7.88%, 03/15/21 | 90,000 | 103,050 | ||||||
| Commodity Chemicals–0.38% | ||||||||
LYB International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Bonds, 4.88%, 03/15/44 | 2,120,000 | 2,125,011 | ||||||
| Communications Equipment–0.19% | ||||||||
Avaya Inc., | 40,000 | 38,000 | ||||||
Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b) | 135,000 | 134,156 | ||||||
9.00%, 04/01/19(b) | 133,000 | 138,320 | ||||||
Juniper Networks Inc., Sr. Unsec. Global Notes, 4.50%, 03/15/24 | 740,000 | 743,462 | ||||||
| 1,053,938 | ||||||||
| Computer & Electronics Retail–0.03% | ||||||||
Rent-A-Center Inc., Sr. Unsec. Gtd. Global Notes, 6.63%, 11/15/20 | 150,000 | 157,313 | ||||||
| Construction & Engineering–0.30% | ||||||||
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 01/15/21 | 105,000 | 114,187 | ||||||
Odebrecht Offshore Drilling Finance Ltd. (Brazil), Sr. Sec. Gtd. Notes, 6.63%, 10/01/22(b) | 400,000 | 410,899 | ||||||
Tutor Perini Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 11/01/18 | 125,000 | 133,750 | ||||||
URS Corp., Sr. Unsec. Gtd. Global Notes, 5.00%, 04/01/22 | 1,050,000 | 1,057,219 | ||||||
| 1,716,055 | ||||||||
| Construction & Farm Machinery & Heavy Trucks–0.15% | ||||||||
Allied Specialty Vehicles, Inc., Sr. Sec. Notes, 8.50%, 11/01/19(b) | 127,000 | 135,890 | ||||||
Commercial Vehicle Group Inc., Sec. Gtd. Global Notes, 7.88%, 04/15/19 | 129,000 | 133,192 | ||||||
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Global Notes, 5.88%, 10/15/22 | 90,000 | 94,950 | ||||||
Meritor Inc., Sr. Unsec. Gtd. Notes, 6.25%, 02/15/24 | 89,000 | 91,225 | ||||||
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21 | 128,000 | 134,720 | ||||||
Oshkosh Corp., Sr. Unsec. Gtd. Notes, 5.38%, 03/01/22(b) | 105,000 | 107,887 | ||||||
Terex Corp., | 70,000 | 74,025 | ||||||
Sr. Unsec. Gtd. Notes, 6.50%, 04/01/20 | 25,000 | 27,125 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Construction & Farm Machinery & Heavy Trucks–(continued) | ||||||||
Titan International Inc., Sr. Sec. Gtd. Notes, 6.88%, 10/01/20(b) | $ | 59,000 | $ | 62,688 | ||||
| 861,702 | ||||||||
| Construction Materials–0.06% | ||||||||
CPG Merger Sub LLC, Sr. Unsec. Gtd. Notes, 8.00%, 10/01/21(b) | 30,000 | 32,250 | ||||||
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 08/15/20 | 230,000 | 267,950 | ||||||
US Concrete, Inc., Sr. Sec. Gtd. Notes, 8.50%, 12/01/18(b) | 36,000 | 38,430 | ||||||
| 338,630 | ||||||||
| Consumer Finance–0.15% | ||||||||
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes, | 200,000 | 243,000 | ||||||
8.00%, 03/15/20 | 160,000 | 198,800 | ||||||
SLM Corp., Sr. Unsec. Medium-Term Global Notes, 6.25%, 01/25/16 | 355,000 | 383,605 | ||||||
| 825,405 | ||||||||
| Data Processing & Outsourced Services–0.28% | ||||||||
Computer Sciences Corp., Sr. Unsec. Global Notes, 4.45%, 09/15/22 | 760,000 | 784,416 | ||||||
CoreLogic, Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/01/21 | 228,000 | 247,380 | ||||||
First Data Corp., | 304,000 | 330,600 | ||||||
Sr. Unsec. Gtd. Global Notes, 12.63%, 01/15/21 | 37,000 | 44,400 | ||||||
Sr. Unsec. Gtd. Sub. Notes, 11.75%, 08/15/21(b) | 75,000 | 80,625 | ||||||
11.75%, 08/15/21(b) | 58,000 | 62,350 | ||||||
| 1,549,771 | ||||||||
| Distillers & Vintners–0.03% | ||||||||
CEDC Finance Corp. International Inc. (Poland), Sr. Sec. Gtd. Global Notes, 10.00%, 04/30/18(d) | 41,281 | 38,605 | ||||||
Constellation Brands Inc., | 60,000 | 69,600 | ||||||
Sr. Unsec. Gtd. Notes, 6.00%, 05/01/22 | 35,000 | 38,850 | ||||||
| 147,055 | ||||||||
| Diversified Banks–4.92% | ||||||||
Access Finance B.V. (Nigeria), Sr. Unsec. Gtd. Notes, | 600,000 | 603,053 | ||||||
Alfa Bank OJSC Via Alfa Bond Issuance PLC (Russia), Sr. Unsec. Loan Participation Notes, 7.75%, 04/28/21(b) | 200,000 | 214,712 | ||||||
Banco Bradesco S.A. (Brazil), Sr. Unsec. Notes, 4.10%, 03/23/15(b) | 415,000 | 427,141 | ||||||
| Principal Amount | Value | |||||||
| Diversified Banks–(continued) | ||||||||
Banco Davivienda S.A. (Colombia), Sr. Unsec. Notes, | $ | 200,000 | $ | 197,034 | ||||
Unsec. Sub. Notes, 5.88%, 07/09/22(b) | 200,000 | 196,786 | ||||||
Banco de Credito e Inversiones (Chile), Sr. Unsec. Notes, 3.00%, 09/13/17(b) | 200,000 | 202,525 | ||||||
4.00%, 02/11/23(b) | 500,000 | 476,821 | ||||||
Banco Santander Mexico S.A. Institucion de Banca Multiple Grupo Financiero Santander (Mexico), Unsec. Sub. Bonds, 5.95%, 01/30/24(b) | 400,000 | 420,000 | ||||||
Bancolombia S.A. (Colombia), Unsec. Sub. Global Notes, 5.13%, 09/11/22 | 140,000 | 134,612 | ||||||
Bank of Montreal (Canada), Sr. Unsec. Medium-Term Notes, 0.80%, 11/06/15 | 1,330,000 | 1,338,592 | ||||||
Barclays Bank PLC (United Kingdom), Unsec. Sub. Global Notes, 5.14%, 10/14/20 | 810,000 | 877,056 | ||||||
BBVA Bancomer S.A. (Mexico), Unsec. Sub. Notes, 6.75%, 09/30/22(b) | 600,000 | 658,586 | ||||||
Credit Agricole S.A. (France), Jr. Unsec. Sub. Notes, 7.88%(b)(e) | 1,395,000 | 1,506,600 | ||||||
Eurasian Development Bank (Supranational), Sr. Unsec. Notes, 4.77%, 09/20/22(b) | 200,000 | 192,462 | ||||||
Grupo Aval Ltd. (Colombia), Sr. Unsec. Gtd. Notes, 4.75%, 09/26/22(b) | 400,000 | 378,957 | ||||||
Hana Bank (South Korea), Sr. Unsec. Notes, 4.25%, 06/14/17(b) | 700,000 | 751,896 | ||||||
HBOS PLC (United Kingdom), Unsec. Sub. Medium-Term Global Notes, 6.75%, 05/21/18(b) | 1,360,000 | 1,544,982 | ||||||
HSBC Holdings PLC (United Kingdom), Sr. Unsec. Global Notes, 4.00%, 03/30/22 | 1,050,000 | 1,091,672 | ||||||
ING Bank N.V. (Netherlands), Sr. Unsec. Notes, 3.00%, 09/01/15(b) | 255,000 | 260,284 | ||||||
Intesa Sanpaolo SpA (Italy), Sr. Unsec. Gtd. Notes, 3.88%, 01/15/19 | 2,840,000 | 2,904,365 | ||||||
Lloyds Bank PLC (United Kingdom), Unsec. Gtd. Sub. Medium-Term Notes, 6.50%, 09/14/20(b) | 955,000 | 1,104,855 | ||||||
Nordea Bank AB (Sweden), Sr. Unsec. Notes, 4.88%, 01/27/20(b) | 575,000 | 641,885 | ||||||
PNC Bank, N.A., Unsec. Sub. Global Notes, 3.80%, 07/25/23 | 1,255,000 | 1,274,171 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Unsec. Sub. Notes, 6.13%, 12/15/22 | 95,000 | 100,550 | ||||||
Royal Bank of Scotland PLC (The) (United Kingdom), REGS, Unsec. | 78,000 | 91,980 | ||||||
Santander U.S. Debt S.A. Unipersonal (Spain), Sr. Unsec. Gtd. Notes, 3.72%, 01/20/15(b) | 700,000 | 713,928 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Diversified Banks–(continued) | ||||||||
Societe Generale S.A. (France), Jr. Unsec. Sub. Bonds, 7.88%(b)(e) | $ | 2,965,000 | $ | 3,157,725 | ||||
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 3.85%, 04/27/15(b) | 775,000 | 803,895 | ||||||
U.S. Bank N.A., Unsec. Sub. Notes, 3.78%, 04/29/20 | 1,400,000 | 1,448,091 | ||||||
VTB Bank OJSC Via VTB Capital S.A. (Russia), Sr. Unsec. Notes, 6.00%, 04/12/17(b) | 200,000 | 212,275 | ||||||
Wells Fargo & Co., Unsec. Sub. Global Notes, 5.38%, 11/02/43 | 3,500,000 | 3,758,441 | ||||||
| 27,685,932 | ||||||||
| Diversified Capital Markets–0.59% | ||||||||
Credit Suisse AG (Switzerland), Unsec. Sub. Notes, 6.50%, 08/08/23(b) | 1,085,000 | 1,182,114 | ||||||
Credit Suisse Group AG (Switzerland), Jr. Sub. Unsec. Notes, 7.50%(b)(e) | 1,225,000 | 1,355,156 | ||||||
UBS AG (Switzerland), | 200,000 | 230,702 | ||||||
Sr. Unsec. Medium-Term Bank Notes, 3.88%, 01/15/15 | 560,000 | 577,049 | ||||||
| 3,345,021 | ||||||||
| Diversified Metals & Mining–2.59% | ||||||||
Anglo American Capital PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.38%, 04/08/19(b) | 170,000 | 219,627 | ||||||
BHP Billiton Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 5.00%, 09/30/43 | 2,369,000 | 2,501,531 | ||||||
FMG Resources Pty. Ltd. (Australia), | 122,000 | 133,590 | ||||||
8.25%, 11/01/19(b) | 105,000 | 116,025 | ||||||
Glencore Funding LLC (Switzerland), | 3,229,000 | 3,095,315 | ||||||
HudBay Minerals Inc. (Canada), | 41,000 | 43,972 | ||||||
Sr. Unsec. Gtd. Notes, 9.50%, 10/01/20(b) | 12,000 | 12,780 | ||||||
Magnetation LLC/ Mag Finance Corp., | 113,000 | 127,690 | ||||||
Rio Tinto Finance USA Ltd. (United Kingdom), Sr. Unsec. Gtd. Global Notes, 7.13%, 07/15/28 | 565,000 | 714,964 | ||||||
Rio Tinto Finance USA PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 3.50%, 03/22/22 | 1,700,000 | 1,700,987 | ||||||
Southern Copper Corp., Sr. Unsec. Global Notes, | 1,720,000 | 1,480,427 | ||||||
5.38%, 04/16/20 | 150,000 | 163,252 | ||||||
6.75%, 04/16/40 | 725,000 | 741,832 | ||||||
| Principal Amount | Value | |||||||
| Diversified Metals & Mining–(continued) | ||||||||
Vedanta Resources PLC (India), Sr. Unsec. Notes, 9.50%, 07/18/18(b) | $ | 100,000 | $ | 112,799 | ||||
Volcan Cia Minera S.A.A. (Peru), Sr. Unsec. Gtd. Notes, 5.38%, 02/02/22(b) | 400,000 | 386,882 | ||||||
Walter Energy, Inc., | 73,000 | 74,277 | ||||||
Sr. Unsec. Gtd. Global Notes, 8.50%, 04/15/21 | 41,000 | 30,238 | ||||||
Xstrata Finance Canada Ltd. (Canada), | 2,969,000 | 2,945,629 | ||||||
| 14,601,817 | ||||||||
| Drug Retail–0.04% | ||||||||
CVS Pass Through Trust, Sr. Sec. Global Pass Through Ctfs., 6.04%, 12/10/28 | 196,735 | 221,897 | ||||||
| Electric Utilities–0.96% | ||||||||
Comision Federal de Electricidad (Mexico), Sr. Unsec. Notes, 5.75%, 02/14/42(b) | 500,000 | 483,519 | ||||||
Electricite de France (France), | 1,535,000 | 1,535,000 | ||||||
Sr. Unsec. Notes, 4.88%, 01/22/44(b) | 1,328,000 | 1,317,638 | ||||||
LSP Energy L.P./LSP Batesville Funding Corp., Series D, Sr. Sec. Bonds, 8.16%, 07/15/25(f) | 5,000 | 0 | ||||||
Majapahit Holding B.V. (Indonesia), | 100,000 | 116,048 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.75%, 01/20/20(b) | 200,000 | 230,500 | ||||||
Mississippi Power Co., Series 12, Class A, Sr. Unsec. Notes, 4.25%, 03/15/42 | 767,000 | 712,427 | ||||||
System Energy Resources Inc., Sr. Sec. First Mortgage Bonds, 4.10%, 04/01/23 | 1,000,000 | 1,016,552 | ||||||
| 5,411,684 | ||||||||
| Electrical Components & Equipment–0.01% | ||||||||
Belden Inc., Sr. Unsec. Gtd. Sub. Notes, 5.50%, 09/01/22(b) | 75,000 | 74,625 | ||||||
| Environmental & Facilities Services–0.02% | ||||||||
ADS Waste Holdings, Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 10/01/20 | 38,000 | 41,420 | ||||||
Clean Harbors Inc., Sr. Unsec. Gtd. Global Notes, | 15,000 | 15,375 | ||||||
5.25%, 08/01/20 | 20,000 | 20,650 | ||||||
Darling International Inc., Sr. Unsec. Gtd. Notes, 5.38%, 01/15/22(b) | 41,000 | 42,230 | ||||||
| 119,675 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Forest Products–0.01% | ||||||||
Boise Cascade Co., Sr. Unsec. Gtd. Global Notes, 6.38%, 11/01/20 | $ | 64,000 | $ | 68,640 | ||||
| Gas Utilities–0.07% | ||||||||
AmeriGas Finance LLC/Corp., Sr. Unsec. Gtd. Global Notes, 7.00%, 05/20/22 | 55,000 | 60,363 | ||||||
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global Notes, 6.50%, 05/01/21 | 127,000 | 133,350 | ||||||
Sr. Unsec. Notes, | 30,000 | 31,500 | ||||||
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., | 54,000 | 59,400 | ||||||
Sr. Unsec. Notes, 7.38%, 03/15/20 | 110,000 | 119,075 | ||||||
| 403,688 | ||||||||
| General Merchandise Stores–0.29% | ||||||||
Dollar General Corp., Sr. Unsec. Global Notes, 1.88%, 04/15/18 | 1,660,000 | 1,646,321 | ||||||
| Gold–1.52% | ||||||||
Barrick North America Finance LLC (Canada), Sr. Unsec. Gtd. Global Notes, 5.70%, 05/30/41 | 600,000 | 581,257 | ||||||
Eldorado Gold Corp. (Canada), Sr. Unsec. Notes, 6.13%, 12/15/20(b) | 30,000 | 29,715 | ||||||
Gold Fields Orogen Holding BVI Ltd. (South Africa), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20(b) | 2,435,000 | 2,094,100 | ||||||
Kinross Gold Corp. (Canada), | 1,365,000 | 1,326,902 | ||||||
Sr. Unsec. Gtd. Notes, 5.95%, 03/15/24(b) | 3,857,000 | 3,846,929 | ||||||
Newcrest Finance Pty Ltd. (Australia), | 815,000 | 671,457 | ||||||
| 8,550,360 | ||||||||
| Health Care Equipment–0.45% | ||||||||
Biomet Inc., | 53,000 | 57,505 | ||||||
Sr. Unsec. Gtd. Sub. Global Notes, 6.50%, 10/01/20 | 154,000 | 164,973 | ||||||
Medtronic Inc., Sr. Unsec. Global Notes, 4.63%, 03/15/44 | 2,190,000 | 2,224,989 | ||||||
Universal Hospital Services Inc., Sec. Gtd. Global Notes, 7.63%, 08/15/20 | 90,000 | 97,200 | ||||||
| 2,544,667 | ||||||||
| Health Care Facilities–0.15% | ||||||||
Aviv Healthcare Properties L.P./Aviv Healthcare Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 10/15/21 | 12,000 | 12,540 | ||||||
| Principal Amount | Value | |||||||
| Health Care Facilities–(continued) | ||||||||
Community Health Systems, Inc., | $ | 33,000 | $ | 34,361 | ||||
Sr. Unsec. Gtd. Notes, 6.88%, 02/01/22(b) | 144,737 | 154,688 | ||||||
HCA Holdings, Inc., Sr. Unsec. Notes, 6.25%, 02/15/21 | 130,000 | 142,350 | ||||||
HCA, Inc., Sr. Sec. Gtd. Global Notes, 5.88%, 03/15/22 | 130,000 | 142,675 | ||||||
LifePoint Hospitals, Inc., Sr. Unsec. Gtd. Notes, 5.50%, 12/01/21(b) | 35,000 | 36,750 | ||||||
Tenet Healthcare Corp., | 43,000 | 46,763 | ||||||
Sr. Unsec. Global Notes, 6.75%, 02/01/20 | 40,000 | 43,000 | ||||||
8.00%, 08/01/20 | 172,000 | 189,845 | ||||||
8.13%, 04/01/22 | 61,000 | �� | 68,701 | |||||
| 871,673 | ||||||||
| Health Care Services–0.69% | ||||||||
DaVita HealthCare Partners Inc., | 25,000 | 26,625 | ||||||
Express Scripts Holding Co., Sr. Unsec. Gtd. Global Notes, 4.75%, 11/15/21 | 3,465,000 | 3,769,052 | ||||||
Prospect Medical Holdings Inc., Sr. Sec. Notes, 8.38%, 05/01/19(b) | 85,000 | 93,925 | ||||||
| 3,889,602 | ||||||||
| Homebuilding–0.44% | ||||||||
Ashton Woods USA LLC/Ashton Woods Finance Co., Sr. Unsec. Notes, 6.88%, 02/15/21(b) | 120,000 | 120,900 | ||||||
Beazer Homes USA Inc., | 66,000 | 69,630 | ||||||
Sr. Unsec. Gtd. Notes, 9.13%, 06/15/18 | 70,000 | 74,287 | ||||||
K. Hovnanian Enterprises Inc., | 66,000 | 72,270 | ||||||
Sr. Unsec. Gtd. Global Notes, 6.25%, 01/15/16 | 147,000 | 155,820 | ||||||
Sr. Unsec. Gtd. Notes, 7.00%, 01/15/19(b) | 90,000 | 93,150 | ||||||
7.50%, 05/15/16 | 115,000 | 125,494 | ||||||
11.88%, 10/15/15 | 10,000 | 11,500 | ||||||
KB Home, Sr. Unsec. Gtd. Notes, 7.00%, 12/15/21 | 42,000 | 45,255 | ||||||
7.50%, 09/15/22 | 20,000 | 21,800 | ||||||
Lennar Corp., Sr. Unsec. Gtd. Global Notes, | 45,000 | 43,200 | ||||||
6.95%, 06/01/18 | 87,000 | 98,636 | ||||||
M/I Homes Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 11/15/18 | 65,000 | 70,688 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Homebuilding–(continued) | ||||||||
MDC Holdings, Inc., Sr. Unsec. Gtd. Notes, 6.00%, 01/15/43 | $ | 1,470,000 | $ | 1,331,960 | ||||
Ryland Group Inc. (The), Sr. Unsec. Gtd. Notes, 5.38%, 10/01/22 | 29,000 | 28,529 | ||||||
Taylor Morrison Communities Inc./ Monarch Communities Inc., Sr. Unsec. Gtd. Notes, 7.75%, 04/15/20(b) | 100,000 | 110,750 | ||||||
| 2,473,869 | ||||||||
| Hotels, Resorts & Cruise Lines–0.92% | ||||||||
Carnival Corp., Sr. Unsec. Gtd. Global Notes, | 1,045,000 | 1,047,707 | ||||||
3.95%, 10/15/20 | 1,735,000 | 1,797,769 | ||||||
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, | 605,000 | 632,225 | ||||||
7.25%, 03/15/18 | 25,000 | 29,375 | ||||||
Wyndham Worldwide Corp., Sr. Unsec. Notes, 5.63%, 03/01/21 | 1,530,000 | 1,687,977 | ||||||
| 5,195,053 | ||||||||
| Household Products–0.04% | ||||||||
Reynolds Group Issuer Inc./LLC, Sr. Sec. Gtd. Global Notes, 5.75%, 10/15/20 | 237,000 | 249,443 | ||||||
| Independent Power Producers & Energy Traders–0.13% | ||||||||
AES Corp., Sr. Unsec. Global Notes, 7.38%, 07/01/21 | 129,000 | 147,382 | ||||||
8.00%, 10/15/17 | 8,000 | 9,500 | ||||||
Israel Electric Corp. Ltd. (Israel), Sr. Sec. Notes, 6.88%, 06/21/23(b) | 350,000 | 381,122 | ||||||
NRG Energy Inc., | 9,000 | 10,215 | ||||||
7.88%, 05/15/21 | 106,000 | 118,190 | ||||||
Sr. Unsec. Gtd. Notes, 6.25%, 07/15/22(b) | 70,000 | 73,063 | ||||||
| 739,472 | ||||||||
| Industrial Conglomerates–0.72% | ||||||||
CTP Transportation Products LLC/CTP Finance Inc., Sr. Sec. Notes, 8.25%, 12/15/19(b) | 65,000 | 69,713 | ||||||
Hutchison Whampoa International Ltd. (Hong Kong), | 1,000,000 | 1,146,246 | ||||||
7.63%, 04/09/19(b) | 925,000 | 1,134,755 | ||||||
Unsec. Gtd. Sub. Notes, 6.00%(b)(e) | 200,000 | 212,250 | ||||||
Sigma Alimentos S.A. de C.V. (Mexico), Sr. Unsec. Gtd. Notes, 5.63%, 04/14/18(b) | 1,350,000 | 1,483,288 | ||||||
| 4,046,252 | ||||||||
| Industrial Machinery–0.51% | ||||||||
CBC Ammo LLC/CBC FinCo Inc. (Brazil), Sr. Unsec. Notes, 7.25%, 11/15/21(b) | 72,000 | 72,540 | ||||||
| Principal Amount | Value | |||||||
| Industrial Machinery–(continued) | ||||||||
Pentair Finance S.A., Sr. Unsec. Gtd. Global Notes, 1.35%, 12/01/15 | $ | 2,700,000 | $ | 2,715,922 | ||||
Waterjet Holdings, Inc., Sr. Sec. Gtd. Notes, 7.63%, 02/01/20(b) | 91,000 | 96,460 | ||||||
| 2,884,922 | ||||||||
| Industrial REIT’s–0.26% | ||||||||
ProLogis L.P., Sr. Unsec. Gtd. Global Notes, 4.25%, 08/15/23 | 1,415,000 | 1,449,121 | ||||||
| Integrated Oil & Gas–0.81% | ||||||||
BP Capital Markets PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 3.81%, 02/10/24 | 3,475,000 | 3,512,945 | ||||||
KazMunayGas National Co. JSC (Kazakhstan), Sr. Unsec. Notes, 7.00%, 05/05/20(b) | 210,000 | 239,360 | ||||||
Lukoil International Finance B.V. (Russia), Sr. Unsec. Gtd. Notes, 7.25%, 11/05/19(b) | 100,000 | 114,933 | ||||||
State Oil Co. of the Azerbaijan Republic (Azerbaijan), | 200,000 | 212,500 | ||||||
Sr. Unsec. Medium-Term Euro Notes, 4.75%, 03/13/23 | 500,000 | 475,000 | ||||||
| 4,554,738 | ||||||||
| Integrated Telecommunication Services–3.03% | ||||||||
AT&T Inc., Sr. Unsec. Global Notes, 2.50%, 08/15/15 | 905,000 | 929,940 | ||||||
2.95%, 05/15/16 | 160,000 | 167,302 | ||||||
Oi S.A. (Brazil), Sr. Unsec. Notes, 5.75%, 02/10/22(b) | 500,000 | 477,326 | ||||||
Telefonica Emisiones S.A. Unipersonal (Spain), Sr. Unsec. Gtd. Global Notes, 5.46%, 02/16/21 | 415,000 | 454,333 | ||||||
Verizon Communications, Inc., Sr. Unsec. Global Notes, | 3,390,000 | 3,712,769 | ||||||
6.40%, 09/15/33 | 4,665,000 | 5,563,119 | ||||||
6.55%, 09/15/43 | 3,030,000 | 3,722,540 | ||||||
Virgin Media Secured Finance PLC (United Kingdom), Sr. Sec. Gtd. Global Notes, 5.25%, 01/15/21 | 200,000 | 208,083 | ||||||
6.50%, 01/15/18 | 1,750,000 | 1,831,313 | ||||||
| 17,066,725 | ||||||||
| Internet Software & Services–0.06% | ||||||||
CyrusOne L.P./CyrusOne Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 11/15/22 | 205,000 | 215,250 | ||||||
Equinix Inc., Sr. Unsec. Notes, 7.00%, 07/15/21 | 100,000 | 111,500 | ||||||
| 326,750 | ||||||||
| Investment Banking & Brokerage–1.59% | ||||||||
Charles Schwab Corp. (The), Series A, Jr. Unsec. Sub. Notes, 7.00%(e) | 1,315,000 | 1,505,675 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Investment Banking & Brokerage–(continued) | ||||||||
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, | $ | 505,000 | $ | 566,353 | ||||
Morgan Stanley, | 450,000 | 469,417 | ||||||
Sr. Unsec. Notes, | 2,010,000 | 2,094,459 | ||||||
5.75%, 01/25/21 | 985,000 | 1,136,095 | ||||||
Unsec. Sub. Medium-Term Notes, 4.10%, 05/22/23 | 3,040,000 | 3,018,768 | ||||||
Raymond James Financial, Inc., Sr. Unsec. Notes, 4.25%, 04/15/16 | 170,000 | 180,954 | ||||||
| 8,971,721 | ||||||||
| Leisure Facilities–0.02% | ||||||||
Cedar Fair L.P./Canada’s Wonderland Co./Magnum Management Corp., | 75,000 | 76,500 | ||||||
Speedway Motorsports Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 02/01/19 | 50,000 | 53,125 | ||||||
| 129,625 | ||||||||
| Life & Health Insurance–1.35% | ||||||||
Forethought Financial Group, Inc., | 50,000 | 56,663 | ||||||
MetLife Inc., Sr. Unsec. Global Notes, 4.13%, 08/13/42 | 2,200,000 | 2,038,469 | ||||||
Nationwide Financial Services, Inc., | 735,000 | 809,320 | ||||||
Pacific LifeCorp., Sr. Unsec. Notes, 6.00%, 02/10/20(b) | 425,000 | 486,466 | ||||||
Prudential Financial, Inc., | 1,640,000 | 2,006,950 | ||||||
Sr. Unsec. Medium-Term Notes, 7.38%, 06/15/19 | 130,000 | 162,057 | ||||||
Series D, Sr. Unsec. Medium-Term Notes, | 1,405,000 | 1,445,848 | ||||||
4.75%, 09/17/15 | 550,000 | 584,119 | ||||||
| 7,589,892 | ||||||||
| Managed Health Care–0.18% | ||||||||
Cigna Corp., | 725,000 | 799,499 | ||||||
Sr. Unsec. Notes, 4.50%, 03/15/21 | 180,000 | 195,667 | ||||||
WellCare Health Plans, Inc., Sr. Unsec. Notes, 5.75%, 11/15/20 | 33,000 | 34,650 | ||||||
| 1,029,816 | ||||||||
| Marine–0.02% | ||||||||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc., Sr. Sec. Gtd. Mortgage Notes, 8.13%, 11/15/21(b) | 124,000 | 129,665 | ||||||
| Principal Amount | Value | |||||||
| Movies & Entertainment–1.82% | ||||||||
AMC Entertainment Inc., Sr. Unsec. Gtd. Sub. Notes, | $ | 41,000 | $ | 41,717 | ||||
DreamWorks Animation SKG, Inc., | 80,000 | 86,200 | ||||||
Live Nation Entertainment Inc., | 180,000 | 198,000 | ||||||
Outerwall, Inc., Sr. Unsec. Gtd. Global Notes, 6.00%, 03/15/19 | 125,000 | 130,625 | ||||||
Time Warner, Inc., | 2,100,000 | 2,229,332 | ||||||
Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16 | 285,000 | 321,220 | ||||||
Viacom Inc., Sr. Unsec. Global Notes, 4.25%, 09/01/23 | 2,940,000 | 3,044,212 | ||||||
5.85%, 09/01/43 | 3,800,000 | 4,187,684 | ||||||
| 10,238,990 | ||||||||
| Multi-Line Insurance–0.28% | ||||||||
American Financial Group, Inc., Sr. Unsec. Notes, 9.88%, 06/15/19 | 10,000 | 13,022 | ||||||
Genworth Holdings Inc., Sr. Unsec. Gtd. Global Notes, 4.90%, 08/15/23 | 1,428,000 | 1,498,829 | ||||||
Hartford Financial Services Group Inc. (The), Jr. Unsec. Sub. Deb., 8.13%, 06/15/38 | 73,000 | 85,866 | ||||||
| 1,597,717 | ||||||||
| Multi-Sector Holdings–0.26% | ||||||||
MidAmerican Energy Co., Sr. Sec. First Mortgage Bonds, 3.70%, 09/15/23 | 1,441,000 | 1,479,883 | ||||||
| Office REIT’s–0.35% | ||||||||
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 4.50%, 07/15/15 | 675,000 | 701,647 | ||||||
Piedmont Operating Partnership L.P., Sr. Unsec. Gtd. Global Notes, 4.45%, 03/15/24 | 1,290,000 | 1,296,054 | ||||||
| 1,997,701 | ||||||||
| Office Services & Supplies–0.00% | ||||||||
Interface Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 12/01/18 | 5,000 | 5,375 | ||||||
| Oil & Gas Drilling–0.90% | ||||||||
Atwood Oceanics Inc., Sr. Unsec. Notes, 6.50%, 02/01/20 | 46,000 | 49,737 | ||||||
Parker Drilling Co., Sr. Unsec. Gtd. Notes, 6.75%, 07/15/22(b) | 7,000 | 7,280 | ||||||
7.50%, 08/01/20(b) | 58,000 | 62,205 | ||||||
Precision Drilling Corp. (Canada), | 95,000 | 102,125 | ||||||
6.63%, 11/15/20 | 48,000 | 51,720 | ||||||
Rowan Cos. Inc., Sr. Unsec. Gtd. Notes, 4.75%, 01/15/24 | 1,785,000 | 1,819,921 | ||||||
5.85%, 01/15/44 | 2,967,000 | 2,999,573 | ||||||
| 5,092,561 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Oil & Gas Equipment & Services–0.13% | ||||||||
Basic Energy Services, Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 02/15/19 | $ | 23,000 | $ | 24,610 | ||||
Bristow Group, Inc., Sr. Unsec. Gtd. Notes, 6.25%, 10/15/22 | 157,000 | 167,205 | ||||||
Calfrac Holdings L.P. (Canada), Sr. Unsec. Gtd. Notes, | 120,000 | 125,850 | ||||||
Exterran Partners L.P./EXLP Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 04/01/21 | 271,000 | 269,645 | ||||||
Gulfmark Offshore Inc., Sr. Unsec. Global Notes, 6.38%, 03/15/22 | 152,000 | 157,320 | ||||||
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes, 6.75%, 03/01/21 | 15,000 | 15,712 | ||||||
| 760,342 | ||||||||
| Oil & Gas Exploration & Production–0.95% | ||||||||
Antero Resources Finance Corp., | 59,000 | 63,278 | ||||||
Sr. Unsec. Gtd. Notes, 5.38%, 11/01/21(b) | 124,000 | 127,410 | ||||||
Berry Petroleum Co. LLC, Sr. Unsec. Notes, 6.75%, 11/01/20 | 139,000 | 147,687 | ||||||
Bonanza Creek Energy Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 04/15/21 | 176,000 | 190,080 | ||||||
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes, | 105,000 | 114,450 | ||||||
8.25%, 09/01/21 | 116,000 | 127,600 | ||||||
Chesapeake Energy Corp., | 25,000 | 28,750 | ||||||
Sr. Unsec. Gtd. Notes, 6.63%, 08/15/20 | 96,000 | 109,980 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 5.88%, 05/01/22 | 144,000 | 156,600 | ||||||
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes, 5.00%, 09/15/22 | 974,000 | 1,022,091 | ||||||
Energy XXI Gulf Coast, Inc., Sr. Unsec. Gtd. Notes, 7.50%, 12/15/21(b) | 128,000 | 134,080 | ||||||
EV Energy Partners L.P./EV Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 04/15/19 | 68,000 | 70,550 | ||||||
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18 | 29,000 | 29,363 | ||||||
GeoPark Latin America Ltd. Agencia en Chile (Chile), Sr. Sec. Gtd. Notes, 7.50%, 02/11/20(b) | 350,000 | 360,648 | ||||||
Halcon Resources Corp., | 202,000 | 206,040 | ||||||
Sr. Unsec. Gtd. Notes, 9.75%, 07/15/20(b) | 70,000 | 74,025 | ||||||
Kodiak Oil & Gas Corp., Sr. Unsec. Gtd. Global Notes, 5.50%, 02/01/22 | 23,000 | 23,805 | ||||||
Laredo Petroleum Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 05/01/22 | 7,000 | 7,805 | ||||||
MEG Energy Corp. (Canada), Sr. Unsec. Gtd. Notes, | 203,000 | 215,180 | ||||||
| Principal Amount | Value | |||||||
| Oil & Gas Exploration & Production–(continued) | ||||||||
Pertamina Persero PT (Indonesia), | $ | 200,000 | $ | 181,164 | ||||
4.88%, 05/03/22(b) | 200,000 | 196,645 | ||||||
6.00%, 05/03/42(b) | 200,000 | 175,243 | ||||||
Petroleos Mexicanos (Mexico), | 200,000 | 189,684 | ||||||
Sr. Unsec. Gtd. Global Notes, 6.50%, 06/02/41 | 100,000 | 107,603 | ||||||
Sr. Unsec. Gtd. Notes, | 120,000 | 123,001 | ||||||
6.38%, 01/23/45(b) | 150,000 | 160,040 | ||||||
QEP Resources Inc., | 25,000 | 25,000 | ||||||
Sr. Unsec. Notes, 5.38%, 10/01/22 | 21,000 | 21,210 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, | 25,000 | 25,875 | ||||||
5.75%, 06/01/21 | 160,000 | 172,400 | ||||||
Rosetta Resources, Inc., | 34,000 | 35,190 | ||||||
Sr. Unsec. Gtd. Notes, 5.88%, 06/01/22 | 56,000 | 57,820 | ||||||
SandRidge Energy Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 03/15/21 | 177,000 | 187,620 | ||||||
SM Energy Co., Sr. Unsec. Global Notes, 6.50%, 11/15/21 | 125,000 | 135,312 | ||||||
6.63%, 02/15/19 | 110,000 | 118,525 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Notes, 5.75%, 03/15/21 | 175,000 | 190,312 | ||||||
WPX Energy Inc., Sr. Unsec. Global Notes, 6.00%, 01/15/22 | 21,000 | 21,578 | ||||||
| 5,333,644 | ||||||||
| Oil & Gas Refining & Marketing–0.06% | ||||||||
Cosan Luxembourg S.A. (Brazil), Sr. Unsec. Gtd. Notes, 5.00%, 03/14/23(b) | 350,000 | 317,486 | ||||||
United Refining Co., Sr. Sec. Gtd. Global Notes, 10.50%, 02/28/18 | 33,000 | 37,042 | ||||||
| 354,528 | ||||||||
| Oil & Gas Storage & Transportation–2.06% | ||||||||
Access Midstream Partners L.P./ACMP Finance Corp., Sr. Unsec. Gtd. Global Notes, | 88,000 | 94,380 | ||||||
6.13%, 07/15/22 | 5,000 | 5,450 | ||||||
Atlas Pipeline Partners L.P./Atlas Pipeline Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.63%, 10/01/20 | 91,000 | 97,825 | ||||||
Crestwood Midstream Partners L.P./Crestwood Midstream Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 12/15/20 | 84,000 | 88,830 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Oil & Gas Storage & Transportation–(continued) | ||||||||
El Paso Pipeline Partners Operating Co. LLC, Sr. Unsec. Gtd. Notes, 4.70%, 11/01/42 | $ | 820,000 | $ | 724,819 | ||||
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20 | 129,000 | 148,027 | ||||||
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Notes, | 1,656,000 | 1,669,368 | ||||||
5.10%, 02/15/45 | 1,619,000 | 1,661,909 | ||||||
6.45%, 09/01/40 | 1,005,000 | 1,215,655 | ||||||
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19 | 420,000 | 502,488 | ||||||
Kenan Advantage Group Inc. (The), Sr. Unsec. Notes, 8.38%, 12/15/18(b) | 141,000 | 150,165 | ||||||
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, | 200,000 | 208,000 | ||||||
6.50%, 08/15/21 | 84,000 | 91,665 | ||||||
NGL Energy Partners L.P./NGL Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 10/15/21(b) | 148,000 | 154,290 | ||||||
PVR Partners L.P./Penn Virginia Resource Finance Corp. II, Sr. Unsec. Gtd. Global Notes, | 72,000 | 77,040 | ||||||
8.38%, 06/01/20 | 56,000 | 62,860 | ||||||
Regency Energy Partners L.P./Regency Energy Finance Corp., | 28,000 | 29,470 | ||||||
5.88%, 03/01/22 | 57,000 | 59,565 | ||||||
Sr. Unsec. Gtd. Notes, 6.50%, 07/15/21 | 32,000 | 34,800 | ||||||
Targa Resources Partners L.P./Targa Resources Partners Finance Corp., | 11,000 | 11,853 | ||||||
6.88%, 02/01/21 | 205,000 | 222,937 | ||||||
Teekay Corp. (Bermuda), Sr. Unsec. Global Notes, 8.50%, 01/15/20 | 35,000 | 39,419 | ||||||
Tesoro Logistics L.P./Tesoro Logistics Finance Corp., | 124,000 | 129,890 | ||||||
6.13%, 10/15/21 | 28,000 | 29,400 | ||||||
Sr. Unsec. Gtd. Notes, 5.88%, 10/01/20(b) | 64,000 | 67,040 | ||||||
Texas Eastern Transmission L.P., Sr. Unsec. Notes, 7.00%, 07/15/32 | 255,000 | 322,580 | ||||||
Williams Partners L.P., Sr. Unsec. Global Notes, | 1,995,000 | 1,993,155 | ||||||
5.40%, 03/04/44 | 1,660,000 | 1,682,355 | ||||||
| 11,575,235 | ||||||||
| Principal Amount | Value | |||||||
| Other Diversified Financial Services–3.54% | ||||||||
Bank of America Corp., Sr. Unsec. Global Notes, | $ | 40,000 | $ | 41,638 | ||||
6.50%, 08/01/16 | 10,000 | 11,269 | ||||||
Citigroup Inc., | 2,145,000 | 2,244,486 | ||||||
Sr. Unsec. Notes, 4.75%, 05/19/15 | 25,000 | 26,216 | ||||||
Unsec. Sub. Global Notes, 5.50%, 09/13/25 | 4,535,000 | 4,891,998 | ||||||
Series A, Jr. Unsec. Sub. Global Notes, 5.95%(e) | 1,495,000 | 1,483,788 | ||||||
General Electric Capital Corp., Sr. Unsec. Global Notes, 2.25%, 11/09/15 | 65,000 | 66,957 | ||||||
ING Bank N.V. (Netherlands), Sr. Unsec. Notes, 3.75%, 03/07/17(b) | 330,000 | 350,204 | ||||||
ING US Inc., Jr. Unsec. Gtd. Sub. Global Notes, 5.65%, 05/15/53 | 3,335,000 | 3,268,300 | ||||||
JPMorgan Chase & Co., | 1,255,000 | 1,327,163 | ||||||
Sr. Unsec. Global Notes, 6.30%, 04/23/19 | 190,000 | 225,885 | ||||||
Series Q, Jr. Unsec. Sub. Global Notes, 5.15%(e) | 770,000 | 729,575 | ||||||
Series R, Jr. Unsec. Sub. Global Notes, 6.00%(e) | 2,980,000 | 2,987,450 | ||||||
Oxford Finance LLC/Oxford Finance Co-Issuer Inc., Sr. Unsec. Notes, 7.25%, 01/15/18(b) | 75,000 | 79,875 | ||||||
Trust F/1401 (Mexico), Sr. Unsec. Notes, 5.25%, 12/15/24(b) | 2,190,000 | 2,181,518 | ||||||
| 19,916,322 | ||||||||
| Packaged Foods & Meats–0.11% | ||||||||
Diamond Foods Inc., Sr. Unsec. Gtd. Notes, 7.00%, 03/15/19(b) | 100,000 | 103,750 | ||||||
FAGE Dairy Industry S.A./FAGE USA Dairy Industry, Inc. (Greece), Sr. Unsec. Gtd. Notes, 9.88%, 02/01/20(b) | 150,000 | 160,875 | ||||||
JBS USA LLC/JBS USA Finance Inc. (Brazil), Sr. Unsec. Gtd. Notes, 7.25%, 06/01/21(b) | 40,000 | 42,450 | ||||||
Post Holdings Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 02/15/22 | 95,000 | 103,550 | ||||||
Simmons Foods Inc., Sec. Notes, 10.50%, 11/01/17(b) | 80,000 | 87,200 | ||||||
Smithfield Foods Inc., Sr. Unsec. Notes, | 24,000 | 25,380 | ||||||
5.88%, 08/01/21(b) | 24,000 | 24,840 | ||||||
Wells Enterprises Inc., Sr. Sec. Notes, 6.75%, 02/01/20(b) | 59,000 | 61,286 | ||||||
| 609,331 | ||||||||
| Paper Packaging–0.15% | ||||||||
Beverage Packaging Holdings Luxembourg II S.A., | 14,000 | 14,472 | ||||||
Sr. Unsec. Gtd. Sub. Notes, 6.00%, 06/15/17(b) | 7,000 | 7,298 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Paper Packaging–(continued) | ||||||||
Rock-Tenn Co., Sr. Unsec. Gtd. Global Notes, 4.00%, 03/01/23 | $ | 800,000 | $ | 811,994 | ||||
| 833,764 | ||||||||
| Paper Products–0.06% | ||||||||
Neenah Paper Inc., Sr. Unsec. Gtd. Notes, 5.25%, 05/15/21(b) | 19,000 | 18,953 | ||||||
PH Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 5.38%, 10/15/20 | 156,000 | 161,460 | ||||||
Unifrax I LLC/Unifrax Holding Co., Sr. Unsec. Gtd. Notes, 7.50%, 02/15/19(b) | 170,000 | 180,625 | ||||||
| 361,038 | ||||||||
| Personal Products–0.57% | ||||||||
Avon Products Inc., Sr. Unsec. Global Notes, 5.00%, 03/15/23 | 2,005,000 | 2,014,882 | ||||||
Estee Lauder Cos. Inc. (The), Sr. Unsec. Global Notes, 3.70%, 08/15/42 | 1,340,000 | 1,170,515 | ||||||
| 3,185,397 | ||||||||
| Pharmaceuticals–1.13% | ||||||||
AbbVie Inc., Sr. Unsec. Global Notes, 4.40%, 11/06/42 | 1,435,000 | 1,409,243 | ||||||
Actavis Inc., Sr. Unsec. Global Notes, 1.88%, 10/01/17 | 1,000,000 | 999,360 | ||||||
Bristol-Meyers Squibb Co., Sr. Unsec. Deb., 6.88%, 08/01/97 | 1,526,000 | 2,064,070 | ||||||
Capsugel S.A., Sr. Unsec. PIK Notes, 7.00%, 05/15/19(b) | 18,000 | 18,769 | ||||||
Perrigo Co. PLC, Sr. Unsec. Gtd. Notes, 4.00%, 11/15/23(b) | 1,480,000 | 1,493,985 | ||||||
Valeant Pharmaceuticals International, Inc., Sr. Unsec. Gtd. Notes, | 112,000 | 119,280 | ||||||
6.38%, 10/15/20(b) | 150,000 | 164,625 | ||||||
6.75%, 08/15/21(b) | 25,000 | 27,375 | ||||||
7.50%, 07/15/21(b) | 50,000 | 57,125 | ||||||
| 6,353,832 | ||||||||
| Precious Metals & Minerals–0.11% | ||||||||
Cia Minera Ares SAC (Peru), Sr. Unsec. Gtd. Notes, 7.75%, 01/23/21(b) | 600,000 | 617,819 | ||||||
| Property & Casualty Insurance–0.64% | ||||||||
Allstate Corp. (The), Unsec. Sub. Global Notes, 5.75%, 08/15/53 | 2,085,000 | 2,178,825 | ||||||
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20 | 20,000 | 23,321 | ||||||
Liberty Mutual Group Inc., | 1,320,000 | 1,422,300 | ||||||
Sr. Unsec. Gtd. Notes, 4.25%, 06/15/23(b) | 5,000 | 5,016 | ||||||
| 3,629,462 | ||||||||
| Railroads–0.28% | ||||||||
CSX Corp., Sr. Unsec. Notes, 5.50%, 04/15/41 | 900,000 | 999,039 | ||||||
| Principal Amount | Value | |||||||
| Railroads–(continued) | ||||||||
Georgian Railway JSC (Georgia), Sr. Unsec. Notes, | $ | 200,000 | $ | 215,805 | ||||
Transnet SOC Ltd. (South Africa), REGS, Sr. Unsec. Euro Notes, 4.00%, 07/26/22(b) | 400,000 | 366,040 | ||||||
| 1,580,884 | ||||||||
| Real Estate Development–0.03% | ||||||||
Country Garden Holdings Co. Ltd. (China), Sr. Unsec. Gtd. Notes, 7.50%, 01/10/23(b) | 200,000 | 193,025 | ||||||
| Real Estate Services–0.01% | ||||||||
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Global Notes, 6.63%, 10/15/20 | 28,000 | 30,100 | ||||||
| Regional Banks–0.73% | ||||||||
Banco Internacional del Peru SAA (Peru), Sr. Unsec. Bonds, 5.75%, 10/07/20(b) | 800,000 | 836,391 | ||||||
Fifth Third Bancorp, Sr. Unsec. Notes, 3.50%, 03/15/22 | 1,550,000 | 1,562,810 | ||||||
First Niagara Financial Group Inc., Unsec. Sub. Notes, 7.25%, 12/15/21 | 650,000 | 762,592 | ||||||
Nationwide Building Society (United Kingdom), Sr. Unsec. Notes, 6.25%, 02/25/20(b) | 465,000 | 543,334 | ||||||
Synovus Financial Corp., | 75,000 | 85,500 | ||||||
Unsec. Sub. Global Notes, 5.13%, 06/15/17 | 185,000 | 194,250 | ||||||
Zions Bancorp., Series I, Jr. Unsec. Sub. Notes, 5.80%(e) | 120,000 | 110,100 | ||||||
| 4,094,977 | ||||||||
| Reinsurance–0.31% | ||||||||
Reinsurance Group of America Inc., | 1,650,000 | 1,734,253 | ||||||
| Research & Consulting Services–0.02% | ||||||||
FTI Consulting, Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/01/20 | 102,000 | 111,435 | ||||||
| Residential REIT’s–0.37% | ||||||||
Essex Portfolio L.P., Sr. Unsec. Gtd. Global Notes, 3.63%, 08/15/22 | 2,135,000 | 2,085,328 | ||||||
| Retail REIT’s–0.43% | ||||||||
Realty Income Corp., Sr. Unsec. Notes, 2.00%, 01/31/18 | 2,115,000 | 2,107,370 | ||||||
WEA Finance LLC (Australia), Sr. Unsec. Gtd. Notes, 7.13%, 04/15/18(b) | 250,000 | 299,061 | ||||||
| 2,406,431 | ||||||||
| Security & Alarm Services–0.01% | ||||||||
ADT Corp. (The), Sr. Unsec. Notes, 6.25%, 10/15/21(b) | 70,000 | 74,200 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Semiconductor Equipment–0.03% | ||||||||
Amkor Technology Inc., Sr. Unsec. Global Notes, 6.63%, 06/01/21 | $ | 180,000 | $ | 191,700 | ||||
| Semiconductors–0.12% | ||||||||
Advanced Mico Devices, Inc., Sr. Unsec. Notes, 6.75%, 03/01/19(b) | 6,000 | 6,060 | ||||||
Freescale Semiconductor Inc., | 85,000 | 90,525 | ||||||
Sr. Unsec. Gtd. Global Notes, 8.05%, 02/01/20 | 204,000 | 224,910 | ||||||
10.75%, 08/01/20 | 60,000 | 69,900 | ||||||
Micron Technology Inc., Sr. Unsec. Notes, 5.88%, 02/15/22(b) | 76,000 | 79,610 | ||||||
NXP B.V./NXP Funding LLC (Netherlands), Sr. Unsec. Gtd. Notes, 5.75%, 02/15/21(b) | 200,000 | 213,500 | ||||||
| 684,505 | ||||||||
| Soft Drinks–0.39% | ||||||||
PepsiCo, Inc., Sr. Unsec. Global Notes, 3.60%, 03/01/24 | 2,185,000 | 2,193,840 | ||||||
| Sovereign Debt–2.56% | ||||||||
Argentina Boden Bonds (Argentina), Sr. Unsec. Bonds, 7.00%, 10/03/15 | 400,000 | 388,000 | ||||||
Commonwealth of the Bahamas (Bahamas), Sr. Unsec. Notes, 5.75%, 01/16/24(b) | 1,605,000 | 1,610,235 | ||||||
Guatemala Government Bond (Guatemala), | 520,000 | 647,400 | ||||||
REGS, Sr. Unsec. Euro Bonds, 8.13%, 10/06/19(b)(g) | 90,000 | 112,050 | ||||||
Hungary Government International Bond (Hungary), Sr. Unsec. Global Notes, 4.13%, 02/19/18 | 300,000 | 305,559 | ||||||
5.38%, 02/21/23 | 400,000 | 407,345 | ||||||
7.63%, 03/29/41 | 450,000 | 509,625 | ||||||
Indonesia Government International Bond (Indonesia), | 300,000 | 320,250 | ||||||
Sr. Unsec. Notes, | 300,000 | 270,750 | ||||||
3.75%, 04/25/22(b) | 300,000 | 285,390 | ||||||
6.75%, 01/15/44(b) | 400,000 | 433,000 | ||||||
Magyar Export-Import Bank Zrt. (Hungary), Sr. Unsec. Gtd. Notes, 5.50%, 02/12/18(b) | 300,000 | 313,944 | ||||||
Mexico Government International Bond (Mexico), | 650,000 | 652,930 | ||||||
Sr. Unsec. Medium-Term Global Notes, 4.75%, 03/08/44 | 310,000 | 290,625 | ||||||
| Principal Amount | Value | |||||||
| Sovereign Debt–(continued) | ||||||||
Morocco Government International Bond (Morocco), | $ | 400,000 | $ | 389,000 | ||||
REGS, Sr. Unsec. Euro Notes, 5.50%, 12/11/42(b) | 600,000 | 552,900 | ||||||
Nigeria Government International Bond (Nigeria), Sr. Unsec. Notes, | 200,000 | 202,750 | ||||||
6.38%, 07/12/23(b) | 200,000 | 202,500 | ||||||
Panama Government International Bond (Panama), Sr. Unsec. Global Bonds, 5.20%, 01/30/20 | 1,250,000 | 1,375,000 | ||||||
Perusahaan Penerbit SBSN (Indonesia), Sr. Unsec. Notes, 4.00%, 11/21/18(b) | 200,000 | 205,250 | ||||||
Peruvian Government International Bond (Peru), Sr. Unsec. Global Bonds, 8.75%, 11/21/33 | 436,000 | 630,020 | ||||||
Philippine Government International Bond (Philippines), Sr. Unsec. Global Bonds, 4.20%, 01/21/24 | 200,000 | 207,250 | ||||||
5.00%, 01/13/37 | 300,000 | 328,500 | ||||||
Poland Government International Bond (Poland), Sr. Unsec. Global Bonds, 4.00%, 01/22/24 | 400,000 | 405,000 | ||||||
Republic of Angola Via Northern Lights III B.V. (Angola), REGS, Sr. Unsec. Euro Notes, 7.00%, 08/16/19(b) | 850,000 | 920,125 | ||||||
Republic of Serbia (Serbia), | 200,000 | 198,750 | ||||||
REGS, Sr. Unsec. Euro Bonds, 6.75%, 11/01/24(b) | 226,574 | 229,972 | ||||||
Romanian Government International Bond (Romania), Sr. Unsec. Notes, 4.38%, 08/22/23(b) | 230,000 | 228,850 | ||||||
4.88%, 01/22/24(b) | 800,000 | 821,000 | ||||||
6.75%, 02/07/22(b) | 110,000 | 129,250 | ||||||
Slovenia Government International Bond (Slovenia), | 200,000 | 205,875 | ||||||
Unsec. Notes, 5.25%, 02/18/24(b) | 200,000 | 204,702 | ||||||
Sri Lanka Government International Bond (Sri Lanka), Sr. Unsec. Bonds, 6.00%, 01/14/19(b) | 400,000 | 421,000 | ||||||
| 14,404,797 | ||||||||
| Specialized Finance–2.48% | ||||||||
Aircastle Ltd., | 10,000 | 10,925 | ||||||
7.63%, 04/15/20 | 195,000 | 222,300 | ||||||
Sr. Unsec. Notes, 4.63%, 12/15/18 | 21,000 | 21,735 | ||||||
CIT Group Inc., | 196,000 | 206,780 | ||||||
Sr. Unsec. Notes, 5.50%, 02/15/19(b) | 205,000 | 223,706 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Specialized Finance–(continued) | ||||||||
CME Group Inc., Sr. Unsec. Global Notes, 5.30%, 09/15/43 | $ | 1,325,000 | $ | 1,489,137 | ||||
International Lease Finance Corp., | 1,915,000 | 1,967,662 | ||||||
Sr. Unsec. Global Notes, 4.63%, 04/15/21 | 65,000 | 65,813 | ||||||
4.88%, 04/01/15 | 1,050,000 | 1,090,031 | ||||||
5.75%, 05/15/16 | 400,000 | 433,500 | ||||||
5.88%, 04/01/19 | 20,000 | 22,088 | ||||||
5.88%, 08/15/22 | 120,000 | 129,075 | ||||||
Sr. Unsec. Notes, 8.25%, 12/15/20 | 195,000 | 239,302 | ||||||
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp., | 75,000 | 80,063 | ||||||
Moody’s Corp., Sr. Unsec. Global Notes, 4.88%, 02/15/24 | 4,595,000 | 4,848,171 | ||||||
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Collateral Trust Global Bonds, 10.38%, 11/01/18 | 2,130,000 | 2,904,900 | ||||||
| 13,955,188 | ||||||||
| Specialized REIT’s–1.94% | ||||||||
American Tower Corp., | 1,250,000 | 1,185,259 | ||||||
4.63%, 04/01/15 | 430,000 | 447,682 | ||||||
Sr. Unsec. Notes, 4.50%, 01/15/18 | 100,000 | 109,262 | ||||||
EPR Properties, Sr. Unsec. Gtd. Global Notes, 7.75%, 07/15/20 | 3,880,000 | 4,567,007 | ||||||
HCP, Inc., Sr. Unsec. Global Notes, 4.25%, 11/15/23 | 1,305,000 | 1,340,293 | ||||||
MPT Operating Partnership L.P./MPT Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 05/01/21 | 65,000 | 70,688 | ||||||
RHP Hotel Properties L.P./RHP Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.00%, 04/15/21 | 115,000 | 116,150 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 1,495,000 | 1,555,734 | ||||||
Ventas Realty L.P./Ventas Capital Corp., Sr. Unsec. Gtd. Notes, 2.00%, 02/15/18 | 1,500,000 | 1,508,801 | ||||||
| 10,900,876 | ||||||||
| Specialty Chemicals–0.07% | ||||||||
Chemtura Corp., Sr. Unsec. Gtd. Notes, 5.75%, 07/15/21 | 51,000 | 53,295 | ||||||
Eagle Spinco Inc., Sr. Unsec. Gtd. Notes, 4.63%, 02/15/21(b) | 10,000 | 10,000 | ||||||
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18 | 40,000 | 42,800 | ||||||
PolyOne Corp., Sr. Unsec. Global Notes, 5.25%, 03/15/23 | 220,000 | 223,300 | ||||||
PQ Corp., Sec. Notes, | 35,000 | 38,675 | ||||||
| 368,070 | ||||||||
| Principal Amount | Value | |||||||
| Specialty Stores–0.04% | ||||||||
Michaels Stores Inc., Sr. Unsec. Gtd. Sub. Notes, 5.88%, 12/15/20(b) | $ | 86,000 | $ | 86,968 | ||||
Sally Holdings LLC/Sally Capital Inc., | 55,000 | 55,963 | ||||||
Sr. Unsec. Gtd. Notes, 5.75%, 06/01/22 | 90,000 | 95,512 | ||||||
| 238,443 | ||||||||
| Steel–1.11% | ||||||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Notes, | 30,000 | 31,160 | ||||||
5.00%, 02/25/17 | 400,000 | 430,026 | ||||||
5.75%, 08/05/20 | 17,000 | 18,231 | ||||||
6.00%, 03/01/21 | 147,000 | 159,396 | ||||||
6.13%, 06/01/18 | 845,000 | 934,117 | ||||||
6.75%, 02/25/22 | 20,000 | 22,339 | ||||||
7.25%, 03/01/41 | 1,280,000 | 1,317,019 | ||||||
OJSC Novolipetsk Steel via Steel Funding Ltd. (Russia), Sr. Unsec. Notes, 4.45%, 02/19/18(b) | 500,000 | 498,838 | ||||||
Samarco Mineracao S.A. (Brazil), Sr. Unsec. Notes, | 700,000 | 640,421 | ||||||
Steel Dynamics Inc., Sr. Unsec. Gtd. Global Notes, | 60,000 | 66,000 | ||||||
6.38%, 08/15/22 | 26,000 | 28,665 | ||||||
SunCoke Energy Partners L.P./SunCoke Energy Partners Finance Corp., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/20(b) | 138,000 | 146,970 | ||||||
United States Steel Corp., | 160,000 | 171,200 | ||||||
Sr. Unsec. Notes, 7.38%, 04/01/20 | 22,000 | 24,090 | ||||||
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, | 730,000 | 764,328 | ||||||
6.88%, 11/10/39 | 400,000 | 428,465 | ||||||
Vale S.A. (Brazil), Sr. Unsec. Global Notes, 5.63%, 09/11/42 | 600,000 | 563,129 | ||||||
| 6,244,394 | ||||||||
| Technology Distributors–0.01% | ||||||||
Anixter Inc., Sr. Unsec. Gtd. Global Notes, 5.63%, 05/01/19 | 50,000 | 53,250 | ||||||
| Tires & Rubber–0.01% | ||||||||
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd. Notes, 6.50%, 03/01/21 | 50,000 | 55,000 | ||||||
| Tobacco–0.74% | ||||||||
Altria Group, Inc., Sr. Unsec. Gtd. Global Notes, 4.75%, 05/05/21 | 1,845,000 | 2,016,706 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Tobacco–(continued) | ||||||||
Philip Morris International Inc., Sr. Unsec. Global Notes, 3.60%, 11/15/23 | $ | 2,150,000 | $ | 2,147,911 | ||||
| 4,164,617 | ||||||||
| Trading Companies & Distributors–0.02% | ||||||||
United Rentals North America Inc., | 5,000 | 5,375 | ||||||
Sr. Unsec. Global Notes, 8.25%, 02/01/21 | 65,000 | 73,613 | ||||||
Sr. Unsec. Gtd. Notes, 6.13%, 06/15/23 | 25,000 | 26,531 | ||||||
| 105,519 | ||||||||
| Trucking–0.02% | ||||||||
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 5.88%, 10/15/20 | 100,000 | 106,875 | ||||||
| Wireless Telecommunication Services–1.31% | ||||||||
America Movil S.A.B. de C.V. (Mexico), | 200,000 | 175,676 | ||||||
Sr. Unsec. Gtd. Global Notes, 6.13%, 03/30/40 | 1,115,000 | 1,246,549 | ||||||
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, | 25,000 | 25,493 | ||||||
4.88%, 08/15/20(b) | 1,835,000 | 1,975,719 | ||||||
Digicel Ltd. (Jamaica), Sr. Unsec. Notes, 6.00%, 04/15/21(b) | 200,000 | 200,500 | ||||||
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20 | 255,000 | 275,081 | ||||||
Mobile Telesystems OJSC via MTS International Funding Ltd. (Russia), | 500,000 | 464,257 | ||||||
Rogers Communications Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 4.50%, 03/15/43 | 695,000 | 650,962 | ||||||
SBA Communications Corp., Sr. Unsec. Global Notes, 5.63%, 10/01/19 | 55,000 | 57,887 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19 | 107,000 | 118,502 | ||||||
Sprint Communications Inc., | 39,000 | 40,170 | ||||||
7.00%, 08/15/20 | 39,000 | 42,754 | ||||||
11.50%, 11/15/21 | 15,000 | 20,100 | ||||||
Sr. Unsec. Gtd. Notes, 7.00%, 03/01/20(b) | 105,000 | 121,275 | ||||||
9.00%, 11/15/18(b) | 40,000 | 49,000 | ||||||
Sprint Corp., Sr. Unsec. Gtd. Notes, 7.88%, 09/15/23(b) | 38,000 | 42,180 | ||||||
T-Mobile USA, Inc., | 75,000 | 80,250 | ||||||
6.63%, 04/01/23 | 75,000 | 80,344 | ||||||
Sr. Unsec. Gtd. Notes, 6.54%, 04/28/20 | 22,000 | 23,870 | ||||||
6.63%, 04/28/21 | 70,000 | 76,212 | ||||||
6.84%, 04/28/23 | 75,000 | 81,469 | ||||||
| Principal Amount | Value | |||||||
| Wireless Telecommunication Services–(continued) | ||||||||
VimpelCom Holdings B.V. (Russia), | $ | 300,000 | $ | 300,850 | ||||
5.95%, 02/13/23(b) | 300,000 | 283,187 | ||||||
7.50%, 03/01/22(b) | 600,000 | 628,500 | ||||||
Wind Acquisition Finance S.A. (Italy), Sec. Gtd. Notes, 11.75%, 07/15/17(b) | 300,000 | 320,250 | ||||||
| 7,381,037 | ||||||||
Total U.S. Dollar Denominated Bonds and Notes |
| 328,004,176 | ||||||
Asset-Backed Securities–22.30% |
| |||||||
AmeriCredit Automobile Receivables Trust, Series 2011-2, Class D, Pass Through Ctfs., 4.00%, 05/08/17 | 3,135,000 | 3,240,441 | ||||||
Banc of America Mortgage Trust, | 3,896,749 | 3,531,288 | ||||||
Bear Stearns Adjustable Rate Mortgage Trust, | 744,528 | 748,886 | ||||||
Series 2006-1, Class A1, Floating Rate Pass Through Ctfs., 2.38%, 02/25/36(c) | 2,237,701 | 2,218,073 | ||||||
Bear Stearns ALT-A Trust, | 4,578,026 | 4,500,456 | ||||||
Bear Stearns Commercial Mortgage Securities Trust, | 42,092 | 43,442 | ||||||
Series 2006-PW11, Class AAB, Variable Rate Pass Through Ctfs., 5.44%, 03/11/39(c) | 12,290 | 12,429 | ||||||
Boca Hotel Portfolio Trust, | 2,500,000 | 2,506,800 | ||||||
CFCRE Commercial Mortgage Trust, Series 2011-C2, Class C, Variable Rate Pass Through Ctfs., 5.56%, 12/15/47(b)(c) | 5,000,000 | 5,485,325 | ||||||
CGBAM Commercial Mortgage Trust, Series 2013-BREH, Class B, Floating Rate Pass Through Ctfs., 1.96%, 05/15/30(b)(c) | 2,570,000 | 2,584,964 | ||||||
Citigroup Mortgage Loan Trust, Inc., | 4,129,347 | 4,080,976 | ||||||
Series 2004-UST1, Class A4, Floating Rate Pass Through Ctfs., 2.25%, 08/25/34(c) | 1,990,937 | 1,997,170 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
Commercial Mortgage Trust, Series 2013-THL, Class A2, Floating Rate Pass Through Ctfs., 1.21%, 06/08/30(b)(c) | $ | 2,875,000 | $ | 2,880,181 | ||||
Series 2014-CR15, Class B, Variable Rate Pass Through Ctfs., 4.72%, 02/10/47(c) | 3,000,000 | 3,138,080 | ||||||
Countrywide Asset-Backed Ctfs., Series 2003-1, Class 3A, Floating Rate Pass Through Ctfs., 0.84%, 06/25/33(c) | 175,619 | 150,482 | ||||||
Countrywide Home Loans Mortgage Pass Through Trust, Series 2007-13, Class A10, Pass Through Ctfs., 6.00%, 08/25/37 | 1,115,610 | 1,025,903 | ||||||
Credit Suisse Mortgage Trust, | 523,984 | 534,137 | ||||||
Series 2010-6R, Class 1A1, Pass Through Ctfs., 5.50%, 02/27/37 (Acquired 03/01/10; Cost $152,579)(b) | 148,135 | 151,236 | ||||||
First Horizon Alternative Mortgage Securities Trust, | 361,547 | 370,064 | ||||||
Series 2006-FA5, Class A3, Pass Through Ctfs., 6.25%, 08/25/36 | 487,120 | 418,687 | ||||||
GS Mortgage Securities Trust, Series 2013-GC14, Class B, Variable Rate Pass Through Ctfs., 4.78%, 08/10/46(b)(c) | 4,000,000 | 4,154,738 | ||||||
Harborview Mortgage Loan Trust, Series 2005-9, Class 2A1C, Floating Rate Pass Through Ctfs., 0.60%, 06/20/35(c) | 46,732 | 43,680 | ||||||
Hilton USA Trust, Series 2013-HLT, Class BFX, Pass Through Ctfs., 3.37%, 11/05/30(b) | 1,500,000 | 1,523,783 | ||||||
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2012-LC9, Class B, Variable Rate Pass Through Ctfs., 3.81%, 12/15/47(b)(c) | 5,000,000 | 4,878,497 | ||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP9, Class A3, Pass Through Ctfs., 5.34%, 05/15/47 | 900,000 | 988,857 | ||||||
JP Morgan Mortgage Trust, | 2,741,409 | 2,774,966 | ||||||
Series 2005-A3, Class 6A5, Floating Rate Pass Through Ctfs., 2.74%, 06/25/35(c) | 2,000,000 | 2,017,446 | ||||||
LB-UBS Commercial Mortgage Trust, Series 2006-C7, Class A3, Pass Through Ctfs., 5.35%, 11/15/38 | 300,000 | 330,027 | ||||||
Lehman Mortgage Trust, Series 2006-1, Class 3A5, Pass Through Ctfs., 5.50%, 02/25/36 | 717,423 | 725,538 | ||||||
| Principal Amount | Value | |||||||
Luminent Mortgage Trust, Series 2005-1, Class A1, Floating Rate Pass Through Ctfs., 0.42%, 11/25/35(c) | $ | 2,043,750 | $ | 1,807,092 | ||||
MBNA Credit Card Master Note Trust, Series 2004-B1, Pass Through Ctfs., 4.45%, 08/15/16 | 4,200,000 | 4,208,033 | ||||||
Merrill Lynch Mortgage Investors Trust, Series 2005-A5, Class A9, Floating Rate Pass Through Ctfs., 2.46%, 06/25/35(c) | 4,761,130 | 4,691,799 | ||||||
Provident Home Equity Loan Trust, Series 2000-2, Class A1, Floating Rate Pass Through Ctfs., 0.70%, 08/25/31(c) | 343,617 | 289,370 | ||||||
RBSCF Trust, Series 2010-RR3, Class MS4A, Variable Rate Pass Through Ctfs., 4.97%, 04/16/40(b)(c) | 2,004,618 | 2,019,398 | ||||||
Santander Drive Auto Receivables Trust, Series 2011-1, Class D, Pass Through Ctfs., 4.01%, 02/15/17 | 1,545,000 | 1,602,481 | ||||||
Sequoia Mortgage Trust, | 2,975,055 | 2,583,339 | ||||||
Series 2013-4, Class A3, Variable Rate Pass Through Ctfs., 1.55%, 04/25/43(c) | 2,795,511 | 2,586,552 | ||||||
Series 2013-6, Class A2, Variable Rate Pass Through Ctfs., 3.00%, 05/25/43(c) | 3,740,112 | 3,526,825 | ||||||
Series 2013-7, Class A2, Variable Rate Pass Through Ctfs., 3.00%, 06/25/43(c) | 2,452,326 | 2,313,872 | ||||||
Shellpoint Asset Funding Trust, Series 2013-1, Class A3, Variable Rate Pass Through Ctfs., 3.75%, 07/25/43(b)(c) | 4,499,333 | 4,358,713 | ||||||
Sierra Timeshare Receivables Funding LLC, Series 2013-2A, Class A, Pass Through Ctfs., 2.28%, 11/20/25(b) | 1,751,481 | 1,773,253 | ||||||
Specialty Underwriting & Residential Finance Trust, Series 2004-BC2, Class A2, Floating Rate Pass Through Ctfs., 0.70%, 05/25/35(c) | 41,645 | 38,652 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-3, Class 4A2, Floating Rate Pass Through Ctfs., 4.96%, 04/25/47(c) | 1,046,631 | 731,839 | ||||||
Structured Asset Investment Loan Trust, Series 2003-BC12, Class 3A, Floating Rate Pass Through Ctfs., 0.90%, 11/25/33(c) | 25,689 | 24,889 | ||||||
Suntrust Alternative Loan Trust, Series 2005-1F, Class 2A8, Pass Through Ctfs., 6.00%, 12/25/35 | 750,495 | 668,607 | ||||||
Thornburg Mortgage Securities Trust, Series 2003-6, Class A2, Floating Rate Pass Through Ctfs., 1.16%, 12/25/33(c) | 1,977,293 | 1,841,488 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
UBS-Citigroup Commercial Mortgage Trust, Series 2011-C1, Class C, Variable Rate Pass Through Ctfs., 5.88%, 01/10/45(b)(c) | $ | 4,500,000 | $ | 5,032,651 | ||||
Wachovia Bank Commercial Mortgage Trust, | 1,515,000 | 1,601,009 | ||||||
Series 2005-C21, Class AM, Variable Rate Pass Through Ctfs., 5.24%, 10/15/44(c) | 1,680,000 | 1,793,606 | ||||||
WaMu Mortgage Pass Through Ctfs., | 1,602,732 | 1,633,525 | ||||||
Series 2005-AR10, Class 1A3, Floating Rate Pass Through Ctfs., 2.43%, 09/25/35(c) | 525,000 | 487,113 | ||||||
Series 2005-AR12, Class 1A8, Floating Rate Pass Through Ctfs., 2.36%, 10/25/35(c) | 2,099,558 | 1,998,895 | ||||||
Series 2007-HY2, Class 2A2, Floating Rate Pass Through Ctfs., 2.52%, 11/25/36(c) | 1,741,763 | 1,524,499 | ||||||
Wells Fargo Mortgage Backed Securities Trust, | 1,302,118 | 1,325,729 | ||||||
Series 2004-Z, Class 2A1, Floating Rate Pass Through Ctfs., 2.62%, 12/25/34(c) | 1,686,558 | 1,729,691 | ||||||
Series 2005-AR2, Class 2A2, Floating Rate Pass Through Ctfs., 2.67%, 03/25/35(c) | 3,322,122 | 3,419,165 | ||||||
WFRBS Commercial Mortgage Trust, | 5,000,000 | 5,656,520 | ||||||
Series 2013-C15, Class B, Variable Rate Pass Through Ctfs., 4.49%, 08/15/46(c) | 3,800,000 | 3,900,996 | ||||||
Series 2013-C16, Class B, Variable Rate Pass Through Ctfs., 4.99%, 09/15/46(c) | 3,127,000 | 3,337,430 | ||||||
Total Asset-Backed Securities |
| 125,563,583 | ||||||
U.S. Government Sponsored Agency Mortgage-Backed Securities–16.87% |
| |||||||
| Collateralized Mortgage Obligations–0.09% | ||||||||
Fannie Mae REMICS, IO, | 25,637 | 4,274 | ||||||
7.00%, 05/25/33 | 23,664 | 5,550 | ||||||
Federal Deposit Insurance Co., Series 2010-S1, Class 1A, Gtd. Floating Rate Notes , 0.71%, 02/25/48 (Acquired 03/05/10; Cost $498,906)(b)(c) | 498,906 | 500,978 | ||||||
| 510,802 | ||||||||
| Principal Amount | Value | |||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–9.19% | ||||||||
Pass Through Ctfs., | $ | 7,625,521 | $ | 8,510,442 | ||||
6.50%, 05/01/16 to 09/01/36 | 1,362,573 | 1,526,124 | ||||||
7.00%, 06/01/16 to 10/01/34 | 2,625,212 | 3,003,811 | ||||||
6.00%, 04/01/17 to 02/01/34 | 630,041 | 694,344 | ||||||
7.50%, 04/01/17 to 05/01/35 | 1,149,223 | 1,385,625 | ||||||
3.50%, 08/01/26 | 2,134,010 | 2,259,523 | ||||||
8.50%, 08/01/31 | 99,235 | 122,876 | ||||||
8.00%, 08/01/32 | 82,232 | 99,900 | ||||||
5.00%, 07/01/34 to 06/01/40 | 7,963,696 | 8,744,482 | ||||||
4.50%, 06/01/41 | 5,463,112 | 5,873,704 | ||||||
Pass Through Ctfs., ARM, 2.54%, 12/01/36(c) | 208,369 | 221,883 | ||||||
2.82%, 02/01/37(c) | 69,390 | 74,364 | ||||||
2.63%, 05/01/37(c) | 493,100 | 525,555 | ||||||
2.37%, 06/01/43(c) | 4,372,989 | 4,333,071 | ||||||
Pass Through Ctfs., TBA, 3.50%, 03/01/44(h) | 11,000,000 | 11,127,188 | ||||||
4.00%, 03/01/44(h) | 3,100,000 | 3,242,043 | ||||||
| 51,744,935 | ||||||||
| Federal National Mortgage Association (FNMA)–6.70% | ||||||||
Pass Through Ctfs., 7.50%, 11/01/15 to 08/01/37 | 1,449,063 | 1,698,806 | ||||||
7.00%, 12/01/15 to 02/01/34 | 1,065,974 | 1,218,819 | ||||||
6.50%, 05/01/16 to 01/01/37 | 443,891 | 498,096 | ||||||
6.00%, 05/01/17 to 10/01/39 | 240,222 | 266,460 | ||||||
5.00%, 03/01/18 to 12/01/39 | 2,456,742 | 2,693,460 | ||||||
5.50%, 11/01/18 to 06/01/40 | 3,683,722 | 4,082,218 | ||||||
8.00%, 08/01/21 to 04/01/33 | 187,278 | 223,083 | ||||||
9.50%, 04/01/30 | 43,171 | 51,227 | ||||||
8.50%, 10/01/32 | 150,723 | 186,040 | ||||||
Pass Through Ctfs., TBA, 3.00%, 03/01/29 to 03/01/44 | 12,300,000 | 12,174,921 | ||||||
4.50%, 03/01/44(h) | 12,400,000 | 13,320,312 | ||||||
Pass Through Ctfs. ARM, 2.33%, 05/01/35(c) | 697,061 | 742,400 | ||||||
2.28%, 01/01/37(c) | 359,489 | 382,330 | ||||||
2.49%, 03/01/38(c) | 188,178 | 199,684 | ||||||
| 37,737,856 | ||||||||
| Government National Mortgage Association (GNMA)–0.89% | ||||||||
Pass Through Ctfs., 7.50%, 06/15/23 to 05/15/32 | 40,575 | 44,835 | ||||||
9.00%, 09/15/24 to 10/15/24 | 22,129 | 22,308 | ||||||
8.50%, 02/15/25 | 7,327 | 7,450 | ||||||
8.00%, 08/15/25 to 09/15/26 | 78,260 | 86,567 | ||||||
6.56%, 01/15/27 | 164,689 | 186,281 | ||||||
7.00%, 04/15/28 to 09/15/32 | 452,455 | 515,296 | ||||||
6.00%, 11/15/28 to 02/15/33 | 139,823 | 159,915 | ||||||
6.50%, 01/15/29 to 09/15/34 | 330,381 | 373,007 | ||||||
5.50%, 06/15/35 | 213,917 | 238,996 | ||||||
5.00%, 07/15/35 to 08/15/35 | 75,056 | 82,854 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Government National Mortgage Association (GNMA)–(continued) | ||||||||
Pass Through Ctfs., TBA, 4.00%, 03/01/44(h) | $ | 3,000,000 | $ | 3,181,875 | ||||
Pass Through Ctfs., ARM, 2.00%, 01/20/25 to 05/20/25(c) | 87,556 | 91,102 | ||||||
3.00%, 06/20/25(c) | 10,647 | 11,071 | ||||||
| 5,001,557 | ||||||||
Total U.S. Government Sponsored Agency Mortgage-Backed Securities |
| 94,995,150 | ||||||
| Shares | ||||||||
Preferred Stocks–3.29% |
| |||||||
| Asset Management & Custody Banks–0.34% | ||||||||
State Street Corp., Series D, 5.90% Pfd. | 75,000 | 1,905,000 | ||||||
| Consumer Finance–0.00% | ||||||||
Ally Financial Inc., Series G, 7.00% Pfd.(b) | 4 | 3,963 | ||||||
| Diversified Banks–0.80% | ||||||||
CoBank ACB, Series F, | 20,000 | 2,015,000 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Series T, 7.25% Jr. Sub. Pfd. | 3,072 | 76,800 | ||||||
Wells Fargo & Co., 5.85% Pfd. | 97,000 | 2,404,630 | ||||||
| 4,496,430 | ||||||||
| Investment Banking & Brokerage–1.68% | ||||||||
Goldman Sachs Group, Inc. (The), Series J, 5.50% Pfd. | 78,000 | 1,847,820 | ||||||
Morgan Stanley, 6.88% Pfd. | 125,000 | 3,235,000 | ||||||
Morgan Stanley, Series E, | 164,000 | 4,395,446 | ||||||
| 9,478,266 | ||||||||
| Multi-Line Insurance–0.02% | ||||||||
Hartford Financial Services Group Inc. (The), 7.88% Jr. Sub. Pfd. | 4,070 | 120,269 | ||||||
| Office REIT’s–0.00% | ||||||||
DuPont Fabros Technology, Inc., Series B, 7.63% Pfd. | 200 | 4,918 | ||||||
| Other Diversified Financial Services–0.18% | ||||||||
Citigroup Inc., Series K, | 39,000 | 1,014,838 | ||||||
| Regional Banks–0.13% | ||||||||
PNC Financial Services Group, Inc. (The), Series P, 6.13% Pfd. | 27,000 | 704,700 | ||||||
| Reinsurance–0.14% | ||||||||
Reinsurance Group of America, Inc., 6.20% Sr. Unsec. Sub. Pfd. | 30,000 | 775,200 | ||||||
| Tires & Rubber–0.00% | ||||||||
Goodyear Tire & Rubber Co. (The), $2.94 Conv. Pfd. | 126 | 9,357 | ||||||
Total Preferred Stocks |
| 18,512,941 | ||||||
| Principal Amount | Value | |||||||
U.S. Treasury Securities–3.29% |
| |||||||
| U.S. Treasury Bills–1.03% | ||||||||
0.07%, 05/01/14(i)(j) | $ | 1,480,000 | $ | 1,479,927 | ||||
0.08%, 05/01/14(i)(j) | 1,050,000 | 1,049,948 | ||||||
0.08%, 11/13/14(i)(j)(k) | 475,000 | 474,714 | ||||||
0.09%, 05/01/14(i)(j) | 275,000 | 274,987 | ||||||
0.09%, 11/13/14(i)(j)(k) | 2,000,000 | 1,998,795 | ||||||
0.10%, 05/01/14(i)(j) | 100,000 | 99,995 | ||||||
0.11%, 05/01/14(i)(j) | 400,000 | 399,980 | ||||||
| 5,778,346 | ||||||||
| U.S. Treasury Notes–1.55% | ||||||||
1.50%, 01/31/19 | 5,385,000 | 5,388,160 | ||||||
2.75%, 02/15/24 | 3,317,000 | 3,344,675 | ||||||
| 8,732,835 | ||||||||
| U.S. Treasury Bonds–0.71% | ||||||||
3.75%, 11/15/43 | 3,881,000 | 3,998,331 | ||||||
Total U.S. Treasury Securities |
| 18,509,512 | ||||||
Non-U.S. Dollar Denominated Bonds & |
| |||||||
| Broadcasting–0.03% | ||||||||
Central European Media Enterprises Ltd. (Czech Republic), REGS, Jr. Sec. Gtd. Euro Notes, 11.63%, 09/15/16(b) | EUR | 100,000 | 146,312 | |||||
| Casinos & Gaming–0.01% | ||||||||
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.63%, 07/25/22(b) | CAD | 75,000 | 72,057 | |||||
| Food Distributors–0.03% | ||||||||
Bakkavor Finance 2 PLC (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 8.25%, 02/15/18(b) | GBP | 100,000 | 179,799 | |||||
| Hotels, Resorts & Cruise Lines–0.03% | ||||||||
Thomas Cook Group PLC (United Kingdom), Sr. Unsec. Gtd. Medium-Term Euro Notes, 7.75%, 06/22/17 | GBP | 100,000 | 184,655 | |||||
| Independent Power Producers & Energy Traders–0.03% | ||||||||
Infinis PLC (United Kingdom), Sr. Sec. Notes, 7.00%, 02/15/19(b) | GBP | 100,000 | 181,265 | |||||
| Other Diversified Financial Services–0.07% | ||||||||
Cabot Financial Luxembourg S.A. (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 10.38%, 10/01/19(b) | GBP | 100,000 | 192,568 | |||||
Lowell Group Financing PLC (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 10.75%, 04/01/19(b) | GBP | 100,000 | 190,893 | |||||
| 383,461 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Sovereign Debt–1.99% | ||||||||
Brazil Notas do Tesouro Nacional (Brazil), Series F, Sr. Unsec. Notes, 10.00%, 01/01/17 | BRL | 900,000 | $ | 372,172 | ||||
Mexican Bonos (Mexico), | MXN | 4,500,000 | 361,928 | |||||
Series M, Unsec. Bonds, 7.75%, 11/13/42 | MXN | 60,000,000 | 4,725,985 | |||||
Series M20, Sr. Unsec. Bonds, 10.00%, 12/05/24 | MXN | 1,300,000 | 125,791 | |||||
New Zealand Government Bond (New Zealand), Series 423, Sr. Unsec. Bonds, 5.50%, 04/15/23 | NZD | 6,000,000 | 5,383,780 | |||||
Peruvian Government International Bond (Peru), Sr. Unsec. Notes, 8.60%, 08/12/17(b) | PEN | 210,000 | 85,805 | |||||
Republic of Costa Rica (Costa Rica), Unsec. Bonds, | CRC | 90,000,000 | 181,433 | |||||
| 11,236,894 | ||||||||
| Wireless Telecommunication Services–0.03% | ||||||||
Mobile Challenger Intermediate Group S.A. (Switzerland), Sr. Sec. PIK Notes, 8.75%, 03/15/19(b) | EUR | 100,000 | 143,551 | |||||
Total Non-U.S. Dollar Denominated Bonds & Notes |
| 12,527,994 | ||||||
Municipal Obligations–1.60% |
| |||||||
Florida Hurricane Catastrophe Fund Finance Corp. Series 2013 A, RB, 3.00%, 07/01/20 | $ | 1,450,000 | 1,440,850 | |||||
| Principal Amount | Value | |||||||
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); | $ | 500,000 | $ | 564,055 | ||||
Series 2010, Build America RB, 6.66%, 04/01/57 | 550,000 | 617,529 | ||||||
Indiana (State of) Finance Authority (Ohio Valley Electric Corp.); Series 2012 A, Midwestern Disaster Relief RB, 5.00%, 06/01/39 | 2,000,000 | 1,938,480 | ||||||
Texas Municipal Gas Acquisition & Supply Corp. I; Series 2008 D, | 2,000,000 | 2,400,340 | ||||||
Virginia (State of) Small Business Financing Authority (Elizabeth River Crossings Opco, LLC); Series 2012, Sr. Lien RB, 5.50%, 01/01/42 (m) | 2,000,000 | 2,059,140 | ||||||
Total Municipal Obligations |
| 9,020,394 | ||||||
| Shares | ||||||||
Common Stocks–0.00% |
| |||||||
| Paper Products–0.00% | ||||||||
NewPage Holdings Inc. (Acquired 07/21/11-08/29/11; Cost $34,248)(b)(n) | 160 | 13,280 | ||||||
TOTAL INVESTMENTS–107.81% |
| 607,147,030 | ||||||
OTHER ASSETS LESS LIABILITIES–(7.81)% |
| (43,997,533 | ) | |||||
NET ASSETS–100.00% | $ | 563,149,497 | ||||||
Investment Abbreviations:
| ARM | – Adjustable Rate Mortgage | |
| BRL | – Brazilian Real | |
| CAD | – Canadian Dollar | |
| Conv. | – Convertible | |
| CRC | – Costa Rican Colon | |
| Ctfs. | – Certificates | |
| Deb. | – Debentures | |
| EUR | – Euro | |
| FHLMC | – Federal Home Loan Mortgage Corp. | |
| FNMA | – Federal National Mortgage Association | |
| GBP | – British Pound | |
| GNMA | – Government National Mortgage Association | |
| Gtd. | – Guaranteed | |
| IO | – Interest Only | |
| Jr. | – Junior |
| MXN | – Mexican Peso | |
| NZD | – New Zealand Dollar | |
| PEN | – Peru Nuevo Sol | |
| Pfd. | – Preferred | |
| PIK | – Payment in Kind | |
| RB | – Revenue Bonds | |
| REGS | – Regulation S | |
| REIT | – Real Estate Investment Trust | |
| REMICS | – Real Estate Mortgage Investment Conduits | |
| Sec. | – Secured | |
| Sr. | – Senior | |
| Sub. | – Subordinated | |
| TBA | – To Be Announced | |
| Unsec. | – Unsecured |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco Core Plus Bond 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) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). 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, 2014 was $142,332,899, which represented 25.27% of the Fund’s Net Assets. |
| (c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2014. |
| (d) | Step coupon bond. The interest rate represents the coupon rate at which the bond will accrue at a specified future date. |
| (e) | Perpetual bond with no specified maturity date. |
| (f) | Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at February 28, 2014 represented less than 1% of the Fund’s Net Assets. |
| (g) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
| (h) | Security purchased on a forward commitment basis. This security is subject to dollar roll transactions. See Note 1I. |
| (i) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1L and Note 4. |
| (j) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
| (k) | All or a portion of the value was designated as collateral to cover margin requirements for swap agreements. See Note 1M and Note 4. |
| (l) | Foreign denominated security. Principal amount is denominated in currency indicated. |
| (m) | Security subject to the alternative minimum tax. |
| (n) | Non-income producing security acquired as part of the NewPage Corp. bankruptcy reorganization. |
Portfolio Composition
By security type, based on Net Assets as of February 28, 2014
U.S. Dollar Denominated Bonds and Notes | 58.2 | % | ||
Asset-Backed Securities | 22.3 | |||
U.S. Government Sponsored Agency Mortgage-Backed Securities | 16.9 | |||
Preferred Stocks | 3.3 | |||
U.S. Treasury Securities | 3.3 | |||
Non-U.S. Dollar Denominated Bonds & Notes | 2.2 | |||
Municipal Obligations | 1.6 | |||
Common Stocks & Other Equity Interests | 0.0 | |||
Other Assets Less Liabilities | (7.8 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 Invesco Core Plus Bond Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $588,709,153) | $ | 607,147,030 | ||
Foreign currencies, at value (Cost $254,922) | 254,142 | |||
Receivable for: | ||||
Investments sold | 29,701,543 | |||
Variation margin — futures | 98,351 | |||
Fund shares sold | 693,393 | |||
Dividends and interest | 5,273,480 | |||
Principal paydowns | 19,604 | |||
Investment for trustee deferred compensation and retirement plans | 108,902 | |||
Total assets | 643,296,445 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 74,405,128 | |||
Fund shares reacquired | 421,939 | |||
Amount due custodian | 2,043,301 | |||
Dividends | 167,418 | |||
Forward foreign currency contracts outstanding | 137,928 | |||
Swap agreements | 271,264 | |||
Variation margin — centrally cleared swap agreements | 1,115 | |||
Accrued fees to affiliates | 298,106 | |||
Accrued trustees’ and officers’ fees and benefits | 3,596 | |||
Accrued other operating expenses | 57,607 | |||
Trustee deferred compensation and retirement plans | 124,346 | |||
Unrealized depreciation — OTC swap agreements | 797,885 | |||
Premiums received — OTC swap agreements | 1,417,315 | |||
Total liabilities | 80,146,948 | |||
Net assets applicable to shares outstanding | $ | 563,149,497 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 631,424,080 | ||
Undistributed net investment income | (518,332 | ) | ||
Undistributed net realized gain (loss) | (85,159,855 | ) | ||
Net unrealized appreciation | 17,403,604 | |||
| $ | 563,149,497 | |||
Net Assets: |
| |||
Class A | $ | 314,845,814 | ||
Class B | $ | 13,681,825 | ||
Class C | $ | 31,845,669 | ||
Class R | $ | 2,949,925 | ||
Class Y | $ | 1,570,576 | ||
Class R5 | $ | 1,397,453 | ||
Class R6 | $ | 196,858,235 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 29,286,575 | |||
Class B | 1,272,982 | |||
Class C | 2,963,253 | |||
Class R | 274,472 | |||
Class Y | 146,012 | |||
Class R5 | 130,086 | |||
Class R6 | 18,322,071 | |||
Class A: | ||||
Net asset value per share | $ | 10.75 | ||
Maximum offering price per share | ||||
(Net asset value of $10.75 ¸ 95.75%) | $ | 11.23 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.75 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.75 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.75 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.76 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.74 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.74 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
24 Invesco Core Plus Bond Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Interest | $ | 12,394,355 | ||
Dividends | 430,051 | |||
Dividends from affiliated money market funds | 893 | |||
Total investment income | 12,825,299 | |||
Expenses: | ||||
Advisory fees | 1,249,344 | |||
Administrative services fees | 79,134 | |||
Custodian fees | 34,717 | |||
Distribution fees: | ||||
Class A | 393,827 | |||
Class B | 73,291 | |||
Class C | 164,187 | |||
Class R | 7,056 | |||
Transfer agent fees — A, B, C, R and Y | 406,780 | |||
Transfer agent fees — R5 | 387 | |||
Transfer agent fees — R6 | 366 | |||
Trustees’ and officers’ fees and benefits | 27,909 | |||
Other | 168,714 | |||
Total expenses | 2,605,712 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (509,361 | ) | ||
Net expenses | 2,096,351 | |||
Net investment income | 10,728,948 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 3,738,644 | |||
Foreign currencies | 192,216 | |||
Forward foreign currency contracts | (258,480 | ) | ||
Futures contracts | (2,424,528 | ) | ||
Swap agreements | (566,375 | ) | ||
| 681,477 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 18,932,678 | |||
Foreign currencies | 2,867 | |||
Forward foreign currency contracts | (132,668 | ) | ||
Futures contracts | 497,895 | |||
Swap agreements | (432,586 | ) | ||
| 18,868,186 | ||||
Net realized and unrealized gain | 19,549,663 | |||
Net increase in net assets resulting from operations | $ | 30,278,611 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
25 Invesco Core Plus Bond Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 10,728,948 | $ | 16,523,223 | ||||
Net realized gain | 681,477 | 5,207,319 | ||||||
Change in net unrealized appreciation (depreciation) | 18,868,186 | (33,872,114 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 30,278,611 | (12,141,572 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (6,829,786 | ) | (10,265,479 | ) | ||||
Class B | (261,431 | ) | (483,301 | ) | ||||
Class C | (586,197 | ) | (953,544 | ) | ||||
Class R | (57,791 | ) | (95,262 | ) | ||||
Class Y | (33,918 | ) | (141,229 | ) | ||||
Class R5 | (40,307 | ) | (498,139 | ) | ||||
Class R6 | (4,381,154 | ) | (5,578,061 | ) | ||||
Total distributions from net investment income | (12,190,584 | ) | (18,015,015 | ) | ||||
Share transactions–net: | ||||||||
Class A | (19,916,587 | ) | 46,603,321 | |||||
Class B | (2,674,099 | ) | (5,686,495 | ) | ||||
Class C | (4,999,083 | ) | (32,154 | ) | ||||
Class R | 37,371 | (335,712 | ) | |||||
Class Y | 67,489 | (4,179,243 | ) | |||||
Class R5 | (619,019 | ) | (167,831,897 | ) | ||||
Class R6 | 5,233,188 | 195,283,747 | ||||||
Net increase in net assets resulting from share transactions | (22,870,740 | ) | 63,821,567 | |||||
Net increase in net assets | (4,782,713 | ) | 33,664,980 | |||||
Net assets: | ||||||||
Beginning of period | 567,932,210 | 534,267,230 | ||||||
End of period (includes undistributed net investment income of $(518,332) and $943,304, respectively) | $ | 563,149,497 | $ | 567,932,210 | ||||
Notes to Financial Statements
February 28, 2014
(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 twelve 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 seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
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
26 Invesco Core Plus Bond Fund
appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
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) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) 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.
27 Invesco Core Plus Bond 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 are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Dollar Rolls and Forward Commitment Transactions — The Fund may enter into dollar roll transactions to enhance the Fund’s performance. The Fund executes its dollar roll transactions in the to be announced (“TBA”) market whereby the Fund makes a forward commitment to purchase a security and, instead of accepting delivery, the position is offset by the sale of the security with a simultaneous agreement to repurchase at a future date. |
The Fund accounts for dollar roll transactions as purchases and sales and realizes gains and losses on these transactions. These transactions increase the Fund’s portfolio turnover rate. The Fund will segregate liquid assets in an amount equal to its dollar roll commitments. Dollar roll transactions are considered borrowings under the 1940 Act.
Dollar roll 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. Dollar rolls transactions also involve the risk that the 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.
| 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. | Forward Foreign Currency Contracts — The Fund may enter into forward foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the |
28 Invesco Core Plus Bond Fund
| price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
| L. | 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. |
| M. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk. Such transactions are agreements between two parties (“Counterparties”). A swap agreement may be negotiated bilaterally and traded over the counter (OTC) between two parties (“uncleared/OTC”) or, in some instances, must be transacted through a future commission merchant (FCM) and cleared through a clearinghouse that serves as a central counterparty (“centrally cleared swap”). These agreements may contain among other conditions, events of default and termination events, and various covenants and representations such as provisions that require the Fund to maintain a pre-determined level of net assets, and/or provide limits regarding the decline of the Fund’s NAV over specific periods of time. If the Fund were to trigger such provisions and have open derivative positions at that time, the Counterparty may be able to terminate such agreement and request immediate payment in an amount equal to the net liability positions, if any. |
Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a “basket” of securities representing a particular index.
In a centrally cleared swap, the Fund’s ultimate counterparty is a central clearinghouse. The Fund initially will enter into centrally cleared swaps through an executing broker. When a Fund enters into a centrally cleared swap, it must deliver to the central counterparty (via the FCM) an amount referred to as “initial margin.” Initial margin requirements are determined by the central counterparty, but an FCM may require additional initial margin above the amount required by the central counterparty. Initial margin deposits required upon entering into centrally cleared swaps are satisfied by cash or securities as collateral at the FCM. Securities deposited as initial margin are designated on the Schedule of Investments and cash deposited is recorded on the Statement of Assets and Liabilities. During the term of a cleared swap agreement, a “variation margin” amount may be required to be paid by the Fund or may be received by the Fund, based on the daily change in price of the underlying reference instrument subject to the swap agreement and is recorded as a receivable or payable on the Statement of Assets and Liabilities. During the term of the centrally cleared swap agreement, payments received from or paid to the counterparty, including termination, are recorded as realized gain (loss) on the Statement of Operations.
A CDS is an agreement between Counterparties to exchange the credit risk of an issuer. A buyer of a CDS is said to buy protection by paying a fixed payment over the life of the agreement and in some situations an upfront payment to the seller of the CDS. If a defined credit event occurs (such as payment default or bankruptcy), the Fund as a protection buyer would cease paying its fixed payment, the Fund would deliver eligible bonds issued by the reference entity to the seller, and the seller would pay the full notional value, or the “par value”, of the referenced obligation to the Fund. A seller of a CDS is said to sell protection and thus would receive a fixed payment over the life of the agreement and an upfront payment, if applicable. If a credit event occurs, the Fund as a protection seller would cease to receive the fixed payment stream, the Fund would pay the buyer “par value” or the full notional value of the referenced obligation, and the Fund would receive the eligible bonds issued by the reference entity. In turn, these bonds may be sold in order to realize a recovery value. Alternatively, the seller of the CDS and its counterparty may agree to net the notional amount and the market value of the bonds and make a cash payment equal to the difference to the buyer of protection. If no credit event occurs, the Fund receives the fixed payment over the life of the agreement. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional amount of the CDS. In connection with these agreements, cash and securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default under the swap agreement or bankruptcy/insolvency of a party to the swap agreement. If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the value of the contract. The risk may be mitigated by having a master netting arrangement between the Fund and the counterparty and by the designation of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
29 Invesco Core Plus Bond Fund
Implied credit spreads represent the current level at which protection could be bought or sold given the terms of the existing CDS contract and serve as an indicator of the current status of the payment/performance risk of the CDS. An implied spread that has widened or increased since entry into the initial contract may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets.
An interest rate swap is an agreement between Counterparties pursuant to which the parties exchange a floating rate payment for a fixed rate payment based on a specified notional amount.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.
| N. | Other Risks — The Fund 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 Fund may not be able to recover its investment in such issuer from the U.S. Government. Many securities purchased by the Fund are not guaranteed by the U.S. Government. |
| O. | Leverage Risk — Leverage exists when a Fund can lose more than it originally invests because it purchases or sells an instrument or enters into a transaction without investing an amount equal to the full economic exposure of the instrument or transaction. |
| P. | Collateral — To the extent the Fund has designated 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
Effective January 1, 2014, the Adviser has contractually agreed, through at least December 31, 2014, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 0.84%, 1.59%, 1.59%, 1.09%, 0.59%, 0.59% and 0.59%, respectively, of average daily net assets. Prior to January 1, 2014, the Adviser had contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 0.75%, 1.50%, 1.50%, 1.00%, 0.50%, 0.50% and 0.50%, 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, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on December 31, 2014. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $127,332 and reimbursed class level expenses of $327,111, $15,219, $34,094, $2,930, $1,526, $284 and $366 of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively.
30 Invesco Core Plus Bond 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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended February 28, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $37,426 in front-end sales commissions from the sale of Class A shares and $839, $6,457 and $5,828 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of February 28, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 9,178,693 | $ | 9,347,528 | $ | — | $ | 18,526,221 | ||||||||
U.S. Treasury Securities | — | 18,509,512 | — | 18,509,512 | ||||||||||||
U.S. Government Sponsored Securities | — | 94,995,150 | — | 94,995,150 | ||||||||||||
Corporate Debt Securities | — | 313,599,379 | 0 | 313,599,379 | ||||||||||||
Asset-Backed Securities | — | 125,563,583 | — | 125,563,583 | ||||||||||||
Municipal Obligations | — | 9,020,394 | — | 9,020,394 | ||||||||||||
Foreign Debt Securities | — | 1,291,100 | — | 1,291,100 | ||||||||||||
Foreign Sovereign Debt Securities | — | 25,641,691 | — | 25,641,691 | ||||||||||||
| 9,178,693 | 597,968,337 | 0 | 607,147,030 | |||||||||||||
Forward Foreign Currency Contracts* | — | (137,928 | ) | — | (137,928 | ) | ||||||||||
Futures* | (101,504 | ) | — | — | (101,504 | ) | ||||||||||
Swap Agreements* | — | (799,000 | ) | — | (799,000 | ) | ||||||||||
Total Investments | $ | 9,077,189 | $ | 597,031,409 | $ | 0 | $ | 606,108,598 | ||||||||
| * | Unrealized appreciation (depreciation). |
31 Invesco Core Plus Bond Fund
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of February 28, 2014:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Credit risk | ||||||||
Swap agreements(a) | $ | — | $ | (797,885 | ) | |||
Currency risk | ||||||||
Forward foreign currency contracts(b) | 49,354 | (187,282 | ) | |||||
Interest rate risk | ||||||||
Futures contracts(c) | 121,513 | (223,017 | ) | |||||
Swap agreements(d) | — | (1,115 | ) | |||||
Total | $ | 170,867 | $ | (1,209,299 | ) | |||
| (a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized depreciation on swap agreements. |
| (b) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
| (c) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
| (d) | Values are disclosed on the Statement of Assets and Liabilities under the caption Variation margin – centrally cleared swap agreements. |
Effect of Derivative Investments for the six months ended February 28, 2014
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain (Loss) on Statement of Operations | ||||||||||||
| Futures(a) | Forward Foreign Currency Contracts(a) | Swap Agreements(a) | ||||||||||
Realized Gain (Loss) | ||||||||||||
Credit risk | $ | — | $ | — | $ | (147,008 | ) | |||||
Currency risk | — | (258,480 | ) | — | ||||||||
Interest rate risk | (2,424,528 | ) | — | (419,367 | ) | |||||||
Change in Unrealized Appreciation (Depreciation) | ||||||||||||
Credit risk | $ | — | $ | — | $ | (431,471 | ) | |||||
Currency risk | — | (132,668 | ) | — | ||||||||
Interest rate risk | 497,895 | — | (1,115 | ) | ||||||||
Total | $ | (1,926,633 | ) | $ | (391,148 | ) | $ | (998,961 | ) | |||
| (a) | The average notional value of futures contracts, forward foreign currency contracts and swap agreements outstanding during the period was $176,423,672, $13,637,872 and $30,666,667, respectively. |
| Open Forward Foreign Currency Contracts at Period-End | ||||||||||||||||||||||||||
Settlement | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
| Deliver | Receive | |||||||||||||||||||||||||
03/06/14 | Citigroup Global Markets Inc. | EUR | 365,000 | USD | 498,234 | $ | 503,811 | $ | (5,577 | ) | ||||||||||||||||
03/06/14 | RBC Capital Markets Corp. | GBP | 416,000 | USD | 679,515 | 696,564 | (17,049 | ) | ||||||||||||||||||
03/06/14 | Citigroup Global Markets Inc. | USD | 141,510 | EUR | 104,153 | 143,762 | 2,252 | |||||||||||||||||||
04/09/14 | Citigroup Global Markets Inc. | NZD | 6,448,842 | USD | 5,301,271 | 5,390,257 | (88,986 | ) | ||||||||||||||||||
04/14/14 | Citigroup Global Markets Inc. | GBP | 111,159 | USD | 182,593 | 186,077 | (3,484 | ) | ||||||||||||||||||
04/15/14 | Citigroup Global Markets Inc. | EUR | 3,880,476 | USD | 5,284,820 | 5,356,325 | (71,505 | ) | ||||||||||||||||||
04/15/14 | Citigroup Global Markets Inc. | USD | 5,309,223 | EUR | 3,880,476 | 5,356,325 | 47,102 | |||||||||||||||||||
04/29/14 | RBC Capital Markets Corp. | CAD | 86,000 | USD | 76,874 | 77,555 | (681 | ) | ||||||||||||||||||
Total forward foreign currency contracts — Currency Risk | $ | (137,928 | ) | |||||||||||||||||||||||
Currency Abbreviations:
| CAD | – Canadian Dollar | |
| EUR | – Euro | |
| GBP | – British Pound Sterling | |
| NZD | – New Zealand Dollar | |
| USD | – U.S. Dollar |
32 Invesco Core Plus Bond Fund
| Open Futures Contracts at Period-End | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
U.S. 2 Year Treasury Notes | Long | 304 | June-2014 | $ | 66,842,000 | $ | 27,849 | |||||||||||||
U.S. 5 Year Treasury Notes | Long | 229 | June-2014 | 27,447,797 | 74,651 | |||||||||||||||
U.S. 10 Year Treasury Notes | Short | 560 | June-2014 | (69,737,500 | ) | (75,573 | ) | |||||||||||||
U.S. Long Bond | Short | 315 | June-2014 | (41,914,688 | ) | 19,013 | ||||||||||||||
U.S. Ultra Bond | Short | 120 | June-2014 | (17,231,250 | ) | (147,444 | ) | |||||||||||||
Total Futures Contracts — Interest Rate Risk | $ | (101,504 | ) | |||||||||||||||||
Centrally Cleared Swap Agreements:
| Interest Rate Swap Agreements | ||||||||||||||||||||||||
| Counterparty/Clearinghouse | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Credit Suisse/CME | Pay | 3 Month USD LIBOR | 2.75 | % | March-2024 | $ | 1,000,000 | $ | (1,115 | ) | ||||||||||||||
Total Interest Rate Swap Agreements — Interest Rate Risk |
| $ | (1,115 | ) | ||||||||||||||||||||
Abbreviations:
| CME | – Chicago Mercantile Exchange | |
| LIBOR | – London interbank offer rate | |
| USD | – United States Dollar |
Over The Counter (OTC) Swap Agreements:
| Credit Default Swap Agreements | ||||||||||||||||||||||||||||||
| Counterparty | Reference Entity | Buy/Sell Protection | (Pay)/Receive Fixed Rate | Expiration Date | Implied Credit | Notional Value | Upfront Payments | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Morgan Stanley & Co., Inc. | CDX E.M.20-V1 | Buy | (5.00 | )% | 12/20/18 | 3.03 | % | $ | (25,000,000 | ) | $ | (1,705,298 | ) | $ | (429,103 | ) | ||||||||||||||
Bank of America Securities LLC | Citigroup Inc. | Buy | (1.00 | ) | 06/20/17 | 0.55 | (5,500,000 | 287,983 | (368,782 | ) | ||||||||||||||||||||
Total Credit Default Swap Agreements — Credit Risk |
| $ | (1,417,315 | ) | $ | (797,885 | ) | |||||||||||||||||||||||
| (a) | Implied credit spreads represent the current level as of February 28, 2014 at which protection could be bought or sold given the terms of the existing credit default swap contract and serve as an indicator of the current status of the payment/performance risk of the credit default swap contract. An implied credit spread that has widened or increased since entry into the initial contract may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets generally. |
Offsetting Assets and Liabilities
Effective with the beginning of the Fund’s fiscal year, the Fund has adopted Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. This update is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Fund’s counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
33 Invesco Core Plus Bond Fund
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of February 28, 2014.
| Assets: | ||||||||||||||||||||||||
| Gross amounts presented in Statement of Assets & Liabilities(a) | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in the Statement of Assets and Liabilities | Collateral Received | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of America Securities LLC(b) | $ | 121,513 | $ | (121,513 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Bank of America Securities LLC(c) | 287,983 | (287,983 | ) | — | — | — | — | |||||||||||||||||
Citigroup Global Markets Inc.(d) | 49,354 | (49,354 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 458,850 | $ | (458,850 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Gross amounts presented in Statement of Assets & Liabilities(a) | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of liabilities presented in the Statement of Assets and Liabilities | Collateral Pledged | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of America Securities LLC(b) | $ | 223,017 | $ | (121,513 | ) | $ | 101,504 | $ | (101,504 | ) | $ | — | $ | 0 | ||||||||||
Bank of America Securities LLC(c) | 379,629 | (287,983 | ) | 91,646 | — | — | 91,646 | |||||||||||||||||
Credit Suisse(c) | 1,115 | — | 1,115 | — | — | 1,115 | ||||||||||||||||||
Citigroup Global Markets Inc.(d) | 169,552 | (49,354 | ) | 120,198 | — | — | 120,198 | |||||||||||||||||
Morgan Stanley & Co., Inc.(c) | 2,394,818 | — | 2,394,818 | — | — | 2,394,818 | ||||||||||||||||||
RBC Capital Markets Corp.(d) | 17,730 | — | 17,730 | — | — | 17,730 | ||||||||||||||||||
Total | $ | 3,185,861 | $ | (458,850 | ) | $ | 2,727,011 | $ | (101,504 | ) | $ | — | $ | 2,625,507 | ||||||||||
| (a) | Includes cumulative appreciation (depreciation) of futures contracts. |
| (b) | Futures contracts counterparty. |
| (c) | Swap agreements counterparty. |
| (d) | Forward foreign currency contracts counterparty. |
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $499.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7—Cash Balances
The Fund 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 State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.
34 Invesco Core Plus Bond Fund
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 81,094,105 | $ | — | $ | 81,094,105 | ||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $1,072,641,356 and $1,121,623,548, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $194,796,138 and $204,366,084, 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 | $ | 22,027,436 | ||
Aggregate unrealized (depreciation) of investment securities | (4,535,574 | ) | ||
Net unrealized appreciation of investment securities | $ | 17,491,862 | ||
Cost of investments for tax purposes is $589,655,168.
35 Invesco Core Plus Bond Fund
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 2,366,268 | $ | 25,075,020 | 11,443,179 | $ | 124,770,153 | ||||||||||
Class B | 48,526 | 513,905 | 259,725 | 2,842,268 | ||||||||||||
Class C | 324,330 | 3,443,910 | 1,644,469 | 17,949,741 | ||||||||||||
Class R | 29,564 | 313,482 | 97,728 | 1,065,927 | ||||||||||||
Class Y | 69,373 | 736,505 | 342,319 | 3,760,180 | ||||||||||||
Class R5 | 875 | 9,333 | 302,401 | 3,240,211 | ||||||||||||
Class R6(b) | 793,502 | 8,403,766 | 17,635,417 | 193,142,924 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 603,005 | 6,416,009 | 816,836 | 8,849,484 | ||||||||||||
Class B | 22,539 | 239,778 | 37,163 | 403,488 | ||||||||||||
Class C | 50,554 | 537,664 | 74,719 | 809,654 | ||||||||||||
Class R | 5,415 | 57,605 | 8,695 | 94,324 | ||||||||||||
Class Y | 2,614 | 27,841 | 4,187 | 45,485 | ||||||||||||
Class R5 | 3,721 | 39,535 | 8,502 | 92,331 | ||||||||||||
Class R6 | 412,182 | 4,381,638 | 515,819 | 5,577,578 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 99,799 | 1,062,352 | 311,678 | 3,391,634 | ||||||||||||
Class B | (99,834 | ) | (1,062,352 | ) | (311,701 | ) | (3,391,634 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (4,952,954 | ) | (52,469,968 | ) | (8,373,749 | ) | (90,407,950 | ) | ||||||||
Class B | (223,379 | ) | (2,365,430 | ) | (512,456 | ) | (5,540,617 | ) | ||||||||
Class C | (848,494 | ) | (8,980,657 | ) | (1,749,709 | ) | (18,791,549 | ) | ||||||||
Class R | (31,478 | ) | (333,716 | ) | (138,164 | ) | (1,495,963 | ) | ||||||||
Class Y | (65,738 | ) | (696,857 | ) | (731,992 | ) | (7,984,908 | ) | ||||||||
Class R5 | (62,905 | ) | (667,887 | ) | (15,607,029 | ) | (171,164,439 | ) | ||||||||
Class R6 | (712,706 | ) | (7,552,216 | ) | (322,143 | ) | (3,436,755 | ) | ||||||||
Net increase (decrease) in share activity | (2,165,221 | ) | $ | (22,870,740 | ) | 5,755,894 | $ | 63,821,567 | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 32% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| In addition, 35% 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 September 24, 2012. |
36 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.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 10.41 | $ | 0.20 | $ | 0.37 | $ | 0.57 | $ | (0.23 | ) | $ | — | $ | (0.23 | ) | $ | 10.75 | 5.50 | % | $ | 314,846 | 0.78 | %(d) | 1.03 | %(d) | 3.81 | %(d) | 202 | % | ||||||||||||||||||||||||||
Year ended 08/31/13 | 10.95 | 0.31 | (0.51 | ) | (0.20 | ) | (0.34 | ) | — | (0.34 | ) | 10.41 | (1.92 | ) | 324,537 | 0.73 | 0.99 | 2.86 | 252 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.60 | 0.37 | 0.44 | 0.81 | (0.44 | ) | (0.02 | ) | (0.46 | ) | 10.95 | 7.86 | 295,311 | 0.74 | 1.01 | 3.44 | 297 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.75 | 0.35 | (0.03 | ) | 0.32 | (0.32 | ) | (0.15 | ) | (0.47 | ) | 10.60 | 3.10 | 225,417 | 0.75 | 1.20 | 3.27 | 138 | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Year 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 02/28/14 | 10.41 | 0.16 | 0.37 | 0.53 | (0.19 | ) | — | (0.19 | ) | 10.75 | 5.11 | 13,682 | 1.53 | (d) | 1.78 | (d) | 3.06 | (d) | 202 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.95 | 0.23 | (0.51 | ) | (0.28 | ) | (0.26 | ) | — | (0.26 | ) | 10.41 | (2.66 | ) | 15,876 | 1.48 | 1.74 | 2.11 | 252 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.60 | 0.29 | 0.44 | 0.73 | (0.36 | ) | (0.02 | ) | (0.38 | ) | 10.95 | 7.06 | 22,465 | 1.49 | 1.76 | 2.69 | 297 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.74 | 0.27 | (0.02 | ) | 0.25 | (0.24 | ) | (0.15 | ) | (0.39 | ) | 10.60 | 2.43 | 24,401 | 1.50 | 1.95 | 2.52 | 138 | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Year 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 02/28/14 | 10.41 | 0.16 | 0.37 | 0.53 | (0.19 | ) | — | (0.19 | ) | 10.75 | 5.11 | 31,846 | 1.53 | (d) | 1.78 | (d) | 3.06 | (d) | 202 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.94 | 0.23 | (0.50 | ) | (0.27 | ) | (0.26 | ) | — | (0.26 | ) | 10.41 | (2.56 | ) | 35,770 | 1.48 | 1.74 | 2.11 | 252 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.60 | 0.29 | 0.44 | 0.73 | (0.37 | ) | (0.02 | ) | (0.39 | ) | 10.94 | 6.96 | 37,950 | 1.49 | 1.76 | 2.69 | 297 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.74 | 0.27 | (0.02 | ) | 0.25 | (0.24 | ) | (0.15 | ) | (0.39 | ) | 10.60 | 2.43 | 33,476 | 1.50 | 1.95 | 2.52 | 138 | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Year 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 02/28/14 | 10.41 | 0.19 | 0.37 | 0.56 | (0.22 | ) | — | (0.22 | ) | 10.75 | 5.37 | 2,950 | 1.03 | (d) | 1.28 | (d) | 3.56 | (d) | 202 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.95 | 0.28 | (0.51 | ) | (0.23 | ) | (0.31 | ) | — | (0.31 | ) | 10.41 | (2.16 | ) | 2,820 | 0.98 | 1.24 | 2.61 | 252 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.60 | 0.34 | 0.44 | 0.78 | (0.41 | ) | (0.02 | ) | (0.43 | ) | 10.95 | 7.59 | 3,313 | 0.99 | 1.26 | 3.19 | 297 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.74 | 0.32 | (0.02 | ) | 0.30 | (0.29 | ) | (0.15 | ) | (0.44 | ) | 10.60 | 2.94 | 2,301 | 1.00 | 1.45 | 3.02 | 138 | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Year 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 02/28/14 | 10.42 | 0.21 | 0.37 | 0.58 | (0.24 | ) | — | (0.24 | ) | 10.76 | 5.63 | 1,571 | 0.53 | (d) | 0.78 | (d) | 4.06 | (d) | 202 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.95 | 0.34 | (0.50 | ) | (0.16 | ) | (0.37 | ) | — | (0.37 | ) | 10.42 | (1.58 | ) | 1,456 | 0.48 | 0.74 | 3.11 | 252 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.60 | 0.39 | 0.45 | 0.84 | (0.47 | ) | (0.02 | ) | (0.49 | ) | 10.95 | 8.12 | 5,753 | 0.49 | 0.76 | 3.69 | 297 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.74 | 0.37 | (0.01 | ) | 0.36 | (0.35 | ) | (0.15 | ) | (0.50 | ) | 10.60 | 3.46 | 5,234 | 0.50 | 0.95 | 3.52 | 138 | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Year 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 | |||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.40 | 0.21 | 0.37 | 0.58 | (0.24 | ) | — | (0.24 | ) | 10.74 | 5.64 | 1,397 | 0.52 | (d) | 0.60 | (d) | 4.07 | (d) | 202 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.94 | 0.34 | (0.51 | ) | (0.17 | ) | (0.37 | ) | — | (0.37 | ) | 10.40 | (1.68 | ) | 1,960 | 0.48 | 0.56 | 3.11 | 252 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.60 | 0.39 | 0.44 | 0.83 | (0.47 | ) | (0.02 | ) | (0.49 | ) | 10.94 | 8.03 | 169,474 | 0.49 | 0.56 | 3.69 | 297 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.74 | 0.37 | (0.01 | ) | 0.36 | (0.35 | ) | (0.15 | ) | (0.50 | ) | 10.60 | 3.46 | 166,656 | 0.50 | 0.66 | 3.52 | 138 | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Year 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 | |||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.41 | 0.21 | 0.36 | 0.57 | (0.24 | ) | — | (0.24 | ) | 10.74 | 5.54 | 196,858 | 0.51 | (d) | 0.56 | (d) | 4.08 | (d) | 202 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(e) | 10.97 | 0.32 | (0.54 | ) | (0.22 | ) | (0.34 | ) | — | (0.34 | ) | 10.41 | (2.07 | ) | 185,513 | 0.48 | (f) | 0.54 | (f) | 3.11 | (f) | 252 | ||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended August 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $390,261,951 and sold of $29,803,473 in the effort to realign the Fund’s portfolio holdings after the reorganizations of Invesco Core Bond Fund and Invesco Van Kampen Core Plus Fixed Income Fund into the Fund. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $317,672, $14,780, $33,110, $2,846, $1,482, $1,782 and $191,716 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Commencement date of June 3, 2009 for Class A, Class B, Class C, Class R, Class Y and Class R5 shares and September 24, 2012 for Class R6 shares. |
| (f) | Annualized. |
37 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio2 | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2,3 | Ending Account Value (02/28/14) | Expenses Paid During Period2,4 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,055.00 | $ | 3.97 | $ | 1,020.93 | $ | 3.91 | 0.78 | % | ||||||||||||
| B | 1,000.00 | 1,051.10 | 7.78 | 1,017.21 | 7.65 | 1.53 | ||||||||||||||||||
| C | 1,000.00 | 1,051.10 | 7.78 | 1,017.21 | 7.65 | 1.53 | ||||||||||||||||||
| R | 1,000.00 | 1,053.70 | 5.24 | 1,019.69 | 5.16 | 1.03 | ||||||||||||||||||
| Y | 1,000.00 | 1,056.30 | 2.70 | 1,022.17 | 2.66 | 0.53 | ||||||||||||||||||
| R5 | 1,000.00 | 1,055.40 | 2.65 | 1,022.22 | 2.61 | 0.52 | ||||||||||||||||||
| R6 | 1,000.00 | 1,055.40 | 2.60 | 1,022.27 | 2.56 | 0.51 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. Effective January 1, 2014, the Fund’s Adviser has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expense of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 0.84%, 1.59%, 1.59%, 1.09%, 0.59%, 0.59% and 0.59% of average daily net assets, respectively. The annualized expense ratios restated as if these agreements had been in effect throughout the entire most recent fiscal half year are 0.84%, 1.59%, 1.59%, 1.09%, 0.59%, 0.59% and 0.56% for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| 3 | The actual expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $4.28, $8.09, $8.09, $5.55, $3.01, $3.01 and $2.85 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| 4 | The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $4.21, $7.95, $7.95, $5.46, $2.96, $2.96 and $2.81 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
38 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.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | CPB-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco Equally-Weighted S&P 500 Fund
Nasdaq:
A: VADAX n B: VADBX n C: VADCX n R: VADRX n Y: VADDX n R6: VADFX
| 2 | Fund Performance |
| 4 | Letters to Shareholders |
| 5 | Schedule of Investments |
| 7 | Financial Statements |
| 9 | Notes to Financial Statements |
| 17 | Financial Highlights |
| 18 | Fund Expenses |
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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 16.48 | % | |||
Class B Shares | 16.03 | ||||
Class C Shares | 16.04 | ||||
Class R Shares | 16.33 | ||||
Class Y Shares | 16.61 | ||||
Class R6 Shares | 16.63 | ||||
S&P 500 Index‚ (Broad Market Index) | 15.07 | ||||
S&P 500 Equal Weight Index‚ (Style-Specific Index) | 16.86 | ||||
Lipper Multi-Cap Core Funds Indexn (Peer Group Index) | 15.57 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.; nLipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US 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.
2 Invesco Equally-Weighted S&P 500 Fund
| Average Annual Total Returns | ||||
As of 2/28/14, including maximum applicable sales charges
|
| |||
| Class A Shares | ||||
Inception (7/28/97) | 8.26 | % | ||
10 Years | 8.26 | |||
5 Years | 26.66 | |||
1 Year | 21.29 | |||
Class B Shares | ||||
Inception (12/1/87) | 11.35 | % | ||
10 Years | 8.22 | |||
5 Years | 27.00 | |||
1 Year | 22.40 | |||
Class C Shares | ||||
Inception (7/28/97) | 7.83 | % | ||
10 Years | 8.07 | |||
5 Years | 27.14 | |||
1 Year | 26.38 | |||
Class R Shares | ||||
Inception (3/31/08) | 10.63 | % | ||
5 Years | 27.78 | |||
1 Year | 28.03 | |||
Class Y Shares | ||||
Inception (7/28/97) | 8.89 | % | ||
10 Years | 9.14 | % | ||
5 Years | 28.41 | |||
1 Year | 28.68 | |||
Class R6 Shares | ||||
10 Years | 8.92 | % | ||
5 Years | 28.20 | |||
1 Year | 28.70 | |||
Effective June 1, 2010, Class A, Class B, Class C, Class R, Class W and Class I shares of the predecessor fund, Morgan Stanley Equally-Weighted S&P 500 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.
Class R6 shares incepted on September 24, 2012. Performance shown prior to that date is that of
| Average Annual Total Returns | ||||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | ||||
| Class A Shares | ||||
Inception (7/28/97) | 8.20 | % | ||
10 Years | 8.48 | |||
5 Years | 21.07 | |||
1 Year | 27.91 | |||
Class B Shares | ||||
Inception (12/1/87) | 11.33 | % | ||
10 Years | 8.44 | |||
5 Years | 21.36 | |||
1 Year | 29.32 | |||
Class C Shares | ||||
Inception (7/28/97) | 7.78 | % | ||
10 Years | 8.29 | |||
5 Years | 21.54 | |||
1 Year | 33.30 | |||
Class R Shares | ||||
Inception (3/31/08) | 10.54 | % | ||
5 Years | 22.15 | |||
1 Year | 34.97 | |||
Class Y Shares | ||||
Inception (7/28/97) | 8.84 | % | ||
10 Years | 9.36 | % | ||
5 Years | 22.75 | |||
1 Year | 35.68 | |||
Class R6 Shares | ||||
10 Years | 9.13 | % | ||
5 Years | 22.53 | |||
1 Year | 35.67 | |||
the Fund’s and 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. 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 Class R6 shares was 0.57%, 1.32%, 1.32%, 0.82%, 0.32% and 0.28%, 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 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
3 Invesco Equally-Weighted S&P 500 Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their |
unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. |
Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Equally-Weighted S&P 500 Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–98.72% |
| |||||||
| Advertising–0.40% | ||||||||
Interpublic Group of Cos., Inc. (The) | 260,228 | $ | 4,611,240 | |||||
Omnicom Group Inc. | 62,391 | 4,721,751 | ||||||
| 9,332,991 | ||||||||
| Aerospace & Defense–2.29% | ||||||||
Boeing Co. (The) | 32,083 | 4,136,140 | ||||||
General Dynamics Corp. | 47,570 | 5,210,818 | ||||||
Honeywell International Inc. | 49,575 | 4,681,863 | ||||||
L-3 Communications Holdings, Inc. | 42,000 | 4,846,800 | ||||||
Lockheed Martin Corp. | 30,883 | 5,012,311 | ||||||
Northrop Grumman Corp. | 39,420 | 4,771,003 | ||||||
Precision Castparts Corp. | 16,963 | 4,374,418 | ||||||
Raytheon Co. | 49,672 | 4,863,386 | ||||||
Rockwell Collins, Inc. | 60,212 | 4,969,898 | ||||||
Textron Inc. | 136,483 | 5,418,375 | ||||||
United Technologies Corp. | 39,997 | 4,680,449 | ||||||
| 52,965,461 | ||||||||
| Agricultural Products–0.19% | ||||||||
Archer-Daniels-Midland Co. | 106,438 | 4,321,383 | ||||||
| Air Freight & Logistics–0.70% | ||||||||
C.H. Robinson Worldwide, Inc. | 76,130 | 3,948,102 | ||||||
Expeditors International of Washington, Inc. | 99,808 | 3,943,414 | ||||||
FedEx Corp. | 31,136 | 4,151,363 | ||||||
United Parcel Service, Inc.–Class B | 42,352 | 4,056,051 | ||||||
| 16,098,930 | ||||||||
| Airlines–0.44% | ||||||||
Delta Air Lines, Inc. | 151,348 | 5,026,267 | ||||||
Southwest Airlines Co. | 230,475 | 5,171,859 | ||||||
| 10,198,126 | ||||||||
| Aluminum–0.23% | ||||||||
Alcoa Inc. | 451,500 | 5,300,610 | ||||||
| Apparel Retail–0.95% | ||||||||
Gap, Inc. (The) | 111,554 | 4,880,487 | ||||||
L Brands, Inc. | 70,193 | 3,953,972 | ||||||
Ross Stores, Inc. | 59,851 | 4,357,153 | ||||||
TJX Cos., Inc. (The) | 70,193 | 4,314,062 | ||||||
Urban Outfitters, Inc.(b) | 120,004 | 4,492,950 | ||||||
| 21,998,624 | ||||||||
| Apparel, Accessories & Luxury Goods–1.10% | ||||||||
Coach, Inc. | 77,364 | 3,776,137 | ||||||
Fossil Group, Inc.(b) | 35,307 | 4,057,127 | ||||||
Michael Kors Holdings Ltd.(b) | 52,190 | 5,116,186 | ||||||
PVH Corp. | 33,269 | 4,206,200 | ||||||
Ralph Lauren Corp. | 24,508 | 3,947,748 | ||||||
| Shares | Value | |||||||
| Apparel, Accessories & Luxury Goods–(continued) | ||||||||
VF Corp. | 73,247 | $ | 4,291,542 | |||||
| 25,394,940 | ||||||||
| Application Software–1.02% | ||||||||
Adobe Systems Inc.(b) | 70,516 | 4,838,103 | ||||||
Autodesk, Inc.(b) | 89,940 | 4,718,252 | ||||||
Citrix Systems, Inc.(b) | 74,043 | 4,446,282 | ||||||
Intuit Inc. | 57,234 | 4,472,837 | ||||||
Salesforce.com, Inc.(b) | 83,977 | 5,237,646 | ||||||
| 23,713,120 | ||||||||
| Asset Management & Custody Banks–1.70% | ||||||||
Ameriprise Financial, Inc. | 40,248 | 4,386,630 | ||||||
Bank of New York Mellon Corp. (The) | 130,469 | 4,175,008 | ||||||
BlackRock, Inc. | 14,418 | 4,395,183 | ||||||
Franklin Resources, Inc. | 79,484 | 4,232,523 | ||||||
Invesco Ltd.(c) | 124,169 | 4,258,997 | ||||||
Legg Mason, Inc. | 103,763 | 4,768,947 | ||||||
Northern Trust Corp. | 74,570 | 4,612,154 | ||||||
State Street Corp. | 61,577 | 4,043,762 | ||||||
T. Rowe Price Group Inc. | 54,787 | 4,447,061 | ||||||
| 39,320,265 | ||||||||
| Auto Parts & Equipment–0.61% | ||||||||
BorgWarner, Inc. | 79,831 | 4,905,615 | ||||||
Delphi Automotive PLC (United Kingdom) | 73,272 | 4,877,717 | ||||||
Johnson Controls, Inc. | 85,875 | 4,242,225 | ||||||
| 14,025,557 | ||||||||
| Automobile Manufacturers–0.34% | ||||||||
Ford Motor Co. | 258,816 | 3,983,178 | ||||||
General Motors Co. | 107,236 | 3,881,943 | ||||||
| 7,865,121 | ||||||||
| Automotive Retail–0.81% | ||||||||
AutoNation, Inc.(b) | 85,857 | 4,519,513 | ||||||
AutoZone, Inc.(b) | 9,230 | 4,969,801 | ||||||
CarMax, Inc.(b) | 84,273 | 4,081,341 | ||||||
O’Reilly Automotive, Inc.(b) | 33,950 | 5,121,358 | ||||||
| 18,692,013 | ||||||||
| Biotechnology–1.55% | ||||||||
Alexion Pharmaceuticals, Inc.(b) | 34,713 | 6,137,258 | ||||||
Amgen Inc. | 38,281 | 4,747,610 | ||||||
Biogen Idec Inc.(b) | 15,595 | 5,312,905 | ||||||
Celgene Corp.(b) | 26,038 | 4,185,609 | ||||||
Gilead Sciences, Inc.(b) | 60,136 | 4,978,659 | ||||||
Regeneron Pharmaceuticals, Inc.(b) | 15,926 | 5,295,395 | ||||||
Vertex Pharmaceuticals Inc.(b) | 65,875 | 5,326,652 | ||||||
| 35,984,088 | ||||||||
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 | |||||||
| Brewers–0.20% | ||||||||
Molson Coors Brewing Co.–Class B | 80,724 | $ | 4,587,545 | |||||
| Broadcasting–0.59% | ||||||||
CBS Corp.–Class B | 73,498 | 4,930,246 | ||||||
Discovery Communications, Inc.–Class A(b) | 52,076 | 4,338,972 | ||||||
Scripps Networks Interactive Inc.–Class A | 53,185 | 4,320,750 | ||||||
| 13,589,968 | ||||||||
| Building Products–0.44% | ||||||||
Allegion PLC(b) | 99,277 | 5,395,705 | ||||||
Masco Corp. | 201,774 | 4,711,423 | ||||||
| 10,107,128 | ||||||||
| Cable & Satellite–0.81% | ||||||||
Cablevision Systems Corp.–Class A | 263,421 | 4,636,210 | ||||||
Comcast Corp.–Class A | 87,609 | 4,528,509 | ||||||
DIRECTV(b) | 64,441 | 5,000,621 | ||||||
Time Warner Cable Inc. | 32,674 | 4,585,796 | ||||||
| 18,751,136 | ||||||||
| Casinos & Gaming–0.41% | ||||||||
International Game Technology | 246,485 | 3,719,458 | ||||||
Wynn Resorts Ltd. | 23,622 | 5,728,099 | ||||||
| 9,447,557 | ||||||||
| Coal & Consumable Fuels–0.38% | ||||||||
CONSOL Energy Inc. | 115,485 | 4,630,949 | ||||||
Peabody Energy Corp. | 233,229 | 4,095,501 | ||||||
| 8,726,450 | ||||||||
| Commodity Chemicals–0.21% | ||||||||
LyondellBasell Industries N.V.–Class A | 56,355 | 4,963,748 | ||||||
| Communications Equipment–1.29% | ||||||||
Cisco Systems, Inc. | 212,142 | 4,624,696 | ||||||
F5 Networks, Inc.(b) | 52,702 | 5,920,543 | ||||||
Harris Corp. | 65,503 | 4,835,431 | ||||||
Juniper Networks, Inc.(b) | 207,729 | 5,554,673 | ||||||
Motorola Solutions, Inc. | 66,007 | 4,369,663 | ||||||
QUALCOMM, Inc. | 59,158 | 4,454,006 | ||||||
| 29,759,012 | ||||||||
| Computer & Electronics Retail–0.27% | ||||||||
Best Buy Co., Inc. | 105,992 | 2,822,567 | ||||||
GameStop Corp.–Class A | 90,796 | 3,387,599 | ||||||
| 6,210,166 | ||||||||
| Computer Hardware–0.38% | ||||||||
Apple Inc. | 7,744 | 4,075,202 | ||||||
Hewlett-Packard Co. | 160,394 | 4,792,573 | ||||||
| 8,867,775 | ||||||||
| Computer Storage & Peripherals–1.00% | ||||||||
EMC Corp. | 184,282 | 4,859,516 | ||||||
NetApp, Inc. | 107,964 | 4,362,825 | ||||||
SanDisk Corp. | 64,792 | 4,814,046 | ||||||
| Shares | Value | |||||||
| Computer Storage & Peripherals–(continued) | ||||||||
Seagate Technology PLC | 85,875 | $ | 4,481,816 | |||||
Western Digital Corp. | 54,316 | 4,724,949 | ||||||
| 23,243,152 | ||||||||
| Construction & Engineering–0.62% | ||||||||
Fluor Corp. | 57,410 | 4,460,183 | ||||||
Jacobs Engineering Group, Inc.(b) | 75,647 | 4,587,990 | ||||||
Quanta Services, Inc.(b) | 149,452 | 5,262,205 | ||||||
| 14,310,378 | ||||||||
| Construction & Farm Machinery & Heavy Trucks–1.01% | ||||||||
Caterpillar Inc. | 49,897 | 4,838,512 | ||||||
Cummins Inc. | 33,025 | 4,819,008 | ||||||
Deere & Co. | 49,250 | 4,232,053 | ||||||
Joy Global Inc. | 80,212 | 4,411,660 | ||||||
PACCAR Inc. | 76,455 | 5,033,797 | ||||||
| 23,335,030 | ||||||||
| Construction Materials–0.22% | ||||||||
Vulcan Materials Co. | 76,496 | 5,196,373 | ||||||
| Consumer Electronics–0.46% | ||||||||
Garmin Ltd. | 92,180 | 4,946,379 | ||||||
Harman International Industries, Inc. | 54,371 | 5,694,275 | ||||||
| 10,640,654 | ||||||||
| Consumer Finance–0.77% | ||||||||
American Express Co. | 51,310 | 4,683,577 | ||||||
Capital One Financial Corp. | 60,077 | 4,411,454 | ||||||
Discover Financial Services | 80,983 | 4,646,805 | ||||||
SLM Corp. | 166,682 | 3,990,367 | ||||||
| 17,732,203 | ||||||||
| Data Processing & Outsourced Services–2.14% | ||||||||
Alliance Data Systems Corp.(b) | 17,115 | 4,879,658 | ||||||
Automatic Data Processing, Inc. | 55,747 | 4,336,002 | ||||||
Computer Sciences Corp. | 82,067 | 5,186,634 | ||||||
Fidelity National Information Services, Inc. | 84,555 | 4,702,103 | ||||||
Fiserv, Inc.(b) | 76,783 | 4,457,253 | ||||||
MasterCard, Inc.–Class A | 54,490 | 4,234,963 | ||||||
Paychex, Inc. | 100,721 | 4,206,109 | ||||||
Total System Services, Inc. | 137,224 | 4,179,843 | ||||||
Visa Inc.–Class A | 20,706 | 4,678,314 | ||||||
Western Union Co. (The) | 262,294 | 4,388,179 | ||||||
Xerox Corp. | 378,973 | 4,164,913 | ||||||
| 49,413,971 | ||||||||
| Department Stores–0.59% | ||||||||
Kohl’s Corp. | 79,396 | 4,461,261 | ||||||
Macy’s, Inc. | 83,519 | 4,832,409 | ||||||
Nordstrom, Inc. | 71,455 | 4,393,054 | ||||||
| 13,686,724 | ||||||||
| Distillers & Vintners–0.66% | ||||||||
Beam Inc. | 65,284 | 5,415,961 | ||||||
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 | |||||||
| Distillers & Vintners–(continued) | ||||||||
Brown-Forman Corp.–Class B | 58,521 | $ | 4,904,060 | |||||
Constellation Brands, Inc.–Class A(b) | 61,941 | 5,019,079 | ||||||
| 15,339,100 | ||||||||
| Distributors–0.20% | ||||||||
Genuine Parts Co. | 52,930 | 4,662,604 | ||||||
| Diversified Banks–0.59% | ||||||||
Comerica Inc. | 95,331 | 4,593,048 | ||||||
U.S. Bancorp | 109,926 | 4,522,356 | ||||||
Wells Fargo & Co. | 98,187 | 4,557,840 | ||||||
| 13,673,244 | ||||||||
| Diversified Chemicals–0.84% | ||||||||
Dow Chemical Co. (The) | 103,413 | 5,037,247 | ||||||
E. I. du Pont de Nemours and Co. | 71,277 | 4,748,474 | ||||||
Eastman Chemical Co. | 59,084 | 5,165,714 | ||||||
FMC Corp. | 58,569 | 4,520,355 | ||||||
| 19,471,790 | ||||||||
| Diversified Metals & Mining–0.18% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 125,036 | 4,078,674 | ||||||
| Diversified REIT’s–0.20% | ||||||||
Vornado Realty Trust | 48,753 | 4,694,426 | ||||||
| Diversified Support Services–0.37% | ||||||||
Cintas Corp. | 77,490 | 4,700,543 | ||||||
Iron Mountain Inc. | 145,600 | 3,960,320 | ||||||
| 8,660,863 | ||||||||
| Drug Retail–0.42% | ||||||||
CVS Caremark Corp. | 63,790 | 4,665,601 | ||||||
Walgreen Co. | 75,315 | 5,117,654 | ||||||
| 9,783,255 | ||||||||
| Education Services–0.22% | ||||||||
Graham Holdings Co.–Class B | 6,965 | 5,005,745 | ||||||
| Electric Utilities–2.59% | ||||||||
American Electric Power Co., Inc. | 93,749 | 4,706,200 | ||||||
Duke Energy Corp. | 62,967 | 4,463,101 | ||||||
Edison International | 93,996 | 4,922,570 | ||||||
Entergy Corp. | 70,159 | 4,477,547 | ||||||
Exelon Corp. | 155,009 | 4,713,824 | ||||||
FirstEnergy Corp. | 135,407 | 4,167,827 | ||||||
NextEra Energy, Inc. | 51,912 | 4,744,238 | ||||||
Northeast Utilities | 103,239 | 4,588,974 | ||||||
Pepco Holdings, Inc. | 231,095 | 4,712,027 | ||||||
Pinnacle West Capital Corp. | 81,321 | 4,525,514 | ||||||
PPL Corp. | 146,795 | 4,740,010 | ||||||
Southern Co. (The) | 107,022 | 4,532,382 | ||||||
Xcel Energy, Inc. | 154,785 | 4,688,438 | ||||||
| 59,982,652 | ||||||||
| Shares | Value | |||||||
| Electrical Components & Equipment–0.98% | ||||||||
AMETEK, Inc. | 87,129 | $ | 4,638,748 | |||||
Eaton Corp. PLC | 60,501 | 4,520,030 | ||||||
Emerson Electric Co. | 64,860 | 4,232,763 | ||||||
Rockwell Automation, Inc. | 38,849 | 4,772,211 | ||||||
Roper Industries, Inc. | 33,053 | 4,482,648 | ||||||
| 22,646,400 | ||||||||
| Electronic Components–0.40% | ||||||||
Amphenol Corp.–Class A | 50,419 | 4,437,880 | ||||||
Corning Inc. | 254,370 | 4,901,710 | ||||||
| 9,339,590 | ||||||||
| Electronic Equipment & Instruments–0.22% | ||||||||
FLIR Systems, Inc. | 149,608 | 5,107,617 | ||||||
| Electronic Manufacturing Services–0.39% | ||||||||
Jabil Circuit, Inc. | 225,157 | 4,167,656 | ||||||
TE Connectivity Ltd. (Switzerland) | 82,603 | 4,838,884 | ||||||
| 9,006,540 | ||||||||
| Environmental & Facilities Services–0.55% | ||||||||
Republic Services, Inc. | 126,510 | 4,315,256 | ||||||
Stericycle, Inc.(b) | 37,473 | 4,271,922 | ||||||
Waste Management, Inc. | 98,435 | 4,085,053 | ||||||
| 12,672,231 | ||||||||
| Fertilizers & Agricultural Chemicals–0.60% | ||||||||
CF Industries Holdings, Inc. | 19,036 | 4,776,132 | ||||||
Monsanto Co. | 38,800 | 4,268,776 | ||||||
Mosaic Co. (The) | 97,651 | 4,771,228 | ||||||
| 13,816,136 | ||||||||
| Food Distributors–0.18% | ||||||||
Sysco Corp. | 118,349 | 4,262,931 | ||||||
| Food Retail–0.58% | ||||||||
Kroger Co. (The) | 107,558 | 4,510,982 | ||||||
Safeway Inc. | 128,095 | 4,797,158 | ||||||
Whole Foods Market, Inc. | 76,660 | 4,143,473 | ||||||
| 13,451,613 | ||||||||
| Footwear–0.19% | ||||||||
NIKE, Inc.–Class B | 56,200 | 4,400,460 | ||||||
| Gas Utilities–0.19% | ||||||||
AGL Resources Inc. | 94,181 | 4,430,274 | ||||||
| General Merchandise Stores–0.74% | ||||||||
Dollar General Corp.(b) | 70,994 | 4,252,541 | ||||||
Dollar Tree, Inc.(b) | 77,059 | 4,220,521 | ||||||
Family Dollar Stores, Inc. | 67,132 | 4,397,146 | ||||||
Target Corp. | 68,854 | 4,306,129 | ||||||
| 17,176,337 | ||||||||
| Gold–0.19% | ||||||||
Newmont Mining Corp. | 184,440 | 4,290,074 | ||||||
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 | |||||||
| Health Care Distributors–0.78% | ||||||||
AmerisourceBergen Corp. | 62,728 | $ | 4,256,095 | |||||
Cardinal Health, Inc. | 65,374 | 4,676,202 | ||||||
McKesson Corp. | 27,280 | 4,829,924 | ||||||
Patterson Cos. Inc. | 106,438 | 4,380,988 | ||||||
| 18,143,209 | ||||||||
| Health Care Equipment–2.86% | ||||||||
Abbott Laboratories | 117,959 | 4,692,409 | ||||||
Baxter International Inc. | 64,792 | 4,503,044 | ||||||
Becton, Dickinson and Co. | 40,717 | 4,691,413 | ||||||
Boston Scientific Corp.(b) | 376,977 | 4,938,399 | ||||||
C.R. Bard, Inc. | 32,138 | 4,633,014 | ||||||
CareFusion Corp.(b) | 110,920 | 4,495,588 | ||||||
Covidien PLC | 65,244 | 4,694,306 | ||||||
Edwards Lifesciences Corp.(b) | 69,885 | 4,875,178 | ||||||
Intuitive Surgical, Inc.(b) | 11,830 | 5,262,339 | ||||||
Medtronic, Inc. | 76,825 | 4,552,649 | ||||||
St. Jude Medical, Inc. | 74,043 | 4,984,575 | ||||||
Stryker Corp. | 60,002 | 4,814,560 | ||||||
Varian Medical Systems, Inc.(b) | 56,156 | 4,707,557 | ||||||
Zimmer Holdings, Inc. | 47,438 | 4,451,582 | ||||||
| 66,296,613 | ||||||||
| Health Care Facilities–0.20% | ||||||||
Tenet Healthcare Corp.(b) | 106,438 | 4,696,045 | ||||||
| Health Care Services–0.80% | ||||||||
DaVita HealthCare Partners Inc.(b) | 71,206 | 4,893,988 | ||||||
Express Scripts Holding Co.(b) | 64,451 | 4,853,805 | ||||||
Laboratory Corp. of America Holdings(b) | 48,173 | 4,506,103 | ||||||
Quest Diagnostics Inc. | 79,220 | 4,198,660 | ||||||
| 18,452,556 | ||||||||
| Health Care Supplies–0.18% | ||||||||
DENTSPLY International Inc. | 89,752 | 4,072,946 | ||||||
| Health Care Technology–0.21% | ||||||||
Cerner Corp.(b) | 79,264 | 4,864,432 | ||||||
| Home Entertainment Software–0.24% | ||||||||
Electronic Arts Inc.(b) | 193,238 | 5,524,674 | ||||||
| Home Furnishings–0.39% | ||||||||
Leggett & Platt, Inc. | 147,298 | 4,720,901 | ||||||
Mohawk Industries, Inc.(b) | 30,748 | 4,351,764 | ||||||
| 9,072,665 | ||||||||
| Home Improvement Retail–0.39% | ||||||||
Home Depot, Inc. (The) | 54,343 | 4,457,756 | ||||||
Lowe’s Cos., Inc. | 91,143 | 4,559,885 | ||||||
| 9,017,641 | ||||||||
| Homebuilding–0.69% | ||||||||
D.R. Horton, Inc. | 226,464 | 5,561,956 | ||||||
Lennar Corp.–Class A | 122,679 | 5,383,154 | ||||||
| Shares | Value | |||||||
| Homebuilding–(continued) | ||||||||
PulteGroup Inc. | 238,145 | $ | 4,998,664 | |||||
| 15,943,774 | ||||||||
| Home Furnishing Retail–0.16% | ||||||||
Bed Bath & Beyond Inc.(b) | 56,112 | 3,805,516 | ||||||
| Hotels, Resorts & Cruise Lines–0.82% | ||||||||
Carnival Corp. | 119,304 | 4,731,597 | ||||||
Marriott International Inc.–Class A | 92,199 | 4,999,952 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 57,866 | 4,771,630 | ||||||
Wyndham Worldwide Corp. | 60,826 | 4,432,999 | ||||||
| 18,936,178 | ||||||||
| Household Appliances–0.18% | ||||||||
Whirlpool Corp. | 28,845 | 4,171,852 | ||||||
| Household Products–0.73% | ||||||||
Clorox Co. (The) | 46,045 | 4,018,808 | ||||||
Colgate-Palmolive Co. | 67,111 | 4,216,584 | ||||||
Kimberly-Clark Corp. | 41,317 | 4,559,331 | ||||||
Procter & Gamble Co. (The) | 52,126 | 4,100,231 | ||||||
| 16,894,954 | ||||||||
| Housewares & Specialties–0.19% | ||||||||
Newell Rubbermaid Inc. | 139,589 | 4,482,203 | ||||||
| Human Resource & Employment Services–0.19% | ||||||||
Robert Half International, Inc. | 109,199 | 4,470,607 | ||||||
| Hypermarkets & Super Centers–0.36% | ||||||||
Costco Wholesale Corp. | 36,415 | 4,253,272 | ||||||
Wal-Mart Stores, Inc. | 54,991 | 4,107,828 | ||||||
| 8,361,100 | ||||||||
| Independent Power Producers & Energy Traders–0.38% | ||||||||
AES Corp. (The) | 313,872 | 4,284,353 | ||||||
NRG Energy, Inc. | 153,622 | 4,465,791 | ||||||
| 8,750,144 | ||||||||
| Industrial Conglomerates–0.57% | ||||||||
3M Co. | 33,961 | 4,575,566 | ||||||
Danaher Corp. | 58,015 | 4,437,567 | ||||||
General Electric Co. | 159,975 | 4,074,563 | ||||||
| 13,087,696 | ||||||||
| Industrial Gases–0.59% | ||||||||
Air Products and Chemicals, Inc. | 39,859 | 4,835,694 | ||||||
Airgas, Inc. | 40,377 | 4,352,640 | ||||||
Praxair, Inc. | 34,556 | 4,505,066 | ||||||
| 13,693,400 | ||||||||
| Industrial Machinery–2.00% | ||||||||
Dover Corp.(b) | 57,417 | 4,469,913 | ||||||
Flowserve Corp. | 59,338 | 4,818,839 | ||||||
Illinois Tool Works Inc. | 54,385 | 4,486,763 | ||||||
Ingersoll-Rand PLC | 75,567 | 4,620,166 | ||||||
Pall Corp. | 52,586 | 4,522,396 | ||||||
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 | |||||||
| Industrial Machinery–(continued) | ||||||||
Parker Hannifin Corp. | 36,090 | $ | 4,350,650 | |||||
Pentair Ltd. | 61,330 | 4,956,077 | ||||||
Snap-on Inc. | 41,369 | 4,640,361 | ||||||
Stanley Black & Decker Inc. | 53,351 | 4,430,267 | ||||||
Xylem, Inc. | 126,997 | 4,997,332 | ||||||
| 46,292,764 | ||||||||
| Industrial REIT’s–0.21% | ||||||||
Prologis, Inc. | 118,317 | 4,873,477 | ||||||
| Insurance Brokers–0.38% | ||||||||
Aon PLC (United Kingdom) | 52,612 | 4,503,587 | ||||||
Marsh & McLennan Cos., Inc. | 90,872 | 4,376,396 | ||||||
| 8,879,983 | ||||||||
| Integrated Oil & Gas–0.93% | ||||||||
Chevron Corp. | 35,810 | 4,129,967 | ||||||
Exxon Mobil Corp. | 45,049 | 4,336,867 | ||||||
Hess Corp. | 54,385 | 4,352,432 | ||||||
Murphy Oil Corp. | 68,144 | 4,045,709 | ||||||
Occidental Petroleum Corp. | 47,126 | 4,548,602 | ||||||
| 21,413,577 | ||||||||
| Integrated Telecommunication Services–0.94% | ||||||||
AT&T Inc. | 126,846 | 4,050,193 | ||||||
CenturyLink Inc. | 139,725 | 4,367,804 | ||||||
Frontier Communications Corp. | 967,065 | 4,719,277 | ||||||
Verizon Communications Inc. | 89,752 | 4,270,400 | ||||||
Windstream Holdings Inc. | 539,418 | 4,326,132 | ||||||
| 21,733,806 | ||||||||
| Internet Retail–1.07% | ||||||||
Amazon.com, Inc.(b) | 11,174 | 4,046,105 | ||||||
Expedia, Inc. | 68,448 | 5,375,221 | ||||||
Netflix Inc.(b) | 11,636 | 5,185,351 | ||||||
Priceline.com Inc.(b) | 3,665 | 4,943,499 | ||||||
TripAdvisor Inc.(b) | 52,761 | 5,288,763 | ||||||
| 24,838,939 | ||||||||
| Internet Software & Services–1.27% | ||||||||
Akamai Technologies, Inc.(b) | 93,913 | 5,740,902 | ||||||
eBay Inc.(b) | 83,292 | 4,895,071 | ||||||
Facebook Inc.–Class A(b) | 80,528 | 5,512,947 | ||||||
Google Inc.–Class A(b) | 4,047 | 4,919,735 | ||||||
VeriSign, Inc.(b) | 75,263 | 4,147,744 | ||||||
Yahoo! Inc.(b) | 108,073 | 4,179,183 | ||||||
| 29,395,582 | ||||||||
| Investment Banking & Brokerage–0.79% | ||||||||
Charles Schwab Corp. (The) | 173,204 | 4,591,638 | ||||||
E*TRADE Financial Corp.(b) | 231,719 | 5,206,726 | ||||||
Goldman Sachs Group, Inc. (The) | 25,498 | 4,244,142 | ||||||
Morgan Stanley | 138,107 | 4,253,696 | ||||||
| 18,296,202 | ||||||||
| Shares | Value | |||||||
| IT Consulting & Other Services–0.82% | ||||||||
Accenture PLC–Class A | 58,070 | $ | 4,840,135 | |||||
Cognizant Technology Solutions Corp.–Class A(b) | 45,902 | 4,776,562 | ||||||
International Business Machines Corp. | 24,847 | 4,600,919 | ||||||
Teradata Corp.(b) | 104,750 | 4,810,120 | ||||||
| 19,027,736 | ||||||||
| Leisure Products–0.35% | ||||||||
Hasbro, Inc. | 82,955 | 4,575,798 | ||||||
Mattel, Inc. | 94,638 | 3,530,944 | ||||||
| 8,106,742 | ||||||||
| Life & Health Insurance–1.28% | ||||||||
Aflac, Inc. | 65,096 | 4,171,352 | ||||||
Lincoln National Corp. | 84,290 | 4,225,458 | ||||||
MetLife, Inc. | 83,878 | 4,250,098 | ||||||
Principal Financial Group, Inc. | 89,304 | 4,049,936 | ||||||
Prudential Financial, Inc. | 48,686 | 4,117,862 | ||||||
Torchmark Corp. | 56,615 | 4,388,229 | ||||||
Unum Group | 126,622 | 4,403,913 | ||||||
| 29,606,848 | ||||||||
| Life Sciences Tools & Services–0.85% | ||||||||
Agilent Technologies, Inc. | 77,841 | 4,431,488 | ||||||
PerkinElmer, Inc. | 110,180 | 4,993,358 | ||||||
Thermo Fisher Scientific, Inc. | 42,369 | 5,276,635 | ||||||
Waters Corp.(b) | 44,712 | 4,980,917 | ||||||
| 19,682,398 | ||||||||
| Managed Health Care–0.99% | ||||||||
Aetna Inc. | 66,037 | 4,801,550 | ||||||
Cigna Corp. | 51,575 | 4,104,854 | ||||||
Humana Inc. | 42,975 | 4,832,969 | ||||||
UnitedHealth Group Inc. | 60,921 | 4,707,366 | ||||||
WellPoint, Inc. | 48,931 | 4,432,659 | ||||||
| 22,879,398 | ||||||||
| Metal & Glass Containers–0.39% | ||||||||
Ball Corp. | 86,029 | 4,779,771 | ||||||
Owens-Illinois, Inc.(b) | 126,473 | 4,289,964 | ||||||
| 9,069,735 | ||||||||
| Motorcycle Manufacturers–0.18% | ||||||||
Harley-Davidson, Inc. | 63,601 | 4,201,482 | ||||||
| Movies & Entertainment–0.79% | ||||||||
Time Warner Inc. | 65,503 | 4,397,216 | ||||||
Twenty-First Century Fox, Inc.–Class A | 130,390 | 4,373,281 | ||||||
Viacom Inc.–Class B | 52,878 | 4,638,987 | ||||||
Walt Disney Co. (The) | 61,674 | 4,983,876 | ||||||
| 18,393,360 | ||||||||
| Multi-Line Insurance–0.93% | ||||||||
American International Group, Inc. | 86,341 | 4,297,191 | ||||||
Assurant, Inc. | 66,829 | 4,385,987 | ||||||
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 | |||||||
| Multi-Line Insurance–(continued) | ||||||||
Genworth Financial Inc.–Class A(b) | 287,016 | $ | 4,460,229 | |||||
Hartford Financial Services Group, Inc. (The) | 122,609 | 4,314,611 | ||||||
Loews Corp. | 92,219 | 4,009,682 | ||||||
| 21,467,700 | ||||||||
| Multi-Sector Holdings–0.19% | ||||||||
Leucadia National Corp. | 157,858 | 4,410,552 | ||||||
| Multi-Utilities–2.82% | ||||||||
Ameren Corp. | 122,609 | 4,954,630 | ||||||
CenterPoint Energy, Inc. | 189,319 | 4,477,394 | ||||||
CMS Energy Corp. | 163,821 | 4,657,431 | ||||||
Consolidated Edison, Inc. | 79,031 | 4,429,688 | ||||||
Dominion Resources, Inc. | 67,533 | 4,686,790 | ||||||
DTE Energy Co. | 65,694 | 4,714,201 | ||||||
Integrys Energy Group, Inc. | 80,846 | 4,630,050 | ||||||
NiSource Inc. | 138,777 | 4,832,215 | ||||||
PG&E Corp. | 106,228 | 4,680,406 | ||||||
Public Service Enterprise Group Inc. | 134,769 | 4,940,632 | ||||||
SCANA Corp. | 92,259 | 4,566,821 | ||||||
Sempra Energy | 49,643 | 4,689,774 | ||||||
TECO Energy, Inc. | 255,429 | 4,286,099 | ||||||
Wisconsin Energy Corp. | 105,939 | 4,657,078 | ||||||
| 65,203,209 | ||||||||
| Office REIT’s–0.21% | ||||||||
Boston Properties, Inc. | 43,608 | 4,902,847 | ||||||
| Office Services & Supplies–0.21% | ||||||||
Pitney Bowes Inc. | 193,065 | 4,913,504 | ||||||
| Oil & Gas Drilling–1.33% | ||||||||
Diamond Offshore Drilling, Inc. | 76,414 | 3,614,382 | ||||||
Ensco PLC–Class A | 74,479 | 3,922,064 | ||||||
Helmerich & Payne, Inc. | 53,995 | 5,332,006 | ||||||
Nabors Industries Ltd. | 273,140 | 6,287,683 | ||||||
Noble Corp. PLC | 117,475 | 3,647,599 | ||||||
Rowan Cos. PLC–Class A(b) | 127,638 | 4,258,004 | ||||||
Transocean Ltd. | 89,044 | 3,775,465 | ||||||
| 30,837,203 | ||||||||
| Oil & Gas Equipment & Services–1.21% | ||||||||
Baker Hughes Inc. | 81,459 | 5,154,726 | ||||||
Cameron International Corp.(b) | 76,551 | 4,903,857 | ||||||
FMC Technologies, Inc.(b) | 83,276 | 4,183,786 | ||||||
Halliburton Co. | 86,935 | 4,955,295 | ||||||
National Oilwell Varco Inc. | 54,530 | 4,200,991 | ||||||
Schlumberger Ltd. | 49,712 | 4,623,216 | ||||||
| 28,021,871 | ||||||||
| Oil & Gas Exploration & Production–3.27% | ||||||||
Anadarko Petroleum Corp. | 54,836 | 4,614,998 | ||||||
Apache Corp. | 49,834 | 3,951,338 | ||||||
Cabot Oil & Gas Corp. | 118,874 | 4,160,590 | ||||||
Chesapeake Energy Corp. | 159,027 | 4,120,390 | ||||||
| Shares | Value | |||||||
| Oil & Gas Exploration & Production–(continued) | ||||||||
ConocoPhillips | 61,843 | $ | 4,112,559 | |||||
Denbury Resources Inc. | 268,696 | 4,395,867 | ||||||
Devon Energy Corp. | 72,505 | 4,670,772 | ||||||
EOG Resources, Inc. | 27,001 | 5,114,529 | ||||||
EQT Corp. | 49,014 | 5,013,642 | ||||||
Marathon Oil Corp. | 119,937 | 4,017,889 | ||||||
Newfield Exploration Co.(b) | 183,808 | 5,181,548 | ||||||
Noble Energy, Inc. | 62,518 | 4,298,738 | ||||||
Pioneer Natural Resources Co. | 23,887 | 4,805,587 | ||||||
QEP Resources Inc. | 139,907 | 4,047,509 | ||||||
Range Resources Corp. | 53,880 | 4,636,374 | ||||||
Southwestern Energy Co.(b) | 111,294 | 4,600,894 | ||||||
WPX Energy Inc.(b) | 225,749 | 3,977,697 | ||||||
| 75,720,921 | ||||||||
| Oil & Gas Refining & Marketing–0.74% | ||||||||
Marathon Petroleum Corp. | 50,389 | 4,232,676 | ||||||
Phillips 66 | 59,968 | 4,489,205 | ||||||
Tesoro Corp. | 76,265 | 3,890,278 | ||||||
Valero Energy Corp. | 93,079 | 4,465,930 | ||||||
| 17,078,089 | ||||||||
| Oil & Gas Storage & Transportation–0.83% | ||||||||
Kinder Morgan Inc. | 130,787 | 4,165,566 | ||||||
ONEOK, Inc. | 83,624 | 4,945,523 | ||||||
Spectra Energy Corp. | 129,252 | 4,818,515 | ||||||
Williams Cos., Inc. (The) | 125,365 | 5,177,574 | ||||||
| 19,107,178 | ||||||||
| Other Diversified Financial Services–0.57% | ||||||||
Bank of America Corp. | 282,856 | 4,675,610 | ||||||
Citigroup Inc. | 84,240 | 4,096,591 | ||||||
JPMorgan Chase & Co. | 76,442 | 4,343,434 | ||||||
| 13,115,635 | ||||||||
| Packaged Foods & Meats–2.29% | ||||||||
Campbell Soup Co. | 105,367 | 4,563,445 | ||||||
ConAgra Foods, Inc. | 135,578 | 3,850,415 | ||||||
General Mills, Inc. | 86,497 | 4,327,445 | ||||||
Hershey Co. (The) | 45,273 | 4,790,789 | ||||||
Hormel Foods Corp. | 97,187 | 4,611,523 | ||||||
JM Smucker Co. (The) | 42,761 | 4,276,528 | ||||||
Kellogg Co. | 70,971 | 4,307,230 | ||||||
Kraft Foods Group, Inc. | 81,614 | 4,510,806 | ||||||
McCormick & Co., Inc. | 63,460 | 4,213,744 | ||||||
Mead Johnson Nutrition Co. | 51,631 | 4,210,508 | ||||||
Mondelez International Inc.–Class A | 126,846 | 4,316,569 | ||||||
Tyson Foods, Inc.–Class A | 129,681 | 5,115,915 | ||||||
| 53,094,917 | ||||||||
| Paper Packaging–0.77% | ||||||||
Avery Dennison Corp. | 88,239 | 4,396,067 | ||||||
Bemis Co., Inc. | 109,842 | 4,314,594 | ||||||
MeadWestvaco Corp. | 122,120 | 4,570,952 | ||||||
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 | |||||||
| Paper Packaging–(continued) | ||||||||
Sealed Air Corp. | 134,812 | $ | 4,589,000 | |||||
| 17,870,613 | ||||||||
| Paper Products–0.19% | ||||||||
International Paper Co. | 89,771 | 4,388,904 | ||||||
| Personal Products–0.35% | ||||||||
Avon Products, Inc. | 255,277 | 3,949,135 | ||||||
Estee Lauder Cos. Inc. (The)–Class A | 59,109 | 4,069,064 | ||||||
| 8,018,199 | ||||||||
| Pharmaceuticals–2.86% | ||||||||
AbbVie Inc. | 81,988 | 4,174,009 | ||||||
Actavis PLC(b) | 26,865 | 5,932,329 | ||||||
Allergan, Inc. | 44,462 | 5,646,674 | ||||||
Bristol-Myers Squibb Co. | 84,639 | 4,551,039 | ||||||
Eli Lilly and Co. | 86,935 | 5,182,195 | ||||||
Forest Laboratories, Inc.(b) | 77,420 | 7,553,869 | ||||||
Hospira, Inc.(b) | 107,666 | 4,659,785 | ||||||
Johnson & Johnson | 47,002 | 4,329,824 | ||||||
Merck & Co., Inc. | 88,750 | 5,057,863 | ||||||
Mylan Inc.(b) | 102,770 | 5,710,929 | ||||||
Perrigo Co. PLC | 28,281 | 4,650,528 | ||||||
Pfizer Inc. | 141,942 | 4,557,758 | ||||||
Zoetis Inc. | 135,964 | 4,217,603 | ||||||
| 66,224,405 | ||||||||
| Property & Casualty Insurance–1.45% | ||||||||
ACE Ltd. | 43,257 | 4,233,563 | ||||||
Allstate Corp. (The) | 81,305 | 4,411,609 | ||||||
Berkshire Hathaway Inc.–Class B(b) | 37,644 | 4,358,422 | ||||||
Chubb Corp. (The) | 46,178 | 4,039,651 | ||||||
Cincinnati Financial Corp. | 83,829 | 3,929,904 | ||||||
Progressive Corp. (The) | 163,633 | 4,007,372 | ||||||
Travelers Cos., Inc. (The) | 49,643 | 4,162,069 | ||||||
XL Group PLC | 144,814 | 4,402,346 | ||||||
| 33,544,936 | ||||||||
| Publishing–0.40% | ||||||||
Gannett Co., Inc. | 163,946 | 4,877,393 | ||||||
News Corp.–Class A(b) | 243,135 | 4,456,665 | ||||||
| 9,334,058 | ||||||||
| Railroads–0.74% | ||||||||
CSX Corp. | 155,740 | 4,315,556 | ||||||
Kansas City Southern | 36,560 | 3,433,715 | ||||||
Norfolk Southern Corp. | 48,808 | 4,485,943 | ||||||
Union Pacific Corp. | 26,710 | 4,817,950 | ||||||
| 17,053,164 | ||||||||
| Real Estate Services–0.21% | ||||||||
CBRE Group, Inc.–Class A(b) | 173,344 | 4,844,965 | ||||||
| Regional Banks–1.78% | ||||||||
BB&T Corp. | 121,498 | 4,592,624 | ||||||
| Shares | Value | |||||||
| Regional Banks–(continued) | ||||||||
Fifth Third Bancorp | 213,726 | $ | 4,636,786 | |||||
Huntington Bancshares Inc. | 458,735 | 4,371,745 | ||||||
KeyCorp | 329,276 | 4,336,565 | ||||||
M&T Bank Corp. | 37,746 | 4,400,806 | ||||||
PNC Financial Services Group, Inc. (The) | 56,960 | 4,658,189 | ||||||
Regions Financial Corp. | 450,552 | 4,793,873 | ||||||
SunTrust Banks, Inc. | 122,714 | 4,623,863 | ||||||
Zions Bancorp. | 150,816 | 4,705,459 | ||||||
| 41,119,910 | ||||||||
| Research & Consulting Services–0.55% | ||||||||
Dun & Bradstreet Corp. (The) | 37,274 | 3,697,954 | ||||||
Equifax Inc. | 64,316 | 4,505,979 | ||||||
Nielsen Holdings N.V. | 94,119 | 4,455,593 | ||||||
| 12,659,526 | ||||||||
| Residential REIT’s–0.62% | ||||||||
Apartment Investment & Management Co.–Class A | 167,267 | 4,999,610 | ||||||
AvalonBay Communities, Inc. | 36,008 | 4,643,952 | ||||||
Equity Residential | 82,240 | 4,808,573 | ||||||
| 14,452,135 | ||||||||
| Restaurants–0.94% | ||||||||
Chipotle Mexican Grill, Inc.(b) | 8,372 | 4,731,938 | ||||||
Darden Restaurants, Inc. | 83,163 | 4,246,303 | ||||||
McDonald’s Corp. | 45,464 | 4,325,900 | ||||||
Starbucks Corp. | 56,237 | 3,990,577 | ||||||
Yum! Brands, Inc. | 59,793 | 4,429,465 | ||||||
| 21,724,183 | ||||||||
| Retail REIT’s–0.79% | ||||||||
General Growth Properties, Inc. | 210,478 | 4,634,725 | ||||||
Kimco Realty Corp. | 214,473 | 4,774,169 | ||||||
Macerich Co. (The) | 73,385 | 4,412,640 | ||||||
Simon Property Group, Inc. | 28,316 | 4,567,088 | ||||||
| 18,388,622 | ||||||||
| Security & Alarm Services–0.36% | ||||||||
ADT Corp. (The) | 110,663 | 3,398,461 | ||||||
Tyco International Ltd. | 114,959 | 4,848,970 | ||||||
| 8,247,431 | ||||||||
| Semiconductor Equipment–0.60% | ||||||||
Applied Materials, Inc. | 257,111 | 4,874,825 | ||||||
KLA-Tencor Corp. | 70,182 | 4,572,357 | ||||||
Lam Research Corp.(b) | 84,075 | 4,349,200 | ||||||
| 13,796,382 | ||||||||
| Semiconductors–2.50% | ||||||||
Altera Corp. | 139,272 | 5,056,966 | ||||||
Analog Devices, Inc. | 88,695 | 4,507,480 | ||||||
Broadcom Corp.–Class A | 153,293 | 4,555,868 | ||||||
First Solar, Inc.(b) | 79,824 | 4,555,556 | ||||||
Intel Corp.(d) | 176,770 | 4,376,825 | ||||||
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 | |||||||
| Semiconductors–(continued) | ||||||||
Linear Technology Corp. | 99,048 | $ | 4,639,408 | |||||
LSI Corp. | 542,828 | 6,019,963 | ||||||
Microchip Technology Inc.(b) | 103,388 | 4,709,324 | ||||||
Micron Technology, Inc.(b) | 186,038 | 4,500,259 | ||||||
NVIDIA Corp. | 285,869 | 5,254,272 | ||||||
Texas Instruments Inc. | 102,353 | 4,601,791 | ||||||
Xilinx, Inc. | 99,116 | 5,173,855 | ||||||
| 57,951,567 | ||||||||
| Soft Drinks–1.01% | ||||||||
Coca-Cola Co. (The) | 109,450 | 4,180,990 | ||||||
Coca-Cola Enterprises, Inc. | 105,601 | 4,971,695 | ||||||
Dr Pepper Snapple Group, Inc. | 90,242 | 4,702,510 | ||||||
Monster Beverage Corp.(b) | 69,862 | 5,169,788 | ||||||
PepsiCo, Inc. | 53,054 | 4,248,034 | ||||||
| 23,273,017 | ||||||||
| Specialized Consumer Services–0.21% | ||||||||
H&R Block, Inc. | 153,129 | 4,845,002 | ||||||
| Specialized Finance–0.94% | ||||||||
CME Group Inc.–Class A | 52,676 | 3,888,542 | ||||||
IntercontinentalExchange Group, Inc. | 19,477 | 4,067,577 | ||||||
McGraw Hill Financial, Inc. | 59,469 | 4,737,300 | ||||||
Moody’s Corp. | 59,776 | 4,722,304 | ||||||
NASDAQ OMX Group, Inc. (The) | 111,381 | 4,275,917 | ||||||
| 21,691,640 | ||||||||
| Specialized REIT’s–1.58% | ||||||||
American Tower Corp. | 55,936 | 4,557,106 | ||||||
HCP, Inc. | 120,038 | 4,653,873 | ||||||
Health Care REIT, Inc. | 79,646 | 4,678,406 | ||||||
Host Hotels & Resorts Inc. | 237,617 | 4,673,927 | ||||||
Plum Creek Timber Co., Inc. | 96,618 | 4,182,593 | ||||||
Public Storage | 28,712 | 4,852,328 | ||||||
Ventas, Inc. | 76,701 | 4,788,444 | ||||||
Weyerhaeuser Co. | 143,077 | 4,222,202 | ||||||
| 36,608,879 | ||||||||
| Specialty Chemicals–1.01% | ||||||||
Ecolab Inc. | 41,857 | 4,510,092 | ||||||
International Flavors & Fragrances Inc. | 50,693 | 4,754,496 | ||||||
PPG Industries, Inc. | 23,474 | 4,643,627 | ||||||
Sherwin-Williams Co. (The) | 24,125 | 4,836,580 | ||||||
Sigma-Aldrich Corp. | 48,006 | 4,532,246 | ||||||
| 23,277,041 | ||||||||
| Specialty Stores–0.71% | ||||||||
PetSmart, Inc. | 59,338 | 3,979,206 | ||||||
Staples, Inc. | 278,273 | 3,781,730 | ||||||
Tiffany & Co. | 48,076 | 4,483,087 | ||||||
Tractor Supply Co. | 59,988 | 4,232,754 | ||||||
| 16,476,777 | ||||||||
| Shares | Value | |||||||
| Steel–0.68% | ||||||||
Allegheny Technologies, Inc. | 131,027 | $ | 4,164,038 | |||||
Cliffs Natural Resources Inc. | 182,635 | 3,658,179 | ||||||
Nucor Corp. | 83,228 | 4,181,375 | ||||||
United States Steel Corp. | 157,222 | 3,807,917 | ||||||
| 15,811,509 | ||||||||
| Systems Software–1.02% | ||||||||
CA, Inc. | 132,769 | 4,447,762 | ||||||
Microsoft Corp. | 117,027 | 4,483,304 | ||||||
Oracle Corp. | 129,213 | 5,053,520 | ||||||
Red Hat, Inc.(b) | 91,805 | 5,415,577 | ||||||
Symantec Corp. | 194,200 | 4,171,416 | ||||||
| 23,571,579 | ||||||||
| Thrifts & Mortgage Finance–0.37% | ||||||||
Hudson City Bancorp, Inc. | 468,751 | 4,453,134 | ||||||
People’s United Financial Inc. | 295,103 | 4,181,610 | ||||||
| 8,634,744 | ||||||||
| Tires & Rubber–0.22% | ||||||||
Goodyear Tire & Rubber Co. (The) | 189,821 | 5,100,490 | ||||||
| Tobacco–0.73% | ||||||||
Altria Group, Inc. | 115,734 | 4,196,515 | ||||||
Lorillard, Inc. | 85,635 | 4,201,253 | ||||||
Philip Morris International Inc. | 50,371 | 4,075,518 | ||||||
Reynolds American Inc. | 87,699 | 4,457,740 | ||||||
| 16,931,026 | ||||||||
| Trading Companies & Distributors–0.38% | ||||||||
Fastenal Co. | 92,857 | 4,381,922 | ||||||
W.W. Grainger, Inc. | 17,068 | 4,352,681 | ||||||
| 8,734,603 | ||||||||
| Trucking–0.21% | ||||||||
Ryder System, Inc. | 63,432 | 4,777,698 | ||||||
| Wireless Telecommunication Services–0.19% | ||||||||
Crown Castle International Corp. | 58,093 | 4,409,259 | ||||||
Total Common Stocks & Other Equity Interests |
| 2,284,798,879 | ||||||
Money Market Funds–0.85% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 9,866,258 | 9,866,258 | ||||||
Premier Portfolio–Institutional | 9,866,258 | 9,866,258 | ||||||
Total Money Market Funds | 19,732,516 | |||||||
TOTAL INVESTMENTS–99.57% |
| 2,304,531,395 | ||||||
OTHER ASSETS LESS LIABILITIES–0.43% |
| 9,866,997 | ||||||
NET ASSETS–100.00% |
| $ | 2,314,398,392 | |||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Equally-Weighted S&P 500 Fund
Investment Abbreviations:
| REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
| (a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
| (b) | Non-income producing security. |
| (c) | The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. See Note 5. |
| (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. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2014
Consumer Discretionary | 16.8 | % | ||
Financials | 15.3 | |||
Information Technology | 13.1 | |||
Industrials | 12.8 | |||
Health Care | 11.3 | |||
Energy | 8.5 | |||
Consumer Staples | 7.7 | |||
Utilities | 6.2 | |||
Materials | 5.9 | |||
Telecommunication Services | 1.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 1.3 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Equally-Weighted S&P 500 Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $1,275,235,499) | $ | 2,280,539,882 | ||
Investments in affiliates (Cost $22,372,945) | 23,991,513 | |||
Total investments, at value (Cost $1,297,608,444) | 2,304,531,395 | |||
Receivable for: | ||||
Investments sold | 770,469 | |||
Variation margin | 27,495 | |||
Fund shares sold | 11,365,109 | |||
Dividends | 3,916,724 | |||
Investment for trustee deferred compensation and retirement plans | 112,896 | |||
Other assets | 56,569 | |||
Total assets | 2,320,780,657 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 738,751 | |||
Fund shares reacquired | 3,816,744 | |||
Accrued fees to affiliates | 1,286,249 | |||
Accrued trustees’ and officers’ fees and benefits | 5,368 | |||
Accrued other operating expenses | 334,901 | |||
Trustee deferred compensation and retirement plans | 200,252 | |||
Total liabilities | 6,382,265 | |||
Net assets applicable to shares outstanding | $ | 2,314,398,392 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 1,319,128,821 | ||
Undistributed net investment income | 3,670,365 | |||
Undistributed net realized gain (loss) | (15,450,692 | ) | ||
Net unrealized appreciation | 1,007,049,898 | |||
| $ | 2,314,398,392 | |||
Net Assets: |
| |||
Class A | $ | 1,307,126,051 | ||
Class B | $ | 18,920,273 | ||
Class C | $ | 244,128,155 | ||
Class R | $ | 48,662,823 | ||
Class Y | $ | 695,544,227 | ||
Class R6 | $ | 16,863 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 29,049,994 | |||
Class B | 420,546 | |||
Class C | 5,607,902 | |||
Class R | 1,084,300 | |||
Class Y | 15,347,367 | |||
Class R6 | 372 | |||
Class A: | ||||
Net asset value per share | $ | 45.00 | ||
Maximum offering price per share | ||||
(Net asset value of $45.00 ¸ 94.50%) | $ | 47.62 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 44.99 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 43.53 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 44.88 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 45.32 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 45.33 | ||
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, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $5,843) | $ | 18,932,746 | ||
Dividends from affiliates (includes securities lending income of $35,307) | 96,195 | |||
Total investment income | 19,028,941 | |||
Expenses: | ||||
Advisory fees | 1,190,264 | |||
Administrative services fees | 215,729 | |||
Custodian fees | 62,658 | |||
Distribution fees: | ||||
Class A | 1,436,909 | |||
Class B | 107,542 | |||
Class C | 953,130 | |||
Class R | 95,057 | |||
Transfer agent fees — A, B, C, R and Y | 1,036,722 | |||
Transfer agent fees — R6 | 7 | |||
Trustees’ and officers’ fees and benefits | 60,443 | |||
Other | 341,790 | |||
Total expenses | 5,500,251 | |||
Less: Fees waived and expense offset arrangement(s) | (18,240 | ) | ||
Net expenses | 5,482,011 | |||
Net investment income | 13,546,930 | |||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 28,135,905 | |||
Futures contracts | 2,502,522 | |||
| 30,638,427 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 252,412,863 | |||
Futures contracts | 309,738 | |||
| 252,722,601 | ||||
Net realized and unrealized gain | 283,361,028 | |||
Net increase in net assets resulting from operations | $ | 296,907,958 | ||
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, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 13,546,930 | $ | 20,543,924 | ||||
Net realized gain | 30,638,427 | 41,189,706 | ||||||
Change in net unrealized appreciation | 252,722,601 | 232,941,418 | ||||||
Net increase in net assets resulting from operations | 296,907,958 | 294,675,048 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (12,875,054 | ) | (11,160,240 | ) | ||||
Class B | (126,859 | ) | (254,363 | ) | ||||
Class C | (1,210,824 | ) | (631,218 | ) | ||||
Class R | (354,344 | ) | (152,295 | ) | ||||
Class Y | (7,443,262 | ) | (5,410,532 | ) | ||||
Class R6 | (165 | ) | (170 | ) | ||||
Total distributions from net investment income | (22,010,508 | ) | (17,608,818 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (29,164,517 | ) | (18,393,200 | ) | ||||
Class B | (532,180 | ) | (869,049 | ) | ||||
Class C | (5,079,486 | ) | (2,156,598 | ) | ||||
Class R | (946,483 | ) | (301,636 | ) | ||||
Class Y | (14,325,712 | ) | (7,685,801 | ) | ||||
Class R6 | (312 | ) | (240 | ) | ||||
Total distributions from net realized gains | (50,048,690 | ) | (29,406,524 | ) | ||||
Share transactions–net: | ||||||||
Class A | 175,986,211 | 115,974,489 | ||||||
Class B | (6,590,255 | ) | (25,161,061 | ) | ||||
Class C | 81,273,701 | 47,119,734 | ||||||
Class R | 15,108,249 | 17,285,208 | ||||||
Class Y | 147,848,235 | 103,991,172 | ||||||
Class R6 | 3,808 | 9,805 | ||||||
Net increase in net assets resulting from share transactions | 413,629,949 | 259,219,347 | ||||||
Net increase in net assets | 638,478,709 | 506,879,053 | ||||||
Net assets: | ||||||||
Beginning of period | 1,675,919,683 | 1,169,040,630 | ||||||
End of period (includes undistributed net investment income of $3,670,365 and $12,133,943, respectively) | $ | 2,314,398,392 | $ | 1,675,919,683 | ||||
Notes to Financial Statements
February 28, 2014
(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 twelve 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 through growth of capital and current income.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Class R6 shares are sold at net asset value. Effective
16 Invesco Equally-Weighted S&P 500 Fund
November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and
17 Invesco Equally-Weighted S&P 500 Fund
are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R6 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
| J. | 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 |
18 Invesco Equally-Weighted S&P 500 Fund
| 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. |
| 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. This practice does not apply to securities pledged as collateral for securities lending transactions. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||
First $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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, 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, Class Y and Class R6 shares to 2.00%, 2.75%, 2.75%, 2.25%, 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 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, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $17,790.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), 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, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $156,363 in front-end sales commissions from the sale of Class A shares and $912, $2,428 and $9,667 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
19 Invesco Equally-Weighted S&P 500 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, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 2,304,531,395 | $ | — | $ | — | $ | 2,304,531,395 | ||||||||
Futures* | 126,947 | — | — | 126,947 | ||||||||||||
Total Investments | $ | 2,304,658,342 | $ | — | $ | — | $ | 2,304,658,342 | ||||||||
| * | Unrealized appreciation. |
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of February 28, 2014:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk | ||||||||
Futures contracts(a) | $ | 126,947 | $ | — | ||||
| (a) | Includes cumulative appreciation of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
Effect of Derivative Investments for the six months ended February 28, 2014
The table below summarizes the gains on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain on Statement of Operations | ||||
| Futures* | ||||
Realized Gain | ||||
Equity risk | $ | 2,502,522 | ||
Change in Unrealized Appreciation | ||||
Equity risk | 309,738 | |||
Total | $ | 2,812,260 | ||
| * | The average notional value of futures contracts outstanding during the period was $21,875,496. |
Open Futures Contracts at Period-End | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
E-Mini S&P 500 | Long | 254 | March-2014 | $ | 23,591,520 | $ | 126,947 | |||||||||||||
20 Invesco Equally-Weighted S&P 500 Fund
Offsetting Assets and Liabilities
Effective with the beginning of the Fund’s fiscal year, the Fund has adopted Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. This update is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Fund’s counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of February 28, 2014.
Assets: | ||||||||||||||||||||||||
| Gross amounts presented in Statement of Assets & Liabilities* | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in the Statement of Assets and Liabilities | Collateral Received | Net Amount | ||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Goldman Sachs & Co. | $ | 126,947 | $ | — | $ | 126,947 | $ | — | $ | — | $ | 126,947 | ||||||||||||
| * | Includes cumulative appreciation of futures contracts. |
NOTE 5—Investments in Affiliates
The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. The following is a summary of the transactions in, and earnings from, investments in Invesco Ltd. for the six months ended February 28, 2014.
| Value 08/31/13 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain | Value 02/28/14 | Dividend Income | ||||||||||||||||||||||
Invesco Ltd. | $ | 2,960,373 | $ | 1,090,866 | $ | (224,077 | ) | $ | 417,667 | $ | 14,168 | $ | 4,258,997 | $ | 54,338 | |||||||||||||
NOTE 6—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $450.
NOTE 7—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2013.
21 Invesco Equally-Weighted S&P 500 Fund
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, 2014 was $524,378,300 and $176,314,478, 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 | $ | 984,634,144 | ||
Aggregate unrealized (depreciation) of investment securities | (9,873,302 | ) | ||
Net unrealized appreciation of investment securities | $ | 974,760,842 | ||
Cost of investments for tax purposes is $1,329,770,553
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 5,262,250 | $ | 226,446,006 | 6,938,918 | $ | 263,020,016 | ||||||||||
Class B | 22,332 | 968,702 | 65,896 | 2,465,090 | ||||||||||||
Class C | 2,188,919 | 91,630,644 | 1,723,158 | 63,962,776 | ||||||||||||
Class R | 456,494 | 19,706,234 | 629,268 | 23,479,568 | ||||||||||||
Class Y | 4,339,201 | 188,620,815 | 4,878,656 | 185,994,372 | ||||||||||||
Class R6(b) | 86 | 3,808 | 286 | 9,805 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 886,321 | 37,385,026 | 788,153 | 26,190,326 | ||||||||||||
Class B | 14,292 | 603,698 | 30,790 | 1,027,145 | ||||||||||||
Class C | 141,126 | 5,767,809 | 75,170 | 2,568,785 | ||||||||||||
Class R | 30,735 | 1,293,625 | 13,660 | 453,388 | ||||||||||||
Class Y | 453,253 | 19,245,106 | 353,324 | 11,808,079 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 156,819 | 6,779,100 | 639,095 | 23,292,837 | ||||||||||||
Class B | (156,946 | ) | (6,779,100 | ) | (638,871 | ) | (23,292,837 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (2,205,874 | ) | (94,623,921 | ) | (5,290,801 | ) | (196,528,690 | ) | ||||||||
Class B | (32,146 | ) | (1,383,555 | ) | (148,389 | ) | (5,360,459 | ) | ||||||||
Class C | (385,979 | ) | (16,124,752 | ) | (537,590 | ) | (19,411,827 | ) | ||||||||
Class R | (136,843 | ) | (5,891,610 | ) | (176,971 | ) | (6,647,748 | ) | ||||||||
Class Y | (1,381,694 | ) | (60,017,686 | ) | (2,498,828 | ) | (93,811,279 | ) | ||||||||
Net increase in share activity | 9,652,346 | $ | 413,629,949 | 6,844,924 | $ | 259,219,347 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 47% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
22 Invesco Equally-Weighted S&P 500 Fund
NOTE 12—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 40.07 | $ | 0.30 | $ | 6.20 | $ | 6.50 | $ | (0.48 | ) | $ | (1.09 | ) | $ | (1.57 | ) | $ | 45.00 | 16.48 | % | $ | 1,307,126 | 0.54 | %(d) | 0.54 | %(d) | 1.38 | %(d) | 9 | % | |||||||||||||||||||||||||
Year ended 08/31/13 | 33.40 | 0.55 | 7.47 | 8.02 | (0.51 | ) | (0.84 | ) | (1.35 | ) | 40.07 | 24.83 | 999,730 | 0.57 | 0.57 | 1.48 | 18 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 29.89 | 0.42 | 3.61 | 4.03 | (0.52 | ) | — | (0.52 | ) | 33.40 | 13.66 | 730,648 | 0.60 | 0.60 | 1.34 | 27 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 25.26 | 0.39 | 4.65 | 5.04 | (0.41 | ) | — | (0.41 | ) | 29.89 | 19.91 | 639,478 | 0.56 | 0.56 | 1.26 | 22 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.74 | 0.08 | 0.44 | 0.52 | — | — | — | 25.26 | 2.10 | 556,910 | 0.65 | (e) | 0.65 | (e) | 1.81 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
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 | 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 | (f) | 0.75 | (f) | 1.62 | (f) | 39 | |||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 40.01 | 0.13 | 6.20 | 6.33 | (0.26 | ) | (1.09 | ) | (1.35 | ) | 44.99 | 16.03 | 18,920 | 1.29 | (d) | 1.29 | (d) | 0.63 | (d) | 9 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 33.34 | 0.27 | 7.49 | 7.76 | (0.25 | ) | (0.84 | ) | (1.09 | ) | 40.01 | 23.90 | 22,925 | 1.32 | 1.32 | 0.73 | 18 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 29.70 | 0.18 | 3.61 | 3.79 | (0.15 | ) | — | (0.15 | ) | 33.34 | 12.82 | 42,131 | 1.35 | 1.35 | 0.59 | 27 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 25.05 | 0.16 | 4.60 | 4.76 | (0.11 | ) | — | (0.11 | ) | 29.70 | 18.98 | 77,702 | 1.31 | 1.31 | 0.51 | 22 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.56 | 0.05 | 0.44 | 0.49 | — | — | — | 25.05 | 2.00 | 110,367 | 1.40 | (e) | 1.40 | (e) | 1.06 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
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 | 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 | (f) | 1.50 | (f) | 0.87 | (f) | 39 | |||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 38.75 | 0.13 | 6.00 | 6.13 | (0.26 | ) | (1.09 | ) | (1.35 | ) | 43.53 | 16.04 | 244,128 | 1.29 | (d) | 1.29 | (d) | 0.63 | (d) | 9 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 32.33 | 0.26 | 7.24 | 7.50 | (0.24 | ) | (0.84 | ) | (1.08 | ) | 38.75 | 23.88 | 141,986 | 1.32 | 1.32 | 0.73 | 18 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 28.81 | 0.18 | 3.49 | 3.67 | (0.15 | ) | — | (0.15 | ) | 32.33 | 12.80 | 77,691 | 1.35 | 1.35 | 0.59 | 27 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 24.29 | 0.16 | 4.47 | 4.63 | (0.11 | ) | — | (0.11 | ) | 28.81 | 19.04 | 67,788 | 1.31 | 1.31 | 0.51 | 22 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 23.82 | 0.04 | 0.43 | 0.47 | — | — | — | 24.29 | 1.97 | 55,797 | 1.40 | (e) | 1.40 | (e) | 1.06 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
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 | 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 | (f) | 1.50 | (f) | 0.87 | (f) | 39 | |||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 39.95 | 0.24 | 6.19 | 6.43 | (0.41 | ) | (1.09 | ) | (1.50 | ) | 44.88 | 16.33 | 48,663 | 0.79 | (d) | 0.79 | (d) | 1.13 | (d) | 9 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 33.31 | 0.46 | 7.44 | 7.90 | (0.42 | ) | (0.84 | ) | (1.26 | ) | 39.95 | 24.48 | 29,320 | 0.82 | 0.82 | 1.23 | 18 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 29.77 | 0.35 | 3.59 | 3.94 | (0.40 | ) | — | (0.40 | ) | 33.31 | 13.36 | 8,924 | 0.85 | 0.85 | 1.09 | 27 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 25.14 | 0.31 | 4.63 | 4.94 | (0.31 | ) | — | (0.31 | ) | 29.77 | 19.62 | 1,176 | 0.81 | 0.81 | 1.01 | 22 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.63 | 0.07 | 0.44 | 0.51 | — | — | — | 25.14 | 2.07 | 205 | 0.90 | (e) | 0.90 | (e) | 1.56 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 | 20.10 | 0.23 | 4.56 | 4.79 | (0.26 | ) | — | (0.26 | ) | 24.63 | 23.78 | 208 | 0.89 | 0.89 | 0.92 | 24 | ||||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 | 33.36 | 0.30 | (9.35 | ) | (9.05 | ) | (0.44 | ) | (3.77 | ) | (4.21 | ) | 20.10 | (24.78 | ) | 73 | 1.00 | (f) | 1.00 | (f) | 1.37 | (f) | 39 | |||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 40.38 | 0.35 | 6.25 | 6.60 | (0.57 | ) | (1.09 | ) | (1.66 | ) | 45.32 | 16.61 | 695,544 | 0.29 | (d) | 0.29 | (d) | 1.63 | (d) | 9 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 33.64 | 0.65 | 7.52 | 8.17 | (0.59 | ) | (0.84 | ) | (1.43 | ) | 40.38 | 25.16 | 481,948 | 0.32 | 0.32 | 1.73 | 18 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 30.13 | 0.50 | 3.63 | 4.13 | (0.62 | ) | — | (0.62 | ) | 33.64 | 13.94 | 309,645 | 0.35 | 0.35 | 1.59 | 27 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 25.47 | 0.47 | 4.68 | 5.15 | (0.49 | ) | — | (0.49 | ) | 30.13 | 20.19 | 178,056 | 0.31 | 0.31 | 1.51 | 22 | ||||||||||||||||||||||||||||||||||||||||
Two months ended 08/31/10 | 24.94 | 0.09 | 0.44 | 0.53 | — | — | — | 25.47 | 2.12 | 155,551 | 0.40 | (e) | 0.40 | (e) | 2.06 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
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 | 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 | (f) | 0.50 | (f) | 1.87 | (f) | 39 | |||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 40.39 | 0.35 | 6.26 | 6.61 | (0.58 | ) | (1.09 | ) | (1.67 | ) | 45.33 | 16.63 | 17 | 0.29 | (d) | 0.29 | (d) | 1.63 | (d) | 9 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(g) | 34.93 | 0.62 | 6.27 | 6.89 | (0.59 | ) | (0.84 | ) | (1.43 | ) | 40.39 | 20.58 | 12 | 0.27 | (e) | 0.27 | (e) | 1.78 | (e) | 18 | ||||||||||||||||||||||||||||||||||||
| (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 are 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 $1,166,028, $21,687, $192,206, $38,338, $581,985 and $13 for Class A, Class B, Class C, Class R, Class Y and Class R6 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 less than 0.005%. |
| (g) | Commencement date of September 24, 2012. |
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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,164.80 | $ | 2.90 | $ | 1,022.12 | $ | 2.71 | 0.54 | % | ||||||||||||
B | 1,000.00 | 1,160.30 | 6.91 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||
C | 1,000.00 | 1,160.40 | 6.91 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||
R | 1,000.00 | 1,163.30 | 4.24 | 1,020.88 | 3.96 | 0.79 | ||||||||||||||||||
Y | 1,000.00 | 1,166.10 | 1.56 | 1,023.36 | 1.45 | 0.29 | ||||||||||||||||||
R6 | 1,000.00 | 1,166.30 | 1.56 | 1,023.36 | 1.45 | 0.29 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
24 Invesco Equally-Weighted S&P 500 Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.
| Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
SEC file numbers: 811-09913 and 333-36074 | MS-EWSP-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco Floating Rate Fund
Nasdaq:
A: AFRAX n C: AFRCX n R: AFRRX n Y: AFRYX n R5: AFRIX n R6: AFRFX
| 2 | Fund Performance |
| 4 | Letters to Shareholders |
| 5 | Schedule of Investments |
| 24 | Financial Statements |
| 27 | Notes to Financial Statements |
| 34 | Financial Highlights |
| 35 | 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 2.54 | % | ||
Class C Shares | 2.42 | |||
Class R Shares | 2.55 | |||
Class Y Shares | 2.80 | |||
Class R5 Shares | 2.81 | |||
Class R6 Shares | 2.84 | |||
Barclays U.S. Aggregate Indexq (Broad Market Index) | 2.84 | |||
CS Leveraged Loan Indexn (Style-Specific Index) | 3.07 | |||
Lipper Loan Participation Funds Classification Average¿ (Peer Group) | 2.78 |
Source(s): qInvesco, Barclays via Factset Research Systems Inc.; nInvesco, Bloomberg L.P.; ¿Lipper Inc.
The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market.
The CS Leveraged Loan Index represents tradable, senior-secured, US dollar-denominated non-investment-grade loans.
The Lipper Loan Participation Funds Classification Average represents an average of all of the funds in the Lipper Loan Participation Funds classification.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Floating Rate Fund
| Average Annual Total Returns | ||||
As of 2/28/14, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (5/1/97) | 4.23 | % | ||
10 Years | 4.06 | |||
5 Years | 11.71 | |||
1 Year | 2.16 | |||
Class C Shares | ||||
Inception (3/31/00) | 3.63 | % | ||
10 Years | 3.86 | |||
5 Years | 11.72 | |||
1 Year | 3.35 | |||
Class R Shares | ||||
10 Years | 4.15 | % | ||
5 Years | 11.99 | |||
1 Year | 4.61 | |||
Class Y Shares | ||||
10 Years | 4.45 | % | ||
5 Years | 12.54 | |||
1 Year | 5.13 | |||
Class R5 Shares | ||||
10 Years | 4.61 | % | ||
5 Years | 12.63 | |||
1 Year | 5.15 | |||
Class R6 Shares | ||||
10 Years | 4.39 | % | ||
5 Years | 12.42 | |||
1 Year | 5.22 | |||
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 Class B shares. The closed-end fund’s Class 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 Class C shares. The closed-end fund’s Class 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
| Average Annual Total Returns | ||||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (5/1/97) | 4.24 | % | ||
10 Years | 4.16 | |||
5 Years | 13.47 | |||
1 Year | 3.27 | |||
Class C Shares | ||||
Inception (3/31/00) | 3.64 | % | ||
10 Years | 3.94 | |||
5 Years | 13.49 | |||
1 Year | 4.50 | |||
Class R Shares | ||||
10 Years | 4.25 | % | ||
5 Years | 13.79 | |||
1 Year | 5.76 | |||
Class Y Shares | ||||
10 Years | 4.54 | % | ||
5 Years | 14.31 | |||
1 Year | 6.16 | |||
Class R5 Shares | ||||
10 Years | 4.69 | % | ||
5 Years | 14.45 | |||
1 Year | 6.31 | |||
Class R6 Shares | ||||
10 Years | 4.46 | % | ||
5 Years | 14.16 | |||
1 Year | 6.25 | |||
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.
Class R5 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.
Class R6 shares incepted on September 24, 2012. 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 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 C, Class R, Class Y, Class R5 and Class R6 shares was 1.10%, 1.60%, 1.35%, 0.85%, 0.83% and 0.76%, 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 C, Class R, Class Y, Class R5 and Class R6 shares was 1.11%, 1.61%, 1.36%, 0.86%, 0.84% and 0.77%, 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/ or reimbursed expenses in the past, 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, 2014. See current prospectus for more information. |
3 Invesco Floating Rate Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors | |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can | |
access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Floating Rate Fund
Schedule of Investments
February 28, 2014
(Unaudited)
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
Variable Rate Senior Loan Interests–93.71%(a)(b) |
| |||||||||||||||
| Aerospace & Defense–2.05% | ||||||||||||||||
Atlantic Aviation FBO Inc., Term Loan | 3.25 | % | 06/01/20 | $ | 997 | $ | 998,787 | |||||||||
Aveos Fleet Performance Inc. (Canada), PIK Second Lien Term Loan (Acquired 03/12/10–12/30/11; Cost $409,566)(c)(d)(e) | 0.00 | % | 03/12/15 | 413 | 82,512 | |||||||||||
Booz Allen Hamilton Inc., Term Loan B | 3.75 | % | 07/31/19 | 7,794 | 7,843,164 | |||||||||||
Camp Systems International Inc., | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 05/31/19 | 3,937 | 3,986,196 | |||||||||||
Second Lien Term Loan | 8.25 | % | 11/30/19 | 258 | 264,120 | |||||||||||
DAE Aviation Holdings, Inc., | ||||||||||||||||
Term Loan B-1 | 5.00 | % | 11/02/18 | 4,043 | 4,105,689 | |||||||||||
Term Loan B-2 | 5.00 | % | 11/02/18 | 1,443 | 1,465,638 | |||||||||||
DynCorp International Inc., Term Loan | 6.25 | % | 07/07/16 | 331 | 333,658 | |||||||||||
IAP Worldwide Services, First Lien Term Loan(c) | 0.00 | % | 12/31/15 | 3,960 | 1,194,707 | |||||||||||
Landmark U.S. Holdings LLC, | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 10/25/19 | 4,092 | 4,133,897 | |||||||||||
Canadian Term Loan | 4.75 | % | 10/25/19 | 276 | 278,889 | |||||||||||
LMI Aerospace, Inc., Term Loan | 4.75 | % | 12/28/18 | 2,355 | 2,361,215 | |||||||||||
PRV Aerospace, LLC, Term Loan | 6.50 | % | 05/09/18 | 1,893 | 1,902,619 | |||||||||||
Sequa Corp., Term Loan | 5.25 | % | 06/19/17 | 3,953 | 3,903,821 | |||||||||||
Transdigm Inc., Term Loan C | 3.75 | % | 02/28/20 | 16,020 | 16,113,078 | |||||||||||
Wesco Aircraft Hardware Corp., Term Loan B | 3.25 | % | 02/26/21 | 5,602 | 5,587,583 | |||||||||||
| 54,555,573 | ||||||||||||||||
| Air Transport–0.78% | ||||||||||||||||
American Airlines, Inc., Term Loan B | 3.75 | % | 06/27/19 | 5,311 | 5,336,221 | |||||||||||
Delta Air Lines, Inc., | ||||||||||||||||
Revolver Loan(f) | 0.00 | % | 04/20/16 | 7,785 | 7,522,285 | |||||||||||
Revolver Loan(f) | 0.00 | % | 10/18/17 | 1,145 | 1,070,442 | |||||||||||
Term Loan B-1 | 3.50 | % | 10/18/18 | 4,999 | 5,022,558 | |||||||||||
United Continental Holdings, Inc., Term Loan B | 4.00 | % | 04/01/19 | 1,836 | 1,851,033 | |||||||||||
| 20,802,539 | ||||||||||||||||
| Automotive–3.46% | ||||||||||||||||
Affinia Group Inc., Term Loan B-2 | 4.75 | % | 04/27/20 | 1,706 | 1,712,708 | |||||||||||
August U.S. Holding Co., Inc., | ||||||||||||||||
First Lien Term Loan B-1 (Acquired 05/03/12-06/24/13; Cost $1,294,569) | 5.00 | % | 04/27/18 | 1,296 | 1,304,353 | |||||||||||
Second Lien Term Loan (Acquired 05/04/12-10/08/13; Cost $1,431,658) | 10.50 | % | 04/29/19 | 1,413 | 1,452,076 | |||||||||||
Second Lien Term Loan (Acquired 05/04/12-10/08/13; Cost $468,769) | 10.50 | % | 04/29/19 | 463 | 475,458 | |||||||||||
Term Loan B-1 (Acquired 05/03/12-06/24/13; Cost $1,635,391) | 5.00 | % | 04/27/18 | 1,636 | 1,645,741 | |||||||||||
Autoparts Holdings Ltd., First Lien Term Loan | 6.50 | % | 07/28/17 | 3,657 | 3,667,134 | |||||||||||
BBB Industries, LLC, Term Loan | 5.50 | % | 03/27/19 | 2,541 | 2,551,392 | |||||||||||
Chrysler Group LLC, | ||||||||||||||||
Term Loan B | 3.50 | % | 05/24/17 | 1,859 | 1,865,863 | |||||||||||
Term Loan B | 3.25 | % | 12/31/18 | 5,275 | 5,261,259 | |||||||||||
Federal-Mogul Corp., | ||||||||||||||||
Term Loan B | 2.10 | % | 12/29/14 | 15,729 | 15,636,331 | |||||||||||
Term Loan C | 2.10 | % | 12/28/15 | 5,869 | 5,834,545 | |||||||||||
Goodyear Tire & Rubber Co., Second Lien Term Loan | 4.75 | % | 04/30/19 | 2,569 | 2,599,397 | |||||||||||
KAR Auction Services, Inc., Term Loan | 3.75 | % | 05/19/17 | 6,041 | 6,058,825 | |||||||||||
Key Safety Systems, Inc., Term Loan | 4.75 | % | 05/09/18 | 3,921 | 3,966,552 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Automotive–(continued) | ||||||||||||||||
Metaldyne, LLC, Term Loan | 4.25 | % | 12/18/18 | $ | 4,740 | $ | 4,781,176 | |||||||||
Pinafore, LLC, Term Loan B-2 | 3.75 | % | 09/29/16 | 43 | 43,459 | |||||||||||
Schaeffler AG (Germany), Term Loan C | 4.25 | % | 01/27/17 | 6,863 | 6,925,420 | |||||||||||
TI Group Automotive Systems, LLC, Term Loan | 5.50 | % | 03/28/19 | 12,956 | 13,045,318 | |||||||||||
Tower Automotive Holdings USA, LLC, Term Loan | 4.00 | % | 04/23/20 | 6,902 | 6,921,442 | |||||||||||
Transtar Holding Co., | ||||||||||||||||
First Lien Term Loan | 5.75 | % | 10/09/18 | 4,721 | 4,660,054 | |||||||||||
Second Lien Term Loan | 10.00 | % | 10/09/19 | 1,654 | 1,612,276 | |||||||||||
| 92,020,779 | ||||||||||||||||
| Beverage and Tobacco–0.29% | ||||||||||||||||
DS Waters of America, Inc., Term Loan B | 5.25 | % | 08/31/20 | 4,526 | 4,608,140 | |||||||||||
North American Breweries Holdings, LLC, Term Loan | 7.50 | % | 12/11/18 | 3,135 | 3,025,532 | |||||||||||
| 7,633,672 | ||||||||||||||||
| Building & Development–2.50% | ||||||||||||||||
ABC Supply Co., Inc., Term Loan B | 3.50 | % | 04/16/20 | 4,689 | 4,701,742 | |||||||||||
Armstrong World Industries, Inc., Term Loan B | 3.50 | % | 03/16/20 | 160 | 160,251 | |||||||||||
Capital Automotive L.P., | ||||||||||||||||
Second Lien Term Loan | 6.00 | % | 04/30/20 | 3,668 | 3,805,792 | |||||||||||
Term Loan B-1 | 4.00 | % | 04/10/19 | 7,119 | 7,156,456 | |||||||||||
CBRE Services, Inc., Term Loan B | 2.91 | % | 03/29/21 | 1,341 | 1,346,518 | |||||||||||
HD Supply, Inc., Term Loan | 4.00 | % | 06/28/18 | 3,927 | 3,949,304 | |||||||||||
Lake at Las Vegas Joint Venture, LLC, | ||||||||||||||||
PIK Exit Revolver Term Loan (Acquired 05/15/12–06/28/13; Cost $10,794)(e)(f) | 0.00 | % | 02/28/17 | 11 | 3,812 | |||||||||||
PIK Exit Revolver Term Loan (Acquired 05/15/12–06/28/13; Cost $138,249)(e) | 4.64 | % | 02/28/17 | 138 | 48,819 | |||||||||||
Nortek, Inc., Term Loan | 5.25 | % | 04/26/17 | 456 | 459,104 | |||||||||||
Ply Gem Industries, Inc., Term Loan | 4.00 | % | 02/01/21 | 1,338 | 1,343,168 | |||||||||||
Quikrete Holdings, Inc., | ||||||||||||||||
First Lien Term Loan | 4.00 | % | 09/28/20 | 10,389 | 10,438,674 | |||||||||||
Second Lien Term Loan | 7.00 | % | 03/26/21 | 1,651 | 1,703,098 | |||||||||||
Re/Max International, Inc., Term Loan | 4.00 | % | 07/31/20 | 4,164 | 4,171,152 | |||||||||||
Realogy Corp., | ||||||||||||||||
Synthetic LOC | 4.42 | % | 10/10/16 | 1 | 630 | |||||||||||
Term Loan B | 4.50 | % | 03/05/20 | 24,388 | 24,491,589 | |||||||||||
United Subcontractors, Inc., PIK Term Loan(e) | 4.25 | % | 06/30/15 | 129 | 126,565 | |||||||||||
Valleycrest Companies LLC, Term Loan | 5.50 | % | 06/13/19 | 1,304 | 1,316,546 | |||||||||||
WireCo WorldGroup Inc., Term Loan (Acquired 07/02/12; Cost $1,144,296) | 6.00 | % | 02/15/17 | 1,152 | 1,160,503 | |||||||||||
| 66,383,723 | ||||||||||||||||
| Business Equipment & Services–8.70% | ||||||||||||||||
Advantage Sales & Marketing Inc., | ||||||||||||||||
First Lien Term Loan | 4.25 | % | 12/18/17 | 1,700 | 1,711,253 | |||||||||||
Second Lien Term Loan | 8.25 | % | 06/18/18 | 273 | 277,405 | |||||||||||
Asurion Corp., | ||||||||||||||||
Incremental Term Loan B-1 | 4.50 | % | 05/24/19 | 29,302 | 29,406,344 | |||||||||||
Incremental Term Loan B-2 | 3.50 | % | 07/08/20 | 22,444 | 22,303,349 | |||||||||||
Second Lien Term Loan(g) | — | 03/03/21 | 29,663 | 29,217,866 | ||||||||||||
AVSC Holding Corp., First Lien Term Loan | 4.50 | % | 01/22/21 | 5,133 | 5,173,555 | |||||||||||
Brickman Group Ltd. LLC, | ||||||||||||||||
First Lien Term Loan | 4.00 | % | 12/18/20 | 2,713 | 2,728,946 | |||||||||||
Second Lien Term Loan | 7.50 | % | 12/17/21 | 1,110 | 1,135,852 | |||||||||||
Brock Holdings III, Inc., First Lien Term Loan | 6.00 | % | 03/16/17 | 228 | 229,805 | |||||||||||
Caraustar Industries, Inc., Term Loan | 7.50 | % | 05/01/19 | 5,779 | 5,920,225 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Business Equipment & Services–(continued) | ||||||||||||||||
Catalina Marketing Corp., Term Loan | 5.25 | % | 10/12/20 | $ | 3,898 | $ | 3,930,281 | |||||||||
Connolly Holdings, Inc., First Lien Term Loan | 5.00 | % | 01/29/21 | 2,033 | 2,058,329 | |||||||||||
Crossmark Holdings, Inc., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 12/20/19 | 4,836 | 4,830,010 | |||||||||||
Second Lien Term Loan | 8.75 | % | 12/21/20 | 576 | 578,592 | |||||||||||
Emdeon Inc., Term Loan B-2 | 3.75 | % | 11/02/18 | 1,643 | 1,648,753 | |||||||||||
Expert Global Solutions, Inc., First Lien Term Loan B | 8.50 | % | 04/03/18 | 10,438 | 10,399,305 | |||||||||||
First Data Corp., | ||||||||||||||||
Term Loan | 4.16 | % | 03/23/18 | 22,519 | 22,603,289 | |||||||||||
Term Loan | 4.16 | % | 09/24/18 | 390 | 391,585 | |||||||||||
Term Loan | 4.16 | % | 03/24/21 | 5,489 | 5,503,992 | |||||||||||
FS Funding AS (Denmark), Term Loan B-12 | 3.75 | % | 04/30/18 | 1,301 | 1,305,589 | |||||||||||
Genesys Telecom Holdings, U.S., Inc., | ||||||||||||||||
Delayed Draw Term Loan | 4.50 | % | 11/13/20 | 3,476 | 3,492,267 | |||||||||||
Term Loan | 4.00 | % | 02/07/20 | 797 | 798,821 | |||||||||||
Information Resources, Inc., Term Loan | 4.75 | % | 09/30/20 | 3,826 | 3,848,362 | |||||||||||
Inmar, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.00 | % | 01/27/22 | 306 | 307,328 | |||||||||||
Term Loan | 4.25 | % | 01/27/21 | 2,461 | 2,458,280 | |||||||||||
ION Trading Technologies S.a.r.l. (Luxembourg), First Lien Term Loan | 4.50 | % | 05/22/20 | 2,565 | 2,587,654 | |||||||||||
Koosharem LLC, PIK First Lien Term Loan(c)(e) | 0.00 | % | 06/30/14 | 741 | 646,111 | |||||||||||
Kronos Inc., | ||||||||||||||||
First Lien Incremental Term Loan | 4.50 | % | 10/30/19 | 8,256 | 8,333,670 | |||||||||||
Second Lien Term Loan | 9.75 | % | 04/30/20 | 1,485 | 1,523,760 | |||||||||||
Lonestar Intermediate Super Holdings, LLC, Term Loan | 11.00 | % | 09/02/19 | 2,788 | 2,854,634 | |||||||||||
Nuance Communications, Inc., Term Loan C | 2.91 | % | 08/07/19 | 6,152 | 6,110,369 | |||||||||||
Pacific Industrial Services US FinCo LLC, | ||||||||||||||||
Second Lien Term Loan (Acquired 09/24/13; Cost $2,343,160) | 8.75 | % | 04/02/19 | 2,365 | 2,430,320 | |||||||||||
Term Loan B | 5.00 | % | 10/02/18 | 6,038 | 6,136,294 | |||||||||||
Sensus USA, Inc., First Lien Term Loan | 4.75 | % | 05/09/17 | 3,710 | 3,745,896 | |||||||||||
Servicemaster Company, The, | ||||||||||||||||
Synthetic LOC B, (Acquired 08/22/12; Cost $3,699,984) | 4.52 | % | 01/31/17 | 3,750 | 3,717,188 | |||||||||||
Term Loan B | 4.41 | % | 01/31/17 | 2,996 | 3,004,387 | |||||||||||
Term Loan C | 4.25 | % | 01/31/17 | 4,066 | 4,073,104 | |||||||||||
SourceHOV LLC, | ||||||||||||||||
First Lien Term Loan B | 5.25 | % | 04/30/18 | 5,169 | 5,222,750 | |||||||||||
Second Lien Term Loan | 8.75 | % | 04/30/19 | 355 | 364,907 | |||||||||||
SunGard Data Systems Inc., | ||||||||||||||||
Term Loan C | 3.91 | % | 02/28/17 | 843 | 847,647 | |||||||||||
Term Loan D | 4.50 | % | 01/31/20 | 1,063 | 1,067,543 | |||||||||||
Term Loan E | 4.00 | % | 03/09/20 | 9,250 | 9,309,381 | |||||||||||
TNS Inc., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 02/14/20 | 1,692 | 1,704,709 | |||||||||||
Second Lien Term Loan | 9.00 | % | 08/14/20 | 262 | 265,485 | |||||||||||
Trans Union LLC, Term Loan | 4.25 | % | 02/10/19 | 1,714 | 1,723,178 | |||||||||||
Wash MultiFamily Laundry Systems, LLC, Term Loan | 4.50 | % | 02/21/19 | 1,593 | 1,604,960 | |||||||||||
West Corp., Revolver Loan(f) | 0.00 | % | 01/15/16 | 1,748 | 1,695,387 | |||||||||||
| 231,228,717 | ||||||||||||||||
| Cable & Satellite Television–3.44% | ||||||||||||||||
Atlantic Broadband Finance, LLC, Term Loan B | 3.25 | % | 12/02/19 | 966 | 964,496 | |||||||||||
Cequel Communications, LLC, Term Loan | 3.50 | % | 02/14/19 | 6,196 | 6,202,573 | |||||||||||
Charter Communications Operating LLC, Term Loan E | 3.00 | % | 07/01/20 | 2,397 | 2,387,997 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Cable & Satellite Television–(continued) | ||||||||||||||||
CSC Holdings, LLC, Term Loan B | 2.65 | % | 04/17/20 | $ | 15,763 | $ | 15,675,138 | |||||||||
ION Media Networks, Inc., Term Loan | 5.00 | % | 12/18/20 | 10,023 | 10,141,769 | |||||||||||
MCC Iowa, | ||||||||||||||||
Term Loan D-1 | 1.87 | % | 01/31/15 | 1,930 | 1,918,748 | |||||||||||
Term Loan D-2 | 1.87 | % | 01/31/15 | 267 | 265,877 | |||||||||||
Term Loan G | 4.00 | % | 01/20/20 | 995 | 998,693 | |||||||||||
Term Loan H | 3.25 | % | 01/29/21 | 3,293 | 3,290,078 | |||||||||||
Mediacom Illinois LLC, | ||||||||||||||||
Term Loan E | 4.50 | % | 10/23/17 | 1,943 | 1,950,969 | |||||||||||
Term Loan F | 2.62 | % | 03/31/18 | 3,291 | 3,278,470 | |||||||||||
Quebecor Media Inc. (Canada), Term Loan B-1 | 3.25 | % | 08/17/20 | 5,512 | 5,512,133 | |||||||||||
UPC Financing Partnership, | ||||||||||||||||
Term Loan AF | 4.00 | % | 01/29/21 | 254 | 255,558 | |||||||||||
Term Loan AH | 3.25 | % | 06/30/21 | 8,080 | 8,087,601 | |||||||||||
Virgin Media Investment Holdings Ltd. (United Kingdom), Term Loan B | 3.50 | % | 06/08/20 | 14,381 | 14,386,603 | |||||||||||
WaveDivision Holdings, LLC, Term Loan | 4.00 | % | 10/15/19 | 3,155 | 3,163,977 | |||||||||||
WideOpenWest Finance, LLC, | ||||||||||||||||
Term Loan B | 4.75 | % | 04/01/19 | 8,028 | 8,084,986 | |||||||||||
Term Loan B-1 | 3.75 | % | 07/17/17 | 4,847 | 4,870,000 | |||||||||||
| 91,435,666 | ||||||||||||||||
| Chemicals & Plastics–4.90% | ||||||||||||||||
Allnex & Cy S.C.A., | ||||||||||||||||
Second Lien Term Loan | 8.25 | % | 04/03/20 | 338 | 350,433 | |||||||||||
Term Loan B-1 | 4.50 | % | 10/03/19 | 2,798 | 2,818,606 | |||||||||||
Term Loan B-2 | 4.50 | % | 10/03/19 | 1,452 | 1,462,439 | |||||||||||
Arysta LifeScience SPC, LLC, | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 05/29/20 | 9,966 | 10,032,433 | |||||||||||
Second Lien Term Loan | 8.25 | % | 11/30/20 | 1,038 | 1,056,291 | |||||||||||
Ascend Performance Materials Operations LLC, Term Loan B | 6.75 | % | 04/10/18 | 4,423 | 4,312,119 | |||||||||||
Aster 1 SA, (Germany) | ||||||||||||||||
Term Loan B-5 | 5.58 | % | 12/31/16 | 721 | 722,982 | |||||||||||
Term Loan C-5 | 5.58 | % | 12/30/16 | 738 | 740,285 | |||||||||||
Term Loan D-2(g) | — | 06/29/18 | 4,096 | 4,088,688 | ||||||||||||
Chromaflo Technologies Corp., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 12/02/19 | 2,183 | 2,194,114 | |||||||||||
Second Lien Term Loan | 8.25 | % | 05/30/20 | 815 | 825,282 | |||||||||||
DuPont Performance Coatings, Inc., Term Loan B | 4.00 | % | 02/01/20 | 13,632 | 13,713,921 | |||||||||||
Emerald Performance Materials, LLC, First Lien Term Loan | 6.75 | % | 05/18/18 | 1,162 | 1,170,900 | |||||||||||
HII Holding Corp., First Lien Term Loan | 4.00 | % | 12/20/19 | 5,583 | 5,617,718 | |||||||||||
Huntsman International LLC, Term Loan(g) | — | 10/15/20 | 18,700 | 18,769,756 | ||||||||||||
Ineos US Finance LLC, Term Loan | 3.75 | % | 05/04/18 | 17,514 | 17,499,689 | |||||||||||
Kronos Worldwide Inc., Term Loan | 4.75 | % | 02/18/20 | 1,932 | 1,951,179 | |||||||||||
MacDermid, Inc., First Lien Term Loan B | 4.00 | % | 06/08/20 | 2,883 | 2,905,224 | |||||||||||
OMNOVA Solutions, Inc., Term Loan B-1 | 4.25 | % | 05/31/18 | 3,698 | 3,721,341 | |||||||||||
Otter Products, LLC, Term Loan | 5.25 | % | 04/29/19 | 1,121 | 1,129,690 | |||||||||||
Oxea Finance LLC, | ||||||||||||||||
First Lien Term Loan B-2 | 4.25 | % | 01/15/20 | 4,610 | 4,650,218 | |||||||||||
Second Lien Term Loan | 8.25 | % | 07/15/20 | 1,557 | 1,593,928 | |||||||||||
Phillips Plastics Corp., Term Loan | 4.75 | % | 02/13/17 | 736 | 742,199 | |||||||||||
PQ Corp., Term Loan | 4.50 | % | 08/07/17 | 9,846 | 9,915,670 | |||||||||||
Taminco Global Chemical Corp., Term Loan B-3 | 3.25 | % | 02/15/19 | 3,505 | 3,512,433 | |||||||||||
Tata Chemicals North America Inc., Term Loan | 3.75 | % | 08/07/20 | 1,630 | 1,639,498 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Chemicals & Plastics–(continued) | ||||||||||||||||
Univar Inc., Term Loan B | 5.00 | % | 06/30/17 | $ | 3,968 | $ | 3,949,118 | |||||||||
W.R. Grace & Co., | ||||||||||||||||
Delayed Draw Term Loan(f) | 0.00 | % | 02/03/21 | 1,267 | 1,267,505 | |||||||||||
Term Loan | 3.00 | % | 01/31/21 | 3,547 | 3,549,014 | |||||||||||
WNA Holdings, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.50 | % | 12/07/20 | 642 | 653,492 | |||||||||||
Term Loan | 4.50 | % | 06/05/20 | 2,336 | 2,359,137 | |||||||||||
Term Loan | 4.50 | % | 06/07/20 | 1,365 | 1,379,079 | |||||||||||
| 130,294,381 | ||||||||||||||||
| Clothing & Textiles–0.17% | ||||||||||||||||
PVH Corp., Term Loan B | 3.25 | % | 02/13/20 | 4,592 | 4,608,829 | |||||||||||
| Conglomerates–0.57% | ||||||||||||||||
CeramTec Acquisition Corp., | ||||||||||||||||
Term Loan B-1 | 4.25 | % | 08/31/20 | 4,867 | 4,886,534 | |||||||||||
Term Loan B-2 | 4.25 | % | 08/28/20 | 479 | 481,158 | |||||||||||
Term Loan B-3 | 4.25 | % | 08/28/20 | 1,480 | 1,486,312 | |||||||||||
Epiq Systems, Inc., Term Loan | 4.75 | % | 08/27/20 | 4,428 | 4,463,825 | |||||||||||
Polymer Group, Inc., Term Loan | 5.25 | % | 12/19/19 | 2,202 | 2,221,597 | |||||||||||
Spectrum Brands, Inc., Term Loan C | 3.50 | % | 09/04/19 | 1,623 | 1,625,309 | |||||||||||
| 15,164,735 | ||||||||||||||||
| Containers & Glass Products–1.74% | ||||||||||||||||
Ardagh Glass Finance PLC (Ireland), Term Loan | 4.25 | % | 12/17/19 | 1,422 | 1,429,771 | |||||||||||
Berlin Packaging, LLC, | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 04/02/19 | 4,322 | 4,361,148 | |||||||||||
Second Lien Term Loan (Acquired 03/28/13; Cost $833,888) | 8.75 | % | 04/02/20 | 845 | 868,183 | |||||||||||
Berry Plastics Group, Inc., | ||||||||||||||||
Term Loan D | 3.50 | % | 02/07/20 | 14,672 | 14,622,893 | |||||||||||
Term Loan E | 3.75 | % | 01/06/21 | 2,665 | 2,662,878 | |||||||||||
BWAY Holding Co., Term Loan | 4.50 | % | 08/07/17 | 3,391 | 3,412,878 | |||||||||||
Consolidated Container Co. LLC, Term Loan | 5.00 | % | 07/03/19 | 1,371 | 1,388,493 | |||||||||||
Exopack Holdings S.A., Term Loan | 5.25 | % | 05/08/19 | 3,438 | 3,495,142 | |||||||||||
Hoffmaster Group, Inc., First Lien Term Loan | 6.50 | % | 01/03/18 | 4,305 | 4,299,954 | |||||||||||
Pertus Sechzehnte GmbH, (Germany) | ||||||||||||||||
Term Loan B2A | 4.53 | % | 12/14/16 | 500 | 501,125 | |||||||||||
Term Loan C2A | 4.78 | % | 06/14/17 | 500 | 501,125 | |||||||||||
Ranpak Corp., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 04/23/19 | 554 | 556,968 | |||||||||||
Second Lien Term Loan (Acquired 04/10/13; Cost $644,103) | 8.50 | % | 04/23/20 | 650 | 667,727 | |||||||||||
Reynolds Group Holdings Inc., | ||||||||||||||||
Incremental Term Loan | 4.00 | % | 12/01/18 | 1,632 | 1,646,813 | |||||||||||
Revolver Loan(f) | 0.00 | % | 11/05/14 | 3,987 | 3,984,019 | |||||||||||
TricorBraun Inc., Term Loan | 4.00 | % | 05/03/18 | 1,918 | 1,923,970 | |||||||||||
| 46,323,087 | ||||||||||||||||
| Cosmetics & Toiletries–0.43% | ||||||||||||||||
Nice-Pak Products, Inc., Term Loan (Acquired 07/25/07-01/05/10; Cost $502,169) | 7.25 | % | 06/18/14 | 503 | 492,950 | |||||||||||
Revlon Consumer Products Corp., | ||||||||||||||||
Term Loan B | 3.25 | % | 11/20/17 | 1,208 | 1,210,271 | |||||||||||
Term Loan | 4.00 | % | 08/19/19 | 6,433 | 6,464,044 | |||||||||||
Vogue International Inc., Term Loan B | 5.25 | % | 02/14/20 | 3,133 | 3,152,933 | |||||||||||
| 11,320,198 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Drugs–2.45% | ||||||||||||||||
Endo Pharmaceuticals Holdings Inc., Term Loan B | 3.25 | % | 02/28/21 | $ | 2,458 | $ | 2,446,087 | |||||||||
Harlan Laboratories, Inc., Term Loan(c) | 7.75 | % | 07/11/14 | 2,249 | 1,980,281 | |||||||||||
Ikaria, Inc., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 02/12/21 | 3,620 | 3,650,572 | |||||||||||
Second Lien Term Loan | 8.75 | % | 02/14/22 | 306 | 311,533 | |||||||||||
IMS Health Inc., Term Loan B-1 | 3.75 | % | 09/01/17 | 10,674 | 10,692,230 | |||||||||||
Medpace Intermediateco, Inc., Term Loan B | 5.25 | % | 06/16/17 | 2,787 | 2,793,994 | |||||||||||
Quintiles Transnational Corp., Term Loan B-3 | 3.75 | % | 06/08/18 | 7,431 | 7,457,119 | |||||||||||
Salix Pharmaceuticals, Ltd., Term Loan | 4.25 | % | 01/02/20 | 3,092 | 3,126,678 | |||||||||||
Valeant Pharmaceuticals International, Inc., (Canada) | ||||||||||||||||
Series C-2 Term Loan B | 3.75 | % | 12/11/19 | 11,173 | 11,231,349 | |||||||||||
Series E-1 Term Loan B | 3.75 | % | 08/05/20 | 21,268 | 21,425,143 | |||||||||||
| 65,114,986 | ||||||||||||||||
| Ecological Services & Equipment–0.08% | ||||||||||||||||
ADS Waste Holdings, Inc., Term Loan B-2 | 3.75 | % | 10/09/19 | 1,265 | 1,266,092 | |||||||||||
WCA Waste Corp., Term Loan | 4.00 | % | 03/23/18 | 943 | 947,768 | |||||||||||
| 2,213,860 | ||||||||||||||||
| Electronics & Electrical–5.66% | ||||||||||||||||
Aeroflex Inc., Term Loan B-1 | 4.50 | % | 11/11/19 | 5,996 | 6,040,897 | |||||||||||
Allegion US Holding Company Inc., Term Loan B | 3.00 | % | 09/30/20 | 559 | 559,076 | |||||||||||
Blackboard Inc., Term Loan B-3 | 4.75 | % | 10/04/18 | 11,762 | 11,879,952 | |||||||||||
Blue Coat Systems, Inc., Term Loan | 4.00 | % | 05/31/19 | 2,438 | 2,451,516 | |||||||||||
BMC Software Finance, Inc., Term Loan | 5.00 | % | 09/10/20 | 2,658 | 2,668,477 | |||||||||||
Dealertrack Technologies, Inc., Term Loan | 3.50 | % | 02/26/21 | 1,323 | 1,319,411 | |||||||||||
DEI Sales, Inc., Term Loan | 5.75 | % | 07/13/17 | 1,956 | 1,935,490 | |||||||||||
Dell International LLC, Term Loan C | 3.75 | % | 10/29/18 | 19,719 | 19,743,438 | |||||||||||
Deltek, Inc., First Lien Term Loan | 4.50 | % | 10/10/18 | 10,282 | 10,359,163 | |||||||||||
FIDJI Luxembourg (BC4) S.A R.L (Luxembourg), Term Loan (Acquired 12/19/13; Cost $3,452,181) | 6.25 | % | 12/24/20 | 3,487 | 3,530,264 | |||||||||||
Freescale Semiconductor, Inc., | ||||||||||||||||
Term Loan B-4 | 5.00 | % | 02/28/20 | 18,067 | 18,184,101 | |||||||||||
Term Loan B-5 | 5.00 | % | 01/15/21 | 12,496 | 12,665,001 | |||||||||||
Infor (US), Inc., | ||||||||||||||||
Term Loan B-3 | 3.75 | % | 06/03/20 | 10,586 | 10,583,187 | |||||||||||
Term Loan B-5 | 3.75 | % | 06/03/20 | 1,765 | 1,766,956 | |||||||||||
Microsemi Corp., | ||||||||||||||||
Term Loan | 3.50 | % | 02/19/20 | 2,813 | 2,823,143 | |||||||||||
Term Loan | 3.75 | % | 02/19/20 | 819 | 822,179 | |||||||||||
Mirion Technologies, Inc., Term Loan | 5.75 | % | 03/30/18 | 2,767 | 2,789,198 | |||||||||||
Oberthur Technologies of America Corp., Term Loan B-2 | 5.75 | % | 10/18/19 | 1,894 | 1,918,854 | |||||||||||
Omnitracs, Inc., Term Loan | 4.75 | % | 11/25/20 | 4,647 | 4,703,434 | |||||||||||
RP Crown Parent, LLC, | ||||||||||||||||
First Lien Term Loan | 6.00 | % | 12/21/18 | 13,195 | 13,245,960 | |||||||||||
Second Lien Term Loan | 11.25 | % | 12/20/19 | 602 | 613,513 | |||||||||||
Ship Luxco 3 S.a.r.l., (Luxembourg) | ||||||||||||||||
Term Loan | 4.50 | % | 11/30/19 | 1,908 | 1,927,142 | |||||||||||
Term Loan B-2A-II | 5.25 | % | 11/29/19 | 1,986 | 2,008,053 | |||||||||||
Term Loan C-2 | 4.75 | % | 11/29/19 | 1,915 | 1,935,385 | |||||||||||
Sophia, L.P., Term Loan B | 4.50 | % | 07/19/18 | 7,472 | 7,537,518 | |||||||||||
SSI Investments II Ltd., Term Loan | 5.00 | % | 05/26/17 | 3,143 | 3,166,605 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Electronics & Electrical–(continued) | ||||||||||||||||
Verint Systems Inc., | ||||||||||||||||
Term Loan | 4.00 | % | 09/06/19 | $ | 882 | $ | 886,201 | |||||||||
Incremental Term Loan B | 3.50 | % | 09/06/19 | 942 | 939,730 | |||||||||||
WESCO Distribution Inc., Term Loan B-1 | 3.75 | % | 12/12/19 | 1,357 | 1,362,566 | |||||||||||
| 150,366,410 | ||||||||||||||||
| Equipment Leasing–0.40% | ||||||||||||||||
Delos Finance S.a.r.l., Term Loan | 3.50 | % | 03/06/21 | 7,915 | 7,874,963 | |||||||||||
Flying Fortress Inc., Term Loan | 3.50 | % | 06/30/17 | 2,738 | 2,751,876 | |||||||||||
| 10,626,839 | ||||||||||||||||
| Financial Intermediaries–2.09% | ||||||||||||||||
Bankruptcy Management Solutions, Inc., Term Loan B | 7.00 | % | 06/27/18 | 23 | 19,994 | |||||||||||
Blackstone Perpetual BidCo B.V. (Netherlands), Term Loan B-2 | 4.70 | % | 04/02/20 | 1,168 | 1,173,040 | |||||||||||
GEO Group, Inc., Term Loan | 3.25 | % | 04/03/20 | 499 | 501,900 | |||||||||||
iPayment Inc., Term Loan | 6.75 | % | 05/08/17 | 3,978 | 3,920,690 | |||||||||||
MIP Delaware, LLC, Term Loan B-1 | 4.00 | % | 03/09/20 | 1,157 | 1,160,877 | |||||||||||
MoneyGram International, Inc., Term Loan | 4.25 | % | 03/27/20 | 8,096 | 8,142,898 | |||||||||||
Nuveen Investments, Inc., First Lien Term Loan B | 4.15 | % | 05/15/17 | 26,700 | 26,697,231 | |||||||||||
RJO Holdings Corp., Term Loan (Acquired 02/08/11; Cost $1,473,155) | 6.91 | % | 12/10/15 | 1,633 | 1,543,500 | |||||||||||
SAM Finance Lux S.a.r.l (Luxembourg), Term Loan | 4.25 | % | 12/17/20 | 4,550 | 4,568,347 | |||||||||||
TransFirst Holdings, Inc., | ||||||||||||||||
First Lien Term Loan B-1 | 4.75 | % | 12/27/17 | 5,069 | 5,087,092 | |||||||||||
Second Lien Term Loan | 11.00 | % | 06/27/18 | 2,574 | 2,613,506 | |||||||||||
| 55,429,075 | ||||||||||||||||
| Food & Drug Retailers–0.98% | ||||||||||||||||
Pantry Inc. (The), Term Loan | 4.75 | % | 08/02/19 | 2,262 | 2,289,978 | |||||||||||
Rite Aid Corp., | ||||||||||||||||
Second Lien Term Loan | 5.75 | % | 08/21/20 | 1,353 | 1,385,765 | |||||||||||
Term Loan | 4.00 | % | 02/21/20 | 4,134 | 4,157,349 | |||||||||||
Roundy’s Supermarkets, Inc., Term Loan B | 6.46 | % | 02/13/19 | 9,023 | 9,000,370 | |||||||||||
Supervalu Inc., Term Loan | 4.50 | % | 03/21/19 | 9,288 | 9,338,374 | |||||||||||
| 26,171,836 | ||||||||||||||||
| Food Products–3.24% | ||||||||||||||||
AdvancePierre Foods, Inc., | ||||||||||||||||
First Lien Term Loan | 5.75 | % | 07/10/17 | 10,393 | 10,453,061 | |||||||||||
Second Lien Term Loan | 9.50 | % | 10/10/17 | 524 | 511,216 | |||||||||||
Big Heart Pet Brands, Term Loan | 3.50 | % | 03/08/20 | 6,156 | 6,168,630 | |||||||||||
Candy Intermediate Holdings, Inc., Term Loan | 7.50 | % | 06/18/18 | 2,832 | 2,725,494 | |||||||||||
CSM Bakery Supplies LLC, Term Loan | 4.75 | % | 07/03/20 | 7,292 | 7,364,498 | |||||||||||
Del Monte Foods, Inc., | ||||||||||||||||
First Lien Term Loan | 4.25 | % | 02/18/21 | 4,411 | 4,425,032 | |||||||||||
Second Lien Term Loan | 8.25 | % | 08/18/21 | 1,149 | 1,163,013 | |||||||||||
Diamond Foods, Inc., Term Loan | 4.25 | % | 08/20/18 | 1,380 | 1,383,550 | |||||||||||
Dole Food Co., Inc., Term Loan B | 4.50 | % | 11/01/18 | 11,714 | 11,807,231 | |||||||||||
H.J. Heinz Company, | ||||||||||||||||
Revolving Term Loan(f) | 0.00 | % | 06/07/18 | 10,581 | 10,421,944 | |||||||||||
Term Loan B-2 | 3.50 | % | 06/05/20 | 7,168 | 7,232,668 | |||||||||||
JBS USA, LLC, | ||||||||||||||||
Incremental Term Loan | 3.75 | % | 09/18/20 | 2,638 | 2,634,008 | |||||||||||
Term Loan | 3.75 | % | 05/25/18 | 7,818 | 7,822,400 | |||||||||||
New HB Acquisition, LLC, Term Loan B | 6.75 | % | 04/09/20 | 2,412 | 2,511,008 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Food Products–(continued) | ||||||||||||||||
Pinnacle Foods Finance LLC, Term Loan H | 3.25 | % | 04/29/20 | $ | 9,507 | $ | 9,498,462 | |||||||||
QCE LLC, Term Loan(g) | — | 01/24/17 | 11 | 4,756 | ||||||||||||
| 86,126,971 | ||||||||||||||||
| Food Service–2.62% | ||||||||||||||||
Aramark Corp., | ||||||||||||||||
LOC | 3.67 | % | 07/26/16 | 82 | 82,428 | |||||||||||
Term Loan F | 3.25 | % | 02/24/21 | 15,444 | 15,416,229 | |||||||||||
ARG IH Corp., Term Loan | 5.00 | % | 11/15/20 | 761 | 766,561 | |||||||||||
CEC Entertainment Concepts, L.P., Term Loan B | 4.25 | % | 02/14/21 | 4,140 | 4,132,788 | |||||||||||
Darling International Inc., Term Loan B | 3.25 | % | 01/06/21 | 3,341 | 3,353,304 | |||||||||||
Focus Brands Inc., First Lien Term Loan | 5.50 | % | 02/21/18 | 2,651 | 2,665,853 | |||||||||||
Landry’s, Inc., Term Loan B | 4.00 | % | 04/24/18 | 4,240 | 4,273,616 | |||||||||||
OSI Restaurant Partners, LLC, Term Loan | 3.50 | % | 10/25/19 | 2,045 | 2,047,196 | |||||||||||
Restaurant Holding Company, LLC, Term Loan | 8.75 | % | 02/28/19 | 2,816 | 2,703,741 | |||||||||||
Seminole Hard Rock Entertainment, Inc., Term Loan | 3.50 | % | 05/14/20 | 1,921 | 1,919,771 | |||||||||||
US Foods, Inc., Incremental Term Loan | 4.50 | % | 03/29/19 | 15,352 | 15,461,902 | |||||||||||
Weight Watchers International, Inc., Term Loan B-2 | 4.00 | % | 04/02/20 | 21,972 | 16,884,540 | |||||||||||
| 69,707,929 | ||||||||||||||||
| Forest Products–0.31% | ||||||||||||||||
NewPage Corp., Term Loan B | 9.50 | % | 02/11/21 | 4,643 | 4,690,951 | |||||||||||
Xerium Technologies, Inc., Term Loan | 5.75 | % | 05/17/19 | 3,508 | 3,539,061 | |||||||||||
| 8,230,012 | ||||||||||||||||
| Healthcare–5.39% | ||||||||||||||||
Alere Inc., | ||||||||||||||||
Incremental Term Loan B-1 | 4.25 | % | 06/30/17 | 1,134 | 1,141,723 | |||||||||||
Incremental Term Loan B-2 | 4.25 | % | 06/30/17 | 511 | 514,325 | |||||||||||
Term Loan B | 4.25 | % | 06/30/17 | 1,724 | 1,736,614 | |||||||||||
AMN Healthcare, Inc., Term Loan B | 3.75 | % | 04/05/18 | 858 | 865,648 | |||||||||||
ATI Holdings, Inc., Term Loan | 5.00 | % | 12/20/19 | 1,877 | 1,908,672 | |||||||||||
Biomet, Inc., Term Loan B-2 | 3.66 | % | 07/25/17 | 10,806 | 10,842,327 | |||||||||||
Carestream Health, Inc., First Lien Term Loan | 5.00 | % | 06/07/19 | 12,172 | 12,346,023 | |||||||||||
Community Health Systems, Inc., | ||||||||||||||||
Term Loan D | 4.25 | % | 01/27/21 | 15,293 | 15,450,449 | |||||||||||
Term Loan E | 3.45 | % | 01/25/17 | 5,687 | 5,726,510 | |||||||||||
DaVita Inc., Term Loan B | 4.50 | % | 10/20/16 | 4,892 | 4,929,743 | |||||||||||
DJO Finance LLC, Term Loan B | 4.75 | % | 09/15/17 | 12,775 | 12,877,270 | |||||||||||
Drumm Investors LLC, Term Loan | 5.00 | % | 05/04/18 | 901 | 893,207 | |||||||||||
HCA, Inc., | ||||||||||||||||
Term Loan B-4 | 3.00 | % | 05/01/18 | 7,000 | 7,003,080 | |||||||||||
Term Loan B-5 | 2.90 | % | 03/31/17 | 14,321 | 14,327,139 | |||||||||||
Hologic Inc., Term Loan B | 3.25 | % | 08/01/19 | 1,708 | 1,707,501 | |||||||||||
Kindred Healthcare, Inc., Term Loan B-1 | 4.25 | % | 06/01/18 | 10,892 | 10,964,685 | |||||||||||
Kinetic Concepts, Inc., Term Loan E-1 | 4.00 | % | 05/04/18 | 25,991 | 26,123,453 | |||||||||||
Pharmaceutical Product Development, Inc., Term Loan | 4.00 | % | 12/05/18 | 658 | 661,987 | |||||||||||
Surgical Care Affiliates, LLC, Incremental Term Loan C | 4.25 | % | 06/29/18 | 2,108 | 2,115,731 | |||||||||||
TriZetto Group, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.50 | % | 03/28/19 | 1,968 | 1,926,353 | |||||||||||
Term Loan | 4.75 | % | 05/02/18 | 6,749 | 6,726,098 | |||||||||||
Western Dental Services, Inc., Term Loan | 6.00 | % | 11/01/18 | 2,606 | 2,618,978 | |||||||||||
| 143,407,516 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Home Furnishings–0.30% | ||||||||||||||||
Britax Group Ltd., Term Loan | 4.50 | % | 10/15/20 | $ | 1,800 | $ | 1,813,862 | |||||||||
Serta Simmons Holdings, LLC, Term Loan | 4.25 | % | 10/01/19 | 6,005 | 6,051,815 | |||||||||||
| 7,865,677 | ||||||||||||||||
| Industrial Equipment–3.07% | ||||||||||||||||
Accudyne Industries LLC, Term Loan | 4.00 | % | 12/13/19 | 5,056 | 5,074,441 | |||||||||||
Alliance Laundry Systems LLC, Second Lien Term Loan | 9.50 | % | 12/10/19 | 535 | 544,736 | |||||||||||
Apex Tool Group, LLC, Term Loan | 4.50 | % | 01/31/20 | 7,420 | 7,345,382 | |||||||||||
Crosby US Acquisition Corp., | ||||||||||||||||
First Lien Term Loan | 4.00 | % | 11/23/20 | 6,498 | 6,500,613 | |||||||||||
Second Lien Term Loan | 7.00 | % | 11/22/21 | 1,620 | 1,646,597 | |||||||||||
Doncasters US Finance LLC, Term Loan B | 5.50 | % | 04/09/20 | 6,608 | 6,684,480 | |||||||||||
Filtration Group Corp., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 11/21/20 | 1,637 | 1,655,819 | |||||||||||
Second Lien Term Loan | 8.25 | % | 11/21/21 | 821 | 842,012 | |||||||||||
Gardner Denver, Inc., Term Loan | 4.25 | % | 07/30/20 | 10,043 | 10,015,346 | |||||||||||
Generac Power System, Inc., Term Loan B | 3.50 | % | 05/31/20 | 1,878 | 1,883,808 | |||||||||||
Grede LLC, Term Loan B | 4.50 | % | 05/02/18 | 2,998 | 3,010,717 | |||||||||||
Husky Injection Molding Systems Ltd., Term Loan | 4.25 | % | 06/29/18 | 5,785 | 5,821,877 | |||||||||||
Milacron LLC, First Lien Term Loan | 4.25 | % | 03/30/20 | 3,149 | 3,158,228 | |||||||||||
MX Holdings US, Inc., Term Loan B-1 | 4.50 | % | 08/14/20 | 3,368 | 3,406,031 | |||||||||||
North American Lifting Holdings, Inc., First Lien Term Loan | 5.50 | % | 11/27/20 | 3,898 | 3,917,740 | |||||||||||
QS0001 Corp., First Lien Term Loan | 4.25 | % | 11/09/18 | 4,436 | 4,463,773 | |||||||||||
Rexnord LLC / RBS Global, Inc., Term Loan B | 4.00 | % | 08/21/20 | 10,419 | 10,465,020 | |||||||||||
Tank Holding Corp., Term Loan | 4.25 | % | 07/09/19 | 2,687 | 2,694,517 | |||||||||||
Unifrax Holding Co., Term Loan | 4.25 | % | 11/28/18 | 538 | 541,680 | |||||||||||
Virtuoso US LLC, Term Loan(g) | — | 02/11/21 | 1,950 | 1,969,253 | ||||||||||||
| 81,642,070 | ||||||||||||||||
| Insurance–0.24% | ||||||||||||||||
Applied Systems, Inc., | ||||||||||||||||
Second Lien Term Loan | 7.50 | % | 01/24/22 | 1,231 | 1,261,539 | |||||||||||
Term Loan | 4.25 | % | 01/25/21 | 1,974 | 1,991,763 | |||||||||||
Cooper Gay Swett & Crawford Ltd., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 04/16/20 | 1,940 | 1,916,387 | |||||||||||
Second Lien Term Loan | 8.25 | % | 10/16/20 | 1,300 | 1,258,283 | |||||||||||
| 6,427,972 | ||||||||||||||||
| Leisure Goods, Activities & Movies–3.10% | ||||||||||||||||
24 Hour Fitness Worldwide, Inc., Term Loan B | 5.25 | % | 04/22/16 | 4,764 | 4,826,627 | |||||||||||
Alpha Topco Ltd. (United Kingdom), Term Loan B | 4.50 | % | 04/30/19 | 21,999 | 22,257,508 | |||||||||||
AMC Entertainment Inc., Term Loan | 3.50 | % | 04/30/20 | 5,179 | 5,190,127 | |||||||||||
Bright Horizons Family Solutions, Inc., Term Loan B | 4.00 | % | 01/30/20 | 3,552 | 3,566,684 | |||||||||||
Cedar Fair, L.P., Term Loan | 3.25 | % | 03/06/20 | 1,122 | 1,124,617 | |||||||||||
CWGS Group, LLC, Term Loan | 5.75 | % | 02/20/20 | 7,784 | 7,832,862 | |||||||||||
Equinox Holdings Inc., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 01/31/20 | 2,077 | 2,101,430 | |||||||||||
Revolver(g) | — | 02/01/18 | 1,724 | 1,722,436 | ||||||||||||
IMG Worldwide, Inc., Term Loan B | 5.50 | % | 06/16/16 | 4,751 | 4,769,048 | |||||||||||
Kasima, LLC, Term Loan | 3.25 | % | 05/17/21 | 3,448 | 3,452,247 | |||||||||||
Live Nation Entertainment, Inc., Term Loan B-1 | 3.50 | % | 08/17/20 | 3,972 | 3,986,573 | |||||||||||
Merlin Entertainments Group Luxembourg 2 S.a.r.l. (Luxembourg), Term Loan B-1 | 3.41 | % | 07/03/19 | 3,904 | 3,924,211 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Leisure Goods, Activities & Movies–(continued) | ||||||||||||||||
Sabre, Inc., | ||||||||||||||||
Incremental Term Loan | 4.50 | % | 02/19/19 | $ | 1,247 | $ | 1,250,771 | |||||||||
Term Loan B | 4.25 | % | 02/19/19 | 8,024 | 8,047,964 | |||||||||||
Seaworld Parks & Entertainment, Inc., Term Loan B-2 | 3.00 | % | 05/14/20 | 1,234 | 1,228,259 | |||||||||||
Six Flags Theme Parks, Inc., Term Loan B | 3.50 | % | 12/20/18 | 582 | 586,541 | |||||||||||
US FinCo LLC, Term Loan B | 4.00 | % | 05/29/20 | 2,518 | 2,527,256 | |||||||||||
Zuffa, LLC, Term Loan | 4.50 | % | 02/25/20 | 3,993 | 4,012,480 | |||||||||||
| 82,407,641 | ||||||||||||||||
| Lodging & Casinos–5.73% | ||||||||||||||||
Bally Technologies, Inc., Term Loan B | 4.25 | % | 11/25/20 | 10,419 | 10,498,884 | |||||||||||
Boyd Acquisition Sub, LLC, Term Loan B | 4.25 | % | 11/20/17 | 148 | 148,836 | |||||||||||
Boyd Gaming Corp., Term Loan B | 4.00 | % | 08/14/20 | 3,984 | 3,995,548 | |||||||||||
Cannery Casino Resorts, LLC, First Lien Term Loan | 6.00 | % | 10/02/18 | 3,699 | 3,662,924 | |||||||||||
Centaur Acquisition, LLC, First Lien Term Loan | 5.25 | % | 02/20/19 | 2,125 | 2,135,213 | |||||||||||
Four Seasons Holdings Inc., (Canada) | ||||||||||||||||
First Lien Term Loan | 3.50 | % | 06/27/20 | 3,291 | 3,303,443 | |||||||||||
Second Lien Term Loan | 6.25 | % | 12/28/20 | 2,066 | 2,117,332 | |||||||||||
Great Wolf Resorts, Inc., Term Loan B | 4.50 | % | 08/06/20 | 6,099 | 6,153,991 | |||||||||||
Harrah’s Operating Co., Inc., | ||||||||||||||||
Term Loan B-5 | 4.49 | % | 01/26/18 | 2,908 | 2,750,218 | |||||||||||
Term Loan B-6 | 5.49 | % | 01/26/18 | 9,145 | 8,765,109 | |||||||||||
Hilton Worldwide Finance, LLC, Term Loan | 3.75 | % | 10/26/20 | 49,166 | 49,400,083 | |||||||||||
Las Vegas Sands LLC, Term Loan B | 3.25 | % | 12/20/20 | 10,142 | 10,147,346 | |||||||||||
MGM Resorts International, Term Loan B | 3.50 | % | 12/20/19 | 6,065 | 6,068,334 | |||||||||||
Pinnacle Entertainment, Inc., | ||||||||||||||||
Term Loan B-1 | 3.75 | % | 08/15/16 | 924 | 930,107 | |||||||||||
Term Loan B-2 | 3.75 | % | 08/13/20 | 3,706 | 3,720,973 | |||||||||||
Scientific Games International, Inc., Term Loan | 4.25 | % | 10/18/20 | 25,226 | 25,291,052 | |||||||||||
Station Casinos LLC, Term Loan B | 5.00 | % | 03/02/20 | 827 | 829,527 | |||||||||||
Twin River Management Group, Inc., Term Loan | 5.25 | % | 11/09/18 | 6,550 | 6,623,338 | |||||||||||
Yonkers Racing Corp., | ||||||||||||||||
First Lien Term Loan | 4.25 | % | 08/20/19 | 5,288 | 5,284,961 | |||||||||||
Second Lien Term Loan (Acquired 08/16/13; Cost $388,313) | 8.75 | % | 08/20/20 | 392 | 390,982 | |||||||||||
| 152,218,201 | ||||||||||||||||
| Nonferrous Metals & Minerals–0.79% | ||||||||||||||||
Alpha Natural Resources, Inc., Term Loan B | 3.50 | % | 05/22/20 | 5,407 | 5,279,795 | |||||||||||
Arch Coal, Inc., Term Loan | 6.25 | % | 05/16/18 | 5,665 | 5,598,879 | |||||||||||
Noranda Aluminum Acquisition Corp., Term Loan B | 5.75 | % | 02/28/19 | 3,392 | 3,240,959 | |||||||||||
Novelis Inc., Term Loan | 3.75 | % | 03/10/17 | 787 | 791,541 | |||||||||||
Walter Energy, Inc., Term Loan B | 6.75 | % | 04/02/18 | 6,050 | 5,958,799 | |||||||||||
| 20,869,973 | ||||||||||||||||
| Oil & Gas–6.15% | ||||||||||||||||
Ameriforge Group Inc., First Lien Term Loan | 5.00 | % | 12/19/19 | 69 | 69,724 | |||||||||||
Atlas Energy, L.P., Term Loan | 6.50 | % | 07/31/19 | 3,355 | 3,459,831 | |||||||||||
Bronco Midstream Funding, LLC, Term Loan | 5.00 | % | 08/17/20 | 6,793 | 6,869,912 | |||||||||||
Buffalo Gulf Coast Terminals LLC, Term Loan (Acquired 10/31/11-10/12/23; Cost $4,625,986) | 5.25 | % | 10/31/17 | 4,611 | 4,657,164 | |||||||||||
Chesapeake Energy Corp., Term Loan | 5.75 | % | 12/01/17 | 23,309 | 23,871,091 | |||||||||||
CITGO Petroleum Corp., Term Loan B | 8.00 | % | 06/24/15 | 919 | 929,659 | |||||||||||
Crestwood Holdings LLC, Term Loan B-1 | 7.00 | % | 06/19/19 | 2,408 | 2,462,197 | |||||||||||
Drillships Financing Holding Inc., Term Loan B-1 | 6.00 | % | 03/31/21 | 20,782 | 21,254,670 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Oil & Gas–(continued) | ||||||||||||||||
EMG Utica, LLC, Term Loan (Acquired 04/01/13-06/18/13; Cost $2,764,229) | 4.75 | % | 03/27/20 | $ | 2,761 | $ | 2,778,640 | |||||||||
EXCO Resources, Inc., Term Loan | 5.00 | % | 08/19/19 | 5,712 | 5,741,021 | |||||||||||
Fieldwood Energy LLC, | ||||||||||||||||
Second Lien Term Loan | 8.38 | % | 09/30/20 | 7,115 | 7,392,907 | |||||||||||
Term Loan | 3.88 | % | 09/28/18 | 7,878 | 7,911,131 | |||||||||||
Glenn Pool Oil & Gas Trust I, Term Loan (Acquired 06/08/11; Cost $788,033) | 4.50 | % | 05/02/16 | 788 | 799,854 | |||||||||||
HGIM Corp., Term Loan B | 5.50 | % | 06/18/20 | 6,058 | 6,139,921 | |||||||||||
Kinder Morgan, Inc., Term Loan (Acquired 08/05/13; Cost $7,179,117) | 4.16 | % | 05/22/15 | 7,138 | 7,173,813 | |||||||||||
NGPL PipeCo LLC, Term Loan | 6.75 | % | 09/15/17 | 8,234 | 8,062,145 | |||||||||||
Obsidian Natural Gas Trust (United Kingdom), Term Loan (Acquired 05/05/11; Cost $846,802) | 7.00 | % | 11/02/15 | 832 | 849,022 | |||||||||||
Pacific Drilling S.A. (Luxembourg), Term Loan | 4.50 | % | 06/04/18 | 3,556 | 3,584,855 | |||||||||||
Samson Investment Company, Second Lien Term Loan | 5.00 | % | 09/25/18 | 5,662 | 5,721,109 | |||||||||||
Saxon Enterprises LLC, Term Loan | 5.50 | % | 02/15/19 | 2,423 | 2,451,400 | |||||||||||
Seadrill Ltd.(Bermuda), Term Loan | 4.00 | % | 02/21/21 | 12,347 | 12,409,862 | |||||||||||
Stena International S.a.r.l. (Luxembourg), Term Loan | 4.00 | % | 03/03/21 | 8,212 | 8,129,809 | |||||||||||
Tallgrass Operations, LLC, Term Loan | 4.25 | % | 11/13/18 | 6,665 | 6,731,835 | |||||||||||
Tervita Corp. (Canada), Term Loan | 6.25 | % | 05/15/18 | 7,007 | 7,052,867 | |||||||||||
Western Refining, Inc., Term Loan | 4.25 | % | 11/12/20 | 2,763 | 2,789,223 | |||||||||||
WildHorse Resources, LLC, Term Loan (Acquired 06/07/13; Cost $4,188,175) | 7.50 | % | 12/13/18 | 4,225 | 4,288,546 | |||||||||||
| 163,582,208 | ||||||||||||||||
| Publishing–3.47% | ||||||||||||||||
CBS Outdoor Americas Capital LLC, Term Loan | 3.00 | % | 01/31/21 | 3,258 | 3,256,200 | |||||||||||
Cenveo Corp., Term Loan B | 6.25 | % | 02/13/17 | 9,391 | 9,513,806 | |||||||||||
Endurance Business Media, Inc., Term Loan (Acquired 07/26/06; Cost $80,716) | 6.50 | % | 12/15/14 | 62 | 16,040 | |||||||||||
Getty Images, Inc., | ||||||||||||||||
Revolver Loan(g) | — | 10/18/17 | 4,889 | 4,277,701 | ||||||||||||
Term Loan | 4.75 | % | 10/18/19 | 5,149 | 4,922,044 | |||||||||||
Harland Clarke Holdings Corp., | ||||||||||||||||
Term Loan B-2 | 5.50 | % | 06/30/17 | 350 | 351,088 | |||||||||||
Term Loan B-4 | 6.00 | % | 08/04/19 | 1,448 | 1,453,735 | |||||||||||
Media General, Inc., Term Loan B | 4.25 | % | 07/31/20 | 6,833 | 6,905,901 | |||||||||||
MediMedia USA, Inc., First Lien Term Loan | 8.00 | % | 11/20/18 | 5,612 | 5,443,474 | |||||||||||
Merrill Communications LLC, Term Loan | 7.25 | % | 03/08/18 | 4,931 | 5,005,432 | |||||||||||
MTL Publishing LLC, Term Loan B-2 | 4.25 | % | 06/29/18 | 4,408 | 4,424,654 | |||||||||||
Multi Packaging Solutions, Inc., | ||||||||||||||||
Term Loan A | 4.25 | % | 09/30/20 | 1,570 | 1,566,308 | |||||||||||
Term Loan B | 4.25 | % | 09/30/20 | 3,706 | 3,741,096 | |||||||||||
Newsday, LLC, Term Loan | 3.65 | % | 10/12/16 | 3,615 | 3,628,100 | |||||||||||
ProQuest LLC, Term Loan | 6.00 | % | 04/13/18 | 1,783 | 1,814,632 | |||||||||||
Southern Graphics Inc., Term Loan | 4.26 | % | 10/17/19 | 4,412 | 4,439,928 | |||||||||||
Tribune Co., Term Loan | 4.00 | % | 12/27/20 | 31,431 | 31,465,574 | |||||||||||
| 92,225,713 | ||||||||||||||||
| Radio & Television–3.14% | ||||||||||||||||
Clear Channel Communications, Inc., | ||||||||||||||||
Term Loan B | 3.80 | % | 01/29/16 | 361 | 355,444 | |||||||||||
Term Loan D | 6.90 | % | 01/30/19 | 34,262 | 33,700,151 | |||||||||||
Term Loan E | 7.65 | % | 07/30/19 | 6,670 | 6,665,913 | |||||||||||
E.W. Scripps Co., Term Loan | 3.25 | % | 11/26/20 | 843 | 847,160 | |||||||||||
Entravision Communications Corp., Term Loan B | 3.50 | % | 05/29/20 | 7,282 | 7,243,557 | |||||||||||
Gray Television, Inc., Term Loan | 4.75 | % | 10/11/19 | 1,311 | 1,320,741 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Radio & Television–(continued) | ||||||||||||||||
Lin Television Corp., Term Loan B | 4.00 | % | 12/21/18 | $ | 687 | $ | 688,746 | |||||||||
Mission Broadcasting, Inc., Term Loan B-2 | 3.75 | % | 10/01/20 | 640 | 642,481 | |||||||||||
NEP/NCP HoldCo, Inc., | ||||||||||||||||
Incremental Term Loan | 4.25 | % | 01/22/20 | 3,518 | 3,538,585 | |||||||||||
Second Lien Term Loan | 9.50 | % | 07/22/20 | 132 | 135,729 | |||||||||||
Nexstar Broadcasting, Inc., Term Loan B-2 | 3.75 | % | 10/01/20 | 726 | 729,270 | |||||||||||
Nine Entertainment Corp., Term Loan B | 3.25 | % | 02/05/20 | 4,566 | 4,560,156 | |||||||||||
Raycom TV Broadcasting, LLC, Term Loan B | 4.25 | % | 05/31/17 | 2,081 | 2,088,697 | |||||||||||
Sinclair Television Group, Inc., Term Loan B | 3.00 | % | 04/09/20 | 2,031 | 2,022,327 | |||||||||||
TWCC Holding Corp., | ||||||||||||||||
Second Lien Term Loan | 7.00 | % | 06/26/20 | 4,011 | 3,898,145 | |||||||||||
Term Loan | 3.50 | % | 02/13/17 | 7,492 | 7,258,319 | |||||||||||
Univision Communications Inc., First Lien Term Loan | 4.00 | % | 03/01/20 | 7,632 | 7,662,502 | |||||||||||
| 83,357,923 | ||||||||||||||||
| Retailers (except Food & Drug)–4.62% | ||||||||||||||||
Academy, Ltd., Term Loan | 4.50 | % | 08/03/18 | 2,264 | 2,281,928 | |||||||||||
CDW LLC, Term Loan | 3.25 | % | 04/29/20 | 13,008 | 12,967,006 | |||||||||||
Collective Brands, Inc., Term Loan | 7.25 | % | 10/09/19 | 6,559 | 6,579,763 | |||||||||||
David’s Bridal, Inc., | ||||||||||||||||
ABL Revolver(f) | 0.00 | % | 10/11/17 | 1,573 | 1,462,593 | |||||||||||
Term Loan | 5.00 | % | 10/11/19 | 1,217 | 1,226,567 | |||||||||||
Guitar Center, Inc., Term Loan | 6.25 | % | 04/10/17 | 7,824 | 7,750,828 | |||||||||||
Hudson’s Bay Co. (Canada), First Lien Term Loan | 4.75 | % | 11/04/20 | 8,333 | 8,469,964 | |||||||||||
Leonardo Acquisition Corp., Term Loan | 4.25 | % | 01/31/21 | 1,809 | 1,819,483 | |||||||||||
National Vision, Inc., Term Loan | 7.00 | % | 08/02/18 | 2,721 | 2,727,694 | |||||||||||
Neiman Marcus Group, Inc., Term Loan | 5.00 | % | 10/26/20 | 10,131 | 10,259,600 | |||||||||||
OSP Group, Inc., First Lien Term Loan | 5.50 | % | 02/05/20 | 4,126 | 4,136,785 | |||||||||||
Pep Boys–Manny, Moe & Jack, Term Loan | 4.25 | % | 10/11/18 | 1,470 | 1,482,032 | |||||||||||
Savers Inc., Term Loan | 5.00 | % | 07/09/19 | 4,890 | 4,916,307 | |||||||||||
Sears Holding Corp., Term Loan | 5.50 | % | 06/30/18 | 24,322 | 24,443,462 | |||||||||||
Spin Holdco Inc., First Lien Term Loan | 4.25 | % | 11/14/19 | 18,540 | 18,613,382 | |||||||||||
Toys ‘R’ US-Delaware, Inc., | ||||||||||||||||
Term Loan | 6.00 | % | 09/01/16 | 1,912 | 1,721,950 | |||||||||||
Term Loan B-2 | 5.25 | % | 05/25/18 | 398 | 335,990 | |||||||||||
Term Loan B-3 | 5.25 | % | 05/25/18 | 115 | 97,474 | |||||||||||
Toys ‘R’ US Property Co. I, LLC | 6.00 | % | 08/21/19 | 10,109 | 9,561,570 | |||||||||||
Wilton Brands LLC, Term Loan B | 7.50 | % | 08/30/18 | 1,925 | 1,840,128 | |||||||||||
| 122,694,506 | ||||||||||||||||
| Steel–0.34% | ||||||||||||||||
JFB Firth Rixson Inc., Term Loan | 4.25 | % | 06/30/17 | 667 | 669,700 | |||||||||||
JMC Steel Group Inc., Term Loan | 4.75 | % | 04/03/17 | 1,082 | 1,084,297 | |||||||||||
Southwire Co., Term Loan | 3.25 | % | 02/11/21 | 1,144 | 1,145,112 | |||||||||||
TMS International Corp., Term Loan B | 4.50 | % | 10/16/20 | 3,390 | 3,431,894 | |||||||||||
Waupaca Foundry, Inc., Term Loan | 4.00 | % | 06/29/17 | 2,752 | 2,759,185 | |||||||||||
| 9,090,188 | ||||||||||||||||
| Surface Transport–0.93% | ||||||||||||||||
Ceva Group PLC, (United Kingdom) | ||||||||||||||||
Term Loan B(g) | — | 08/31/16 | 1,260 | 1,259,805 | ||||||||||||
Term Loan B | 0.15 | % | 08/31/16 | 216 | 215,770 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Surface Transport–(continued) | ||||||||||||||||
Hertz Corp. (The), | ||||||||||||||||
Synthetic LOC | 3.75 | % | 03/09/18 | $ | 552 | $ | 550,900 | |||||||||
Term Loan B-1 | 3.75 | % | 03/12/18 | 903 | 906,558 | |||||||||||
JHCI Acquisition, Inc., First Lien Term Loan | 7.00 | % | 07/11/19 | 2,750 | 2,783,985 | |||||||||||
Kenan Advantage Group, Inc., | ||||||||||||||||
Term Loan | 3.75 | % | 06/10/16 | 629 | 635,694 | |||||||||||
Term Loan D (Acquired 12/11/13; Cost $728,438) | 3.75 | % | 06/10/16 | 729 | 734,765 | |||||||||||
Navios Partners Finance (US) Inc., Term Loan | 5.25 | % | 06/27/18 | 8,159 | 8,322,638 | |||||||||||
U.S. Shipping Corp., Term Loan | 9.00 | % | 04/30/18 | 9,070 | 9,324,721 | |||||||||||
| 24,734,836 | ||||||||||||||||
| Telecommunications–7.14% | ||||||||||||||||
Alcatel-Lucent USA Inc., Term Loan | 4.50 | % | 01/30/19 | 11,341 | 11,463,624 | |||||||||||
Arris Enterprises, Inc., Term Loan | 3.50 | % | 04/17/20 | 204 | 203,052 | |||||||||||
Avaya Inc., | ||||||||||||||||
Term Loan B-3 | 4.73 | % | 10/26/17 | 23,626 | 23,051,156 | |||||||||||
Term Loan B-6 | 6.50 | % | 03/30/18 | 10,280 | 10,280,133 | |||||||||||
Cellular South, Inc., Term Loan B | 3.25 | % | 05/22/20 | 2,580 | 2,570,207 | |||||||||||
Consolidated Communications, Inc., Term Loan | 4.25 | % | 12/23/20 | 13,258 | 13,367,663 | |||||||||||
Cricket Communications, Inc., | ||||||||||||||||
Term Loan | 4.75 | % | 10/10/19 | 2,568 | 2,572,364 | |||||||||||
Term Loan C | 4.75 | % | 03/09/20 | 4,196 | 4,205,516 | |||||||||||
Crown Castle Operating Company, Term Loan B-2 | 3.25 | % | 01/31/21 | 13,139 | 13,163,536 | |||||||||||
Fairpoint Communications, Inc., Term Loan | 7.50 | % | 02/14/19 | 9,099 | 9,375,655 | |||||||||||
Hargray Communications Group, Inc., Term Loan | 4.75 | % | 06/26/19 | 2,423 | 2,453,309 | |||||||||||
Intelsat Jackson Holdings S.A., Term Loan B-2 | 3.75 | % | 06/30/19 | 10,437 | 10,527,419 | |||||||||||
Level 3 Communications, Inc., | ||||||||||||||||
Term Loan B | 4.00 | % | 01/15/20 | 22,474 | 22,568,616 | |||||||||||
Term Loan B-III | 4.00 | % | 08/01/19 | 428 | 430,528 | |||||||||||
LTS Buyer LLC, | ||||||||||||||||
First Lien Term Loan B | 4.00 | % | 04/13/20 | 3,302 | 3,303,726 | |||||||||||
Second Lien Term Loan | 8.00 | % | 04/12/21 | 82 | 83,577 | |||||||||||
NTELOS Inc., Term Loan B | 5.75 | % | 11/08/19 | 6,635 | 6,651,458 | |||||||||||
SBA Senior Finance II LLC, | ||||||||||||||||
Incremental Term Loan B(g) | — | 03/24/21 | 5,725 | 5,719,010 | ||||||||||||
Incremental Term Loan A | 3.25 | % | 03/24/21 | 5,725 | 5,720,041 | |||||||||||
Syniverse Holdings, Inc., Term Loan | 4.00 | % | 04/23/19 | 9,263 | 9,305,590 | |||||||||||
Telesat LLC, Term Loan B-2 | 3.50 | % | 03/28/19 | 1,272 | 1,273,847 | |||||||||||
U.S. TelePacific Corp., Term Loan | 5.75 | % | 02/23/17 | 5,256 | 5,302,943 | |||||||||||
Windstream Corp., | ||||||||||||||||
Term Loan B-4 | 3.50 | % | 01/23/20 | 7,799 | 7,805,255 | |||||||||||
Term Loan B-5 | 3.50 | % | 08/08/19 | 1,000 | 1,002,500 | |||||||||||
Yankee Cable Acquisition, LLC, Term Loan | 4.50 | % | 03/02/20 | 6,130 | 6,192,299 | |||||||||||
Zayo Group, LLC, Term Loan | 4.00 | % | 07/02/19 | 11,119 | 11,162,002 | |||||||||||
| 189,755,026 | ||||||||||||||||
| Utilities–2.44% | ||||||||||||||||
AES Corp. (The), Term Loan | 3.75 | % | 06/01/18 | 999 | 1,005,167 | |||||||||||
Calpine Construction Finance Co., L.P., | ||||||||||||||||
Term Loan B-1 | 3.00 | % | 05/03/20 | 5,474 | 5,422,600 | |||||||||||
Term Loan B-2 | 3.25 | % | 01/31/22 | 7,249 | 7,179,930 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Utilities–(continued) | ||||||||||||||||
Calpine Corp., | ||||||||||||||||
Term Loan | 4.00 | % | 04/02/18 | $ | 1,653 | $ | 1,663,843 | |||||||||
Term Loan | 4.00 | % | 04/02/18 | 26 | 26,288 | |||||||||||
Term Loan | 4.00 | % | 10/09/19 | 7,665 | 7,716,189 | |||||||||||
Term Loan B | 4.00 | % | 10/30/20 | 1,023 | 1,033,013 | |||||||||||
Dynegy Inc., Term Loan B-2 | 4.00 | % | 04/23/20 | 6,986 | 7,028,566 | |||||||||||
EquiPower Resources Holdings, LLC, | ||||||||||||||||
First Lien Term Loan B | 4.25 | % | 12/21/18 | 6,065 | 6,098,836 | |||||||||||
First Lien Term Loan C | 4.25 | % | 12/31/19 | 3,752 | 3,770,999 | |||||||||||
LSP Madison Funding, LLC, Term Loan | 5.50 | % | 06/28/19 | 948 | 964,098 | |||||||||||
NSG Holdings LLC, Term Loan | 3.75 | % | 12/11/19 | 873 | 876,939 | |||||||||||
Sapphire Power Finance LLC, Term Loan B | 6.00 | % | 07/10/18 | 3,144 | 3,181,256 | |||||||||||
Texas Competitive Electric Holdings, | ||||||||||||||||
Term Loan | 3.74 | % | 10/10/14 | 6,868 | 4,812,258 | |||||||||||
Term Loan | 4.74 | % | 10/10/17 | 12,148 | 8,496,247 | |||||||||||
USIC Holdings, Inc., First Lien Term Loan | 4.00 | % | 07/10/20 | 5,636 | 5,647,330 | |||||||||||
| 64,923,559 | ||||||||||||||||
Total Variable Rate Senior Loan Interests | 2,490,962,826 | |||||||||||||||
Bonds and Notes–3.96% | ||||||||||||||||
| Air Transport–0.02% | ||||||||||||||||
Continental Airlines, Inc.(h) | 6.75 | % | 09/15/15 | 460 | 472,075 | |||||||||||
| Automotive–0.08% | ||||||||||||||||
Goodyear Tire & Rubber Co. | 6.50 | % | 03/01/21 | 1,063 | 1,169,300 | |||||||||||
Schaeffler AG (Germany)(h) | 4.75 | % | 05/15/21 | 1,042 | 1,052,279 | |||||||||||
| 2,221,579 | ||||||||||||||||
| Business Equipment & Services–0.36% | ||||||||||||||||
ADT Corp. (The)(h) | 6.25 | % | 10/15/21 | 2,222 | 2,355,320 | |||||||||||
First Data Corp.(h) | 6.75 | % | 11/01/20 | 6,807 | 7,368,577 | |||||||||||
| 9,723,897 | ||||||||||||||||
| Cable & Satellite–0.01% | ||||||||||||||||
Lynx II Corp.(h) | 5.38 | % | 04/15/21 | 200 | 206,500 | |||||||||||
| Cable & Satellite Television–0.05% | ||||||||||||||||
UPC Broadband Holdings, B.V. (Netherlands)(h) | 7.25 | % | 11/15/21 | 1,074 | 1,184,085 | |||||||||||
UPC Broadband Holdings, B.V. (Netherlands)(h) | 6.88 | % | 01/15/22 | 173 | 190,427 | |||||||||||
| 1,374,512 | ||||||||||||||||
| Chemicals & Plastics–0.31% | ||||||||||||||||
Hexion Specialty Chemicals, Inc. | 6.63 | % | 04/15/20 | 7,205 | 7,493,200 | |||||||||||
Ineos Holdings Ltd.(h) | 8.38 | % | 02/15/19 | 241 | 268,112 | |||||||||||
Ineos Holdings Ltd.(h) | 7.50 | % | 05/01/20 | 157 | 173,093 | |||||||||||
Taminco Global Chemical Corp.(h) | 9.75 | % | 03/31/20 | 226 | 257,640 | |||||||||||
| 8,192,045 | ||||||||||||||||
| Containers & Glass Products–0.73% | ||||||||||||||||
Ardagh Glass Finance PLC (Ireland)(h) | 6.25 | % | 01/31/19 | 1,631 | 1,700,318 | |||||||||||
Ardagh Glass Finance PLC (Ireland)(h) | 7.00 | % | 11/15/20 | 151 | 154,440 | |||||||||||
Reynolds Group Holdings Inc. | 7.88 | % | 08/15/19 | 1,854 | 2,050,988 | |||||||||||
Reynolds Group Holdings Inc. | 9.88 | % | 08/15/19 | 1,879 | 2,127,967 | |||||||||||
Reynolds Group Holdings Inc. | 5.75 | % | 10/15/20 | 12,685 | 13,350,962 | |||||||||||
| 19,384,675 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Electronics & Electrical–0.19% | ||||||||||||||||
Blackboard Inc.(h) | 7.75 | % | 11/15/19 | $ | 4,194 | $ | 4,351,275 | |||||||||
Freescale Semiconductor Inc.(h) | 6.00 | % | 01/15/22 | 561 | 597,465 | |||||||||||
| 4,948,740 | ||||||||||||||||
| Food Products–0.02% | ||||||||||||||||
Chiquita Brands Intl | 7.88 | % | 02/01/21 | 412 | 454,230 | |||||||||||
| Forest Products–0.07% | ||||||||||||||||
Verso Paper Holdings LLC | 11.75 | % | 01/15/19 | 1,626 | 1,764,210 | |||||||||||
| Healthcare–0.52% | ||||||||||||||||
Accellent Inc. | 8.38 | % | 02/01/17 | 2,878 | 3,021,900 | |||||||||||
Biomet, Inc. | 6.50 | % | 08/01/20 | 469 | 508,865 | |||||||||||
Community Health Systems, Inc. | 5.13 | % | 08/15/18 | 940 | 999,925 | |||||||||||
Community Health Systems, Inc.(h) | 5.13 | % | 08/01/21 | 861 | 861,000 | |||||||||||
Community Health Systems, Inc.(h) | 6.88 | % | 02/01/22 | 971 | 1,037,756 | |||||||||||
DJO Finance LLC | 9.75 | % | 10/15/17 | 1,099 | 1,156,698 | |||||||||||
DJO Finance LLC | 8.75 | % | 03/15/18 | 1,386 | 1,524,600 | |||||||||||
Kindred Healthcare, Inc. | 8.25 | % | 06/01/19 | 542 | 588,070 | |||||||||||
Kinetic Concepts, Inc. | 10.50 | % | 11/01/18 | 1,764 | 2,055,060 | |||||||||||
Tenet Healthcare Corp.(h) | 6.00 | % | 10/01/20 | 1,832 | 1,992,300 | |||||||||||
| 13,746,174 | ||||||||||||||||
| Lodging & Casinos–0.04% | ||||||||||||||||
Harrah’s Operating Co., Inc. | 8.50 | % | 02/15/20 | 360 | 346,050 | |||||||||||
Harrah’s Operating Co., Inc. | 9.00 | % | 02/15/20 | 791 | 775,180 | |||||||||||
| 1,121,230 | ||||||||||||||||
| Nonferrous Metals & Minerals–0.04% | ||||||||||||||||
TiZir Ltd. (United Kingdom) | 9.00 | % | 09/28/17 | 1,000 | 1,062,500 | |||||||||||
| Oil & Gas–0.27% | ||||||||||||||||
Kinder Morgan, Inc.(h) | 5.00 | % | 02/15/21 | 2,141 | 2,162,410 | |||||||||||
Pacific Drilling S.A. (Luxembourg)(h) | 5.38 | % | 06/01/20 | 2,798 | 2,848,255 | |||||||||||
Tervita Corp. (Canada)(h) | 8.00 | % | 11/15/18 | 1,949 | 2,046,450 | |||||||||||
Western Refining, Inc. | 6.25 | % | 04/01/21 | 190 | 196,080 | |||||||||||
| 7,253,195 | ||||||||||||||||
| Publishing–0.04% | ||||||||||||||||
Merrill Communications, LLC | 10.00 | % | 03/08/23 | 1,104 | 1,015,416 | |||||||||||
| Radio & Television–0.21% | ||||||||||||||||
Sinclair Television Group, Inc. | 6.38 | % | 11/01/21 | 1,208 | 1,280,480 | |||||||||||
Univision Communications Inc.(h) | 6.88 | % | 05/15/19 | 1,000 | 1,080,000 | |||||||||||
Univision Communications Inc.(h) | 6.75 | % | 09/15/22 | 2,833 | 3,151,713 | |||||||||||
| 5,512,193 | ||||||||||||||||
| Retailers (except Food & Drug)–0.12% | ||||||||||||||||
Claire’s Stores Inc.(h) | 9.00 | % | 03/15/19 | 1,202 | 1,269,613 | |||||||||||
Claire’s Stores Inc.(h) | 6.13 | % | 03/15/20 | 2,079 | 1,982,846 | |||||||||||
| 3,252,459 | ||||||||||||||||
| Telecommunications–0.61% | ||||||||||||||||
Avaya Inc.(h) | 7.00 | % | 04/01/19 | 2,835 | 2,817,480 | |||||||||||
Goodman Networks Inc.(h) | 12.13 | % | 07/01/18 | 4,933 | 5,265,977 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Telecommunications–(continued) | ||||||||||||||||
Goodman Networks Inc.(h) | 12.13 | % | 07/01/18 | $ | 2,775 | $ | 2,962,312 | |||||||||
Wind Telecomunicazioni S.p.A. (Italy)(h) | 7.25 | % | 02/15/18 | 1,500 | 1,575,938 | |||||||||||
Wind Telecomunicazioni S.p.A. (Italy)(h) | 7.25 | % | 02/15/18 | 1,612 | 1,693,607 | |||||||||||
Wind Telecomunicazioni S.p.A. (Italy)(h) | 6.50 | % | 04/30/20 | 256 | 282,880 | |||||||||||
Windstream Corp. | 7.50 | % | 06/01/22 | 1,484 | 1,565,620 | |||||||||||
Windstream Corp. | 6.38 | % | 08/01/23 | 17 | 16,873 | |||||||||||
| 16,180,687 | ||||||||||||||||
| Utilities–0.27% | ||||||||||||||||
Calpine Corp.(h) | 7.50 | % | 02/15/21 | 2,830 | 3,140,961 | |||||||||||
Calpine Corp.(h) | 6.00 | % | 01/15/22 | 807 | 859,455 | |||||||||||
Calpine Corp.(h) | 7.88 | % | 01/15/23 | — | 292 | |||||||||||
NRG Energy Inc. | 7.63 | % | 05/15/19 | 713 | 746,868 | |||||||||||
NRG Energy Inc.(h) | 6.25 | % | 07/15/22 | 1,579 | 1,648,081 | |||||||||||
NRG Energy Inc. | 6.63 | % | 03/15/23 | 880 | 932,800 | |||||||||||
| 7,328,457 | ||||||||||||||||
Total Bonds and Notes | 105,214,774 | |||||||||||||||
Structured Products–3.04% | ||||||||||||||||
Apidos Cinco CDO (Cayman Islands)(h)(i) | 4.49 | % | 05/14/20 | 345 | 336,895 | |||||||||||
Apidos CLO II(h)(i) | 4.99 | % | 12/21/18 | 1,621 | 1,619,621 | |||||||||||
Apidos CLO IX(h)(i) | 6.74 | % | 07/15/23 | 3,083 | 3,090,955 | |||||||||||
Apidos CLO X(h)(i) | 6.49 | % | 10/30/22 | 2,190 | 2,195,341 | |||||||||||
Apidos CLO X(h)(i) | 6.49 | % | 10/30/22 | 1,367 | 1,370,334 | |||||||||||
Apidos CLO XI(h)(i) | 5.49 | % | 01/17/23 | 2,070 | 1,998,204 | |||||||||||
Apidos CLO XV(h)(i) | 5.00 | % | 10/20/25 | 4,500 | 4,181,441 | |||||||||||
Apidos Quattro CDO (Cayman Islands)(h)(i) | 3.84 | % | 01/20/19 | 408 | 396,110 | |||||||||||
Ares XI CLO, Ltd.(h)(i) | 3.24 | % | 10/11/21 | 724 | 703,231 | |||||||||||
Atrium IV CDO Corp.(h) | 9.18 | % | 06/08/19 | 205 | 215,952 | |||||||||||
Atrium X CDO(h)(i) | 4.74 | % | 07/16/25 | 3,742 | 3,436,819 | |||||||||||
Babson CLO Ltd. 2007-I(h)(i) | 3.49 | % | 01/18/21 | 1,034 | 995,230 | |||||||||||
Babson CLO Ltd. 2013-II(h)(i) | 4.74 | % | 01/18/25 | 4,442 | 4,033,728 | |||||||||||
Carlyle Global Market Strategies 2012-2 (Cayman Islands)(h)(i) | 6.49 | % | 07/20/23 | 1,418 | 1,421,568 | |||||||||||
Carlyle Global Market Strategies 2012-3 (Cayman Islands)(h)(i) | 5.74 | % | 10/14/24 | 3,188 | 3,132,865 | |||||||||||
Columbus Nova CLO Ltd.(h)(i) | 3.84 | % | 05/16/19 | 429 | 411,210 | |||||||||||
Columbus Nova CLO Ltd.(h)(i) | 3.84 | % | 05/16/19 | 1,093 | 1,047,674 | |||||||||||
Dryden Senior Loan Fund 2012-23 (Cayman Islands)(h)(i) | 6.24 | % | 07/17/23 | 1,770 | 1,771,670 | |||||||||||
Dryden Senior Loan Fund 2013-30 (Cayman Islands)(h)(i) | 5.26 | % | 10/15/25 | 3,276 | 3,127,604 | |||||||||||
Flagship CLO VI(h)(i) | 4.99 | % | 06/10/21 | 3,254 | 3,246,510 | |||||||||||
Flagship CLO VI(h)(i) | 4.99 | % | 06/10/21 | 987 | 984,487 | |||||||||||
Four Corners CLO II, Ltd.(h)(i) | 2.09 | % | 01/26/20 | 310 | 301,066 | |||||||||||
Four Corners CLO II, Ltd.(h)(i) | 2.09 | % | 01/26/20 | 103 | 100,032 | |||||||||||
Gramercy Park CLO(h)(i) | 5.74 | % | 07/17/23 | 1,336 | 1,317,454 | |||||||||||
Halcyon Loan Investors CLO II, Ltd.(h)(i) | 3.84 | % | 04/24/21 | 917 | 866,890 | |||||||||||
ING IM CLO 2012-3, Ltd.(h)(i) | 6.09 | % | 10/15/22 | 1,243 | 1,237,066 | |||||||||||
ING IM CLO 2012-4, Ltd.(h)(i) | 5.99 | % | 10/15/23 | 1,861 | 1,846,967 | |||||||||||
ING IM CLO 2013-1, Ltd.(h)(i) | 5.24 | % | 04/15/24 | 4,808 | 4,565,327 | |||||||||||
ING IM CLO 2013-3, Ltd.(h)(i) | 4.74 | % | 01/18/26 | 2,745 | 2,511,227 | |||||||||||
ING Investment Management CLO III, Ltd.(h)(i) | 3.75 | % | 12/13/20 | 1,188 | 1,123,068 | |||||||||||
ING Investment Management CLO IV, Ltd.(h)(i) | 4.49 | % | 06/14/22 | 293 | 287,530 | |||||||||||
Keuka Park CLO 2013-1(h)(i) | 4.74 | % | 10/21/24 | 617 | 569,716 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Floating Rate Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Structured Products–(continued) | ||||||||||||||||
Kingsland Ltd (Cayman Islands)(h)(i) | 4.74 | % | 04/21/21 | $ | 1,205 | $ | 1,164,331 | |||||||||
KKR Financial CLO 2012-1(h)(i) | 5.75 | % | 12/15/24 | 2,100 | 2,041,231 | |||||||||||
KKR Financial CLO 2013-1(h)(i) | 4.99 | % | 07/15/25 | 2,461 | 2,277,884 | |||||||||||
Madison Park Funding IV Ltd.(h)(i) | 3.85 | % | 03/22/21 | 1,344 | 1,305,612 | |||||||||||
Madison Park Funding X Ltd. (Cayman Islands)(h)(i) | 5.49 | % | 01/20/25 | 1,953 | 1,891,851 | |||||||||||
Marine Park CLO 2012-1(h)(i) | 5.99 | % | 05/18/23 | 2,191 | 2,178,231 | |||||||||||
Octagon Investment Partners XVII Ltd. (Cayman Islands)(h)(i) | 4.74 | % | 10/25/25 | 980 | 901,587 | |||||||||||
Octagon Investment Partners XVIII Ltd. (Cayman Islands)(h)(i) | 5.49 | % | 12/16/24 | 4,442 | 4,287,924 | |||||||||||
Pacifica CDO VI, Ltd.(h)(i) | 3.99 | % | 08/15/21 | 565 | 530,849 | |||||||||||
Sierra CLO II Ltd.(i) | 3.74 | % | 01/22/21 | 733 | 707,087 | |||||||||||
Silverado CLO 2006-II Ltd.(h)(i) | 4.00 | % | 10/16/20 | 886 | 843,957 | |||||||||||
Slater Mill Loan Fund, L.P.(h)(i) | 5.74 | % | 08/17/22 | 1,108 | 1,089,705 | |||||||||||
Symphony CLO 2013-12, Ltd.(h)(i) | 5.15 | % | 10/15/25 | 1,850 | 1,745,119 | |||||||||||
Symphony CLO IX, Ltd.(h)(i) | 5.25 | % | 04/16/22 | 1,901 | 1,818,254 | |||||||||||
Symphony CLO VIII, Ltd.(h)(i) | 5.99 | % | 01/09/23 | 1,035 | 1,026,423 | |||||||||||
Symphony CLO XI(h)(i) | 5.49 | % | 01/17/25 | 2,640 | 2,553,756 | |||||||||||
Total Structured Products | 80,807,593 | |||||||||||||||
| Shares | ||||||||||||||||
Common Stocks & Other Equity Interests–0.25% | ||||||||||||||||
| Automotive–0.01% | ||||||||||||||||
Dayco Products, LLC,(h)(j) | 856 | 35,524 | ||||||||||||||
Dayco Products, LLC,(h)(j) | 3,261 | 135,331 | ||||||||||||||
| 170,855 | ||||||||||||||||
| Building & Development–0.12% | ||||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class A (Acquired 04/28/10–07/15/10; Cost $664,569)(h)(j) | 518 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class B (Acquired 06/30/10; Cost $3,408,940)(h)(j) | 4 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class C Wts. expiring 07/15/15 (Acquired 06/30/10; Cost $0)(h)(j) | 17 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class D Wts. expiring 07/15/15 (Acquired 06/30/10; Cost $0)(h)(j) | 24 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class E Wts. expiring 07/15/15 (Acquired 06/30/10; Cost $0)(h)(j) | 27 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class F Wts. expiring 07/15/15 (Acquired 06/30/10; Cost $0)(h)(j) | 30 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class G Wts. expiring 07/15/15 (Acquired 06/30/10; Cost $0)(h)(j) | 34 | 0 | ||||||||||||||
Stile Acquisition Corp. (Canada)(h)(j) | 53,093 | 3,063,466 | ||||||||||||||
United Subcontractors, Inc.(h)(j) | 4,840 | 53,245 | ||||||||||||||
| 3,116,711 | ||||||||||||||||
| Cable & Satellite Television–0.04% | ||||||||||||||||
Ion Media Networks, Inc.(h)(j) | 4,471 | 1,117,750 | ||||||||||||||
| Chemicals & Plastics–0.00% | ||||||||||||||||
LyondellBasell Industries N.V. Class A, | 218 | 19,201 | ||||||||||||||
| Financial Intermediaries–0.00% | ||||||||||||||||
Bankruptcy Management Solutions, Inc.(h)(k) | 335 | 13,400 | ||||||||||||||
Bankruptcy Management Solutions, Inc. Class A Wts. expiring 06/27/18 (Acquired 06/27/13; Cost $0)(h)(k) | 19 | 0 | ||||||||||||||
Bankruptcy Management Solutions, Inc. Class B Wts. expiring 06/27/18 (Acquired 06/27/13; Cost $0)(h)(k) | 21 | 0 | ||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco Floating Rate Fund
| Shares | Value | |||||||||||
| Financial Intermediaries–(continued) | ||||||||||||
Bankruptcy Management Solutions, Inc. Class C Wts. expiring 06/27/18 (Acquired 06/27/13; Cost $0)(h)(k) | 31 | $ | 0 | |||||||||
| 13,400 | ||||||||||||
| Forest Products–0.00% | ||||||||||||
Xerium Technologies, Inc.(j) | 1,766 | 27,815 | ||||||||||
| Leisure Goods, Activities & Movies–0.00% | ||||||||||||
AMF Bowling Centers, Inc.(j) | 1,665 | 39,336 | ||||||||||
| Lodging & Casinos–0.02% | ||||||||||||
Twin River Worldwide Holdings, Inc., Class A,(h)(j) | 18,663 | 465,642 | ||||||||||
| Publishing–0.04% | ||||||||||||
Endurance Business Media, Inc. Class A (Acquired 07/26/06; Cost $82,567)(h)(j) | 124 | 0 | ||||||||||
F&W Publications, Inc.(h)(j) | 288 | 2,304 | ||||||||||
F&W Publications, Inc., Wts. expiring 12/09/17(h)(k) | 559 | 4,471 | ||||||||||
Merrill Communications LLC, Class A(j) | 133,776 | 267,552 | ||||||||||
Tribune Co. Class A(k) | 9,050 | 717,213 | ||||||||||
| 991,540 | ||||||||||||
| Surface Transport–0.00% | ||||||||||||
U.S. Shipping Corp. (Acquired 09/28/07-09/30/09; Cost $0)(h)(j) | 6,189 | 804 | ||||||||||
U.S. Shipping Corp. (Acquired 09/28/07-09/30/09; Cost $87,805)(h)(j) | 87,805 | 48,293 | ||||||||||
| 49,097 | ||||||||||||
| Telecommunications–0.02% | ||||||||||||
FairPoint Communications, Inc.(j) | 44,928 | 596,644 | ||||||||||
| Utilities–0.00% | ||||||||||||
Bicent Power, LLC Series A, Wts. expiring 08/21/22 (Acquired 08/21/12; Cost $0)(h)(j) | 101 | 0 | ||||||||||
Bicent Power, LLC Series B, Wts. expiring 08/21/22 (Acquired 08/21/12; Cost $0)(h)(j) | 164 | 0 | ||||||||||
| 0 | ||||||||||||
Total Common Stocks & Other Equity Interests | 6,607,991 | |||||||||||
Preferred Stock–0.01% | ||||||||||||
| Building & Development–0.01% | ||||||||||||
United Subcontractors, Inc. (Acquired 08/02/13; Cost $0)(j) | 4,840 | 145,214 | ||||||||||
Money Market Funds–3.75% | ||||||||||||
Liquid Assets Portfolio–Institutional Class(l) | 49,889,818 | 49,889,818 | ||||||||||
Premier Portfolio–Institutional Class(l) | 49,889,818 | 49,889,818 | ||||||||||
Total Money Market Funds | 99,779,636 | |||||||||||
TOTAL INVESTMENTS–104.72% (Cost $2,773,658,512) | 2,783,518,034 | |||||||||||
OTHER ASSETS LESS LIABILITIES–(4.72)% | (125,379,380 | ) | ||||||||||
NET ASSETS–100.00% | $ | 2,658,138,654 | ||||||||||
Investment Abbreviations:
| CDO | – Collateralized Debt Obligation | |
| CLO | – Collateralized Loan Obligation | |
| LOC | – Letter of Credit | |
| PIK | – Payment in Kind | |
| Wts. | – Warrants |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco Floating Rate Fund
Notes to Schedule of Investments:
| (a) | 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 an expected average life of three to five years. |
| (b) | Variable rate senior loan interests are, at present, not readily marketable, not registered under the Securities Act of 1933, as amended (the “1933 Act”), 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) | Defaulted security. Currently, the issuer is partially or fully in default with respect to principal and/or interest payments. The aggregate value of these securities at February 28, 2014 was $3,903,611, which represented less than 1% of the Fund’s Net Assets. |
| (d) | The borrower has filed for protection in federal bankruptcy court. |
| (e) | All or a portion of this security is Payment-in-Kind. |
| (f) | All or a portion of this holding is subject to unfunded loan commitments. Interest rate will be determined at the time of funding. See Note 1M and Note 8. |
| (g) | This floating rate interest will settle after February 28, 2014, at which time the interest rate will be determined. |
| (h) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). 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, 2014 was $144,051,668, which represented 5.42% of the Fund’s Net Assets. |
| (i) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2014. |
| (j) | Non-income producing securities acquired through the restructuring of senior loans. |
| (k) | Non-income producing security acquired as part of a bankruptcy restructuring. |
| (l) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition*
By credit quality rating, based on total net assets†
as of February 28, 2014
BBB | 0.1 | % | ||
BBB- | 2.3 | |||
BB+ | 6.3 | |||
BB | 16.6 | |||
BB- | 17.2 | |||
B+ | 20.7 | |||
B | 23.5 | |||
B- | 6.2 | |||
CCC+ | 3.1 | |||
CCC | 0.3 | |||
CCC- | 0.5 | |||
Not-Rated | 2.9 | |||
Equity | 0.3 |
| † | Source: Standard & Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. “Non-Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard and Poor’s rating methodology, please visit standardandpoors.com and select “Understanding Ratings” under Rating Resources on the homepage. |
| * | Excluding money market funds. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 Invesco Floating Rate Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $2,673,878,876) | $ | 2,683,738,398 | ||
Investments in affiliated money market funds, at value and cost | 99,779,636 | |||
Total investments, at value (Cost $2,773,658,512) | 2,783,518,034 | |||
Cash | 27,084,147 | |||
Receivable for: | ||||
Investments sold | 104,935,923 | |||
Interest and fees | 12,318,594 | |||
Fund shares sold | 20,359,027 | |||
Investments matured | 6,517 | |||
Investment for trustee deferred compensation and retirement plans | 150,176 | |||
Other assets | 134,581 | |||
Total assets | 2,948,506,999 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 279,045,367 | |||
Income distributions | 1,100,433 | |||
Fund shares repurchased | 8,676,200 | |||
Accrued fees to affiliates | 1,153,759 | |||
Accrued trustees’ and officers’ fees and benefits | 6,413 | |||
Accrued other operating expenses | 208,873 | |||
Trustee deferred compensation and retirement plans | 177,300 | |||
Total liabilities | 290,368,345 | |||
Net assets applicable to shares outstanding | $ | 2,658,138,654 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 2,655,228,980 | ||
Undistributed net investment income | (623,563 | ) | ||
Undistributed net realized gain (loss) | (6,171,043 | ) | ||
Net unrealized appreciation | 9,704,280 | |||
| $ | 2,658,138,654 | |||
Net Assets: |
| |||
Class A | $ | 1,142,899,255 | ||
Class C | $ | 647,828,984 | ||
Class R | $ | 10,516,611 | ||
Class Y | $ | 782,297,300 | ||
Class R5 | $ | 10,354,569 | ||
Class R6 | $ | 64,241,935 | ||
Shares outstanding, $0.01 par value per share |
| |||
Class A | 143,131,797 | |||
Class C | 81,494,311 | |||
Class R | 1,314,751 | |||
Class Y | 98,132,961 | |||
Class R5 | 1,295,903 | |||
Class R6 | 8,043,750 | |||
Class A: | ||||
Net asset value per share | $ | 7.98 | ||
Maximum offering price per share | ||||
(Net asset value of $7.98 ¸ 97.50%) | $ | 8.18 | ||
Class C | ||||
Net asset value and offering price per share | $ | 7.95 | ||
Class R | ||||
Net asset value and offering price per share | $ | 8.00 | ||
Class Y | ||||
Net asset value and offering price per share | $ | 7.97 | ||
Class R5 | ||||
Net asset value and offering price per share | $ | 7.99 | ||
Class R6 | ||||
Net asset value and offering price per share | $ | 7.99 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
24 Invesco Floating Rate Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Interest | $ | 55,146,833 | ||
Dividends (net of foreign withholding taxes of $8,398) | 2,113,299 | |||
Dividends from affiliated money market funds | 34,201 | |||
Other income | 2,000,302 | |||
Total investment income | 59,294,635 | |||
Expenses: | ||||
Advisory fees | 7,196,290 | |||
Administrative services fees | 240,014 | |||
Custodian fees | 117,718 | |||
Distribution fees: | ||||
Class A | 1,309,923 | |||
Class C | 2,177,483 | |||
Class R | 17,197 | |||
Transfer agent fees — A, C, R & Y | 982,716 | |||
Transfer agent fees — R5 | 3,019 | |||
Transfer agent fees — R6 | 1,584 | |||
Trustees’ and officers’ fees and benefits | 66,362 | |||
Other | 496,356 | |||
Total expenses | 12,608,662 | |||
Less: Fees waived and expense offset arrangement(s) | (110,172 | ) | ||
Net expenses | 12,498,490 | |||
Net investment income | 46,796,145 | |||
Realized and unrealized gain: | ||||
Net realized gain from investment securities | 1,268,412 | |||
Change in net unrealized appreciation of investment securities | 13,232,244 | |||
Net realized and unrealized gain | 14,500,656 | |||
Net increase in net assets resulting from operations | $ | 61,296,801 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
25 Invesco Floating Rate Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 46,796,145 | $ | 56,982,715 | ||||
Net realized gain | 1,268,412 | 14,606,234 | ||||||
Change in net unrealized appreciation | 13,232,244 | 3,528,753 | ||||||
Net increase in net assets resulting from operations | 61,296,801 | 75,117,702 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (21,206,047 | ) | (27,865,428 | ) | ||||
Class C | (10,279,748 | ) | (13,389,847 | ) | ||||
Class R | (130,887 | ) | (102,164 | ) | ||||
Class Y | (13,876,392 | ) | (13,386,252 | ) | ||||
Class R5 | (214,102 | ) | (770,560 | ) | ||||
Class R6 | (1,391,076 | ) | (2,424,391 | ) | ||||
Total distributions to shareholders from net investment income | (47,098,252 | ) | (57,938,642 | ) | ||||
Share transactions–net: | ||||||||
Class A | 178,976,754 | 500,918,627 | ||||||
Class C | 125,325,689 | 255,350,771 | ||||||
Class R | 6,922,138 | 1,748,631 | ||||||
Class Y | 227,675,006 | 382,712,276 | ||||||
Class R5 | 1,033,688 | (49,516,697 | ) | |||||
Class R6 | 792,404 | 62,452,814 | ||||||
Net change in net assets resulting from share transactions | 540,725,679 | 1,153,666,422 | ||||||
Net increase in net assets | 554,924,228 | 1,170,845,482 | ||||||
Net assets applicable to common shares: | ||||||||
Beginning of period | 2,103,214,426 | 932,368,944 | ||||||
End of period (includes undistributed net investment income of $(623,563) and $(321,456), respectively) | $ | 2,658,138,654 | $ | 2,103,214,426 | ||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
26 Invesco Floating Rate Fund
Statement of Cash Flows
For the six months ended February 28, 2014
(Unaudited)
Cash provided by (used in) operating activities: | ||||
Net increase in net assets resulting from operations | $ | 61,296,801 | ||
Adjustments to reconcile net increase in net assets to net cash provided by (used in) operating activities: |
| |||
Purchases of investments | (1,452,210,199 | ) | ||
Proceeds from sales of investments | 802,645,419 | |||
Increase in receivables and other assets | (2,724,508 | ) | ||
Accretion of discounts on investment securities | (2,796,166 | ) | ||
Increase in accrued expenses and other payables | 204,397 | |||
Net realized gain from investment securities | (1,268,412 | ) | ||
Net change in unrealized appreciation on investment securities | (13,232,244 | ) | ||
Net cash provided by (used in) operating activities | (608,084,912 | ) | ||
Cash provided by financing activities: | ||||
Dividends paid to shareholders | (13,197,031 | ) | ||
Proceeds from shares of beneficial interest sold | 924,774,422 | |||
Disbursements from shares of beneficial interest reacquired | (407,435,959 | ) | ||
Net cash provided by financing activities | 504,141,432 | |||
Net increase (decrease) in cash and cash equivalents | (103,943,480 | ) | ||
Cash and cash equivalents at beginning of period | 230,807,263 | |||
Cash and cash equivalents at end of period | $ | 126,863,783 | ||
Non-cash financing activities: | ||||
Value of shares of beneficial interest issued in reinvestment of dividends paid to shareholders | $ | 33,779,160 | ||
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest, facilities and maintenance fees | $ | 66,667 | ||
Notes to Financial Statements
February 28, 2014
(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 twelve 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 C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Variable rate senior loan interests 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 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”).
27 Invesco Floating Rate Fund
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
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) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from the settlement date. Facility fees received may be amortized over the life of the loan. 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. |
28 Invesco Floating Rate Fund
| D. | Distributions — Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | 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. |
| H. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| I. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| J. | 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”.
| K. | Bank Loan Risk Disclosures — Although the resale, or secondary market for floating rate loans has grown substantially over the past decade, both in overall size and number of market participants, there is no organized exchange or board of trade on which floating rate loans are traded. Instead, the secondary market for floating rate loans is a private, unregulated interdealer or interbank resale market. Such a market may therefore be subject to irregular trading activity, wide bid/ask spreads, and extended trade settlement periods. Similar to other asset classes, bank loan funds may be exposed to counterparty credit risk, or the risk than an entity with which the Fund has unsettled or open transactions may fail to or be unable to perform on its commitments. The Fund manages counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. |
| L. | 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. |
| M. | 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. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
First $500 million | 0 | .65% | ||||
Next $4.5 billion | 0 | .60% | ||||
Next $5 billion | 0 | .575% | ||||
Over $10 billion | 0 | .55% | ||||
29 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.50%, 2.00%, 1.75%, 1.25%, 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 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, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $109,806.
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, 2014, 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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 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, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $180,386 in front-end sales commissions from the sale of Class A shares and $24,710 and $64,568 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 the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
30 Invesco Floating Rate Fund
The following is a summary of the tiered valuation input levels, as of February 28, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 102,890,118 | $ | 1,811,454 | $ | 1,831,269 | $ | 106,532,841 | ||||||||
Variable Rate Senior Loan Interests | — | 2,429,843,622 | 61,119,204 | 2,490,962,826 | ||||||||||||
Bonds and Notes | — | 105,214,774 | — | 105,214,774 | ||||||||||||
Structured Products | — | 80,807,593 | — | 80,807,593 | ||||||||||||
Total Investments | $ | 102,890,118 | $ | 2,617,677,443 | $ | 62,950,473 | $ | 2,783,518,034 | ||||||||
A reconciliation of Level 3 investments is presented when the Fund had a significant amount of Level 3 investments at the beginning and/or end of the reporting period in relation to net assets.
The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) for the Variable Rate Senior Loan Interests during the six months ended February 28, 2014:
| Beginning Balance, as of August 31, 2013 | Purchases | Sales | Accrued discounts/ premiums | Net realized gain (loss) | Net Change in Unrealized Appreciation (Depreciation) | Transfers into Level 3 | Transfers out of Level 3 | Ending Balance, as of February 28, 2014 | ||||||||||||||||||||||||||||
Variable Rate Senior Loan Interests | $ | 57,870,285 | $ | 16,724,201 | $ | (17,907,791 | ) | $ | 86,684 | $ | (237,570 | ) | $ | 237,680 | $ | 25,679,637 | $ | (21,333,922 | ) | $ | 61,119,204 | |||||||||||||||
Equity Securities | 208,198 | — | (97,167 | ) | — | 97,167 | (487 | ) | 1,636,958 | (13,400 | ) | 1,831,269 | ||||||||||||||||||||||||
| $ | 58,078,483 | $ | 16,724,201 | $ | (18,004,958 | ) | $ | 86,684 | $ | (140,403 | ) | $ | 237,193 | $ | 27,316,595 | $ | (21,347,322 | ) | $ | 62,950,473 | ||||||||||||||||
The Variable Rate Senior Loan Interests determined to be Level 3 at the end of the reporting period were valued utilizing quotes from a third-party vendor pricing service. A significant change in third-party pricing information could result in a significantly lower or higher value in Level 3 investments.
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $366.
NOTE 5—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 6—Borrowings
The Board of Trustees of the Fund approved a revolving line of credit agreement with SSB in which the Fund may borrow up to the lesser of (1) $300,000,000 or (2) the limits set by its prospectus for borrowings. This agreement will expire on July 24, 2014.
Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7—Senior Loan Participation Commitments
The Fund invests in participations, assignments, or acts as a party to the primary lending syndicate of a Senior Loan interest to corporations, partnerships, and other entities. When the Fund purchases a participation of a Senior Loan interest, the Fund typically enters into a contractual agreement with the lender or other third party selling the participation, but not with the borrower directly. As such, the Fund assumes the credit risk of the borrower, selling participant or other persons interpositioned between the Fund and the borrower.
31 Invesco Floating Rate Fund
At the six months ended February 28, 2014, the following sets forth the selling participants with respect to interest in Senior Loans purchased by the Fund on a participation basis.
| Selling Participant | Principal Amount | Value | ||||||
Goldman Sachs Lending Partners LLC | $ | 12,153,335 | $ | 11,884,537 | ||||
NOTE 8—Unfunded Loan Commitments
As of February 28, 2014, the Fund had unfunded loan commitments, which could be extended at the option of the borrower, pursuant to the following loan agreements with the following borrowers:
| Borrower | Type | Principal Amount | Value | |||||||
David’s Bridal, Inc. | Revolver Loan | $ | 1,572,681 | $ | 1,462,593 | |||||
Delta Air Lines, Inc. | Revolver Loan | 1,144,857 | 1,070,442 | |||||||
Delta Air Lines, Inc. | Revolver Loan | 7,785,030 | 7,522,285 | |||||||
H.J. Heinz Company | Revolver Loan | 10,580,654 | 10,421,944 | |||||||
Lake at Las Vegas Joint Venture, LLC | Exit Revolver | 10,794 | 3,812 | |||||||
Reynolds Group Holdings, Inc. | Revolver Loan | 3,986,510 | 3,984,019 | |||||||
W.R. Grace & Co. | Delayed Draw Term Loan | 1,266,713 | 1,267,505 | |||||||
West Corp. | Revolver Loan | 1,747,822 | 1,695,387 | |||||||
| $ | 28,095,061 | $ | 27,427,987 | |||||||
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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2017 | $ | 6,039,554 | $ | — | $ | 6,039,554 | ||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $1,491,808,380 and $862,027,132, 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 | $ | 30,458,662 | ||
Aggregate unrealized (depreciation) of investment securities | (22,936,997 | ) | ||
Net unrealized appreciation of investment securities | $ | 7,521,665 | ||
Cost of investments for tax purposes is $2,775,996,369.
32 Invesco Floating Rate Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 42,041,249 | $ | 335,073,652 | 85,809,233 | $ | 681,689,852 | ||||||||||
Class C | 24,694,262 | 195,974,950 | 39,732,283 | 314,470,469 | ||||||||||||
Class R | 878,141 | 7,009,630 | 282,129 | 2,247,568 | ||||||||||||
Class Y | 46,547,536 | 370,696,852 | 65,890,315 | 522,776,943 | ||||||||||||
Class R5 | 467,741 | 3,734,550 | 1,652,090 | 13,075,361 | ||||||||||||
Class R6(b) | 822,864 | 6,560,248 | 7,948,789 | 62,499,889 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,871,189 | 14,918,201 | 2,577,561 | 20,453,288 | ||||||||||||
Class C | 967,742 | 7,682,916 | 1,263,362 | 9,972,285 | ||||||||||||
Class R | 15,300 | 122,369 | 12,477 | 99,053 | ||||||||||||
Class Y | 1,187,631 | 9,451,826 | 1,196,684 | 9,480,543 | ||||||||||||
Class R5 | 26,666 | 212,772 | 72,079 | 571,177 | ||||||||||||
Class R6 | 174,428 | 1,391,076 | 305,796 | 2,424,391 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (21,452,861 | ) | (171,015,099 | ) | (25,392,869 | ) | (201,224,513 | ) | ||||||||
Class C | (9,868,223 | ) | (78,332,177 | ) | (8,754,185 | ) | (69,091,983 | ) | ||||||||
Class R | (26,309 | ) | (209,861 | ) | (75,449 | ) | (597,990 | ) | ||||||||
Class Y | (19,162,681 | ) | (152,473,672 | ) | (18,876,729 | ) | (149,545,210 | ) | ||||||||
Class R5 | (364,958 | ) | (2,913,634 | ) | (8,025,950 | ) | (63,163,235 | ) | ||||||||
Class R6 | (896,330 | ) | (7,158,920 | ) | (311,797 | ) | (2,471,466 | ) | ||||||||
Net increase in share activity | 67,923,387 | $ | 540,725,679 | 145,305,819 | $ | 1,153,666,422 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 66% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
33 Invesco Floating Rate Fund
NOTE 12—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income(a) | Net gains on securities | Total from investment operations | Dividends from net investment income | Net asset value, end of period(b) | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of and/or expenses | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 7.93 | $ | 0.16 | $ | 0.05 | $ | 0.21 | $ | (0.16 | ) | $ | 7.98 | 2.67 | % | $ | 1,142,899 | 1.01 | %(e)(f) | 1.02 | %(e)(f) | 4.01 | %(e) | 37 | % | |||||||||||||||||||||||
Year ended 08/31/13 | 7.77 | 0.35 | 0.17 | 0.52 | (0.36 | ) | 7.93 | 6.83 | 957,442 | 1.08 | (f) | 1.09 | (f) | 4.36 | 97 | |||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.36 | 0.37 | 0.41 | 0.78 | (0.37 | ) | 7.77 | 10.75 | 448,142 | 1.11 | (f) | 1.11 | (f) | 4.80 | 82 | |||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.47 | 0.35 | (0.11 | ) | 0.24 | (0.35 | ) | 7.36 | 3.07 | 450,750 | 0.99 | (f) | 1.00 | (f) | 4.53 | 152 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.09 | 0.40 | 0.39 | (g) | 0.79 | (0.41 | ) | 7.47 | 11.28 | (g) | 359,476 | 1.12 | (f) | 1.14 | (f) | 5.34 | 106 | |||||||||||||||||||||||||||||||
Year ended 08/31/09 | 7.99 | 0.41 | (0.89 | ) | (0.48 | ) | (0.42 | ) | 7.09 | (4.97 | ) | 218,448 | 1.24 | (f) | 1.25 | (f) | 6.50 | 52 | ||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 7.90 | 0.14 | 0.05 | 0.19 | (0.14 | ) | 7.95 | 2.42 | 647,829 | 1.51 | (e)(f) | 1.52 | (e)(f) | 3.51 | (e) | 37 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 7.73 | 0.31 | 0.18 | 0.49 | (0.32 | ) | 7.90 | 6.45 | 518,948 | 1.58 | (f) | 1.59 | (f) | 3.86 | 97 | |||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.32 | 0.33 | 0.41 | 0.74 | (0.33 | ) | 7.73 | 10.24 | 258,800 | 1.61 | (f) | 1.61 | (f) | 4.30 | 82 | |||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.44 | 0.31 | (0.12 | ) | 0.19 | (0.31 | ) | 7.32 | 2.41 | 267,796 | 1.49 | (f) | 1.50 | (f) | 4.03 | 152 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.06 | 0.36 | 0.39 | (g) | 0.75 | (0.37 | ) | 7.44 | 10.75 | (g) | 189,966 | 1.62 | (f) | 1.64 | (f) | 4.84 | 106 | |||||||||||||||||||||||||||||||
Year ended 08/31/09 | 7.97 | 0.38 | (0.90 | ) | (0.52 | ) | (0.39 | ) | 7.06 | (5.61 | ) | 103,975 | 1.74 | (f) | 1.75 | (f) | 6.00 | 52 | ||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 7.95 | 0.15 | 0.05 | 0.20 | (0.15 | ) | 8.00 | 2.55 | 10,517 | 1.26 | (e)(f) | 1.27 | (e)(f) | 3.76 | (e) | 37 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 7.79 | 0.33 | 0.17 | 0.50 | (0.34 | ) | 7.95 | 6.57 | 3,559 | 1.33 | (f) | 1.34 | (f) | 4.11 | 97 | |||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.37 | 0.35 | 0.42 | 0.77 | (0.35 | ) | 7.79 | 10.61 | 1,779 | 1.36 | (f) | 1.36 | (f) | 4.55 | 82 | |||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.49 | 0.33 | (0.12 | ) | 0.21 | (0.33 | ) | 7.37 | 2.68 | 1,491 | 1.24 | (f) | 1.25 | (f) | 4.28 | 152 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.10 | 0.39 | 0.39 | (g) | 0.78 | (0.39 | ) | 7.49 | 11.15 | (g) | 1,080 | 1.37 | (f) | 1.39 | (f) | 5.09 | 106 | |||||||||||||||||||||||||||||||
Year ended 08/31/09 | 8.00 | 0.40 | (0.89 | ) | (0.49 | ) | (0.41 | ) | 7.10 | (5.19 | ) | 427 | 1.49 | (f) | 1.50 | (f) | 6.25 | 52 | ||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 7.92 | 0.17 | 0.05 | 0.22 | (0.17 | ) | 7.97 | 2.80 | 782,297 | 0.76 | (e)(f) | 0.77 | (e)(f) | 4.26 | (e) | 37 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 7.76 | 0.37 | 0.17 | 0.54 | (0.38 | ) | 7.92 | 7.10 | 550,974 | 0.83 | (f) | 0.84 | (f) | 4.61 | 97 | |||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.34 | 0.38 | 0.42 | 0.80 | (0.38 | ) | 7.76 | 11.19 | 165,609 | 0.86 | (f) | 0.86 | (f) | 5.05 | 82 | |||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.46 | 0.37 | (0.12 | ) | 0.25 | (0.37 | ) | 7.34 | 3.19 | 125,900 | 0.74 | (f) | 0.75 | (f) | 4.78 | 152 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.07 | 0.42 | 0.39 | (g) | 0.81 | (0.42 | ) | 7.46 | 11.72 | (g) | 93,479 | 0.87 | (f) | 0.89 | (f) | 5.59 | 106 | |||||||||||||||||||||||||||||||
Year ended 08/31/09(h) | 7.29 | 0.41 | (0.24 | ) | 0.17 | (0.39 | ) | 7.07 | 3.48 | 20,176 | 1.00 | (f)(i) | 1.00 | (f)(i) | 6.74 | (i) | 52 | |||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 7.94 | 0.17 | 0.05 | 0.22 | (0.17 | ) | 7.99 | 2.81 | 10,355 | 0.74 | (e)(f) | 0.75 | (e)(f) | 4.28 | (e) | 37 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 7.77 | 0.37 | 0.18 | 0.55 | (0.38 | ) | 7.94 | 7.26 | 9,260 | 0.81 | (f) | 0.82 | (f) | 4.63 | 97 | |||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.36 | 0.39 | 0.41 | 0.80 | (0.39 | ) | 7.77 | 11.13 | 58,039 | 0.77 | (f) | 0.77 | (f) | 5.14 | 82 | |||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.47 | 0.38 | (0.12 | ) | 0.26 | (0.37 | ) | 7.36 | 3.40 | 48,967 | 0.68 | (f) | 0.69 | (f) | 4.84 | 152 | ||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 7.09 | 0.42 | 0.39 | (g) | 0.81 | (0.43 | ) | 7.47 | 11.65 | (g) | 37,580 | 0.79 | (f) | 0.81 | (f) | 5.67 | 106 | |||||||||||||||||||||||||||||||
Year ended 08/31/09 | 7.99 | 0.44 | (0.89 | ) | (0.45 | ) | (0.45 | ) | 7.09 | (4.62 | ) | 38,720 | 0.88 | (f) | 0.89 | (f) | 6.86 | 52 | ||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 7.94 | 0.17 | 0.05 | 0.22 | (0.17 | ) | 7.99 | 2.84 | 64,242 | 0.68 | (e)(f) | 0.69 | (e)(f) | 4.34 | (e) | 37 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13(h) | 7.84 | 0.35 | 0.11 | 0.46 | (0.36 | ) | 7.94 | 6.01 | 63,032 | 0.76 | (f)(i) | 0.77 | (f)(i) | 4.68 | (i) | 97 | ||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share for the fiscal years ended August 31, 2012 and prior. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $1,056,623, $585,474, $6,936, $654,095, $9,978 and $63,870 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (f) | Ratio includes line of credit expense of 0.02%, 0.02%, 0.03%, 0.01%, 0.02% and 0.02% for the six months ended February 28, 2014 and the years ended August 31, 2013, August 31, 2012, August 31, 2011, August 31, 2010 and August 31, 2009, 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 Class R5 shares, respectively, and total returns would have been lower. |
| (h) | Commencement date of October 3, 2008 and September 24, 2012 for Class Y and Class R6 Shares, respectively. |
| (i) | Annualized. |
34 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,025.40 | $ | 5.07 | $ | 1,019.79 | $ | 5.06 | 1.01 | % | ||||||||||||
| C | 1,000.00 | 1,024.20 | 7.58 | 1,017.31 | 7.55 | 1.51 | ||||||||||||||||||
| R | 1,000.00 | 1,025.50 | 6.33 | 1,018.55 | 6.31 | 1.26 | ||||||||||||||||||
| Y | 1,000.00 | 1,028.00 | 3.82 | 1,021.03 | 3.81 | 0.76 | ||||||||||||||||||
| R5 | 1,000.00 | 1,028.10 | 3.72 | 1,021.12 | 3.71 | 0.74 | ||||||||||||||||||
| R6 | 1,000.00 | 1,028.40 | 3.42 | 1,021.42 | 3.41 | 0.68 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
35 Invesco Floating Rate Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | FLR-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco S&P 500 Index Fund
Nasdaq:
A: SPIAX n B: SPIBX n C: SPICX n Y: SPIDX
| 2 | Fund Performance |
| 3 | Letters to Shareholders |
| 4 | Schedule of Investments |
| 12 | Financial Statements |
| 14 | Notes to Financial Statements |
| 21 | Financial Highlights |
| 22 | 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 14.78 | % | |||
| Class B Shares | 14.29 | ||||
| Class C Shares | 14.35 | ||||
| Class Y Shares | 14.87 | ||||
| S&P 500 Index‚ (Broad Market/Style-Specific Index) | 15.07 | ||||
| Lipper S&P 500 Objective Funds Index¢ (Peer Group Index) | 14.93 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.; ¢Lipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US stock market.
The Lipper S&P 500 Objective Funds Index is an unmanaged index considered representative of S&P 500 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 2/28/14, including maximum applicable sales charges
|
| ||||
| Class A Shares | |||||
| Inception (9/26/97) | 5.16 | % | |||
| 10 Years | 6.03 | ||||
| 5 Years | 21.02 | ||||
| 1 Year | 17.78 | ||||
| Class B Shares | |||||
| Inception (9/26/97) | 5.13 | % | |||
| 10 Years | 5.98 | ||||
| 5 Years | 21.28 | ||||
| 1 Year | 18.72 | ||||
| Class C Shares | |||||
| Inception (9/26/97) | 4.74 | % | |||
| 10 Years | 5.84 | ||||
| 5 Years | 21.50 | ||||
| 1 Year | 22.74 | ||||
| Class Y Shares | |||||
| Inception (9/26/97) | 5.77 | % | |||
| 10 Years | 6.88 | ||||
| 5 Years | 22.70 | ||||
| 1 Year | 24.94 | ||||
| Average Annual Total Returns | |||||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | |||||
| Class A Shares | |||||
| Inception (9/26/97) | 5.16 | % | |||
| 10 Years | 6.26 | ||||
| 5 Years | 16.03 | ||||
| 1 Year | 24.44 | ||||
| Class B Shares | |||||
| Inception (9/26/97) | 5.13 | % | |||
| 10 Years | 6.22 | ||||
| 5 Years | 16.26 | ||||
| 1 Year | 25.68 | ||||
| Class C Shares | |||||
| Inception (9/26/97) | 4.73 | % | |||
| 10 Years | 6.07 | ||||
| 5 Years | 16.48 | ||||
| 1 Year | 29.63 | ||||
| Class Y Shares | |||||
| Inception (9/26/97) | 5.77 | % | |||
| 10 Years | 7.13 | ||||
| 5 Years | 17.64 | ||||
| 1 Year | 31.93 | ||||
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund, Morgan Stanley S&P 500 Index 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
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 0.62%, 1.37%, 1.36% 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 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: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our |
blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
3 Invesco S&P 500 Index Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–99.43% |
| |||||||
| Advertising–0.16% | ||||||||
Interpublic Group of Cos., Inc. (The) | 16,545 | $ | 293,177 | |||||
Omnicom Group Inc. | 10,248 | 775,569 | ||||||
| 1,068,746 | ||||||||
| Aerospace & Defense–2.81% | ||||||||
Boeing Co. (The) | 27,480 | 3,542,721 | ||||||
General Dynamics Corp. | 13,344 | 1,461,702 | ||||||
Honeywell International Inc. | 31,175 | 2,944,167 | ||||||
L-3 Communications Holdings, Inc. | 3,494 | 403,208 | ||||||
Lockheed Martin Corp. | 10,694 | 1,735,636 | ||||||
Northrop Grumman Corp. | 8,823 | 1,067,848 | ||||||
Precision Castparts Corp. | 5,798 | 1,495,188 | ||||||
Raytheon Co. | 12,698 | 1,243,261 | ||||||
Rockwell Collins, Inc. | 5,354 | 441,919 | ||||||
Textron Inc. | 11,177 | 443,727 | ||||||
United Technologies Corp. | 33,536 | 3,924,383 | ||||||
| 18,703,760 | ||||||||
| Agricultural Products–0.16% | ||||||||
Archer-Daniels-Midland Co. | 26,154 | 1,061,852 | ||||||
| Air Freight & Logistics–0.74% | ||||||||
C.H. Robinson Worldwide, Inc. | 6,026 | 312,508 | ||||||
Expeditors International of Washington, Inc. | 8,198 | 323,903 | ||||||
FedEx Corp. | 11,840 | 1,578,627 | ||||||
United Parcel Service, Inc.–Class B | 28,414 | 2,721,209 | ||||||
| 4,936,247 | ||||||||
| Airlines–0.26% | ||||||||
Delta Air Lines, Inc. | 34,008 | 1,129,406 | ||||||
Southwest Airlines Co. | 27,694 | 621,453 | ||||||
| 1,750,859 | ||||||||
| Aluminum–0.08% | ||||||||
Alcoa Inc. | 42,517 | 499,150 | ||||||
| Apparel Retail–0.53% | ||||||||
Gap, Inc. (The) | 10,529 | 460,644 | ||||||
L Brands, Inc. | 9,704 | 546,626 | ||||||
Ross Stores, Inc. | 8,634 | 628,555 | ||||||
TJX Cos., Inc. (The) | 28,270 | 1,737,474 | ||||||
Urban Outfitters, Inc.(b) | 4,285 | 160,431 | ||||||
| 3,533,730 | ||||||||
| Apparel, Accessories & Luxury Goods–0.46% | ||||||||
Coach, Inc. | 11,133 | 543,402 | ||||||
Fossil Group, Inc.(b) | 1,929 | 221,661 | ||||||
Michael Kors Holdings Ltd.(b) | 7,119 | 697,875 | ||||||
PVH Corp. | 3,204 | 405,082 | ||||||
Ralph Lauren Corp. | 2,349 | 378,377 | ||||||
VF Corp. | 14,000 | 820,260 | ||||||
| 3,066,657 | ||||||||
| Shares | Value | |||||||
| Application Software–0.67% | ||||||||
Adobe Systems Inc.(b) | 18,479 | $ | 1,267,844 | |||||
Autodesk, Inc.(b) | 8,986 | 471,406 | ||||||
Citrix Systems, Inc.(b) | 7,366 | 442,328 | ||||||
Intuit Inc. | 11,322 | 884,814 | ||||||
Salesforce.com, Inc.(b) | 22,051 | 1,375,321 | ||||||
| 4,441,713 | ||||||||
| Asset Management & Custody Banks–1.21% | ||||||||
Ameriprise Financial, Inc. | 7,732 | 842,711 | ||||||
Bank of New York Mellon Corp. (The) | 45,654 | 1,460,928 | ||||||
BlackRock, Inc. | 5,049 | 1,539,137 | ||||||
Franklin Resources, Inc. | 16,048 | 854,556 | ||||||
Invesco Ltd.(c) | 17,646 | 605,258 | ||||||
Legg Mason, Inc. | 4,185 | 192,342 | ||||||
Northern Trust Corp. | 8,894 | 550,094 | ||||||
State Street Corp. | 17,449 | 1,145,876 | ||||||
T. Rowe Price Group Inc. | 10,366 | 841,408 | ||||||
| 8,032,310 | ||||||||
| Auto Parts & Equipment–0.40% | ||||||||
BorgWarner, Inc. | 9,038 | 555,385 | ||||||
Delphi Automotive PLC (United Kingdom) | 11,130 | 740,924 | ||||||
Johnson Controls, Inc. | 27,263 | 1,346,792 | ||||||
| 2,643,101 | ||||||||
| Automobile Manufacturers–0.64% | ||||||||
Ford Motor Co. | 156,796 | 2,413,090 | ||||||
General Motors Co. | 51,820 | 1,875,884 | ||||||
| 4,288,974 | ||||||||
| Automotive Retail–0.29% | ||||||||
AutoNation, Inc.(b) | 2,598 | 136,759 | ||||||
AutoZone, Inc.(b) | 1,351 | 727,432 | ||||||
CarMax, Inc.(b) | 8,909 | 431,463 | ||||||
O’Reilly Automotive, Inc.(b) | 4,224 | 637,190 | ||||||
| 1,932,844 | ||||||||
| Biotechnology–2.67% | ||||||||
Alexion Pharmaceuticals, Inc.(b) | 7,793 | 1,377,802 | ||||||
Amgen Inc. | 30,021 | 3,723,205 | ||||||
Biogen Idec Inc.(b) | 9,388 | 3,198,304 | ||||||
Celgene Corp.(b) | 16,389 | 2,634,532 | ||||||
Gilead Sciences, Inc.(b) | 60,995 | 5,049,776 | ||||||
Regeneron Pharmaceuticals, Inc.(b) | 3,128 | 1,040,060 | ||||||
Vertex Pharmaceuticals Inc.(b) | 9,277 | 750,138 | ||||||
| 17,773,817 | ||||||||
| Brewers–0.05% | ||||||||
Molson Coors Brewing Co.–Class B | 6,235 | 354,335 | ||||||
| Broadcasting–0.39% | ||||||||
CBS Corp.–Class B | 22,183 | 1,488,036 | ||||||
Discovery Communications, Inc.–Class A(b) | 8,969 | 747,297 | ||||||
Scripps Networks Interactive Inc.–Class A | 4,320 | 350,957 | ||||||
| 2,586,290 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Building Products–0.08% | ||||||||
Allegion PLC(b) | 3,595 | $ | 195,388 | |||||
Masco Corp. | 14,223 | 332,107 | ||||||
| 527,495 | ||||||||
| Cable & Satellite–1.29% | ||||||||
Cablevision Systems Corp.–Class A | 8,524 | 150,022 | ||||||
Comcast Corp.–Class A | 103,591 | 5,354,619 | ||||||
DIRECTV(b) | 19,424 | 1,507,302 | ||||||
Time Warner Cable Inc. | 11,204 | 1,572,482 | ||||||
| 8,584,425 | ||||||||
| Casinos & Gaming–0.14% | ||||||||
International Game Technology | 9,893 | 149,286 | ||||||
Wynn Resorts Ltd. | 3,219 | 780,575 | ||||||
| 929,861 | ||||||||
| Coal & Consumable Fuels–0.08% | ||||||||
CONSOL Energy Inc. | 9,119 | 365,672 | ||||||
Peabody Energy Corp. | 10,752 | 188,805 | ||||||
| 554,477 | ||||||||
| Commodity Chemicals–0.23% | ||||||||
LyondellBasell Industries N.V.–Class A | 17,364 | 1,529,421 | ||||||
| Communications Equipment–1.72% | ||||||||
Cisco Systems, Inc. | 212,535 | 4,633,263 | ||||||
F5 Networks, Inc.(b) | 3,037 | 341,177 | ||||||
Harris Corp. | 4,220 | 311,520 | ||||||
Juniper Networks, Inc.(b) | 20,073 | 536,752 | ||||||
Motorola Solutions, Inc. | 9,151 | 605,796 | ||||||
QUALCOMM, Inc. | 67,156 | 5,056,175 | ||||||
| 11,484,683 | ||||||||
| Computer & Electronics Retail–0.07% | ||||||||
Best Buy Co., Inc. | 10,864 | 289,308 | ||||||
GameStop Corp.–Class A | 4,652 | 173,566 | ||||||
| 462,874 | ||||||||
| Computer Hardware–3.17% | ||||||||
Apple Inc. | 35,765 | 18,820,973 | ||||||
Hewlett-Packard Co. | 76,394 | 2,282,653 | ||||||
| 21,103,626 | ||||||||
| Computer Storage & Peripherals–0.72% | ||||||||
EMC Corp. | 81,801 | 2,157,092 | ||||||
NetApp, Inc. | 13,552 | 547,636 | ||||||
SanDisk Corp. | 8,978 | 667,066 | ||||||
Seagate Technology PLC | 12,963 | 676,539 | ||||||
Western Digital Corp. | 8,375 | 728,541 | ||||||
| 4,776,874 | ||||||||
| Construction & Engineering–0.17% | ||||||||
Fluor Corp. | 6,496 | 504,674 | ||||||
Jacobs Engineering Group, Inc.(b) | 5,201 | 315,441 | ||||||
Quanta Services, Inc.(b) | 8,617 | 303,404 | ||||||
| 1,123,519 | ||||||||
| Construction & Farm Machinery & Heavy Trucks–0.89% | ||||||||
Caterpillar Inc. | 25,252 | 2,448,687 | ||||||
Cummins Inc. | 6,937 | 1,012,247 | ||||||
| Shares | Value | |||||||
| Construction & Farm Machinery & Heavy Trucks–(continued) | ||||||||
Deere & Co. | 15,256 | $ | 1,310,948 | |||||
Joy Global Inc. | 4,234 | 232,870 | ||||||
PACCAR Inc. | 14,105 | 928,673 | ||||||
| 5,933,425 | ||||||||
| Construction Materials–0.05% | ||||||||
Vulcan Materials Co. | 5,178 | 351,742 | ||||||
| Consumer Electronics–0.08% | ||||||||
Garmin Ltd. | 4,872 | 261,431 | ||||||
Harman International Industries, Inc. | 2,649 | 277,430 | ||||||
| 538,861 | ||||||||
| Consumer Finance–0.98% | ||||||||
American Express Co. | 36,621 | 3,342,765 | ||||||
Capital One Financial Corp. | 22,917 | 1,682,795 | ||||||
Discover Financial Services | 19,040 | 1,092,515 | ||||||
SLM Corp. | 17,382 | 416,125 | ||||||
| 6,534,200 | ||||||||
| Data Processing & Outsourced Services–1.96% | ||||||||
Alliance Data Systems Corp.(b) | 1,935 | 551,688 | ||||||
Automatic Data Processing, Inc. | 19,136 | 1,488,398 | ||||||
Computer Sciences Corp. | 5,824 | 368,077 | ||||||
Fidelity National Information Services, Inc. | 11,539 | 641,684 | ||||||
Fiserv, Inc.(b) | 10,211 | 592,748 | ||||||
MasterCard, Inc.–Class A | 41,140 | 3,197,401 | ||||||
Paychex, Inc. | 12,963 | 541,335 | ||||||
Total System Services, Inc. | 6,635 | 202,102 | ||||||
Visa Inc.–Class A | 20,242 | 4,573,477 | ||||||
Western Union Co. (The) | 21,994 | 367,960 | ||||||
Xerox Corp. | 46,001 | 505,551 | ||||||
| 13,030,421 | ||||||||
| Department Stores–0.25% | ||||||||
Kohl’s Corp. | 8,000 | 449,520 | ||||||
Macy’s, Inc. | 14,646 | 847,418 | ||||||
Nordstrom, Inc. | 5,727 | 352,096 | ||||||
| 1,649,034 | ||||||||
| Distillers & Vintners–0.24% | ||||||||
Beam Inc. | 6,520 | 540,899 | ||||||
Brown-Forman Corp.–Class B | 6,465 | 541,767 | ||||||
Constellation Brands, Inc.–Class A(b) | 6,601 | 534,879 | ||||||
| 1,617,545 | ||||||||
| Distributors–0.08% | ||||||||
Genuine Parts Co. | 6,170 | 543,515 | ||||||
| Diversified Banks–1.83% | ||||||||
Comerica Inc. | 7,229 | 348,293 | ||||||
U.S. Bancorp | 72,597 | 2,986,641 | ||||||
Wells Fargo & Co. | 190,548 | 8,845,238 | ||||||
| 12,180,172 | ||||||||
| Diversified Chemicals–0.86% | ||||||||
Dow Chemical Co. (The) | 48,227 | 2,349,137 | ||||||
E. I. du Pont de Nemours and Co. | 36,799 | 2,451,550 | ||||||
Eastman Chemical Co. | 6,145 | 537,257 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Diversified Chemicals–(continued) | ||||||||
FMC Corp. | 5,296 | $ | 408,745 | |||||
| 5,746,689 | ||||||||
| Diversified Metals & Mining–0.20% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 41,258 | 1,345,836 | ||||||
| Diversified REIT’s–0.10% | ||||||||
Vornado Realty Trust | 6,926 | 666,905 | ||||||
| Diversified Support Services–0.06% | ||||||||
Cintas Corp. | 4,002 | 242,761 | ||||||
Iron Mountain Inc. | 6,772 | 184,199 | ||||||
| 426,960 | ||||||||
| Drug Retail–0.87% | ||||||||
CVS Caremark Corp. | 47,313 | 3,460,473 | ||||||
Walgreen Co. | 34,645 | 2,354,128 | ||||||
| 5,814,601 | ||||||||
| Education Services–0.02% | ||||||||
Graham Holdings Co.–Class B | 174 | 125,054 | ||||||
| Electric Utilities–1.67% | ||||||||
American Electric Power Co., Inc. | 19,397 | 973,729 | ||||||
Duke Energy Corp. | 28,028 | 1,986,625 | ||||||
Edison International | 12,982 | 679,867 | ||||||
Entergy Corp. | 7,062 | 450,697 | ||||||
Exelon Corp. | 34,032 | 1,034,913 | ||||||
FirstEnergy Corp. | 16,665 | 512,949 | ||||||
NextEra Energy, Inc. | 17,119 | 1,564,506 | ||||||
Northeast Utilities | 12,542 | 557,492 | ||||||
Pepco Holdings, Inc. | 9,926 | 202,391 | ||||||
Pinnacle West Capital Corp. | 4,382 | 243,858 | ||||||
PPL Corp. | 25,052 | 808,929 | ||||||
Southern Co. (The) | 35,049 | 1,484,325 | ||||||
Xcel Energy, Inc. | 19,827 | 600,560 | ||||||
| 11,100,841 | ||||||||
| Electrical Components & Equipment–0.75% | ||||||||
AMETEK, Inc. | 9,732 | 518,132 | ||||||
Eaton Corp. PLC | 18,884 | 1,410,824 | ||||||
Emerson Electric Co. | 27,982 | 1,826,105 | ||||||
Rockwell Automation, Inc. | 5,525 | 678,691 | ||||||
Roper Industries, Inc. | 3,936 | 533,800 | ||||||
| 4,967,552 | ||||||||
| Electronic Components–0.25% | ||||||||
Amphenol Corp.–Class A | 6,294 | 553,998 | ||||||
Corning Inc. | 57,527 | 1,108,545 | ||||||
Knowles Corp.(b) | 1 | 16 | ||||||
| 1,662,559 | ||||||||
| Electronic Equipment & Instruments–0.03% | ||||||||
FLIR Systems, Inc. | 5,660 | 193,232 | ||||||
| Electronic Manufacturing Services–0.16% | ||||||||
Jabil Circuit, Inc. | 7,349 | 136,030 | ||||||
TE Connectivity Ltd. (Switzerland) | 16,312 | 955,557 | ||||||
| 1,091,587 | ||||||||
| Shares | Value | |||||||
| Environmental & Facilities Services–0.22% | ||||||||
Republic Services, Inc. | 10,718 | $ | 365,591 | |||||
Stericycle, Inc.(b) | 3,407 | 388,398 | ||||||
Waste Management, Inc. | 17,372 | 720,938 | ||||||
| 1,474,927 | ||||||||
| Fertilizers & Agricultural Chemicals–0.53% | ||||||||
CF Industries Holdings, Inc. | 2,264 | 568,037 | ||||||
Monsanto Co. | 20,901 | 2,299,528 | ||||||
Mosaic Co. (The) | 13,574 | 663,226 | ||||||
| 3,530,791 | ||||||||
| Food Distributors–0.13% | ||||||||
Sysco Corp. | 23,117 | 832,674 | ||||||
| Food Retail–0.30% | ||||||||
Kroger Co. (The) | 20,651 | 866,103 | ||||||
Safeway Inc. | 9,809 | 367,347 | ||||||
Whole Foods Market, Inc. | 14,743 | 796,859 | ||||||
| 2,030,309 | ||||||||
| Footwear–0.35% | ||||||||
NIKE, Inc.–Class B | 29,702 | 2,325,667 | ||||||
| Gas Utilities–0.03% | ||||||||
AGL Resources Inc. | 4,712 | 221,652 | ||||||
| General Merchandise Stores–0.45% | ||||||||
Dollar General Corp.(b) | 11,711 | 701,489 | ||||||
Dollar Tree, Inc.(b) | 8,271 | 453,003 | ||||||
Family Dollar Stores, Inc. | 3,872 | 253,616 | ||||||
Target Corp. | 25,150 | 1,572,881 | ||||||
| 2,980,989 | ||||||||
| Gold–0.07% | ||||||||
Newmont Mining Corp. | 19,831 | 461,269 | ||||||
| Health Care Distributors–0.50% | ||||||||
AmerisourceBergen Corp. | 9,104 | 617,706 | ||||||
Cardinal Health, Inc. | 13,526 | 967,515 | ||||||
McKesson Corp. | 9,110 | 1,612,926 | ||||||
Patterson Cos. Inc. | 3,363 | 138,421 | ||||||
| 3,336,568 | ||||||||
| Health Care Equipment–2.05% | ||||||||
Abbott Laboratories | 61,462 | 2,444,958 | ||||||
Baxter International Inc. | 21,528 | 1,496,196 | ||||||
Becton, Dickinson and Co. | 7,739 | 891,688 | ||||||
Boston Scientific Corp.(b) | 53,076 | 695,296 | ||||||
C.R. Bard, Inc. | 3,095 | 446,175 | ||||||
CareFusion Corp.(b) | 8,400 | 340,452 | ||||||
Covidien PLC | 18,330 | 1,318,843 | ||||||
Edwards Lifesciences Corp.(b) | 4,348 | 303,316 | ||||||
Intuitive Surgical, Inc.(b) | 1,512 | 672,583 | ||||||
Medtronic, Inc. | 39,648 | 2,349,540 | ||||||
St. Jude Medical, Inc. | 11,599 | 780,845 | ||||||
Stryker Corp. | 11,753 | 943,061 | ||||||
Varian Medical Systems, Inc.(b) | 4,178 | 350,242 | ||||||
Zimmer Holdings, Inc. | 6,755 | 633,889 | ||||||
| 13,667,084 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Health Care Facilities–0.03% | ||||||||
Tenet Healthcare Corp.(b) | 3,943 | $ | 173,965 | |||||
| Health Care Services–0.53% | ||||||||
DaVita HealthCare Partners Inc.(b) | 7,030 | 483,172 | ||||||
Express Scripts Holding Co.(b) | 32,030 | 2,412,179 | ||||||
Laboratory Corp. of America Holdings(b) | 3,473 | 324,865 | ||||||
Quest Diagnostics Inc. | 5,779 | 306,287 | ||||||
| 3,526,503 | ||||||||
| Health Care Supplies–0.04% | ||||||||
DENTSPLY International Inc. | 5,709 | 259,074 | ||||||
| Health Care Technology–0.11% | ||||||||
Cerner Corp.(b) | 11,758 | 721,588 | ||||||
| Home Entertainment Software–0.05% | ||||||||
Electronic Arts Inc.(b) | 12,318 | 352,172 | ||||||
| Home Furnishings–0.08% | ||||||||
Leggett & Platt, Inc. | 5,657 | 181,307 | ||||||
Mohawk Industries, Inc.(b) | 2,424 | 343,069 | ||||||
| 524,376 | ||||||||
| Home Improvement Retail–1.00% | ||||||||
Home Depot, Inc. (The) | 55,978 | 4,591,876 | ||||||
Lowe’s Cos., Inc. | 41,572 | 2,079,847 | ||||||
| 6,671,723 | ||||||||
| Homebuilding–0.13% | ||||||||
D.R. Horton, Inc. | 11,320 | 278,019 | ||||||
Lennar Corp.–Class A | 6,613 | 290,179 | ||||||
PulteGroup Inc. | 13,703 | 287,626 | ||||||
| 855,824 | ||||||||
| Home Furnishing Retail–0.09% | ||||||||
Bed Bath & Beyond Inc.(b) | 8,535 | 578,844 | ||||||
| Hotels, Resorts & Cruise Lines–0.33% | ||||||||
Carnival Corp. | 17,444 | 691,829 | ||||||
Marriott International Inc.–Class A | 8,929 | 484,220 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 7,611 | 627,603 | ||||||
Wyndham Worldwide Corp. | 5,163 | 376,279 | ||||||
| 2,179,931 | ||||||||
| Household Appliances–0.07% | ||||||||
Whirlpool Corp. | 3,111 | 449,944 | ||||||
| Household Products–1.92% | ||||||||
Clorox Co. (The) | 5,124 | 447,223 | ||||||
Colgate-Palmolive Co. | 34,938 | 2,195,154 | ||||||
Kimberly-Clark Corp. | 15,163 | 1,673,237 | ||||||
Procter & Gamble Co. (The) | 108,053 | 8,499,449 | ||||||
| 12,815,063 | ||||||||
| Housewares & Specialties–0.05% | ||||||||
Newell Rubbermaid Inc. | 11,375 | 365,251 | ||||||
| Human Resource & Employment Services–0.03% | ||||||||
Robert Half International, Inc. | 5,484 | 224,515 | ||||||
| Hypermarkets & Super Centers–1.03% | ||||||||
Costco Wholesale Corp. | 17,401 | 2,032,437 | ||||||
| Shares | Value | |||||||
| Hypermarkets & Super Centers–(continued) | ||||||||
Wal-Mart Stores, Inc. | 64,312 | $ | 4,804,106 | |||||
| 6,836,543 | ||||||||
| Independent Power Producers & Energy Traders–0.11% | ||||||||
AES Corp. (The) | 26,101 | 356,278 | ||||||
NRG Energy, Inc. | 12,868 | 374,073 | ||||||
| 730,351 | ||||||||
| Industrial Conglomerates–2.33% | ||||||||
3M Co. | 25,424 | 3,425,375 | ||||||
Danaher Corp. | 23,837 | 1,823,292 | ||||||
General Electric Co.(d) | 402,180 | 10,243,525 | ||||||
| 15,492,192 | ||||||||
| Industrial Gases–0.43% | ||||||||
Air Products and Chemicals, Inc. | 8,354 | 1,013,507 | ||||||
Airgas, Inc. | 2,653 | 285,994 | ||||||
Praxair, Inc. | 11,749 | 1,531,717 | ||||||
| 2,831,218 | ||||||||
| Industrial Machinery–0.87% | ||||||||
Dover Corp.(b) | 6,777 | 527,590 | ||||||
Flowserve Corp. | 5,572 | 452,502 | ||||||
Illinois Tool Works Inc. | 16,230 | 1,338,975 | ||||||
Ingersoll-Rand PLC | 10,649 | 651,080 | ||||||
Pall Corp. | 4,378 | 376,508 | ||||||
Parker Hannifin Corp. | 5,884 | 709,316 | ||||||
Pentair Ltd. | 7,936 | 641,308 | ||||||
Snap-on Inc. | 2,325 | 260,795 | ||||||
Stanley Black & Decker Inc. | 6,169 | 512,274 | ||||||
Xylem, Inc. | 7,371 | 290,049 | ||||||
| 5,760,397 | ||||||||
| Industrial REIT’s–0.12% | ||||||||
Prologis, Inc. | 19,869 | 818,404 | ||||||
| Insurance Brokers–0.31% | ||||||||
Aon PLC (United Kingdom) | 11,966 | 1,024,290 | ||||||
Marsh & McLennan Cos., Inc. | 21,801 | 1,049,936 | ||||||
| 2,074,226 | ||||||||
| Integrated Oil & Gas–4.50% | ||||||||
Chevron Corp. | 76,448 | 8,816,748 | ||||||
Exxon Mobil Corp. | 173,654 | 16,717,670 | ||||||
Hess Corp. | 11,306 | 904,819 | ||||||
Murphy Oil Corp. | 6,999 | 415,531 | ||||||
Occidental Petroleum Corp. | 32,008 | 3,089,412 | ||||||
| 29,944,180 | ||||||||
| Integrated Telecommunication Services–2.35% | ||||||||
AT&T Inc. | 209,410 | 6,686,461 | ||||||
CenturyLink Inc. | 23,495 | 734,454 | ||||||
Frontier Communications Corp. | 39,732 | 193,892 | ||||||
Verizon Communications Inc. | 164,441 | 7,824,103 | ||||||
Windstream Holdings Inc. | 23,723 | 190,258 | ||||||
| 15,629,168 | ||||||||
| Internet Retail–1.49% | ||||||||
Amazon.com, Inc.(b) | 14,747 | 5,339,889 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Internet Retail–(continued) | ||||||||
Expedia, Inc. | 4,092 | $ | 321,345 | |||||
Netflix Inc.(b) | 2,347 | 1,045,893 | ||||||
Priceline.com Inc.(b) | 2,043 | 2,755,680 | ||||||
TripAdvisor Inc.(b) | 4,387 | 439,753 | ||||||
| 9,902,560 | ||||||||
| Internet Software & Services–3.44% | ||||||||
Akamai Technologies, Inc.(b) | 7,098 | 433,901 | ||||||
eBay Inc.(b) | 46,315 | 2,721,933 | ||||||
Facebook Inc.–Class A(b) | 65,379 | 4,475,846 | ||||||
Google Inc.–Class A(b) | 11,154 | 13,559,360 | ||||||
VeriSign, Inc.(b) | 5,120 | 282,163 | ||||||
Yahoo! Inc.(b) | 37,501 | 1,450,164 | ||||||
| 22,923,367 | ||||||||
| Investment Banking & Brokerage–0.90% | ||||||||
Charles Schwab Corp. (The) | 46,083 | 1,221,661 | ||||||
E*TRADE Financial Corp.(b) | 11,439 | 257,034 | ||||||
Goldman Sachs Group, Inc. (The) | 16,754 | 2,788,703 | ||||||
Morgan Stanley | 55,072 | 1,696,218 | ||||||
| 5,963,616 | ||||||||
| IT Consulting & Other Services–1.68% | ||||||||
Accenture PLC–Class A | 25,270 | 2,106,254 | ||||||
Cognizant Technology Solutions Corp.–Class A(b) | 12,009 | 1,249,657 | ||||||
International Business Machines Corp. | 40,573 | 7,512,902 | ||||||
Teradata Corp.(b) | 6,542 | 300,409 | ||||||
| 11,169,222 | ||||||||
| Leisure Products–0.11% | ||||||||
Hasbro, Inc. | 4,629 | 255,336 | ||||||
Mattel, Inc. | 13,452 | 501,894 | ||||||
| 757,230 | ||||||||
| Life & Health Insurance–1.00% | ||||||||
Aflac, Inc. | 18,533 | 1,187,595 | ||||||
Lincoln National Corp. | 10,427 | 522,705 | ||||||
MetLife, Inc. | 44,524 | 2,256,031 | ||||||
Principal Financial Group, Inc. | 10,908 | 494,678 | ||||||
Prudential Financial, Inc. | 18,403 | 1,556,526 | ||||||
Torchmark Corp. | 3,608 | 279,656 | ||||||
Unum Group | 10,380 | 361,016 | ||||||
| 6,658,207 | ||||||||
| Life Sciences Tools & Services–0.49% | ||||||||
Agilent Technologies, Inc. | 13,181 | 750,395 | ||||||
PerkinElmer, Inc. | 4,432 | 200,858 | ||||||
Thermo Fisher Scientific, Inc. | 15,752 | 1,961,754 | ||||||
Waters Corp.(b) | 3,350 | 373,190 | ||||||
| 3,286,197 | ||||||||
| Managed Health Care–1.02% | ||||||||
Aetna Inc. | 14,607 | 1,062,075 | ||||||
Cigna Corp. | 10,986 | 874,376 | ||||||
Humana Inc. | 6,178 | 694,778 | ||||||
UnitedHealth Group Inc. | 40,019 | 3,092,268 | ||||||
WellPoint, Inc. | 11,742 | 1,063,708 | ||||||
| 6,787,205 | ||||||||
| Shares | Value | |||||||
| Metal & Glass Containers–0.08% | ||||||||
Ball Corp. | 5,762 | $ | 320,137 | |||||
Owens-Illinois, Inc.(b) | 6,548 | 222,108 | ||||||
| 542,245 | ||||||||
| Motorcycle Manufacturers–0.09% | ||||||||
Harley-Davidson, Inc. | 8,788 | 580,535 | ||||||
| Movies & Entertainment–1.76% | ||||||||
Time Warner Inc. | 35,963 | 2,414,196 | ||||||
Twenty-First Century Fox, Inc.–Class A | 78,005 | 2,616,288 | ||||||
Viacom Inc.–Class B | 16,173 | 1,418,857 | ||||||
Walt Disney Co. (The) | 64,963 | 5,249,660 | ||||||
| 11,699,001 | ||||||||
| Multi-Line Insurance–0.69% | ||||||||
American International Group, Inc. | 58,527 | 2,912,889 | ||||||
Assurant, Inc. | 2,872 | 188,489 | ||||||
Genworth Financial Inc.–Class A(b) | 19,674 | 305,734 | ||||||
Hartford Financial Services Group, Inc. (The) | 17,771 | 625,362 | ||||||
Loews Corp. | 12,192 | 530,108 | ||||||
| 4,562,582 | ||||||||
| Multi-Sector Holdings–0.05% | ||||||||
Leucadia National Corp. | 12,488 | 348,915 | ||||||
| Multi-Utilities–1.15% | ||||||||
Ameren Corp. | 9,668 | 390,684 | ||||||
CenterPoint Energy, Inc. | 17,080 | 403,942 | ||||||
CMS Energy Corp. | 10,594 | 301,187 | ||||||
Consolidated Edison, Inc. | 11,670 | 654,103 | ||||||
Dominion Resources, Inc. | 23,074 | 1,601,336 | ||||||
DTE Energy Co. | 7,071 | 507,415 | ||||||
Integrys Energy Group, Inc. | 3,136 | 179,599 | ||||||
NiSource Inc. | 12,455 | 433,683 | ||||||
PG&E Corp. | 17,859 | 786,868 | ||||||
Public Service Enterprise Group Inc. | 20,157 | 738,956 | ||||||
SCANA Corp. | 5,577 | 276,061 | ||||||
Sempra Energy | 9,051 | 855,048 | ||||||
TECO Energy, Inc. | 8,117 | 136,203 | ||||||
Wisconsin Energy Corp. | 8,971 | 394,365 | ||||||
| 7,659,450 | ||||||||
| Office REIT’s–0.10% | ||||||||
Boston Properties, Inc. | 6,071 | 682,563 | ||||||
| Office Services & Supplies–0.03% | ||||||||
Pitney Bowes Inc. | 8,042 | 204,669 | ||||||
| Oil & Gas Drilling–0.35% | ||||||||
Diamond Offshore Drilling, Inc. | 2,757 | 130,406 | ||||||
Ensco PLC–Class A | 9,308 | 490,160 | ||||||
Helmerich & Payne, Inc. | 4,267 | 421,366 | ||||||
Nabors Industries Ltd. | 10,346 | 238,165 | ||||||
Noble Corp. PLC | 10,096 | 313,481 | ||||||
Rowan Cos. PLC–Class A(b) | 4,906 | 163,664 | ||||||
Transocean Ltd. | 13,498 | 572,315 | ||||||
| 2,329,557 | ||||||||
| Oil & Gas Equipment & Services–1.55% | ||||||||
Baker Hughes Inc. | 17,655 | 1,117,208 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Oil & Gas Equipment & Services–(continued) | ||||||||
Cameron International Corp.(b) | 9,454 | $ | 605,623 | |||||
FMC Technologies, Inc.(b) | 9,440 | 474,266 | ||||||
Halliburton Co. | 33,696 | 1,920,672 | ||||||
National Oilwell Varco Inc. | 17,036 | 1,312,454 | ||||||
Schlumberger Ltd. | 52,350 | 4,868,550 | ||||||
| 10,298,773 | ||||||||
| Oil & Gas Exploration & Production–2.38% | ||||||||
Anadarko Petroleum Corp. | 20,032 | 1,685,893 | ||||||
Apache Corp. | 15,869 | 1,258,253 | ||||||
Cabot Oil & Gas Corp. | 16,765 | 586,775 | ||||||
Chesapeake Energy Corp. | 20,088 | 520,480 | ||||||
ConocoPhillips | 48,736 | 3,240,944 | ||||||
Denbury Resources Inc. | 14,575 | 238,447 | ||||||
Devon Energy Corp. | 15,208 | 979,699 | ||||||
EOG Resources, Inc. | 10,855 | 2,056,154 | ||||||
EQT Corp. | 6,000 | 613,740 | ||||||
Marathon Oil Corp. | 27,691 | 927,649 | ||||||
Newfield Exploration Co.(b) | 5,436 | 153,241 | ||||||
Noble Energy, Inc. | 14,311 | 984,024 | ||||||
Pioneer Natural Resources Co. | 5,668 | 1,140,288 | ||||||
QEP Resources Inc. | 7,143 | 206,647 | ||||||
Range Resources Corp. | 6,459 | 555,797 | ||||||
Southwestern Energy Co.(b) | 13,906 | 574,874 | ||||||
WPX Energy Inc.(b) | 7,993 | 140,837 | ||||||
| 15,863,742 | ||||||||
| Oil & Gas Refining & Marketing–0.61% | ||||||||
Marathon Petroleum Corp. | 11,965 | 1,005,060 | ||||||
Phillips 66 | 23,831 | 1,783,989 | ||||||
Tesoro Corp. | 5,279 | 269,282 | ||||||
Valero Energy Corp. | 21,447 | 1,029,027 | ||||||
| 4,087,358 | ||||||||
| Oil & Gas Storage & Transportation–0.52% | ||||||||
Kinder Morgan Inc. | 26,729 | 851,319 | ||||||
ONEOK, Inc. | 8,216 | 485,894 | ||||||
Spectra Energy Corp. | 26,672 | 994,332 | ||||||
Williams Cos., Inc. (The) | 27,123 | 1,120,180 | ||||||
| 3,451,725 | ||||||||
| Other Diversified Financial Services–3.21% | ||||||||
Bank of America Corp. | 423,995 | 7,008,638 | ||||||
Citigroup Inc. | 120,565 | 5,863,076 | ||||||
JPMorgan Chase & Co. | 149,432 | 8,490,726 | ||||||
| 21,362,440 | ||||||||
| Packaged Foods & Meats–1.36% | ||||||||
Campbell Soup Co. | 7,088 | 306,981 | ||||||
ConAgra Foods, Inc. | 16,819 | 477,660 | ||||||
General Mills, Inc. | 25,211 | 1,261,306 | ||||||
Hershey Co. (The) | 6,005 | 635,449 | ||||||
Hormel Foods Corp. | 5,327 | 252,766 | ||||||
JM Smucker Co. (The) | 4,147 | 414,742 | ||||||
Kellogg Co. | 10,254 | 622,315 | ||||||
Kraft Foods Group, Inc. | 23,733 | 1,311,723 | ||||||
McCormick & Co., Inc. | 5,206 | 345,678 | ||||||
Mead Johnson Nutrition Co. | 8,045 | 656,070 | ||||||
| Shares | Value | |||||||
| Packaged Foods & Meats–(continued) | ||||||||
Mondelez International Inc.–Class A | 69,714 | $ | 2,372,368 | |||||
Tyson Foods, Inc.–Class A | 10,796 | 425,902 | ||||||
| 9,082,960 | ||||||||
| Paper Packaging–0.13% | ||||||||
Avery Dennison Corp. | 3,839 | 191,259 | ||||||
Bemis Co., Inc. | 4,056 | 159,320 | ||||||
MeadWestvaco Corp. | 7,040 | 263,507 | ||||||
Sealed Air Corp. | 7,801 | 265,546 | ||||||
| 879,632 | ||||||||
| Paper Products–0.13% | ||||||||
International Paper Co. | 17,633 | 862,077 | ||||||
| Personal Products–0.15% | ||||||||
Avon Products, Inc. | 17,281 | 267,337 | ||||||
Estee Lauder Cos. Inc. (The)–Class A | 10,188 | 701,342 | ||||||
| 968,679 | ||||||||
| Pharmaceuticals–6.14% | ||||||||
AbbVie Inc. | 63,279 | 3,221,534 | ||||||
Actavis PLC(b) | 6,903 | 1,524,320 | ||||||
Allergan, Inc. | 11,827 | 1,502,029 | ||||||
Bristol-Myers Squibb Co. | 65,451 | 3,519,300 | ||||||
Eli Lilly and Co. | 39,408 | 2,349,111 | ||||||
Forest Laboratories, Inc.(b) | 9,413 | 918,426 | ||||||
Hospira, Inc.(b) | 6,562 | 284,003 | ||||||
Johnson & Johnson | 112,155 | 10,331,719 | ||||||
Merck & Co., Inc. | 116,150 | 6,619,389 | ||||||
Mylan Inc.(b) | 15,215 | 845,498 | ||||||
Perrigo Co. PLC | 5,288 | 869,559 | ||||||
Pfizer Inc. | 257,632 | 8,272,564 | ||||||
Zoetis Inc. | 19,924 | 618,042 | ||||||
| 40,875,494 | ||||||||
| Property & Casualty Insurance–2.08% | ||||||||
ACE Ltd. | 13,553 | 1,326,432 | ||||||
Allstate Corp. (The) | 18,079 | 980,966 | ||||||
Berkshire Hathaway Inc.–Class B(b) | 71,553 | 8,284,406 | ||||||
Chubb Corp. (The) | 10,006 | 875,325 | ||||||
Cincinnati Financial Corp. | 5,869 | 275,139 | ||||||
Progressive Corp. (The) | 21,940 | 537,311 | ||||||
Travelers Cos., Inc. (The) | 14,471 | 1,213,249 | ||||||
XL Group PLC | 11,241 | 341,726 | ||||||
| 13,834,554 | ||||||||
| Publishing–0.09% | ||||||||
Gannett Co., Inc. | 9,030 | 268,642 | ||||||
News Corp.–Class A(b) | 19,742 | 361,871 | ||||||
| 630,513 | ||||||||
| Railroads–0.90% | ||||||||
CSX Corp. | 40,294 | 1,116,547 | ||||||
Kansas City Southern | 4,380 | 411,369 | ||||||
Norfolk Southern Corp. | 12,278 | 1,128,471 | ||||||
Union Pacific Corp. | 18,307 | 3,302,217 | ||||||
| 5,958,604 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Real Estate Services–0.05% | ||||||||
CBRE Group, Inc.–Class A(b) | 11,048 | $ | 308,792 | |||||
| Regional Banks–0.98% | ||||||||
BB&T Corp. | 28,048 | 1,060,214 | ||||||
Fifth Third Bancorp | 35,093 | 761,343 | ||||||
Huntington Bancshares Inc. | 33,062 | 315,081 | ||||||
KeyCorp | 35,643 | 469,418 | ||||||
M&T Bank Corp. | 5,154 | 600,905 | ||||||
PNC Financial Services Group, Inc. (The) | 21,180 | 1,732,100 | ||||||
Regions Financial Corp. | 54,758 | 582,625 | ||||||
SunTrust Banks, Inc. | 21,276 | 801,680 | ||||||
Zions Bancorp. | 7,353 | 229,414 | ||||||
| 6,552,780 | ||||||||
| Research & Consulting Services–0.15% | ||||||||
Dun & Bradstreet Corp. (The) | 1,534 | 152,188 | ||||||
Equifax Inc. | 4,855 | 340,141 | ||||||
Nielsen Holdings N.V. | 10,058 | 476,146 | ||||||
| 968,475 | ||||||||
| Residential REIT’s–0.24% | ||||||||
Apartment Investment & Management Co.–Class A | 5,759 | 172,136 | ||||||
AvalonBay Communities, Inc. | 4,846 | 624,989 | ||||||
Equity Residential | 13,353 | 780,750 | ||||||
| 1,577,875 | ||||||||
| Restaurants–1.22% | ||||||||
Chipotle Mexican Grill, Inc.(b) | 1,221 | 690,122 | ||||||
Darden Restaurants, Inc. | 5,164 | 263,674 | ||||||
McDonald’s Corp. | 39,553 | 3,763,468 | ||||||
Starbucks Corp. | 29,943 | 2,124,755 | ||||||
Yum! Brands, Inc. | 17,680 | 1,309,734 | ||||||
| 8,151,753 | ||||||||
| Retail REIT’s–0.47% | ||||||||
General Growth Properties, Inc. | 21,369 | 470,546 | ||||||
Kimco Realty Corp. | 16,324 | 363,372 | ||||||
Macerich Co. (The) | 5,585 | 335,826 | ||||||
Simon Property Group, Inc. | 12,315 | 1,986,286 | ||||||
| 3,156,030 | ||||||||
| Security & Alarm Services–0.15% | ||||||||
ADT Corp. (The) | 7,969 | 244,728 | ||||||
Tyco International Ltd. | 18,522 | 781,258 | ||||||
| 1,025,986 | ||||||||
| Semiconductor Equipment–0.25% | ||||||||
Applied Materials, Inc. | 47,831 | 906,876 | ||||||
KLA-Tencor Corp. | 6,657 | 433,703 | ||||||
Lam Research Corp.(b) | 6,500 | 336,245 | ||||||
| 1,676,824 | ||||||||
| Semiconductors–1.77% | ||||||||
Altera Corp. | 12,730 | 462,226 | ||||||
Analog Devices, Inc. | 12,380 | 629,152 | ||||||
Broadcom Corp.–Class A | 21,448 | 637,435 | ||||||
First Solar, Inc.(b) | 2,809 | 160,310 | ||||||
Intel Corp. | 197,604 | 4,892,675 | ||||||
| Shares | Value | |||||||
| Semiconductors–(continued) | ||||||||
Linear Technology Corp. | 9,292 | $ | 435,237 | |||||
LSI Corp. | 21,661 | 240,220 | ||||||
Microchip Technology Inc.(b) | 7,854 | 357,750 | ||||||
Micron Technology, Inc.(b) | 41,811 | 1,011,408 | ||||||
NVIDIA Corp. | 22,956 | 421,931 | ||||||
Texas Instruments Inc. | 43,509 | 1,956,165 | ||||||
Xilinx, Inc. | 10,711 | 559,114 | ||||||
| 11,763,623 | ||||||||
| Soft Drinks–1.79% | ||||||||
Coca-Cola Co. (The) | 150,963 | 5,766,787 | ||||||
Coca-Cola Enterprises, Inc. | 9,597 | 451,827 | ||||||
Dr Pepper Snapple Group, Inc. | 7,974 | 415,525 | ||||||
Monster Beverage Corp.(b) | 5,379 | 398,046 | ||||||
PepsiCo, Inc. | 60,962 | 4,881,227 | ||||||
| 11,913,412 | ||||||||
| Specialized Consumer Services–0.05% | ||||||||
H&R Block, Inc. | 10,812 | 342,092 | ||||||
| Specialized Finance–0.53% | ||||||||
CME Group Inc.–Class A | 12,521 | 924,300 | ||||||
IntercontinentalExchange Group, Inc. | 4,575 | 955,443 | ||||||
McGraw Hill Financial, Inc. | 10,763 | 857,381 | ||||||
Moody’s Corp. | 7,523 | 594,317 | ||||||
NASDAQ OMX Group, Inc. (The) | 4,600 | 176,594 | ||||||
| 3,508,035 | ||||||||
| Specialized REIT’s–0.89% | ||||||||
American Tower Corp. | 15,639 | 1,274,109 | ||||||
HCP, Inc. | 18,135 | 703,094 | ||||||
Health Care REIT, Inc. | 11,426 | 671,163 | ||||||
Host Hotels & Resorts Inc. | 30,062 | 591,320 | ||||||
Plum Creek Timber Co., Inc. | 7,031 | 304,372 | ||||||
Public Storage | 5,757 | 972,933 | ||||||
Ventas, Inc. | 11,684 | 729,432 | ||||||
Weyerhaeuser Co. | 23,164 | 683,570 | ||||||
| 5,929,993 | ||||||||
| Specialty Chemicals–0.56% | ||||||||
Ecolab Inc. | 10,808 | 1,164,562 | ||||||
International Flavors & Fragrances Inc. | 3,247 | 304,536 | ||||||
PPG Industries, Inc. | 5,643 | 1,116,298 | ||||||
Sherwin-Williams Co. (The) | 3,422 | 686,043 | ||||||
Sigma-Aldrich Corp. | 4,748 | 448,259 | ||||||
| 3,719,698 | ||||||||
| Specialty Stores–0.21% | ||||||||
PetSmart, Inc. | 4,112 | 275,751 | ||||||
Staples, Inc. | 26,219 | 356,316 | ||||||
Tiffany & Co. | 4,346 | 405,265 | ||||||
Tractor Supply Co. | 5,549 | 391,537 | ||||||
| 1,428,869 | ||||||||
| Steel–0.16% | ||||||||
Allegheny Technologies, Inc. | 4,301 | 136,686 | ||||||
Cliffs Natural Resources Inc. | 6,061 | 121,402 | ||||||
Nucor Corp. | 12,679 | 636,993 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Steel–(continued) | ||||||||
United States Steel Corp. | 5,707 | $ | 138,223 | |||||
| 1,033,304 | ||||||||
| Systems Software–2.78% | ||||||||
CA, Inc. | 12,914 | 432,619 | ||||||
Microsoft Corp. | 301,976 | 11,568,700 | ||||||
Oracle Corp. | 139,497 | 5,455,728 | ||||||
Red Hat, Inc.(b) | 7,531 | 444,254 | ||||||
Symantec Corp. | 27,667 | 594,287 | ||||||
| 18,495,588 | ||||||||
| Thrifts & Mortgage Finance–0.05% | ||||||||
Hudson City Bancorp, Inc. | 18,943 | 179,959 | ||||||
People’s United Financial Inc. | 12,632 | 178,995 | ||||||
| 358,954 | ||||||||
| Tires & Rubber–0.04% | ||||||||
Goodyear Tire & Rubber Co. (The) | 9,802 | 263,380 | ||||||
| Tobacco–1.41% | ||||||||
Altria Group, Inc. | 79,502 | 2,882,742 | ||||||
Lorillard, Inc. | 14,642 | 718,337 | ||||||
Philip Morris International Inc. | 63,687 | 5,152,915 | ||||||
Reynolds American Inc. | 12,459 | 633,291 | ||||||
| 9,387,285 | ||||||||
| Shares | Value | |||||||
| Trading Companies & Distributors–0.17% | ||||||||
Fastenal Co. | 10,883 | $ | 513,569 | |||||
W.W. Grainger, Inc. | 2,449 | 624,544 | ||||||
| 1,138,113 | ||||||||
| Trucking–0.02% | ||||||||
Ryder System, Inc. | 2,089 | 157,343 | ||||||
| Wireless Telecommunication Services–0.15% | ||||||||
Crown Castle International Corp. | 13,278 | 1,007,800 | ||||||
Total Common Stocks & Other Equity Interests |
| 662,029,429 | ||||||
Money Market Funds–0.48% | ||||||||
Liquid Assets Portfolio–Institutional Class(e) | 1,588,047 | 1,588,047 | ||||||
Premier Portfolio–Institutional Class(e) | 1,588,048 | 1,588,048 | ||||||
Total Money Market Funds |
| 3,176,095 | ||||||
TOTAL INVESTMENTS–99.91% |
| 665,205,524 | ||||||
OTHER ASSETS LESS LIABILITIES–0.09% |
| 592,344 | ||||||
NET ASSETS–100.00% |
| $ | 665,797,868 | |||||
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) | The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. See Note 5. |
| (d) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1I and Note 4. |
| (e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2014
Information Technology | 18.6 | % | ||
Financials | 15.7 | |||
Health Care | 13.6 | |||
Consumer Discretionary | 12.6 | |||
Industrials | 10.6 | |||
Energy | 9.9 | |||
Consumer Staples | 9.4 | |||
Materials | 3.5 | |||
Utilities | 3.0 | |||
Telecommunication Services | 2.5 | |||
Money Market Funds Plus Other Assets Less Liabilities | 0.6 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco S&P 500 Index Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $330,970,268) | $ | 661,424,171 | ||
Investments in affiliates, at value (Cost $3,584,622) | 3,781,353 | |||
Total investments, at value (Cost $334,554,890) | 665,205,524 | |||
Receivable for: | ||||
Investments sold | 108,933 | |||
Variation margin | 8,693 | |||
Fund shares sold | 993,035 | |||
Dividends | 1,457,915 | |||
Investment for trustee deferred compensation and retirement plans | 59,939 | |||
Other assets | 18,901 | |||
Total assets | 667,852,940 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 1,265,096 | |||
Accrued fees to affiliates | 574,749 | |||
Accrued trustees’ and officers’ fees and benefits | 4,058 | |||
Accrued other operating expenses | 140,556 | |||
Trustee deferred compensation and retirement plans | 70,613 | |||
Total liabilities | 2,055,072 | |||
Net assets applicable to shares outstanding | $ | 665,797,868 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 412,497,978 | ||
Undistributed net investment income | 1,153,690 | |||
Undistributed net realized gain (loss) | (78,620,784 | ) | ||
Net unrealized appreciation | 330,766,984 | |||
| $ | 665,797,868 | |||
Net Assets: |
| |||
Class A | $ | 523,262,042 | ||
Class B | $ | 9,367,432 | ||
Class C | $ | 110,205,136 | ||
Class Y | $ | 22,963,258 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 26,175,054 | |||
Class B | 476,903 | |||
Class C | 5,675,584 | |||
Class Y | 1,137,133 | |||
Class A: | ||||
Net asset value per share | $ | 19.99 | ||
Maximum offering price per share | ||||
(Net asset value of $19.99 ¸ 94.50%) | $ | 21.15 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 19.64 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 19.42 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 20.19 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco S&P 500 Index Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $513) | $ | 6,283,443 | ||
Dividends from affiliates | 9,789 | |||
Total investment income | 6,293,232 | |||
Expenses: | ||||
Advisory fees | 379,613 | |||
Administrative services fees | 80,198 | |||
Custodian fees | 9,968 | |||
Distribution fees: | ||||
Class A | 611,389 | |||
Class B | 51,929 | |||
Class C | 504,777 | |||
Transfer agent fees | 403,570 | |||
Trustees’ and officers’ fees and benefits | 29,063 | |||
Other | 153,621 | |||
Total expenses | 2,224,128 | |||
Less: Fees waived and expense offset arrangement(s) | (5,271 | ) | ||
Net expenses | 2,218,857 | |||
Net investment income | 4,074,375 | |||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 4,513,013 | |||
Futures contracts | 550,766 | |||
| 5,063,779 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 76,335,648 | |||
Futures contracts | 198,207 | |||
| 76,533,855 | ||||
Net realized and unrealized gain | 81,597,634 | |||
Net increase in net assets resulting from operations | $ | 85,672,009 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco S&P 500 Index Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| 2014 | 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 4,074,375 | $ | 8,488,186 | ||||
Net realized gain | 5,063,779 | 3,025,005 | ||||||
Change in net unrealized appreciation | 76,533,855 | 79,565,143 | ||||||
Net increase in net assets resulting from operations | 85,672,009 | 91,078,334 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (7,179,915 | ) | (7,761,631 | ) | ||||
Class B | (81,335 | ) | (194,940 | ) | ||||
Class C | (813,327 | ) | (920,398 | ) | ||||
Class Y | (436,370 | ) | (330,633 | ) | ||||
Total distributions from net investment income | (8,510,947 | ) | (9,207,602 | ) | ||||
Share transactions-net: | ||||||||
Class A | (4,483,509 | ) | (8,062,305 | ) | ||||
Class B | (3,019,915 | ) | (11,116,271 | ) | ||||
Class C | 5,879,307 | 611,425 | ||||||
Class Y | (2,325,008 | ) | 5,284,880 | |||||
Net increase (decrease) in net assets resulting from share transactions | (3,949,125 | ) | (13,282,271 | ) | ||||
Net increase in net assets | 73,211,937 | 68,588,461 | ||||||
Net assets: | ||||||||
Beginning of period | 592,585,931 | 523,997,470 | ||||||
End of period (includes undistributed net investment income of $1,153,690 and $5,590,262, respectively) | $ | 665,797,868 | $ | 592,585,931 | ||||
Notes to Financial Statements
February 28, 2014
(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 twelve 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 through growth of capital and 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 to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to 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”).
14 Invesco S&P 500 Index Fund
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
15 Invesco S&P 500 Index Fund
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | 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 designated 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, 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 and Class Y shares to 2.00%, 2.75%, 2.75% 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 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, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $5,053.
16 Invesco S&P 500 Index 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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, the expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates: (1) Class A — up to 0.25% of the average daily net assets of Class A shares; (2) Class B — up to 1.00% of the average daily net assets of Class B shares; and (3) Class C — up to 1.00% of the average daily net assets of Class C shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI, may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended February 28, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $26,760 in front-end sales commissions from the sale of Class A shares and $19, $2,867 and $5,544 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of February 28, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 665,205,524 | $ | — | $ | — | $ | 665,205,524 | ||||||||
Futures* | 116,350 | — | — | 116,350 | ||||||||||||
Total Investments | $ | 665,321,874 | $ | — | $ | — | $ | 665,321,874 | ||||||||
| * | Unrealized appreciation. |
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of February 28, 2014:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk | ||||||||
Futures contracts(a) | $ | 116,350 | $ | — | ||||
| (a) | Includes cumulative appreciation of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
17 Invesco S&P 500 Index Fund
Effect of Derivative Investments for the six months ended February 28, 2014
The table below summarizes the gains on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain on Statement of Operations | ||||
| Futures* | ||||
Realized Gain | ||||
Equity risk | $ | 550,766 | ||
Change in Unrealized Appreciation | ||||
Equity risk | 198,207 | |||
Total | $ | 748,973 | ||
| * | The average notional value of futures contracts outstanding was $8,519,233. |
| Open Futures Contracts | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
E-Mini S&P 500 | Long | 50 | March-2014 | $ | 4,644,000 | $ | 116,350 | |||||||||||||
Offsetting Assets and Liabilities
Effective with the beginning of the Fund’s fiscal year, the Fund has adopted Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. This update is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Fund’s counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of February 28, 2014.
Assets: | ||||||||||||||||||||||||
Counterparty | Gross amounts | Gross amounts | Net amounts of assets | Collateral Received | Net Amount | |||||||||||||||||||
| Financial Instruments | Cash | |||||||||||||||||||||||
Goldman Sachs & Co. | $ | 116,350 | $ | — | $ | 116,350 | $ | — | $ | — | $ | 116,350 | ||||||||||||
| * | Includes cumulative appreciation of futures contracts. |
NOTE 5—Investments in Affiliates
The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. The following is a summary of the transactions in, and earnings from, investments in Invesco Ltd. for the six months ended February 28, 2014.
Value 08/31/13 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain (Loss) | Value 02/28/14 | Dividend Income | ||||||||||||||||||||||
Invesco Ltd. | $ | 544,689 | $ | — | $ | (9,449 | ) | $ | 69,118 | $ | (900 | ) | $ | 605,258 | $ | 7,941 | ||||||||||||
NOTE 6—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $218.
NOTE 7—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
18 Invesco S&P 500 Index Fund
NOTE 8—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2017 | $ | 12,322,416 | $ | — | $ | 12,322,416 | ||||||
August 31, 2018 | 19,847,353 | — | 19,847,353 | |||||||||
August 31, 2019 | 10,267,726 | — | 10,267,726 | |||||||||
Not subject to expiration | — | 13,621,262 | 13,621,262 | |||||||||
| $ | 42,437,495 | $ | 13,621,262 | $ | 56,058,757 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $18,588,931 and $23,107,623, 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 | $ | 310,396,454 | ||
Aggregate unrealized (depreciation) of investment securities | (7,426,392 | ) | ||
Net unrealized appreciation of investment securities | $ | 302,970,062 | ||
Cost of investments for tax purposes is $362,235,462.
19 Invesco S&P 500 Index Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 1,792,488 | $ | 34,436,197 | 3,609,161 | $ | 59,967,499 | ||||||||||
Class B | 26,457 | 490,926 | 48,627 | 807,977 | ||||||||||||
Class C | 707,560 | 13,120,033 | 879,159 | 14,382,285 | ||||||||||||
Class Y | 408,106 | 7,876,015 | 745,535 | 12,266,779 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 341,048 | 6,486,732 | 466,707 | 7,079,950 | ||||||||||||
Class B | 3,781 | 70,771 | 11,362 | 169,870 | ||||||||||||
Class C | 39,586 | 732,740 | 56,433 | 834,081 | ||||||||||||
Class Y | 21,684 | 416,552 | 20,998 | 321,482 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 126,939 | 2,436,831 | 604,257 | 9,883,567 | ||||||||||||
Class B | (129,409 | ) | (2,436,831 | ) | (615,612 | ) | (9,883,567 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (2,520,634 | ) | (47,843,269 | ) | (5,154,351 | ) | (84,993,321 | ) | ||||||||
Class B | (61,765 | ) | (1,144,781 | ) | (137,855 | ) | (2,210,551 | ) | ||||||||
Class C | (430,858 | ) | (7,973,466 | ) | (904,350 | ) | (14,604,941 | ) | ||||||||
Class Y | (554,379 | ) | (10,617,575 | ) | (445,668 | ) | (7,303,381 | ) | ||||||||
Net increase (decrease) in share activity | (229,396 | ) | $ | (3,949,125 | ) | (815,597 | ) | $ | (13,282,271 | ) | ||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 64% 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. |
20 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.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted)(c) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed(d) | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed(d) | Ratio of net investment income to average net assets(d) | Portfolio turnover(e) | |||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 17.67 | $ | 0.13 | $ | 2.47 | $ | 2.60 | $ | (0.28 | ) | $ | 19.99 | 14.78 | % | $ | 523,262 | 0.58 | %(f) | 0.58 | %(f) | 1.41 | %(f) | 3 | % | |||||||||||||||||||||||
Year ended 08/31/13 | 15.26 | 0.27 | 2.43 | 2.70 | (0.29 | ) | 17.67 | 18.04 | 467,234 | 0.62 | 0.62 | 1.64 | 6 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 13.25 | 0.22 | 2.03 | 2.25 | (0.24 | ) | 15.26 | 17.26 | 410,772 | 0.65 | 0.67 | 1.55 | 3 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.36 | 0.19 | 1.85 | 2.04 | (0.15 | ) | 13.25 | 17.94 | 369,597 | 0.61 | 0.61 | 1.42 | 4 | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 17.32 | 0.06 | 2.41 | 2.47 | (0.15 | ) | 19.64 | 14.29 | 9,367 | 1.33 | (f) | 1.33 | (f) | 0.66 | (f) | 3 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 14.96 | 0.14 | 2.40 | 2.54 | (0.18 | ) | 17.32 | 17.14 | 11,045 | 1.37 | 1.37 | 0.89 | 6 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 12.92 | 0.11 | 2.01 | 2.12 | (0.08 | ) | 14.96 | 16.47 | 19,912 | 1.40 | 1.42 | 0.80 | 3 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.10 | 0.09 | 1.80 | 1.89 | (0.07 | ) | 12.92 | 17.02 | 37,840 | 1.36 | 1.36 | 0.67 | 4 | |||||||||||||||||||||||||||||||||||
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 | (h) | 7 | |||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 17.12 | 0.06 | 2.39 | 2.45 | (0.15 | ) | 19.42 | 14.35 | 110,205 | 1.33 | (f) | 1.33 | (f) | 0.66 | (f) | 3 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 14.79 | 0.14 | 2.37 | 2.51 | (0.18 | ) | 17.12 | 17.14 | (i) | 91,761 | 1.36 | (i) | 1.36 | (i) | 0.90 | (i) | 6 | |||||||||||||||||||||||||||||||
Year ended 08/31/12 | 12.79 | 0.11 | 1.99 | 2.10 | (0.10 | ) | 14.79 | 16.50 | 78,797 | 1.40 | 1.42 | 0.80 | 3 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 10.99 | 0.10 | 1.77 | 1.87 | (0.07 | ) | 12.79 | 17.01 | (i) | 68,753 | 1.27 | (i) | 1.27 | (i) | 0.76 | (i) | 4 | |||||||||||||||||||||||||||||||
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 | (j) | 7 | |||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 17.87 | 0.16 | 2.48 | 2.64 | (0.32 | ) | 20.19 | 14.87 | 22,963 | 0.33 | (f) | 0.33 | (f) | 1.66 | (f) | 3 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 15.43 | 0.32 | 2.45 | 2.77 | (0.33 | ) | 17.87 | 18.33 | 22,546 | 0.37 | 0.37 | 1.89 | 6 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 13.40 | 0.26 | 2.06 | 2.32 | (0.29 | ) | 15.43 | 17.64 | 14,518 | 0.40 | 0.42 | 1.80 | 3 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 11.48 | 0.23 | 1.86 | 2.09 | (0.17 | ) | 13.40 | 18.21 | 16,824 | 0.36 | 0.36 | 1.67 | 4 | |||||||||||||||||||||||||||||||||||
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 | (k) | 7 | |||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year, if applicable. |
| (c) | Net assets, end of period, for the year ended August 31, 2009 is stated in millions. |
| (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 was 0.00% for the year ended 2009. The rebate was less than 0.005% for the year ended 2009. |
| (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) of $500,393, $10,472, $101,792 and $25,275 for Class A, Class B, Class C and Class Y shares, respectively. |
| (g) | Ratio of net investment income (loss) to average net assets without fee waivers and/or expense reimbursements was 1.96% for the year ended August 31, 2009. |
| (h) | Ratio of net investment income (loss) to average net assets without fee waivers and/or expense reimbursements was 1.21% for the year ended August 31, 2009. |
| (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 0.99% and 0.91% for the year ended August 31, 2013 and August 31, 2011, respectively. |
| (j) | Ratio of net investment income (loss) to average net assets without fee waivers and/or expense reimbursements was 1.21% for the year ended August 31, 2009. |
| (k) | Ratio of net investment income (loss) to average net assets without fee waivers and/or expense reimbursements was 2.21% for the year ended August 31, 2009. |
21 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,147.80 | $ | 3.09 | $ | 1,021.92 | $ | 2.91 | 0.58 | % | ||||||||||||
| B | 1,000.00 | 1,142.90 | 7.07 | 1,018.20 | 6.66 | 1.33 | ||||||||||||||||||
| C | 1,000.00 | 1,143.50 | 7.07 | 1,018.20 | 6.66 | 1.33 | ||||||||||||||||||
| Y | 1,000.00 | 1,148.70 | 1.76 | 1,023.16 | 1.66 | 0.33 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
22 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.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
|
|
| SEC file numbers: 811-09913 and 333-36074 | MS-SPI-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco Global Real Estate Income Fund
Nasdaq:
A: ASRAX ¡ B: SARBX ¡ C: ASRCX ¡ Y: ASRYX ¡ R5: ASRIX ¡ R6: ASRFX
| 2 | Fund Performance |
| 4 | Letters to Shareholders |
| 5 | Schedule of Investments |
| 10 | Financial Statements |
| 12 | 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
Fund vs. Indexes
Cumulative total returns, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 8.71 | % | ||||||||
Class B Shares | 8.19 | |||||||||
Class C Shares | 8.31 | |||||||||
Class Y Shares | 8.74 | |||||||||
Class R5 Shares | 8.77 | |||||||||
Class R6 Shares | 8.93 | |||||||||
MSCI World Index‚ (Broad Market Index) | 14.67 | |||||||||
Custom Global Real Estate Income Index¡ (Style-Specific Index)* | 8.96 | |||||||||
FTSE EPRA/NAREIT Developed Real Estate Index¨ (Former Style-Specific Index)* | 9.31 | |||||||||
Lipper Global Real Estate Funds Classification Averagep (Peer Group) | 9.40 | |||||||||
| Source(s): | ‚Invesco, MSCI via FactSet Research Systems Inc.; ¡Invesco, FTSE via FactSet Research Systems Inc.; ¨Invesco, Bloomberg L.P.; pLipper Inc. |
| * | The Fund has elected to use the Custom Global Real Estate Income Index rather than the FTSE EPRA/NAREIT Developed Real Estate Index as its style-specific index because the Custom Global Real Estate Income Index better reflects the Fund’s geographic investment focus over time and reflects the Fund’s withholding environment. |
The MSCI World IndexSM is an unmanaged index considered representative of stocks of developed countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors.
The Custom Global Real Estate Income Index is an index comprised of the FTSE NAREIT All Equity REIT Index, through August 31, 2011, and the FTSE EPRA/NAREIT Developed Real Estate Index, which is computed using the net return by withholding applicable taxes.
The FTSE EPRA/NAREIT Developed Real Estate Index is an unmanaged index considered representative of global real estate companies and real estate investment trusts. The index is computed using the gross return which does not withhold taxes for non-resident investors.
The Lipper Global Real Estate Funds Classification Average represents an average of all funds in the Lipper Global Real Estate Funds classification.
The FTSE NAREIT All Equity REIT Index is an unmanaged index considered representative of US REITs. The index is computed using the net return which withholds applicable taxes for non-resident investors.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Global Real Estate Income Fund
| Average Annual Total Returns | |||||
As of 2/28/14, including maximum applicable sales charges |
| ||||
Class A Shares | |||||
Inception (5/31/02) | 9.05 | % | |||
10 Years | 6.21 | ||||
5 Years | 19.38 | ||||
1 Year | -3.45 | ||||
Class B Shares | |||||
10 Years | 5.90 | % | |||
5 Years | 19.66 | ||||
1 Year | -3.42 | ||||
Class C Shares | |||||
10 Years | 5.90 | % | |||
5 Years | 19.86 | ||||
1 Year | 0.44 | ||||
Class Y Shares | |||||
10 Years | 6.92 | % | |||
5 Years | 21.04 | ||||
1 Year | 2.34 | ||||
Class R5 Shares | |||||
10 Years | 7.09 | % | |||
5 Years | 21.21 | ||||
1 Year | 2.53 | ||||
Class R6 Shares | |||||
10 Years | 6.89 | % | |||
5 Years | 20.94 | ||||
1 Year | 2.74 | ||||
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
| Average Annual Total Returns | |||||
As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges |
| ||||
Class A Shares | |||||
Inception (5/31/02) | 8.72 | % | |||
10 Years | 6.46 | ||||
5 Years | 12.93 | ||||
1 Year | -5.58 | ||||
Class B Shares | |||||
10 Years | 6.14 | % | |||
5 Years | 13.12 | ||||
1 Year | -5.61 | ||||
Class C Shares | |||||
10 Years | 6.14 | % | |||
5 Years | 13.32 | ||||
1 Year | -1.84 | ||||
Class Y Shares | |||||
10 Years | 7.17 | % | |||
5 Years | 14.41 | ||||
1 Year | 0.11 | ||||
Class R5 Shares | |||||
10 Years | 7.33 | % | |||
5 Years | 14.65 | ||||
1 Year | 0.19 | ||||
Class R6 Shares | |||||
10 Years | 7.13 | % | |||
5 Years | 14.35 | ||||
1 Year | 0.40 | ||||
reflects any applicable fee waivers or expense reimbursements.
Class R5 shares incepted on March 9, 2007. 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.
Class R6 shares incepted on September 24, 2012. 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 (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 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 Y, Class R5 and Class R6 shares was 1.27%, 2.02%, 2.02%, 1.02%, 0.95% and 0.87%, 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 Y, Class R5 and Class R6 shares was 1.28%, 2.03%, 2.03%, 1.03%, 0.96% 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 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance 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.
| 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, 2014. See current prospectus for more information. |
3 Invesco Global Real Estate Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Global Real Estate Income Fund
Schedule of Investments
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Real Estate Investment Trusts, Common Stocks & Other Equity Interests–61.92% |
| |||||||
| Australia–5.81% | ||||||||
CFS Retail Property Trust | 2,499,503 | $ | 4,400,598 | |||||
Charter Hall Group | 957,356 | 3,443,699 | ||||||
Dexus Property Group | 6,776,578 | 6,477,744 | ||||||
Federation Centres Ltd. | 3,620,843 | 7,721,799 | ||||||
Goodman Group | 1,784,769 | 7,665,129 | ||||||
GPT Group | 1,108,313 | 3,686,192 | ||||||
Investa Office Fund | 950,510 | 2,723,276 | ||||||
Mirvac Group | 2,305,061 | 3,639,433 | ||||||
Stockland | 3,292,356 | 11,373,480 | ||||||
Westfield Group | 534,331 | 4,920,854 | ||||||
Westfield Retail Trust | 1,918,478 | 5,333,094 | ||||||
| 61,385,298 | ||||||||
| Canada–4.86% | ||||||||
Allied Properties REIT | 375,300 | 11,355,266 | ||||||
Artis REIT | 455,800 | 6,450,854 | ||||||
Boardwalk REIT | 75,300 | 4,049,279 | ||||||
Calloway REIT | 201,100 | 4,695,118 | ||||||
Canadian Apartment Properties REIT | 343,700 | 6,788,944 | ||||||
Canadian REIT | 179,800 | 7,083,522 | ||||||
Cominar REIT | 341,600 | 5,590,491 | ||||||
H&R REIT | 264,700 | 5,316,951 | ||||||
| 51,330,425 | ||||||||
| China–0.46% | ||||||||
Shimao Property Holdings Ltd. | 1,253,500 | 2,537,225 | ||||||
SOHO China Ltd. | 3,071,000 | 2,326,815 | ||||||
| 4,864,040 | ||||||||
| France–2.28% | ||||||||
ICADE | 18,107 | 1,783,413 | ||||||
Mercialys S.A. | 357,562 | 8,118,346 | ||||||
Unibail–Rodamco S.E. | 53,574 | 14,116,710 | ||||||
| 24,018,469 | ||||||||
| Germany–0.76% | ||||||||
Alstria Office REIT–AG | 100,000 | 1,389,272 | ||||||
Deutsche Euroshop AG | 110,208 | 4,938,314 | ||||||
Deutsche Wohnen AG(a) | 82,398 | 1,695,205 | ||||||
| 8,022,791 | ||||||||
| Hong Kong–2.04% | ||||||||
Fortune REIT | 3,243,000 | 2,515,638 | ||||||
Link REIT (The) | 1,317,000 | 6,117,807 | ||||||
New World Development Co. Ltd. | 2,310,000 | 2,982,727 | ||||||
Sino Land Co. Ltd. | 1,883,000 | 2,663,969 | ||||||
Sun Hung Kai Properties Ltd. | 245,000 | 3,139,049 | ||||||
Wharf Holdings Ltd. (The) | 592,000 | 4,161,299 | ||||||
| 21,580,489 | ||||||||
| Shares | Value | |||||||
| Japan–8.12% | ||||||||
Activia Properties, Inc. | 794 | $ | 6,748,649 | |||||
Advance Residence Investment Corp. | 2,164 | 4,640,599 | ||||||
Frontier Real Estate Investment Corp. | 1,464 | 7,940,729 | ||||||
Hulic Co., Ltd. | 227,900 | 2,631,798 | ||||||
Hulic Reit, Inc. | 2,036 | 2,764,815 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 478 | 4,096,959 | ||||||
Japan Logistics Fund Inc. | 232 | 518,848 | ||||||
Japan Prime Realty Investment Corp. | 2,815 | 9,767,290 | ||||||
Japan Retail Fund Investment Corp. | 3,581 | 7,073,501 | ||||||
Kenedix Office Investment Corp. | 1,930 | 9,576,987 | ||||||
Mitsui Fudosan Co., Ltd. | 330,000 | 9,848,603 | ||||||
Nippon Accommodations Fund Inc. | 890 | 3,077,903 | ||||||
Nippon Prologis REIT Inc. | 2,255 | 4,839,048 | ||||||
Sumitomo Realty & Development Co., Ltd. | 208,000 | 8,432,622 | ||||||
United Urban Investment Corp. | 2,482 | 3,792,385 | ||||||
| 85,750,736 | ||||||||
| Netherlands–0.43% | ||||||||
Eurocommercial Properties N.V. | 101,315 | 4,560,349 | ||||||
| Singapore–3.19% | ||||||||
Ascendas REIT | 3,637,000 | 6,197,964 | ||||||
CapitaCommercial Trust | 2,746,000 | 3,178,750 | ||||||
CapitaMall Trust | 954,000 | 1,433,511 | ||||||
CDL Hospitality Trusts | 574,000 | 738,162 | ||||||
Frasers Centrepoint Trust | 3,812,000 | 5,270,058 | ||||||
Mapletree Commercial Trust | 3,280,000 | 3,131,203 | ||||||
Mapletree Industrial Trust | 3,894,000 | 4,147,456 | ||||||
Starhill Global REIT | 6,610,000 | 4,067,692 | ||||||
Suntec REIT | 4,189,000 | 5,502,710 | ||||||
| 33,667,506 | ||||||||
| South Africa–0.59% | ||||||||
Growthpoint Properties Ltd. | 1,441,541 | 3,146,300 | ||||||
Hyprop Investments Ltd. | 435,414 | 3,118,342 | ||||||
| 6,264,642 | ||||||||
| Sweden–0.26% | ||||||||
Fabege AB | 200,050 | 2,779,946 | ||||||
| United Kingdom–4.11% | ||||||||
Big Yellow Group PLC | 967,455 | 9,258,319 | ||||||
Hammerson PLC | 852,798 | 8,203,919 | ||||||
Land Securities Group PLC | 1,220,700 | 22,168,125 | ||||||
Shaftesbury PLC | 335,679 | 3,732,307 | ||||||
| 43,362,670 | ||||||||
| United States–29.01% | ||||||||
Acadia Realty Trust | 212,400 | 5,617,980 | ||||||
AvalonBay Communities, Inc. | 192,226 | 24,791,387 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Real Estate Income Fund
| Shares | Value | |||||||
| United States–(continued) | ||||||||
BioMed Realty Trust, Inc. | 330,800 | $ | 6,840,944 | |||||
Boston Properties, Inc. | 84,500 | 9,500,335 | ||||||
Brandywine Realty Trust | 393,400 | 5,763,310 | ||||||
Brixmor Property Group Inc. | 286,800 | 6,332,544 | ||||||
CBL & Associates Properties, Inc. | 365,400 | 6,500,466 | ||||||
Cohen & Steers Quality Income Realty Fund, Inc. | 357,173 | 3,728,886 | ||||||
Corrections Corp. of America | 75,577 | 2,520,493 | ||||||
DCT Industrial Trust Inc. | 725,900 | 5,749,128 | ||||||
EastGroup Properties, Inc. | 91,100 | 5,651,844 | ||||||
Essex Property Trust, Inc. | 97,300 | 16,273,425 | ||||||
Extra Space Storage Inc. | 172,000 | 8,445,200 | ||||||
Federal Realty Investment Trust | 30,900 | 3,439,479 | ||||||
General Growth Properties, Inc. | 571,500 | 12,584,430 | ||||||
Geo Group Inc. (The) | 111,300 | 3,587,199 | ||||||
Government Properties Income Trust | 255,250 | 6,358,277 | ||||||
Healthcare Realty Trust, Inc. | 334,300 | 8,013,171 | ||||||
Healthcare Trust of America, Inc.–Class A | 862,480 | 9,685,650 | ||||||
Hersha Hospitality Trust | 1,051,500 | 5,909,430 | ||||||
Highwoods Properties, Inc. | 183,400 | 6,916,014 | ||||||
Host Hotels & Resorts Inc. | 155,400 | 3,056,718 | ||||||
Hudson Pacific Properties Inc. | 227,700 | 5,193,837 | ||||||
LaSalle Hotel Properties | 369,600 | 11,583,264 | ||||||
Liberty Property Trust | 239,300 | 9,155,618 | ||||||
LTC Properties, Inc. | 16,399 | 617,914 | ||||||
Mid-America Apartment Communities, Inc. | 183,800 | 12,432,232 | ||||||
National Health Investors, Inc. | 121,959 | 7,524,870 | ||||||
National Retail Properties Inc. | 377,000 | 13,530,530 | ||||||
Pebblebrook Hotel Trust | 101,600 | 3,377,184 | ||||||
Piedmont Office Realty Trust Inc.–Class A | 590,200 | 10,198,656 | ||||||
Prologis, Inc. | 109,600 | 4,514,424 | ||||||
Public Storage | 44,077 | 7,449,013 | ||||||
Realty Income Corp. | 182,766 | 8,118,466 | ||||||
Retail Opportunity Investments Corp. | 929,900 | 13,790,417 | ||||||
RLJ Lodging Trust | 371,900 | 9,665,681 | ||||||
Simon Property Group, Inc. | 103,600 | 16,709,644 | ||||||
Taubman Centers, Inc. | 73,800 | 5,199,210 | ||||||
| 306,327,270 | ||||||||
Total Real Estate Investment Trusts, Common Stocks & Other Equity Interests (Cost $627,664,634) |
| 653,914,631 | ||||||
Preferred Stocks–19.21% |
| |||||||
| Australia–0.51% | ||||||||
Goodman PLUS Trust 6.46% Unsec. Sub. Gtd. Floating Rate Pfd.(b) | 60,179 | 5,383,197 | ||||||
| United States–18.70% | ||||||||
Alexandria Real Estate Equities Inc., Series D, $1.75 Conv. Pfd. | 252,000 | 6,867,000 | ||||||
CBL & Associates Properties, Inc., Series D, 7.38% Pfd. | 149,700 | 3,732,021 | ||||||
CBL & Associates Properties, Inc., Series E, 6.63% Pfd. | 249,500 | 5,808,360 | ||||||
| Shares | Value | |||||||
| United States–(continued) | ||||||||
Coresite Realty Corp., Series A, 7.25% Pfd. | 290,585 | $ | 7,006,004 | |||||
CubeSmart, Series A, 7.75% Pfd. | 26,700 | 680,850 | ||||||
DDR Corp., Series K, 6.25% Pfd. | 16,502 | 365,849 | ||||||
Eagle Hospitality Properties Trust Inc., Series A, 8.25% Pfd. | 195,800 | 12,433 | ||||||
EPR Properties, Series E, $2.25 Conv. Pfd. | 111,000 | 3,429,900 | ||||||
EPR Properties, Series F, 6.63% Pfd. | 78,000 | 1,763,580 | ||||||
Essex Property Trust, Inc., Series H, 7.13% Pfd. | 240,907 | 6,215,401 | ||||||
General Growth Properties, Inc., Series A, 6.38% Pfd. | 162,558 | 3,807,108 | ||||||
Health Care REIT, Inc., Series I, $3.25 Conv. Pfd. | 209,100 | 11,709,600 | ||||||
Health Care REIT, Inc., Series J, 6.50% Pfd. | 236,678 | 5,720,507 | ||||||
Hersha Hospitality Trust, Series B, 8.00% Pfd. | 338,500 | 8,597,900 | ||||||
Hudson Pacific Properties Inc., Series B, 8.38% Pfd. | 206,632 | 5,345,570 | ||||||
Inland Real Estate Corp., Series A, 8.13% Pfd. | 96,947 | 2,471,179 | ||||||
Kilroy Realty Corp., Series G, 6.88% Pfd. | 282,410 | 6,806,081 | ||||||
Kilroy Realty Corp., Series H, 6.38% Pfd. | 273,622 | 6,317,932 | ||||||
Kimco Realty Corp., Series K, 5.63% Pfd. | 77,607 | 1,656,910 | ||||||
LaSalle Hotel Properties, Series G, 7.25% Pfd. | 33,834 | 840,775 | ||||||
LaSalle Hotel Properties, Series H, 7.50% Pfd. | 153,900 | 3,885,975 | ||||||
LaSalle Hotel Properties, Series I, 6.38% Pfd. | 99,500 | 2,238,750 | ||||||
National Retail Properties Inc., Series D, 6.63% Pfd. | 402,000 | 9,579,660 | ||||||
National Retail Properties, Inc., Series E, 5.70% Pfd. | 148,500 | 3,083,231 | ||||||
Pebblebrook Hotel Trust, Series A, 7.88% Pfd. | 238,700 | 6,089,237 | ||||||
Pebblebrook Hotel Trust, Series B, 8.00% Pfd. | 139,200 | 3,537,072 | ||||||
Pebblebrook Hotel Trust, Series C, 6.50% Pfd. | 356,286 | 7,873,921 | ||||||
PS Business Parks, Inc., Series S, 6.45% Pfd. | 120,000 | 2,834,400 | ||||||
PS Business Parks, Inc., Series U, 5.75% Pfd. | 49,579 | 1,056,529 | ||||||
Public Storage, Series O, 6.88% Pfd. | 228,000 | 5,989,560 | ||||||
Public Storage, Series Q, 6.50% Pfd. | 70,000 | 1,797,600 | ||||||
Public Storage, Series S, 5.90% Pfd. | 65,000 | 1,521,650 | ||||||
Public Storage, Series T, 5.75% Pfd. | 80,000 | 1,816,000 | ||||||
Regency Centers Corp., Series 6, 6.63% Pfd. | 176,801 | 4,252,064 | ||||||
Regency Centers Corp., Series 7, 6.00% Pfd. | 48,500 | 1,050,510 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Real Estate Income Fund
| Shares | Value | |||||||
| United States–(continued) | ||||||||
Saul Centers, Inc., Series C, 6.88% Pfd. | 155,000 | $ | 3,659,550 | |||||
Senior Housing Properties Trust 5.63% Sr. Unsec. Pfd. | 201,569 | 4,178,525 | ||||||
SL Green Realty Corp., Series I, 6.50% Pfd. | 436,000 | 10,219,840 | ||||||
Summit Hotel Properties, Inc., Series A, 9.25% Pfd. | 35,183 | 946,423 | ||||||
Summit Hotel Properties, Inc., Series B, 7.88% Pfd. | 160,156 | 4,003,900 | ||||||
Taubman Centers, Inc., Series J, 6.50% Pfd. | 212,895 | 4,964,711 | ||||||
Taubman Centers, Inc., Series K, 6.25% Pfd. | 346,468 | 7,854,430 | ||||||
Terreno Realty Corp., Series A, 7.75% Pfd. | 109,631 | 2,794,494 | ||||||
Vornado Realty Trust, Series G, 6.63% Pfd. | 22,000 | 552,200 | ||||||
Vornado Realty Trust, Series I, 6.63% Pfd. | 281,574 | 6,983,035 | ||||||
Vornado Realty Trust, Series J, 6.88% Pfd. | 10,000 | 255,000 | ||||||
Weyerhaeuser Co., Series A, $3.19 Conv. Pfd. | 97,000 | 5,282,620 | ||||||
| 197,455,847 | ||||||||
Total Preferred Stocks |
| 202,839,044 | ||||||
| Principal Amount | ||||||||
Mortgage-Backed Securities–14.46% |
| |||||||
| United Kingdom–0.71% | ||||||||
Hercules (Eclipse) PLC., | ||||||||
Series 2006-4, Class B, Floating Rate Pass Through Ctfs., 0.87%, 10/25/18(b)(c) | GBP | 3,842,446 | 5,926,964 | |||||
Triton European Loan Conduit PLC, Series 26X, Class G, Floating Rate Pass Through Ctfs., 1.20%, 10/25/19(b)(c) | GBP | 975,926 | 1,511,625 | |||||
| 7,438,589 | ||||||||
| United States–13.75% | ||||||||
Banc of America Merrill Lynch Commercial Mortgage Inc., Variable Rate Pass Through Ctfs., 4.90%, 11/10/38(b)(d) | $ | 600,000 | 583,469 | |||||
Bear Stearns Commercial Mortgage Securities Trust, | ||||||||
Series 2004-PWR6, Class B, Variable Rate Pass Through Ctfs., 4.95%, 11/11/41(b)(d) | 50,000 | 52,575 | ||||||
Series 2005-PWR8, Class C, Pass Through Ctfs., 4.86%, 06/11/41 | 4,900,000 | 4,882,184 | ||||||
| Principal Amount | Value | |||||||
| United States–(continued) | ||||||||
Citigroup/Deutsche Commercial Mortgage Trust, Series 2005-CD1, Class E, Variable Rate Pass Through Ctfs., 5.22%, 07/15/44(b) | $ | 12,119,000 | $ | 12,072,887 | ||||
Credit Suisse First Boston Mortgage Securities Corp., | ||||||||
Series 2003-C5, Class G, Variable Rate Pass Through Ctfs., 5.75%, 12/15/36(b)(d) | 2,350,000 | 2,346,921 | ||||||
Series 2005-C3, Class B, Pass Through Ctfs., 4.88%, 07/15/37 | 9,950,000 | 9,477,723 | ||||||
Credit Suisse First Boston Mortgage Securities Corp.,, | ||||||||
Series 2005-C4, Class D, Variable Rate Pass Through Ctfs., 5.38%, 08/15/38(b) | 2,950,000 | 3,006,311 | ||||||
Series 2005-C5, Class C, Variable Rate Pass Through Ctfs., 5.10%, 08/15/38(b) | 4,975,000 | 5,111,313 | ||||||
DLJ Commercial Mortgage Corp., Series 1998-CG1, Class B4, Variable Rate Pass Through Ctfs., 7.17%, 06/10/31(b)(d) | 9,985 | 9,988 | ||||||
FREMF Mortgage Trust, | ||||||||
Series 2012-K705, Class C, Variable Rate Pass Through Ctfs., 4.16%, 09/25/44(b)(d) | 5,000,000 | 4,970,997 | ||||||
Series 2012-KF01, Class C, Floating Rate Pass Through Ctfs., 4.42%, 10/25/44(b)(d) | 1,278,000 | 1,358,159 | ||||||
GS Mortgage Securities Corp. II, Series 2013-KING, Class E, Variable Rate Pass Through Ctfs., 3.44%, 12/10/27(b)(d) | 1,000,000 | 893,284 | ||||||
GS Mortgage Securities Corp. Trust, Series 2013-NYC5, Class G, Variable Rate Pass Through Ctfs., | 4,000,000 | 3,899,760 | ||||||
GS Mortgage Securities Trust, | ||||||||
Series GSMS 2011-GC5, Class E, Variable Rate Pass Through Ctfs., | 6,800,000 | 6,358,000 | ||||||
Series GSMS 2011-GC3, Class E, Variable Rate Pass Through Ctfs., | 7,475,000 | 6,823,244 | ||||||
JP Morgan Chase Commercial Mortgage Securities Corp., | ||||||||
Series 2004-C3, Class F, Variable Rate Pass Through Ctfs., 5.07%, 01/15/42(b)(d) | 7,950,000 | 7,513,350 | ||||||
Series 2012-PHH, Class D, Floating Rate Pass Through Ctfs., 3.42%, 10/15/25(b)(d) | 3,250,000 | 3,268,453 | ||||||
Series 2012-PHH, Class E, Floating Rate Pass Through Ctfs., 3.42%, 10/15/25(b)(d) | 1,250,000 | 1,246,477 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Real Estate Income Fund
| Principal Amount | Value | |||||||
| United States–(continued) | ||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, | ||||||||
Series 2006-LDP7, Class AJ, Variable Rate Pass Through Ctfs., 5.87%, 04/15/45 | $ | 6,645,000 | $ | 6,832,851 | ||||
Series 2011-C4, Class TAC1, Pass Through Ctfs., 7.99%, 07/15/46(d) | 1,909,792 | 2,086,747 | ||||||
LB-UBS Commercial Mortgage Trust, | ||||||||
Series 2005-C1, Class C, Variable Rate Pass Through Ctfs., 4.84%, 02/15/40(b) | 170,000 | 174,127 | ||||||
Series 2006-C4, Class AJ, Variable Rate Pass Through Ctfs., 5.86%, 06/15/38(b) | 4,260,000 | 4,535,754 | ||||||
Merrill Lynch Mortgage Trust, | ||||||||
Series 2003-KEY1, Class F, Variable Rate Pass Through Ctfs., 6.19%, 11/12/35(b)(d) | 937,000 | 924,250 | ||||||
Series 2004-MKB1, Class B, Variable Rate Pass Through Ctfs., 5.28%, 02/12/42(b) | 25,000 | 25,094 | ||||||
Series 2005-MCP1, Class E, Variable Rate Pass Through Ctfs., 5.13%, 06/12/43(b)(d) | 4,500,000 | 4,480,535 | ||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2012-CKSV, Class CK, Pass Through Ctfs., 4.30%, 10/15/30(d) | 3,900,000 | 3,604,594 | ||||||
Morgan Stanley Capital I Trust, | ||||||||
Series 2005-IQ10, Class B, Variable Rate Pass Through Ctfs., 5.25%, 09/15/42(b) | 6,475,000 | 6,635,383 | ||||||
Series 2006-HQ8, Class C, Variable Rate Pass Through Ctfs., 5.50%, 03/12/44(b) | 7,819,000 | 7,440,674 | ||||||
Series 2006-HQ8, Class D, Variable Rate Pass Through Ctfs., 5.50%, 03/12/44(b) | 7,400,000 | 6,645,307 | ||||||
Series 2006-HQ9, Class D, Variable Rate Pass Through Ctfs., 5.86%, 07/12/44(b) | 8,859,000 | 9,047,635 | ||||||
Series 2006-IQ11, Class B, Variable Rate Pass Through Ctfs., 5.66%, 10/15/42(b) | 270,000 | 255,406 | ||||||
Series 2007-TOP27, Class AJ, Variable Rate Pass Through Ctfs., 5.65%, 06/11/42(b) | 7,400,000 | 8,155,459 | ||||||
Series 2007-TOP27, Class AM, Variable Rate Pass Through Ctfs., 5.65%, 06/11/42(b) | 25,000 | 28,235 | ||||||
| Principal Amount | Value | |||||||
| United States–(continued) | ||||||||
Wachovia Bank Commercial Mortgage Trust, | ||||||||
Series 2005-C16, Class H, Variable Rate Pass Through Ctfs., 5.56%, 10/15/41(d) | $ | 550,000 | $ | 550,989 | ||||
Series 2005-C16, Class TO, Variable Rate Pass Through Ctfs., 5.62%, 10/15/41(b)(d) | 425,295 | 425,943 | ||||||
Series 2005-C19, Class F, Variable Rate Pass Through Ctfs., 5.44%, 05/15/44(b)(d) | 900,000 | 912,542 | ||||||
Series 2005-C19, Class G, Variable Rate Pass Through Ctfs., 5.45%, 05/15/44(b)(d) | 5,000,000 | 5,055,677 | ||||||
Series 2005-C21, Class D, Variable Rate Pass Through Ctfs., 5.24%, 10/15/44(b) | 3,450,000 | 3,548,846 | ||||||
| 145,241,143 | ||||||||
Total Mortgage-Backed Securities (Cost $147,104,088) |
| 152,679,732 | ||||||
U.S. Dollar Denominated Bonds & Notes–1.39% |
| |||||||
| Brazil–0.59% | ||||||||
BR Properties S.A., Sr. Unsec. Gtd. Notes, 9.00%,(d)(e) | 6,200,000 | 6,202,318 | ||||||
| China–0.52% | ||||||||
Agile Property Holdings Ltd., Sr. Unsec. Gtd. Euro Notes, 9.88%, 03/20/17 | 2,500,000 | 2,675,000 | ||||||
Country Garden Holdings Co. Ltd., Sr. Unsec. Gtd. Notes, | 2,500,000 | 2,781,692 | ||||||
| 5,456,692 | ||||||||
| United States–0.28% | ||||||||
Retail Opportunity Investments Partnership L.P., Sr. Unsec. Gtd. Notes, 5.00%, 12/15/23 | 1,975,000 | 2,055,207 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 900,000 | 936,563 | ||||||
| 2,991,770 | ||||||||
Total Bonds & Notes |
| 14,650,780 | ||||||
Non U.S. Dollar Denominated Bonds & Notes–0.27%(c) |
| |||||||
| Australia–0.27% | ||||||||
General Property Trust, Sr. Unsec. Gtd. Medium-Term Notes, 6.75%, 01/24/19 (Cost $3,240,074) | AUD | 2,980,000 | 2,881,518 | |||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Global Real Estate Income Fund
| Shares | Value | |||||||
Money Market Funds–2.11% |
| |||||||
Liquid Assets Portfolio–Institutional Class(f) | 11,162,775 | $ | 11,162,775 | |||||
Premier Portfolio–Institutional | 11,162,776 | 11,162,776 | ||||||
Total Money Market Funds |
| 22,325,551 | ||||||
TOTAL INVESTMENTS–99.36% |
| 1,049,291,256 | ||||||
OTHER ASSETS LESS LIABILITIES–0.64% |
| 6,749,549 | ||||||
NET ASSETS–100.00% |
| $ | 1,056,040,805 | |||||
Investment Abbreviations:
| AUD | – Australian Dollar | |
| Conv. | – Convertible | |
| Ctfs. | – Certificates | |
| GBP | – British Pound | |
| Gtd. | – Guaranteed | |
| Pfd. | – Preferred | |
| REIT | – Real Estate Investment Trust | |
| Sr. | – Senior | |
| Sub. | – Subordinated | |
| Unsec. | – Unsecured |
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2014. |
| (c) | Foreign denominated security. Principal amount is denominated in currency indicated. |
| (d) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). 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, 2014 was $66,349,964, which represented 6.28% of the Fund’s Net Assets. |
| (e) | Perpetual bond with no specified maturity date. |
| (f) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By country, based on Net Assets
as of February 28, 2014
United States | 61.7 | % | ||
Japan | 8.1 | |||
Australia | 6.6 | |||
Canada | 4.9 | |||
United Kingdom | 4.8 | |||
Singapore | 3.2 | |||
France | 2.3 | |||
Hong Kong | 2.0 | |||
Countries each less than 2.0% of portfolio | 3.6 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.8 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Global Real Estate Income Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $1,002,396,736) | $ | 1,026,965,705 | ||
Investments in affiliated money market funds, at value and cost | 22,325,551 | |||
Total investments, at value (Cost $1,024,722,287) | 1,049,291,256 | |||
Foreign currencies, at value (Cost $1,953,713) | 1,963,881 | |||
Receivable for: | ||||
Investments sold | 11,207,545 | |||
Fund shares sold | 6,887,293 | |||
Dividends and interest | 2,686,236 | |||
Investment for trustee deferred compensation and retirement plans | 122,033 | |||
Other assets | 84,915 | |||
Total assets | 1,072,243,159 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 10,582,758 | |||
Fund shares reacquired | 4,655,377 | |||
Accrued fees to affiliates | 717,516 | |||
Accrued trustees’ and officers’ fees and benefits | 4,915 | |||
Accrued other operating expenses | 98,735 | |||
Trustee deferred compensation and retirement plans | 143,053 | |||
Total liabilities | 16,202,354 | |||
Net assets applicable to shares outstanding | $ | 1,056,040,805 | ||
Net assets applicable to common shares consist of: |
| |||
Shares of beneficial interest | $ | 1,039,511,574 | ||
Undistributed net investment income | (3,524,162 | ) | ||
Undistributed net realized gain (loss) | (4,544,979 | ) | ||
Net unrealized appreciation | 24,598,372 | |||
| $ | 1,056,040,805 | |||
Net Assets: |
| |||
Class A | $ | 600,719,305 | ||
Class B | $ | 1,705,912 | ||
Class C | $ | 112,010,255 | ||
Class Y | $ | 318,097,506 | ||
Class R5 | $ | 23,447,500 | ||
Class R6 | $ | 60,327 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 67,372,286 | |||
Class B | 191,712 | |||
Class C | 12,589,663 | |||
Class Y | 35,775,242 | |||
Class R5 | 2,631,356 | |||
Class R6 | 6,766 | |||
Class A: | ||||
Net asset value per share | $ | 8.92 | ||
Maximum offering price per share | ||||
(Net asset value of $8.92 ¸ 94.50%) | $ | 9.44 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 8.90 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 8.90 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 8.89 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 8.91 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 8.92 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Global Real Estate Income Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $739,508) | $ | 20,460,205 | ||
Dividends from affiliated money market funds | 4,947 | |||
Interest | 4,819,808 | |||
Total investment income | 25,284,960 | |||
Expenses: | ||||
Advisory fees | 3,796,761 | |||
Administrative services fees | 130,911 | |||
Custodian fees | 37,193 | |||
Distribution fees: | ||||
Class A | 780,007 | |||
Class B | 8,868 | |||
Class C | 555,196 | |||
Transfer Agent Fees — A, B, C and Y | 880,117 | |||
Transfer agent fees — R5 | 2,960 | |||
Transfer agent fees — R6 | 6 | |||
Trustees’ and officers’ fees and benefits | 41,188 | |||
Other | 267,847 | |||
Total expenses | 6,501,054 | |||
Less: Fees waived and expense offset arrangement(s) | (14,282 | ) | ||
Net expenses | 6,486,772 | |||
Net investment income | 18,798,188 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (3,910,965 | ) | ||
Foreign currencies | (40,301 | ) | ||
| (3,951,266 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 69,685,567 | |||
Foreign currencies | 44,755 | |||
| 69,730,322 | ||||
Net realized and unrealized gain | 65,779,056 | |||
Net increase in net assets resulting from operations | $ | 84,577,244 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Global Real Estate Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 18,798,188 | $ | 34,376,102 | ||||
Net realized gain (loss) | (3,951,266 | ) | 20,420,827 | |||||
Change in net unrealized appreciation (depreciation) | 69,730,322 | (78,750,517 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 84,577,244 | (23,953,588 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (15,882,747 | ) | (25,666,681 | ) | ||||
Class B | (38,921 | ) | (85,901 | ) | ||||
Class C | (2,409,422 | ) | (3,226,317 | ) | ||||
Class Y | (7,028,748 | ) | (11,045,614 | ) | ||||
Class R5 | (663,739 | ) | (1,588,351 | ) | ||||
Class R6 | (1,575 | ) | (305,539 | ) | ||||
Total distributions from net investment income | (26,025,152 | ) | (41,918,403 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (7,329,405 | ) | — | |||||
Class B | (20,715 | ) | — | |||||
Class C | (1,307,959 | ) | — | |||||
Class Y | (3,044,760 | ) | — | |||||
Class R5 | (292,640 | ) | — | |||||
Class R6 | (633 | ) | — | |||||
Total distributions from net realized gains | (11,996,112 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | (43,179,542 | ) | 336,455,070 | |||||
Class B | (196,483 | ) | 313,925 | |||||
Class C | (1,816,000 | ) | 72,059,586 | |||||
Class Y | 35,485,511 | 173,687,611 | ||||||
Class R5 | (1,202,737 | ) | (5,198,420 | ) | ||||
Class R6 | (2,984 | ) | (509,175 | ) | ||||
Net increase (decrease) in net assets resulting from share transactions | (10,912,235 | ) | 576,808,597 | |||||
Net increase in net assets | 35,643,745 | 510,936,606 | ||||||
Net assets: | ||||||||
Beginning of period | 1,020,397,060 | 509,460,454 | ||||||
End of period (includes undistributed net investment income of $(3,524,162) and $3,702,802, respectively) | $ | 1,056,040,805 | $ | 1,020,397,060 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global 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 twelve separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest.
The Fund’s investment objective is current income and, secondarily, capital appreciation.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue
12 Invesco Global Real Estate Income Fund
to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices will be used to value debt obligations and corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. 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
13 Invesco Global Real Estate Income Fund
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 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, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
| J. | Forward Foreign Currency Contracts — The Fund may enter into forward foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of |
14 Invesco Global Real Estate Income Fund
| these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
| K. | 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. |
Because, 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 1.75%, 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 and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $14,010.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B and Class C shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended February 28, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption
15 Invesco Global Real Estate Income Fund
proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $84,850 in front-end sales commissions from the sale of Class A shares and $8,847, $927 and $22,273 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of February 28, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended February 28, 2014, there were transfers from Level 1 to Level 2 of $138,405,760 and from Level 2 to Level 1 of $20,833,978, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | $ | 13,104,996 | $ | 56,545,017 | $ | — | $ | 69,650,013 | ||||||||
Brazil | — | 6,202,318 | — | 6,202,318 | ||||||||||||
Canada | 51,330,425 | — | — | 51,330,425 | ||||||||||||
China | 2,326,815 | 7,993,917 | — | 10,320,732 | ||||||||||||
France | 14,116,710 | 9,901,759 | — | 24,018,469 | ||||||||||||
Germany | 3,084,477 | 4,938,314 | — | 8,022,791 | ||||||||||||
Hong Kong | 8,633,445 | 12,947,044 | — | 21,580,489 | ||||||||||||
Japan | 31,342,413 | 54,408,323 | — | 85,750,736 | ||||||||||||
Netherlands | 4,560,349 | — | — | 4,560,349 | ||||||||||||
Singapore | 23,785,187 | 9,882,319 | — | 33,667,506 | ||||||||||||
South Africa | 3,146,300 | 3,118,342 | — | 6,264,642 | ||||||||||||
Sweden | 2,779,946 | — | — | 2,779,946 | ||||||||||||
United Kingdom | 21,194,545 | 29,606,714 | — | 50,801,259 | ||||||||||||
United States | 516,146,004 | 158,195,577 | — | 674,341,581 | ||||||||||||
Total Investments | $ | 695,551,612 | $ | 353,739,644 | $ | — | $ | 1,049,291,256 | ||||||||
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $272.
NOTE 5—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
16 Invesco Global Real Estate Income Fund
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2013.
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended February 28, 2014 was $287,819,351 and $315,276,663, 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 | $ | 48,161,772 | ||
Aggregate unrealized (depreciation) of investment securities | (31,374,693 | ) | ||
Net unrealized appreciation of investment securities | $ | 16,787,079 | ||
Cost of investments for tax purposes is $1,032,504,177.
17 Invesco Global Real Estate Income Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 13,369,319 | $ | 116,859,807 | 51,782,661 | $ | 473,071,246 | ||||||||||
Class B | 4,761 | 41,923 | 92,521 | 840,179 | ||||||||||||
Class C | 1,501,127 | 13,132,249 | 9,354,648 | 86,167,442 | ||||||||||||
Class Y | 15,985,902 | 140,072,618 | 28,585,952 | 260,842,380 | ||||||||||||
Class R5 | 318,158 | 2,781,321 | 1,792,319 | 16,207,911 | ||||||||||||
Class R6(b) | 1,109 | 9,726 | 1,058,633 | 9,542,340 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 2,275,297 | 19,427,862 | 2,262,975 | 20,143,201 | ||||||||||||
Class B | 6,158 | 52,430 | 8,184 | 72,954 | ||||||||||||
Class C | 376,309 | 3,202,344 | 310,380 | 2,758,916 | ||||||||||||
Class Y | 973,084 | 8,283,348 | 1,013,301 | 9,002,041 | ||||||||||||
Class R5 | 103,871 | 882,695 | 165,684 | 1,478,806 | ||||||||||||
Class R6 | 217 | 1,853 | 34,061 | 305,436 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 10,014 | 87,791 | 34,937 | 321,041 | ||||||||||||
Class B | (10,025 | ) | (87,791 | ) | (34,993 | ) | (321,041 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (20,527,779 | ) | (179,555,002 | ) | (17,336,317 | ) | (157,080,418 | ) | ||||||||
Class B | (23,380 | ) | (203,045 | ) | (30,996 | ) | (278,167 | ) | ||||||||
Class C | (2,088,385 | ) | (18,150,593 | ) | (1,869,410 | ) | (16,866,772 | ) | ||||||||
Class Y | (12,966,389 | ) | (112,870,455 | ) | (10,617,706 | ) | (96,156,810 | ) | ||||||||
Class R5 | (557,792 | ) | (4,866,753 | ) | (2,548,470 | ) | (22,885,137 | ) | ||||||||
Class R6 | (1,614 | ) | (14,563 | ) | (1,085,640 | ) | (10,356,951 | ) | ||||||||
Net increase (decrease) in share activity | (1,250,038 | ) | $ | (10,912,235 | ) | 62,972,724 | $ | 576,808,597 | ||||||||
| (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, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
18 Invesco Global 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.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 8.52 | $ | 0.16 | $ | 0.56 | $ | 0.72 | $ | (0.22 | ) | $ | (0.10 | ) | $ | (0.32 | ) | $ | 8.92 | 8.71 | % | $ | 600,719 | 1.25 | %(d) | 1.25 | %(d) | 3.66 | %(d) | 28 | % | |||||||||||||||||||||||||
Year ended 08/31/13 | 8.97 | 0.36 | (0.31 | ) | 0.05 | (0.50 | ) | — | (0.50 | ) | 8.52 | 0.43 | 615,876 | 1.26 | 1.27 | 4.00 | 63 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.39 | 0.41 | 0.57 | 0.98 | (0.40 | ) | — | (0.40 | ) | 8.97 | (e) | 12.19 | 318,464 | 1.31 | 1.31 | 4.82 | 49 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.77 | 0.32 | 0.61 | 0.93 | (0.31 | ) | — | (0.31 | ) | 8.39 | 12.11 | 203,100 | 1.30 | 1.30 | 3.83 | 101 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.62 | 0.28 | 1.14 | 1.42 | (0.27 | ) | — | (0.27 | ) | 7.77 | 21.85 | 147,568 | 1.37 | 1.38 | 3.93 | 77 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 8.38 | 0.27 | (1.75 | ) | (1.48 | ) | (0.28 | ) | — | (0.28 | ) | 6.62 | (17.12 | ) | 94,979 | 1.73 | 1.74 | 4.83 | 59 | |||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 8.51 | 0.13 | 0.55 | 0.68 | (0.19 | ) | (0.10 | ) | (0.29 | ) | 8.90 | 8.19 | 1,706 | 2.00 | (d) | 2.00 | (d) | 2.91 | (d) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.95 | 0.29 | (0.30 | ) | (0.01 | ) | (0.43 | ) | — | (0.43 | ) | 8.51 | (0.23 | ) | 1,822 | 2.01 | 2.02 | 3.25 | 63 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.36 | 0.34 | 0.59 | 0.93 | (0.34 | ) | — | (0.34 | ) | 8.95 | (e) | 11.49 | 1,606 | 2.06 | 2.06 | 4.07 | 49 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.75 | 0.26 | 0.59 | 0.85 | (0.24 | ) | — | (0.24 | ) | 8.36 | 11.15 | 1,772 | 2.05 | 2.05 | 3.08 | 101 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 8.51 | 0.13 | 0.55 | 0.68 | (0.19 | ) | (0.10 | ) | (0.29 | ) | 8.90 | 8.19 | 112,010 | 2.00 | (d) | 2.00 | (d) | 2.91 | (d) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.95 | 0.29 | (0.30 | ) | (0.01 | ) | (0.43 | ) | — | (0.43 | ) | 8.51 | (0.23 | ) | 108,878 | 2.01 | 2.02 | 3.25 | 63 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.36 | 0.34 | 0.59 | 0.93 | (0.34 | ) | — | (0.34 | ) | 8.95 | (e) | 11.49 | 44,790 | 2.06 | 2.06 | 4.07 | 49 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.75 | 0.26 | 0.59 | 0.85 | (0.24 | ) | — | (0.24 | ) | 8.36 | 11.15 | 26,511 | 2.05 | 2.05 | 3.08 | 101 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 8.50 | 0.17 | 0.55 | 0.72 | (0.23 | ) | (0.10 | ) | (0.33 | ) | 8.89 | 8.74 | 318,098 | 1.00 | (d) | 1.00 | (d) | 3.91 | (d) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.95 | 0.39 | (0.32 | ) | 0.07 | (0.52 | ) | — | (0.52 | ) | 8.50 | 0.68 | 270,196 | 1.01 | 1.02 | 4.25 | 63 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.36 | 0.43 | 0.58 | 1.01 | (0.42 | ) | — | (0.42 | ) | 8.95 | (e) | 12.62 | 114,525 | 1.06 | 1.06 | 5.07 | 49 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.75 | 0.34 | 0.60 | 0.94 | (0.33 | ) | — | (0.33 | ) | 8.36 | 12.28 | 26,139 | 1.05 | 1.05 | 4.08 | 101 | ||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 8.52 | 0.18 | 0.55 | 0.73 | (0.24 | ) | (0.10 | ) | (0.34 | ) | 8.91 | 8.77 | 23,448 | 0.85 | (d) | 0.85 | (d) | 4.06 | (d) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.96 | 0.39 | (0.30 | ) | 0.09 | (0.53 | ) | — | (0.53 | ) | 8.52 | 0.85 | 23,565 | 0.94 | 0.95 | 4.32 | 63 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.38 | 0.44 | 0.57 | 1.01 | (0.43 | ) | — | (0.43 | ) | 8.96 | (e) | 12.63 | 30,076 | 0.98 | 0.98 | 5.15 | 49 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.76 | 0.35 | 0.61 | 0.96 | (0.34 | ) | — | (0.34 | ) | 8.38 | 12.52 | 35,777 | 0.96 | 0.96 | 4.17 | 101 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 8.52 | 0.18 | 0.56 | 0.74 | (0.24 | ) | (0.10 | ) | (0.34 | ) | 8.92 | 8.93 | 60 | 0.85 | (d) | 0.85 | (d) | 4.06 | (d) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(f) | 8.98 | 0.38 | (0.41 | ) | (0.03 | ) | (0.43 | ) | — | (0.43 | ) | 8.52 | (0.49 | ) | 60 | 0.86 | (g) | 0.87 | (g) | 4.40 | (g) | 63 | ||||||||||||||||||||||||||||||||||
| (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 $629,177, $1,788, $111,959, $271,523, $24,585 and $58 for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share. |
| (f) | Commencement date of October 3, 2008 for Class Y shares and September 24, 2012 for Class R6 shares. |
| (g) | Annualized. |
19 Invesco Global 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,087.10 | $ | 6.47 | $ | 1,018.60 | $ | 6.26 | 1.25 | % | ||||||||||||
| B | 1,000.00 | 1,081.90 | 10.32 | 1,014.88 | 9.99 | 2.00 | ||||||||||||||||||
| C | 1,000.00 | 1,083.10 | 10.33 | 1,014.88 | 9.99 | 2.00 | ||||||||||||||||||
| Y | 1,000.00 | 1,087.40 | 5.18 | 1,019.84 | 5.01 | 1.00 | ||||||||||||||||||
| R5 | 1,000.00 | 1,087.70 | 4.40 | 1,020.58 | 4.26 | 0.85 | ||||||||||||||||||
| R6 | 1,000.00 | 1,089.30 | 4.40 | 1,020.58 | 4.26 | 0.85 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
20 Invesco Global Real Estate Income Fund
Distribution Notice
Form 1099-DIV for 2013 reported distributions for federal income tax purposes. The Fund’s annual report to shareholders will include information regarding the tax character of Fund distributions for the fiscal year. This Notice is sent to comply with certain Securities and Exchange Commission requirements.
Shareholders were sent a notice from the Fund that set forth an estimate on a per share basis of the source or sources from which the distribution was paid in December 2013. Subsequently, certain of these estimates have been corrected. Listed below is a written statement of the sources of this distribution, as corrected, on a generally accepted accounting principles (“GAAP”) basis and as noted above are not being provided for tax reporting purposes.
During the month of December 2013, the Fund declared a quarterly distribution, which was payable to shareholders on December 13, 2013. This distribution, determined in accordance with generally accepted accounting principles, is estimated to be from the following sources: (1) $0.0869 (Class A), $0.0702 (Class B), $0.0702 (Class C), $0.0938 (Class R5), $0.0957 (Class R6), and $0.0918 (Class Y) per share from net investment income; and (2) $0.1024 per share gain from sale of securities, and (3) $0.0443 (Class A), $0.0443 (Class B), $0.0443 (Class C), $0.0443 (Class R5), $0.0443 (Class R6), and $0.0443 (Class Y) per share from return of principal.
21 Invesco Global Real Estate Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | GREI-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
| Invesco Low Volatility Equity Yield Fund |
| Nasdaq: |
A: SCAUX n B: SBCUX n C: SCCUX n R: SCRUX n Y: SCAYX Investor: SCNUX n R5: SCIUX |
| 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares | 11.10 | % | ||
Class B Shares | 10.82 | |||
Class C Shares | 10.74 | |||
Class R Shares | 11.01 | |||
Class Y Shares | 11.30 | |||
Investor Class Shares | 11.17 | |||
Class R5 Shares | 11.35 | |||
S&P 500 Indexq (Broad Market Index) | 15.07 | |||
Russell 1000 Indexn (Style-Specific Index) | 15.67 | |||
Lipper Equity Income Index¿ (Peer Group Index) | 12.23 |
Source(s): qInvesco, S&P-Dow Jones via FactSet Research Systems Inc.;
nInvesco, Russell via FactSet Research Systems Inc.; ¿Lipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US 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 Equity Income Index is an unmanaged Index considered representative of equity income funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Low Volatility Equity Yield Fund
Average Annual Total Returns As of 2/28/14, including maximum applicable sales charges
| ||||
Class A Shares | ||||
Inception (3/31/06) | 4.30 | % | ||
5 Years | 18.40 | |||
1 Year | 14.90 | |||
Class B Shares | ||||
Inception (3/31/06) | 4.30 | % | ||
5 Years | 18.62 | |||
1 Year | 15.76 | |||
Class C Shares | ||||
Inception (3/31/06) | 4.26 | % | ||
5 Years | 18.75 | |||
1 Year | 19.56 | |||
Class R Shares | ||||
Inception (3/31/06) | 4.80 | % | ||
5 Years | 19.43 | |||
1 Year | 21.27 | |||
Class Y Shares | ||||
Inception | 5.25 | % | ||
5 Years | 19.99 | |||
1 Year | 21.89 | |||
Investor Class Shares | ||||
Inception | 5.07 | % | ||
5 Years | 19.70 | |||
1 Year | 21.62 | |||
Class R5 Shares | ||||
Inception (3/31/06) | 5.36 | % | ||
5 Years | 20.05 | |||
1 Year | 22.06 | |||
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
Average Annual Total Returns As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (3/31/06) | 4.29 | % | ||
5 Years | 13.34 | |||
1 Year | 20.41 | |||
Class B Shares | ||||
Inception (3/31/06) | 4.30 | % | ||
5 Years | 13.55 | |||
1 Year | 21.55 | |||
Class C Shares | ||||
Inception (3/31/06) | 4.26 | % | ||
5 Years | 13.72 | |||
1 Year | 25.34 | |||
Class R Shares | ||||
Inception (3/31/06) | 4.81 | % | ||
5 Years | 14.35 | |||
1 Year | 27.07 | |||
Class Y Shares | ||||
Inception | 5.25 | % | ||
5 Years | 14.93 | |||
1 Year | 27.71 | |||
Investor Class Shares | ||||
Inception | 5.07 | % | ||
5 Years | 14.62 | |||
1 Year | 27.43 | |||
Class R5 Shares | ||||
Inception (3/31/06) | 5.36 | % | ||
5 Years | 14.95 | |||
1 Year | 27.89 | |||
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, Investor Class and Class R5 shares was 1.18%, 1.93%, 1.93%, 1.43%, 0.93%, 1.18% and 0.76%, 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 Class R5 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 Low Volatility Equity Yield Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives |
should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our |
blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Low Volatility Equity Yield Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.15% |
| |||||||
| Aerospace & Defense–6.05% | ||||||||
Alliant Techsystems Inc. | 8,200 | $ | 1,105,278 | |||||
Exelis Inc. | 26,300 | 537,309 | ||||||
Lockheed Martin Corp. | 38,800 | 6,297,240 | ||||||
Northrop Grumman Corp. | 50,500 | 6,112,015 | ||||||
Raytheon Co. | 67,200 | 6,579,552 | ||||||
| 20,631,394 | ||||||||
| Agricultural Products–1.43% | ||||||||
Archer-Daniels-Midland Co. | 119,700 | 4,859,820 | ||||||
| Apparel Retail–0.50% | ||||||||
Guess?, Inc. | 56,000 | 1,699,040 | ||||||
| Automotive Retail–0.14% | ||||||||
Murphy USA Inc.(b) | 12,000 | 486,720 | ||||||
| Biotechnology–1.78% | ||||||||
PDL BioPharma Inc. | 210,900 | 1,807,413 | ||||||
United Therapeutics Corp.(b) | 41,900 | 4,249,498 | ||||||
| 6,056,911 | ||||||||
| Broadcasting–0.15% | ||||||||
CTC Media, Inc. | 48,200 | 508,992 | ||||||
| Building Products–0.16% | ||||||||
Allegion PLC(b) | 10,200 | 554,370 | ||||||
| Commercial Printing–0.94% | ||||||||
R. R. Donnelley & Sons Co. | 166,600 | 3,187,058 | ||||||
| Communications Equipment–1.69% | ||||||||
Cisco Systems, Inc. | 263,700 | 5,748,660 | ||||||
| Computer & Electronics Retail–3.02% | ||||||||
Best Buy Co., Inc. | 200,700 | 5,344,641 | ||||||
GameStop Corp.–Class A | 132,400 | 4,939,844 | ||||||
| 10,284,485 | ||||||||
| Computer Hardware–1.92% | ||||||||
Hewlett-Packard Co. | 219,300 | 6,552,684 | ||||||
| Computer Storage & Peripherals–2.60% | ||||||||
Lexmark International, Inc.–Class A | 86,500 | 3,645,110 | ||||||
NetApp, Inc. | 128,900 | 5,208,849 | ||||||
| 8,853,959 | ||||||||
| Consumer Electronics–1.12% | ||||||||
Garmin Ltd. | 70,900 | 3,804,494 | ||||||
| Data Processing & Outsourced Services–1.73% | ||||||||
Computer Sciences Corp. | 14,300 | 903,760 | ||||||
Western Union Co. (The) | 298,000 | 4,985,540 | ||||||
| 5,889,300 | ||||||||
| Shares | Value | |||||||
| Diversified REIT’s–0.37% | ||||||||
Lexington Realty Trust | 110,100 | $ | 1,256,241 | |||||
| Electric Utilities–7.15% | ||||||||
American Electric Power Co., Inc. | 43,300 | 2,173,660 | ||||||
Edison International | 71,100 | 3,723,507 | ||||||
Entergy Corp. | 79,600 | 5,080,072 | ||||||
Exelon Corp. | 84,000 | 2,554,440 | ||||||
FirstEnergy Corp. | 150,300 | 4,626,234 | ||||||
Generac Holdings, Inc. | 17,500 | 996,975 | ||||||
PPL Corp. | 161,100 | 5,201,919 | ||||||
| 24,356,807 | ||||||||
| Fertilizers & Agricultural Chemicals–0.10% | ||||||||
Scotts Miracle–Gro Co. (The)–Class A | 6,000 | 342,660 | ||||||
| Health Care Distributors–1.59% | ||||||||
AmerisourceBergen Corp. | 3,500 | 237,475 | ||||||
Cardinal Health, Inc. | 72,400 | 5,178,772 | ||||||
| 5,416,247 | ||||||||
| Health Care Services–0.47% | ||||||||
Omnicare, Inc. | 27,000 | 1,590,300 | ||||||
| Home Entertainment Software–0.36% | ||||||||
Activision Blizzard, Inc. | 63,800 | 1,234,530 | ||||||
| Hypermarkets & Super Centers–1.41% | ||||||||
Wal-Mart Stores, Inc. | 64,400 | 4,810,680 | ||||||
| Integrated Oil & Gas–1.42% | ||||||||
Suncor Energy, Inc. (Canada) | 146,800 | 4,850,272 | ||||||
| Integrated Telecommunication Services–4.99% | ||||||||
AT&T Inc. | 186,000 | 5,938,980 | ||||||
BCE Inc. (Canada) | 25,500 | 1,111,800 | ||||||
CenturyLink Inc. | 163,400 | 5,107,884 | ||||||
Windstream Holdings Inc. | 606,000 | 4,860,120 | ||||||
| 17,018,784 | ||||||||
| IT Consulting & Other Services–0.26% | ||||||||
Amdocs Ltd. | 14,700 | 653,856 | ||||||
Booz Allen Hamilton Holding Corp. | 11,100 | 233,433 | ||||||
| 887,289 | ||||||||
| Life & Health Insurance–0.13% | ||||||||
Lincoln National Corp. | 4,600 | 230,598 | ||||||
StanCorp Financial Group, Inc. | 3,100 | 205,158 | ||||||
| 435,756 | ||||||||
| Managed Health Care–2.84% | ||||||||
Humana Inc. | 25,700 | 2,890,222 | ||||||
UnitedHealth Group Inc. | 68,700 | 5,308,449 | ||||||
WellPoint, Inc. | 16,500 | 1,494,735 | ||||||
| 9,693,406 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Low Volatility Equity Yield Fund
| Shares | Value | |||||||
| Mortgage REIT’s–4.11% | ||||||||
Annaly Capital Management Inc. | 509,900 | $ | 5,700,682 | |||||
CYS Investments, Inc. | 175,600 | 1,545,280 | ||||||
MFA Financial, Inc. | 364,800 | 2,867,328 | ||||||
Starwood Property Trust, Inc. | 162,700 | 3,908,054 | ||||||
| 14,021,344 | ||||||||
| Movies & Entertainment–0.41% | ||||||||
Live Nation Entertainment, Inc.(b) | 17,400 | 394,806 | ||||||
Regal Entertainment Group–Class A | 54,700 | 1,006,480 | ||||||
| 1,401,286 | ||||||||
| Multi-Line Insurance–0.23% | ||||||||
Assurant, Inc. | 11,900 | 780,997 | ||||||
| Multi-Utilities–3.12% | ||||||||
Ameren Corp. | 73,100 | 2,953,971 | ||||||
Integrys Energy Group, Inc. | 4,200 | 240,534 | ||||||
Public Service Enterprise Group Inc. | 154,300 | 5,656,638 | ||||||
TECO Energy, Inc. | 95,600 | 1,604,168 | ||||||
Vectren Corp. | 4,600 | 176,962 | ||||||
| 10,632,273 | ||||||||
| Office REIT’s–0.43% | ||||||||
Piedmont Office Realty Trust Inc.–Class A | 84,300 | 1,456,704 | ||||||
| Office Services & Supplies–1.69% | ||||||||
Pitney Bowes Inc. | 225,800 | 5,746,610 | ||||||
| Oil & Gas Drilling–2.91% | ||||||||
Diamond Offshore Drilling, Inc. | 90,600 | 4,285,380 | ||||||
Patterson–UTI Energy, Inc. | 38,400 | 1,117,824 | ||||||
Seadrill Ltd. (Norway) | 122,300 | 4,520,208 | ||||||
| 9,923,412 | ||||||||
| Oil & Gas Exploration & Production–5.27% | ||||||||
Baytex Energy Corp. (Canada) | 14,500 | 528,090 | ||||||
Chesapeake Energy Corp. | 133,500 | 3,458,985 | ||||||
ConocoPhillips | 78,300 | 5,206,950 | ||||||
Encana Corp. (Canada) | 280,600 | 5,325,788 | ||||||
Enerplus Corp. (Canada) | 49,700 | 985,054 | ||||||
Gran Tierra Energy, Inc. (Canada)(b) | 21,600 | 153,144 | ||||||
Pengrowth Energy Corp. (Canada) | 117,300 | 790,602 | ||||||
Penn West Petroleum Ltd. (Canada) | 185,500 | 1,524,810 | ||||||
| 17,973,423 | ||||||||
| Oil & Gas Refining & Marketing–1.92% | ||||||||
CVR Energy, Inc. | 66,900 | 2,632,515 | ||||||
Western Refining, Inc. | 106,900 | 3,896,505 | ||||||
| 6,529,020 | ||||||||
| Packaged Foods & Meats–0.87% | ||||||||
General Mills, Inc. | 25,700 | 1,285,771 | ||||||
Tyson Foods, Inc.–Class A | 42,400 | 1,672,680 | ||||||
| 2,958,451 | ||||||||
| Paper Products–0.28% | ||||||||
Domtar Corp. | 8,600 | 952,708 | ||||||
| Shares | Value | |||||||
| Pharmaceuticals–6.23% | ||||||||
Eli Lilly and Co. | 81,400 | $ | 4,852,254 | |||||
Johnson & Johnson | 54,500 | 5,020,540 | ||||||
Mallinckrodt PLC(b) | 10,800 | 731,052 | ||||||
Merck & Co., Inc. | 71,500 | 4,074,785 | ||||||
Pfizer Inc. | 203,700 | 6,540,807 | ||||||
| 21,219,438 | ||||||||
| Property & Casualty Insurance–0.05% | ||||||||
Old Republic International Corp. | 10,800 | 168,048 | ||||||
| Publishing–0.17% | ||||||||
News Corp.–Class A(b) | 31,800 | 582,894 | ||||||
| Reinsurance–1.81% | ||||||||
Everest Re Group, Ltd. | 16,650 | 2,484,846 | ||||||
PartnerRe Ltd. | 35,500 | 3,510,240 | ||||||
Validus Holdings, Ltd. | 4,700 | 173,007 | ||||||
| 6,168,093 | ||||||||
| Residential REIT’s–0.26% | ||||||||
Starwood Waypoint Residential Trust(b) | 32,540 | 882,159 | ||||||
| Retail REIT’s–0.69% | ||||||||
Kimco Realty Corp. | 40,000 | 890,400 | ||||||
Retail Properties of America, Inc.–Class A | 105,200 | 1,466,488 | ||||||
| 2,356,888 | ||||||||
| Semiconductors–5.34% | ||||||||
Intel Corp. | 212,500 | 5,261,500 | ||||||
Marvell Technology Group Ltd. | 422,400 | 6,458,496 | ||||||
NVIDIA Corp. | 352,400 | 6,477,112 | ||||||
| 18,197,108 | ||||||||
| Soft Drinks–1.39% | ||||||||
PepsiCo, Inc. | 59,200 | 4,740,144 | ||||||
| Specialized REIT’s–4.93% | ||||||||
Extra Space Storage Inc. | 3,400 | 166,940 | ||||||
Geo Group Inc. (The) | 57,500 | 1,853,225 | ||||||
Hospitality Properties Trust | 71,200 | 1,886,800 | ||||||
National Health Investors, Inc. | 14,600 | 900,820 | ||||||
Omega Healthcare Investors, Inc. | 98,300 | 3,141,668 | ||||||
Potlatch Corp | 19,200 | 761,088 | ||||||
Public Storage | 29,550 | 4,993,950 | ||||||
RLJ Lodging Trust | 42,500 | 1,104,575 | ||||||
Senior Housing Properties Trust | 90,000 | 2,007,000 | ||||||
| 16,816,066 | ||||||||
| Specialty Stores–1.42% | ||||||||
Staples, Inc. | 356,500 | 4,844,835 | ||||||
| Systems Software–3.22% | ||||||||
CA, Inc. | 163,900 | 5,490,650 | ||||||
Microsoft Corp. | 134,700 | 5,160,357 | ||||||
Symantec Corp. | 15,300 | 328,644 | ||||||
| 10,979,651 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Low Volatility Equity Yield Fund
| Shares | Value | |||||||
| Thrifts & Mortgage Finance–1.34% | ||||||||
New York Community Bancorp, Inc. | 286,300 | $ | 4,575,073 | |||||
| Tobacco–4.74% | ||||||||
Altria Group, Inc. | 142,800 | 5,177,928 | ||||||
Lorillard, Inc. | 117,500 | 5,764,550 | ||||||
Reynolds American Inc. | 102,500 | 5,210,075 | ||||||
| 16,152,553 | ||||||||
Total Common Stocks & Other Equity Interests |
| 331,070,037 | ||||||
| Principal Amount | ||||||||
U.S. Treasury Bills–0.19% |
| |||||||
0.03%, 03/13/14 (Cost $649,992)(c)(d) | $ | 650,000 | 650,000 | |||||
| Shares | Value | |||||||
Money Market Funds–2.49% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 4,242,775 | $ | 4,242,775 | |||||
Premier Portfolio–Institutional Class(e) | 4,242,775 | 4,242,775 | ||||||
Total Money Market Funds |
| 8,485,550 | ||||||
TOTAL INVESTMENTS–99.83% |
| 340,205,587 | ||||||
OTHER ASSETS LESS LIABILITIES–0.17% |
| 581,627 | ||||||
NET ASSETS–100.00% |
| $ | 340,787,214 | |||||
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) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1I and Note 4. |
| (d) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
| (e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2014
Information Technology | 17.1 | % | ||
Financials | 13.8 | |||
Health Care | 12.9 | |||
Energy | 11.5 | |||
Utilities | 10.3 | |||
Consumer Staples | 9.8 | |||
Industrials | 9.4 | |||
Consumer Discretionary | 6.9 | |||
Telecommunication Services | 5.0 | |||
Materials | 0.4 | |||
U.S. Treasury Bills, Plus Money Market Funds, Plus Other Assets Less Liabilities | 2.9 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Low Volatility Equity Yield Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: | ||||
Investments, at value (Cost $304,960,854) | $ | 331,720,037 | ||
Investments in affiliated money market funds, at value and cost | 8,485,550 | |||
Total investments, at value (Cost $313,446,404) | 340,205,587 | |||
Receivable for: | ||||
Variation margin | 18,471 | |||
Fund shares sold | 111,910 | |||
Dividends | 1,030,246 | |||
Investment for trustee deferred compensation and retirement plans | 227,033 | |||
Other assets | 59,472 | |||
Total assets | 341,652,719 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares reacquired | 370,147 | |||
Accrued fees to affiliates | 184,375 | |||
Accrued trustees’ and officers’ fees and benefits | 3,536 | |||
Accrued other operating expenses | 56,060 | |||
Trustee deferred compensation and retirement plans | 251,387 | |||
Total liabilities | 865,505 | |||
Net assets applicable to shares outstanding | $ | 340,787,214 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 344,230,691 | ||
Undistributed net investment income | 4,168,116 | |||
Undistributed net realized gain (loss) | (34,617,333 | ) | ||
Net unrealized appreciation | 27,005,740 | |||
| $ | 340,787,214 | |||
Net Assets: | ||||
Class A | $ | 209,142,737 | ||
Class B | $ | 12,880,535 | ||
Class C | $ | 38,725,918 | ||
Class R | $ | 190,863 | ||
Class Y | $ | 4,312,233 | ||
Investor Class | $ | 61,405,269 | ||
Class R5 | $ | 14,129,659 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 19,430,917 | |||
Class B | 1,213,277 | |||
Class C | 3,655,882 | |||
Class R | 17,817 | |||
Class Y | 398,902 | |||
Investor Class | 5,687,516 | |||
Class R5 | 1,305,578 | |||
Class A: | ||||
Net asset value per share | $ | 10.76 | ||
Maximum offering price per share | ||||
(Net asset value of $10.76 ¸ 94.50%) | $ | 11.39 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.62 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.59 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.71 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.81 | ||
Investor Class: | ||||
Net asset value and offering price per share | $ | 10.80 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.82 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Low Volatility Equity Yield Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $22,935) | $ | 7,134,548 | ||
Dividends from affiliated money market funds | 1,842 | |||
Total investment income | 7,136,390 | |||
Expenses: | ||||
Advisory fees | 997,296 | |||
Administrative services fees | 53,529 | |||
Custodian fees | 9,157 | |||
Distribution fees: | ||||
Class A | 255,877 | |||
Class B | 65,845 | |||
Class C | 190,339 | |||
Class R | 542 | |||
Investor Class | 77,609 | |||
Transfer agent fees — A, B, C, R, Y and Investor | 258,713 | |||
Transfer agent fees — R5 | 4,167 | |||
Trustees’ and officers’ fees and benefits | 21,813 | |||
Other | 92,350 | |||
Total expenses | 2,027,237 | |||
Less: Fees waived and expense offset arrangement(s) | (6,476 | ) | ||
Net expenses | 2,020,761 | |||
Net investment income | 5,115,629 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain from: | ||||
Investment securities | 32,719,382 | |||
Futures contracts | 828,471 | |||
| 33,547,853 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (3,463,371 | ) | ||
Futures contracts | 404,313 | |||
| (3,059,058 | ) | |||
Net realized and unrealized gain | 30,488,795 | |||
Net increase in net assets resulting from operations | $ | 35,604,424 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Low Volatility Equity Yield Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 5,115,629 | $ | 4,063,726 | ||||
Net realized gain | 33,547,853 | 80,098,018 | ||||||
Change in net unrealized appreciation (depreciation) | (3,059,058 | ) | (33,342,112 | ) | ||||
Net increase in net assets resulting from operations | 35,604,424 | 50,819,632 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (2,832,994 | ) | (2,404,575 | ) | ||||
Class B | (134,687 | ) | (47,545 | ) | ||||
Class C | (385,479 | ) | (119,396 | ) | ||||
Class R | (2,650 | ) | (8,911 | ) | ||||
Class Y | (64,560 | ) | (68,486 | ) | ||||
Investor Class | (874,363 | ) | (773,952 | ) | ||||
Class R5 | (210,806 | ) | (185,733 | ) | ||||
Total distributions from net investment income | (4,505,539 | ) | (3,608,598 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (3,264,832 | ) | — | |||||
Class B | (212,477 | ) | — | |||||
Class C | (616,876 | ) | — | |||||
Class R | (3,433 | ) | — | |||||
Class Y | (68,026 | ) | — | |||||
Investor Class | (956,050 | ) | — | |||||
Class R5 | (215,652 | ) | — | |||||
Total distributions from net realized gains | (5,337,346 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | (6,102,591 | ) | (27,233,949 | ) | ||||
Class B | (1,409,854 | ) | (5,795,678 | ) | ||||
Class C | (1,489,801 | ) | (9,320,625 | ) | ||||
Class R | (25,475 | ) | (905,829 | ) | ||||
Class Y | (200,373 | ) | (690,831 | ) | ||||
Investor Class | (7,857,979 | ) | (8,125,971 | ) | ||||
Class R5 | 93,815 | (33,993 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | (16,992,258 | ) | (52,106,876 | ) | ||||
Net increase (decrease) in net assets | 8,769,281 | (4,895,842 | ) | |||||
Net assets: | ||||||||
Beginning of period | 332,017,933 | 336,913,775 | ||||||
End of period (includes undistributed net investment income of $4,168,116 and $3,558,026, respectively) | $ | 340,787,214 | $ | 332,017,933 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Low Volatility Equity Yield 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 twelve 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 income and long-term growth of capital.
10 Invesco Low Volatility Equity Yield Fund
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Investor Class and Class R5. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Investor Class and Class R5 shares are sold at net asset value. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. 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 Low Volatility Equity Yield 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, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | 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 designated 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 Low Volatility Equity Yield Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
First $250 million | 0 | .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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, 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, Investor Class and Class R5 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75%, 2.00% 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 reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $5,551.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y, Investor Class and Class R5 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B, 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, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $6,915 in front-end sales commissions from the sale of Class A shares and $5, $3,363 and $340 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
13 Invesco Low Volatility Equity Yield 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, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 339,555,587 | $ | — | $ | — | $ | 339,555,587 | ||||||||
U.S. Treasury Securities | — | 650,000 | — | 650,000 | ||||||||||||
| 339,555,587 | 650,000 | — | 340,205,587 | |||||||||||||
Futures* | 246,557 | — | — | 246,557 | ||||||||||||
Total Investments | $ | 339,802,144 | $ | 650,000 | $ | — | $ | 340,452,144 | ||||||||
| * | Unrealized appreciation. |
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of February 28, 2014:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Market risk | ||||||||
Futures contracts(a) | $ | 246,557 | $ | — | ||||
| (a) | Includes cumulative appreciation of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
Effect of Derivative Investments for the six months ended February 28, 2014
The table below summarizes the gains on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain on Statement of Operations | ||||
| Futures* | ||||
Realized Gain | ||||
Market risk | $ | 828,471 | ||
Change in Unrealized Appreciation | ||||
Market risk | 404,313 | |||
Total | $ | 1,232,784 | ||
| * | The average notional value of futures contracts outstanding during the period was $8,272,544, respectively. |
Open Futures Contracts at Period-End | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
E-Mini S&P 500 Index | Long | 94 | March-2014 | $ | 8,730,720 | $ | 246,557 | |||||||||||||
Offsetting Assets and Liabilities
Effective with the beginning of the Fund’s fiscal year, the Fund has adopted Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. This update is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting
14 Invesco Low Volatility Equity Yield Fund
arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Fund’s counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of February 28, 2014.
Assets: | ||||||||||||||||||||||||
| Gross amounts presented in Statement of Assets & Liabilities* | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in the Statement of Assets and Liabilities | Collateral Received | |||||||||||||||||||||
Counterparty
| Financial
| Cash
| Net
| |||||||||||||||||||||
Goldman Sachs & Co. | $ | 246,557 | $ | — | $ | 246,557 | $ | — | $ | — | $ | 246,557 | ||||||||||||
| * | Includes cumulative appreciation of futures contracts. |
NOTE 5—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $925.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 33,513,732 | $ | — | $ | 33,513,732 | ||||||
August 31, 2018 | 33,897,876 | — | 33,897,876 | |||||||||
Total capital loss carryforward | $ | 67,411,608 | $ | — | $ | 67,411,608 | ||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
15 Invesco Low Volatility Equity Yield 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, 2014 was $178,753,672 and $200,849,915, 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 | $ | 34,776,170 | ||
Aggregate unrealized (depreciation) of investment securities | (8,923,109 | ) | ||
Net unrealized appreciation of investment securities | $ | 25,853,061 | ||
Cost of investments for tax purposes is $314,352,526.
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 330,069 | $ | 3,457,864 | 791,263 | $ | 7,509,498 | ||||||||||
Class B | 5,699 | 59,411 | 27,394 | 256,786 | ||||||||||||
Class C | 137,231 | 1,416,493 | 224,308 | 2,102,551 | ||||||||||||
Class R | 4,070 | 41,913 | 47,129 | 407,001 | ||||||||||||
Class Y | 58,790 | 617,671 | 124,611 | 1,160,536 | ||||||||||||
Investor Class | 280,285 | 2,913,388 | 598,412 | 5,620,041 | ||||||||||||
Class R5 | 19,176 | 203,019 | 251,033 | 2,499,070 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 537,362 | 5,518,706 | 248,581 | 2,142,768 | ||||||||||||
Class B | 29,007 | 294,190 | 4,655 | 39,806 | ||||||||||||
Class C | 81,894 | 828,932 | 10,631 | 90,790 | ||||||||||||
Class R | 552 | 5,638 | 1,023 | 8,795 | ||||||||||||
Class Y | 9,933 | 102,410 | 6,167 | 53,284 | ||||||||||||
Investor Class | 172,395 | 1,776,093 | 87,128 | 753,658 | ||||||||||||
Class R5 | 41,269 | 425,897 | 21,468 | 185,483 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 73,429 | 772,319 | 218,167 | 2,029,866 | ||||||||||||
Class B | (74,408 | ) | (772,319 | ) | (220,775 | ) | (2,029,866 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (1,514,944 | ) | (15,851,480 | ) | (4,206,505 | ) | (38,916,081 | ) | ||||||||
Class B | (96,815 | ) | (991,136 | ) | (444,734 | ) | (4,062,404 | ) | ||||||||
Class C | (363,833 | ) | (3,735,226 | ) | (1,269,208 | ) | (11,513,966 | ) | ||||||||
Class R | (6,937 | ) | (73,026 | ) | (151,067 | ) | (1,321,625 | ) | ||||||||
Class Y | (87,891 | ) | (920,454 | ) | (203,050 | ) | (1,904,651 | ) | ||||||||
Investor Class | (1,196,141 | ) | (12,547,460 | ) | (1,540,011 | ) | (14,499,670 | ) | ||||||||
Class R5 | (50,502 | ) | (535,101 | ) | (285,481 | ) | (2,718,546 | ) | ||||||||
Net increase (decrease) in share activity | (1,610,310 | ) | $ | (16,992,258 | ) | (5,658,861 | ) | $ | (52,106,876 | ) | ||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 19% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
16 Invesco Low Volatility Equity Yield Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 9.98 | $ | 0.16 | $ | 0.93 | $ | 1.09 | $ | (0.14 | ) | $ | (0.17 | ) | $ | (0.31 | ) | $ | 10.76 | 11.10 | % | $ | 209,143 | 1.11 | %(d) | 1.11 | %(d) | 3.14 | %(d) | 54 | % | |||||||||||||||||||||||||
Year ended 08/31/13 | 8.66 | 0.12 | 1.31 | 1.43 | (0.11 | ) | — | (0.11 | ) | 9.98 | 16.71 | 199,636 | 1.18 | 1.18 | 1.31 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.34 | 0.09 | 1.27 | 1.36 | (0.04 | ) | — | (0.04 | ) | 8.66 | 18.54 | 198,831 | 1.03 | 1.23 | 1.10 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.29 | 0.07 | 1.06 | 1.13 | (0.08 | ) | — | (0.08 | ) | 7.34 | 18.00 | 204,311 | 1.00 | 1.22 | 0.90 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.47 | 0.06 | (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 | (2.16 | ) | (2.05 | ) | (0.07 | ) | (1.30 | ) | (1.37 | ) | 6.47 | (18.66 | ) | 1,618 | 0.66 | 1.29 | 1.85 | 77 | ||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 9.84 | 0.12 | 0.93 | 1.05 | (0.10 | ) | (0.17 | ) | (0.27 | ) | 10.62 | 10.82 | 12,881 | 1.86 | (d) | 1.86 | (d) | 2.39 | (d) | 54 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.53 | 0.05 | 1.29 | 1.34 | (0.03 | ) | — | (0.03 | ) | 9.84 | 15.72 | 13,288 | 1.93 | 1.93 | 0.56 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.26 | 0.03 | 1.26 | 1.29 | (0.02 | ) | — | (0.02 | ) | 8.53 | 17.75 | 16,913 | 1.78 | 1.98 | 0.35 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.22 | 0.01 | 1.06 | 1.07 | (0.03 | ) | — | (0.03 | ) | 7.26 | 17.15 | 20,750 | 1.75 | 1.97 | 0.15 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.37 | 0.01 | (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 | (2.13 | ) | (2.07 | ) | (0.05 | ) | (1.30 | ) | (1.35 | ) | 6.37 | (19.10 | ) | 211 | 1.41 | 2.04 | 1.10 | 77 | ||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 9.82 | 0.12 | 0.92 | 1.04 | (0.10 | ) | (0.17 | ) | (0.27 | ) | 10.59 | 10.74 | 38,726 | 1.86 | (d) | 1.86 | (d) | 2.39 | (d) | 54 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.51 | 0.05 | 1.29 | 1.34 | (0.03 | ) | — | (0.03 | ) | 9.82 | 15.75 | 37,335 | 1.93 | 1.93 | 0.56 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.25 | 0.03 | 1.25 | 1.28 | (0.02 | ) | — | (0.02 | ) | 8.51 | 17.64 | 41,148 | 1.78 | 1.98 | 0.35 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.22 | 0.01 | 1.05 | 1.06 | (0.03 | ) | — | (0.03 | ) | 7.25 | 16.99 | 48,592 | 1.75 | 1.97 | 0.15 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.37 | 0.01 | (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 | (2.13 | ) | (2.07 | ) | (0.05 | ) | (1.30 | ) | (1.35 | ) | 6.37 | (19.10 | ) | 254 | 1.41 | 2.04 | 1.10 | 77 | ||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 9.93 | 0.15 | 0.93 | 1.08 | (0.13 | ) | (0.17 | ) | (0.30 | ) | 10.71 | 11.01 | 191 | 1.36 | (d) | 1.36 | (d) | 2.89 | (d) | 54 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.61 | 0.10 | 1.30 | 1.40 | (0.08 | ) | — | (0.08 | ) | 9.93 | 16.37 | 200 | 1.43 | 1.43 | 1.06 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.31 | 0.07 | 1.26 | 1.33 | (0.03 | ) | — | (0.03 | ) | 8.61 | 18.24 | 1,059 | 1.28 | 1.48 | 0.85 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.27 | 0.05 | 1.06 | 1.11 | (0.07 | ) | — | (0.07 | ) | 7.31 | 17.68 | 1,300 | 1.25 | 1.47 | 0.65 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.45 | 0.05 | (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 | (2.15 | ) | (2.05 | ) | (0.06 | ) | (1.30 | ) | (1.36 | ) | 6.45 | (18.70 | ) | 77 | 0.91 | 1.54 | 1.60 | 77 | ||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.02 | 0.18 | 0.94 | 1.12 | (0.16 | ) | (0.17 | ) | (0.33 | ) | 10.81 | 11.30 | 4,312 | 0.86 | (d) | 0.86 | (d) | 3.39 | (d) | 54 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.71 | 0.15 | 1.30 | 1.45 | (0.14 | ) | — | (0.14 | ) | 10.02 | 16.90 | 4,189 | 0.93 | 0.93 | 1.56 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.37 | 0.11 | 1.27 | 1.38 | (0.04 | ) | — | (0.04 | ) | 8.71 | 18.89 | 4,269 | 0.78 | 0.98 | 1.35 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.32 | 0.09 | 1.06 | 1.15 | (0.10 | ) | — | (0.10 | ) | 7.37 | 18.24 | 3,846 | 0.75 | 0.97 | 1.15 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.50 | 0.08 | (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 | (0.54 | ) | (0.42 | ) | (0.07 | ) | (1.30 | ) | (1.37 | ) | 6.50 | (2.50 | ) | 211 | 0.43 | (f) | 1.07 | (f) | 2.08 | (f) | 77 | |||||||||||||||||||||||||||||||||
Investor Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.01 | 0.16 | 0.94 | 1.10 | (0.14 | ) | (0.17 | ) | (0.31 | ) | 10.80 | 11.17 | 61,405 | 1.11 | (d) | 1.11 | (d) | 3.14 | (d) | 54 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.69 | 0.12 | 1.31 | 1.43 | (0.11 | ) | — | (0.11 | ) | 10.01 | 16.65 | 64,369 | 1.18 | 1.18 | 1.31 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.36 | 0.09 | 1.28 | 1.37 | (0.04 | ) | — | (0.04 | ) | 8.69 | 18.63 | 63,296 | 1.03 | 1.23 | 1.10 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.32 | 0.07 | 1.05 | 1.12 | (0.08 | ) | — | (0.08 | ) | 7.36 | 17.76 | 63,890 | 1.00 | 1.22 | 0.90 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.50 | 0.06 | (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 | (2.15 | ) | (2.03 | ) | (0.07 | ) | (1.30 | ) | (1.37 | ) | 6.50 | (18.43 | ) | 88,674 | 0.66 | 1.29 | 1.85 | 77 | ||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.03 | 0.18 | 0.94 | 1.12 | (0.16 | ) | (0.17 | ) | (0.33 | ) | 10.82 | 11.35 | 14,130 | 0.76 | (d) | 0.76 | (d) | 3.49 | (d) | 54 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.71 | 0.16 | 1.31 | 1.47 | (0.15 | ) | — | (0.15 | ) | 10.03 | 17.12 | 13,000 | 0.76 | 0.76 | 1.73 | 107 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 7.37 | 0.11 | 1.28 | 1.39 | (0.05 | ) | — | (0.05 | ) | 8.71 | 18.90 | 11,397 | 0.76 | 0.77 | 1.37 | 45 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 6.32 | 0.09 | 1.06 | 1.15 | (0.10 | ) | — | (0.10 | ) | 7.37 | 18.24 | 11,645 | 0.74 | 0.77 | 1.18 | 125 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 6.50 | 0.08 | (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 | (2.16 | ) | (2.03 | ) | (0.08 | ) | (1.30 | ) | (1.38 | ) | 6.50 | (18.32 | ) | 22,128 | 0.41 | 0.89 | 2.10 | 77 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended August 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $286,080,448 and sold of $155,521,831 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Select Equity Fund and Invesco Van Kampen Equity Premium Income Fund into the Fund. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $206,398, $13,278, $38,383, $218, $4,314, $62,602 and $13,697 for Class A, Class B, Class C, Class R, Class Y, Investor Class, Class R5 shares, respectively. |
| (e) | Commencement date of October 03, 2008 for Class Y shares. |
| (f) | Annualized. |
17 Invesco Low Volatility Equity Yield Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 1, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,111.00 | $ | 5.81 | $ | 1,019.29 | $ | 5.56 | 1.11 | % | ||||||||||||
| B | 1,000.00 | 1,108.20 | 9.72 | 1,015.57 | 9.30 | 1.86 | ||||||||||||||||||
| C | 1,000.00 | 1,107.40 | 9.72 | 1,015.57 | 9.30 | 1.86 | ||||||||||||||||||
| R | 1,000.00 | 1,110.10 | 7.12 | 1,018.05 | 6.80 | 1.36 | ||||||||||||||||||
| Y | 1,000.00 | 1,113.00 | 4.51 | 1,020.53 | 4.31 | 0.86 | ||||||||||||||||||
| Investor | 1,000.00 | 1,111.70 | 5.81 | 1,019.29 | 5.56 | 1.11 | ||||||||||||||||||
| R5 | 1,000.00 | 1,113.50 | 3.98 | 1,021.03 | 3.81 | 0.76 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
18 Invesco Low Volatility Equity Yield Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | LVEY-SAR-1 | Invesco Distributors, Inc. |
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco American Franchise Fund
Nasdaq:
A: VAFAX n B: VAFBX n C: VAFCX n R: VAFRX n Y: VAFIX
n R5: VAFNX n R6: VAFFX
| 2 | Fund Performance |
| 4 | Letters to Shareholders |
| 5 | Schedule of Investments |
| 8 | Financial Statements |
| 10 | 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 22.22 | % | |||
| Class B Shares | 22.23 | ||||
| Class C Shares | 21.72 | ||||
| Class R Shares | 22.02 | ||||
| Class Y Shares | 22.37 | ||||
| Class R5 Shares | 22.46 | ||||
| Class R6 Shares | 22.43 | ||||
| S&P 500 Index‚ (Broad Market Index) | 15.07 | ||||
| Russell 1000 Growth Indexn (Style-Specific Index) | 17.84 | ||||
| Lipper Large-Cap Growth Funds Index¿ (Peer Group Index) | 20.83 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.; nInvesco, Russell via FactSet Research Systems Inc.;
¿Lipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US 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 indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco American Franchise Fund
| Average Annual Total Returns | |||||
As of 2/28/14, including maximum applicable sales charges
|
| ||||
| Class A Shares | |||||
| Inception (6/23/05) | 8.07 | % | |||
| 5 Years | 21.97 | ||||
| 1 Year | 30.61 | ||||
| Class B Shares | |||||
| Inception (6/23/05) | 8.20 | % | |||
| 5 Years | 22.78 | ||||
| 1 Year | 33.27 | ||||
| Class C Shares | |||||
| Inception (6/23/05) | 7.99 | % | |||
| 5 Years | 22.52 | ||||
| 1 Year | 36.12 | ||||
| Class R Shares | |||||
| Inception | 8.50 | % | |||
| 5 Years | 23.05 | ||||
| 1 Year | 37.82 | ||||
| Class Y Shares | |||||
| Inception (6/23/05) | 9.02 | % | |||
| 5 Years | 23.66 | ||||
| 1 Year | 38.53 | ||||
| Class R5 Shares | |||||
| Inception | 8.93 | % | |||
| 5 Years | 23.66 | ||||
| 1 Year | 38.67 | ||||
| Class R6 Shares | |||||
| Inception | 8.85 | % | |||
| 5 Years | 23.52 | ||||
| 1 Year | 38.83 | ||||
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund, Van Kampen American Franchise 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 (renamed Invesco 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 American Franchise Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R shares incepted on May 23, 2011. Performance shown prior to that date is that of the predecessor fund’s Class A shares, restated to reflect the higher 12b-1 fees applicable to Class R shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
| Average Annual Total Returns | |||||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | |||||
| Class A Shares | |||||
| Inception (6/23/05) | 7.90 | % | |||
| 5 Years | 17.23 | ||||
| 1 Year | 31.98 | ||||
| Class B Shares | |||||
| Inception (6/23/05) | 8.03 | % | |||
| 5 Years | 17.92 | ||||
| 1 Year | 34.70 | ||||
| Class C Shares | |||||
| Inception (6/23/05) | 7.84 | % | |||
| 5 Years | 17.72 | ||||
| 1 Year | 37.65 | ||||
| Class R Shares | |||||
| Inception | 8.35 | % | |||
| 5 Years | 18.27 | ||||
| 1 Year | 39.41 | ||||
| Class Y Shares | |||||
| Inception (6/23/05) | 8.86 | % | |||
| 5 Years | 18.81 | ||||
| 1 Year | 40.09 | ||||
| Class R5 Shares | |||||
| Inception | 8.76 | % | |||
| 5 Years | 18.82 | ||||
| 1 Year | 40.16 | ||||
| Class R6 Shares | |||||
| Inception | 8.69 | % | |||
| 5 Years | 18.70 | ||||
| 1 Year | 40.40 | ||||
Class R5 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.
Class R6 shares incepted on September 24, 2012. 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 R, Class Y, Class R5 and Class R6 shares was 1.14%, 1.14%, 1.89%, 1.39%, 0.89%, 0.75% and 0.65%, 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/ or reimbursed expenses for Class B shares in the past, performance would have been lower.
3 Invesco American Franchise Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our |
blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco American Franchise Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–99.56% |
| |||||||
| Aerospace & Defense–4.47% | ||||||||
B/E Aerospace, Inc.(b) | 1,089,490 | $ | 91,789,533 | |||||
Honeywell International Inc. | 1,553,087 | 146,673,536 | ||||||
Precision Castparts Corp. | 537,878 | 138,707,979 | ||||||
United Technologies Corp. | 656,566 | 76,831,353 | ||||||
| 454,002,401 | ||||||||
| Apparel Retail–0.57% | ||||||||
Gap, Inc. (The) | 1,310,992 | 57,355,900 | ||||||
| Apparel, Accessories & Luxury Goods–1.90% | ||||||||
Michael Kors Holdings Ltd.(b) | 1,297,330 | 127,177,260 | ||||||
PVH Corp. | 515,442 | 65,167,332 | ||||||
| 192,344,592 | ||||||||
| Application Software–2.46% | ||||||||
Salesforce.com, Inc.(b) | 3,357,789 | 209,425,300 | ||||||
Splunk, Inc.(b) | 437,175 | 40,547,981 | ||||||
| 249,973,281 | ||||||||
| Automobile Manufacturers–1.29% | ||||||||
General Motors Co. | 3,622,262 | 131,125,884 | ||||||
| Biotechnology–10.56% | ||||||||
Alkermes PLC(b) | 1,748,765 | 85,112,393 | ||||||
Amgen Inc. | 875,240 | 108,547,265 | ||||||
Biogen Idec Inc.(b) | 389,381 | 132,654,319 | ||||||
Celgene Corp.(b) | 1,601,973 | 257,517,160 | ||||||
Gilead Sciences, Inc.(b) | 5,893,850 | 487,951,841 | ||||||
| 1,071,782,978 | ||||||||
| Brewers–1.05% | ||||||||
Anheuser–Busch InBev N.V.–ADR (Belgium) | 1,014,698 | 106,147,558 | ||||||
| Broadcasting–1.15% | ||||||||
CBS Corp.–Class B | 1,741,538 | 116,822,369 | ||||||
| Cable & Satellite–7.32% | ||||||||
Comcast Corp.–Class A | 1,446,256 | 74,756,972 | ||||||
DIRECTV(b) | 1,018,155 | 79,008,828 | ||||||
DISH Network Corp.–Class A(b) | 7,921,501 | 466,101,119 | ||||||
Time Warner Cable Inc. | 874,165 | 122,689,058 | ||||||
| 742,555,977 | ||||||||
| Casinos & Gaming–1.12% | ||||||||
Las Vegas Sands Corp. | 1,330,744 | 113,445,926 | ||||||
| Communications Equipment–2.29% | ||||||||
F5 Networks, Inc.(b) | 815,332 | 91,594,397 | ||||||
QUALCOMM, Inc. | 1,864,658 | 140,390,101 | ||||||
| 231,984,498 | ||||||||
| Shares | Value | |||||||
| Computer Hardware–5.18% | ||||||||
3D Systems Corp.(b)(c) | 562,231 | $ | 42,707,067 | |||||
Apple Inc. | 918,219 | 483,203,566 | ||||||
| 525,910,633 | ||||||||
| Construction & Engineering–2.86% | ||||||||
Fluor Corp. | 1,213,109 | 94,246,438 | ||||||
Foster Wheeler AG (Switzerland)(b) | 3,164,172 | 101,633,205 | ||||||
Jacobs Engineering Group, Inc.(b) | 1,547,862 | 93,877,830 | ||||||
| 289,757,473 | ||||||||
| Consumer Electronics–0.75% | ||||||||
Harman International Industries, Inc. | 722,845 | 75,703,557 | ||||||
| Data Processing & Outsourced Services–2.82% | ||||||||
MasterCard, Inc.–Class A | 1,496,011 | 116,269,975 | ||||||
Visa Inc.–Class A | 753,373 | 170,217,096 | ||||||
| 286,487,071 | ||||||||
| Drug Retail–1.02% | ||||||||
CVS Caremark Corp. | 1,418,000 | 103,712,520 | ||||||
| Electrical Components & Equipment–0.88% | ||||||||
Roper Industries, Inc. | 660,226 | 89,539,850 | ||||||
| Fertilizers & Agricultural Chemicals–0.89% | ||||||||
Monsanto Co. | 817,274 | 89,916,486 | ||||||
| General Merchandise Stores–0.91% | ||||||||
Dollar General Corp.(b) | 1,546,058 | 92,608,874 | ||||||
| Health Care Facilities–0.93% | ||||||||
HCA Holdings, Inc.(b) | 1,845,091 | 94,468,659 | ||||||
| Home Entertainment Software–0.81% | ||||||||
Electronic Arts Inc.(b) | 1,802,728 | 51,539,993 | ||||||
Nintendo Co., Ltd. (Japan) | 246,130 | 30,364,176 | ||||||
| 81,904,169 | ||||||||
| Home Improvement Retail–2.63% | ||||||||
Lowe's Cos., Inc. | 5,326,737 | 266,496,652 | ||||||
| Household Appliances–0.98% | ||||||||
Whirlpool Corp. | 686,528 | 99,292,545 | ||||||
| Industrial Machinery–1.79% | ||||||||
Flowserve Corp. | 1,236,550 | 100,420,225 | ||||||
Ingersoll–Rand PLC | 1,324,470 | 80,978,096 | ||||||
| 181,398,321 | ||||||||
| Insurance Brokers–1.25% | ||||||||
Aon PLC (United Kingdom) | 1,486,792 | 127,269,395 | ||||||
| Internet Retail–5.11% | ||||||||
Amazon.com, Inc.(b) | 642,936 | 232,807,125 | ||||||
Priceline.com Inc.(b) | 174,874 | 235,877,046 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco American Franchise Fund
| Shares | Value | |||||||
| Internet Retail–(continued) | ||||||||
TripAdvisor Inc.(b) | 493,761 | $ | 49,494,603 | |||||
| 518,178,774 | ||||||||
| Internet Software & Services–12.62% | ||||||||
Baidu, Inc.–ADR (China)(b) | 292,075 | 49,924,380 | ||||||
Facebook Inc.–Class A(b) | 8,430,445 | 577,148,265 | ||||||
Google Inc.–Class A(b) | 500,231 | 608,105,815 | ||||||
LinkedIn Corp.–Class A(b) | 222,756 | 45,451,134 | ||||||
| 1,280,629,594 | ||||||||
| Investment Banking & Brokerage–0.30% | ||||||||
Morgan Stanley | 993,811 | 30,609,379 | ||||||
| IT Consulting & Other Services–1.22% | ||||||||
Cognizant Technology Solutions Corp.–Class A(b) | 1,191,171 | 123,953,254 | ||||||
| Life Sciences Tools & Services–0.69% | ||||||||
Thermo Fisher Scientific, Inc. | 561,912 | 69,980,520 | ||||||
| Movies & Entertainment–0.74% | ||||||||
Walt Disney Co. (The) | 927,251 | 74,931,153 | ||||||
| Oil & Gas Equipment & Services–2.13% | ||||||||
Baker Hughes Inc. | 402,996 | 25,501,587 | ||||||
Schlumberger Ltd. | 1,528,229 | 142,125,297 | ||||||
Weatherford International Ltd.(b) | 2,922,826 | 48,723,509 | ||||||
| 216,350,393 | ||||||||
| Oil & Gas Exploration & Production–1.47% | ||||||||
Anadarko Petroleum Corp. | 1,081,221 | 90,995,559 | ||||||
Pioneer Natural Resources Co. | 287,414 | 57,821,949 | ||||||
| 148,817,508 | ||||||||
| Oil & Gas Refining & Marketing–0.58% | ||||||||
Phillips 66 | 783,022 | 58,617,027 | ||||||
| Other Diversified Financial Services–1.99% | ||||||||
Citigroup Inc. | 4,161,101 | 202,354,342 | ||||||
| Packaged Foods & Meats–1.73% | ||||||||
Mondelez International Inc.–Class A | 5,165,886 | 175,795,101 | ||||||
| Pharmaceuticals–3.73% | ||||||||
Actavis PLC(b) | 613,586 | 135,492,060 | ||||||
Bristol–Myers Squibb Co. | 1,717,119 | 92,329,489 | ||||||
| Shares | Value | |||||||
| Pharmaceuticals–(continued) | ||||||||
Johnson & Johnson | 609,858 | $ | 56,180,119 | |||||
Pfizer Inc. | 2,932,911 | 94,175,772 | ||||||
| 378,177,440 | ||||||||
| Semiconductor Equipment–0.90% | ||||||||
Applied Materials, Inc. | 4,834,933 | 91,670,330 | ||||||
| Semiconductors–1.52% | ||||||||
Altera Corp. | 4,250,330 | 154,329,482 | ||||||
| Specialized REIT's–1.10% | ||||||||
American Tower Corp. | 1,376,412 | 112,136,286 | ||||||
| Systems Software–1.39% | ||||||||
VMware, Inc.–Class A(b) | 1,465,172 | 140,729,771 | ||||||
| Trucking–0.65% | ||||||||
J.B. Hunt Transport | 918,831 | 66,036,384 | ||||||
| Wireless Telecommunication Services–3.81% | ||||||||
Sprint Corp.(b) | 44,276,210 | 386,974,075 | ||||||
Total Common Stocks & Other |
| 10,102,278,382 | ||||||
Money Market Funds–0.54% |
| |||||||
Liquid Assets Portfolio–Institutional Class(d) | 27,464,881 | 27,464,881 | ||||||
Premier Portfolio– | 27,464,882 | 27,464,882 | ||||||
Total Money Market Funds |
| 54,929,763 | ||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.10% (Cost $6,737,797,952) |
| 10,157,208,145 | ||||||
Investments Purchased with Cash Collateral from Securities on Loan–0.24% |
| |||||||
Money Market Funds–0.24% |
| |||||||
Liquid Assets Portfolio–Institutional Class | 24,331,680 | 24,331,680 | ||||||
TOTAL INVESTMENTS–100.34% |
| 10,181,539,825 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.34)% |
| (34,061,230 | ) | |||||
NET ASSETS–100.00% |
| $ | 10,147,478,595 | |||||
Investment Abbreviations:
| ADR | – American Depositary Receipt | |
| REIT | – Real Estate Investment Trust |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco 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, 2014. |
| (d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
| (e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 1I. The following table presents the Fund’s gross and net amount of assets available for offset by the Fund as of February 28, 2014. |
| Counterparty | Gross Amount of Securities on Loan at Value | Cash Collateral Received for Securities Loaned* | Net Amount | |||||||||
State Street Bank and Trust Co | $ | 24,239,140 | $ | (24,239,140 | ) | $ | — | |||||
| * | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2014
Information Technology | 31.2 | % | ||
Consumer Discretionary | 24.4 | |||
Health Care | 15.9 | |||
Industrials | 10.7 | |||
Financials | 4.7 | |||
Energy | 4.2 | |||
Consumer Staples | 3.8 | |||
Telecommunication Services | 3.8 | |||
Materials | 0.9 | |||
Money Market Funds Plus Other Assets Less Liabilities | 0.4 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco American Franchise Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: | ||||
Investments, at value (Cost $6,682,868,189)* | $ | 10,102,278,382 | ||
Investments in affiliated money market funds, at value and cost | 79,261,443 | |||
Total investments, at value (Cost $6,762,129,632) | 10,181,539,825 | |||
Receivable for: | ||||
Investments sold | 79,500,266 | |||
Fund shares sold | 5,177,392 | |||
Dividends | 7,244,324 | |||
Investment for trustee deferred compensation and retirement plans | 2,556,906 | |||
Other assets | 139,600 | |||
Total assets | 10,276,158,313 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 86,262,686 | |||
Fund shares reacquired | 8,970,717 | |||
Collateral upon return of securities loaned | 24,331,680 | |||
Accrued fees to affiliates | 5,705,441 | |||
Accrued trustees' and officers' fees and benefits | 19,823 | |||
Accrued other operating expenses | 371,854 | |||
Trustee deferred compensation and retirement plans | 3,017,517 | |||
Total liabilities | 128,679,718 | |||
Net assets applicable to shares outstanding | $ | 10,147,478,595 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 6,339,327,584 | ||
Undistributed net investment income (loss) | (11,396,121 | ) | ||
Undistributed net realized gain | 400,134,229 | |||
Net unrealized appreciation | 3,419,412,903 | |||
| $ | 10,147,478,595 | |||
Net Assets: | ||||
Class A | $ | 9,098,111,672 | ||
Class B | $ | 289,777,157 | ||
Class C | $ | 421,817,173 | ||
Class R | $ | 31,437,290 | ||
Class Y | $ | 124,079,109 | ||
Class R5 | $ | 48,989,556 | ||
Class R6 | $ | 133,266,638 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 524,084,689 | |||
Class B | 17,079,411 | |||
Class C | 25,221,901 | |||
Class R | 1,822,152 | |||
Class Y | 7,094,218 | |||
Class R5 | 2,806,040 | |||
Class R6 | 7,629,149 | |||
Class A: | ||||
Net asset value and offering price per share | $ | 17.36 | ||
Maximum offering price per share | ||||
(Net asset value of $17.36 ¸ 94.50%) | $ | 18.37 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 16.97 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 16.72 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 17.25 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 17.49 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 17.46 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 17.47 | ||
| * | At February 28, 2014, securities with an aggregate value of $24,239,140 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco American Franchise Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $159,307) | $ | 40,028,909 | ||
Dividends from affiliated money market funds (includes securities lending income of $74,254) | 100,814 | |||
Total investment income | 40,129,723 | |||
Expenses: | ||||
Advisory fees | 27,487,487 | |||
Administrative services fees | 377,911 | |||
Custodian fees | 80,314 | |||
Distribution fees: | ||||
Class A | 10,368,835 | |||
Class B | 359,368 | |||
Class C | 1,931,283 | |||
Class R | 72,645 | |||
Transfer agent fees — A, B, C, R and Y | 8,687,800 | |||
Transfer agent fees — R5 | 21,203 | |||
Transfer agent fees — R6 | 1,837 | |||
Trustees’ and officers’ fees and benefits | 226,147 | |||
Other | 1,062,140 | |||
Total expenses | 50,676,970 | |||
Less: Fees waived and expense offset arrangement(s) | (100,628 | ) | ||
Net expenses | 50,576,342 | |||
Net investment income (loss) | (10,446,619 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (includes net gains from securities sold to affiliates of $4,194,415) | 582,388,713 | |||
Foreign currencies | (93,065 | ) | ||
| 582,295,648 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 1,225,525,753 | |||
Foreign currencies | 1,274 | |||
| 1,225,527,027 | ||||
Net realized and unrealized gain | 1,807,822,675 | |||
Net increase in net assets resulting from operations | $ | 1,797,376,056 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco American Franchise Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (10,446,619 | ) | $ | 8,543,462 | |||
Net realized gain | 582,295,648 | 787,954,544 | ||||||
Change in net unrealized appreciation | 1,225,527,027 | 189,234,461 | ||||||
Net increase in net assets resulting from operations | 1,797,376,056 | 985,732,467 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (8,146,035 | ) | (1,680,357 | ) | ||||
Class B | (284,805 | ) | (88,298 | ) | ||||
Class Y | (287,210 | ) | (269,635 | ) | ||||
Class R5 | (126,411 | ) | (655,036 | ) | ||||
Class R6 | (414,675 | ) | (545,579 | ) | ||||
Total distributions from net investment income | (9,259,136 | ) | (3,238,905 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (349,819,062 | ) | — | |||||
Class B | (12,230,508 | ) | — | |||||
Class C | (16,851,639 | ) | — | |||||
Class R | (1,234,648 | ) | — | |||||
Class Y | (4,914,966 | ) | — | |||||
Class R5 | (1,888,689 | ) | — | |||||
Class R6 | (5,092,450 | ) | — | |||||
Total distributions from net realized gains | (392,031,962 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 2,433,886,987 | (135,809,151 | ) | |||||
Class B | 19,040,789 | (87,558,797 | ) | |||||
Class C | 93,401,751 | (22,109,739 | ) | |||||
Class R | 7,543,060 | (2,317,486 | ) | |||||
Class Y | 13,727,451 | (22,131,891 | ) | |||||
Class R5 | (120,671,612 | ) | (181,966,427 | ) | ||||
Class R6 | (96,746 | ) | 99,950,199 | |||||
Net increase (decrease) in net assets resulting from share transactions | 2,446,831,680 | (351,943,292 | ) | |||||
Net increase in net assets | 3,842,916,638 | 630,550,270 | ||||||
Net assets: | ||||||||
Beginning of period | 6,304,561,957 | 5,674,011,687 | ||||||
End of period (includes undistributed net investment income of $(11,396,121) and $8,309,634, respectively) | $ | 10,147,478,595 | $ | 6,304,561,957 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco 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 twelve 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 long-term capital appreciation.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to
10 Invesco American Franchise Fund
contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the
11 Invesco American Franchise Fund
Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
| J. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net |
12 Invesco American Franchise Fund
| unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
| K. | Forward Foreign Currency Contracts — The Fund may enter into forward foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
First $250 million | 0 | .695% | ||||
Next $250 million | 0 | .67% | ||||
Next $500 million | 0 | .645% | ||||
Next $550 million | 0 | .62% | ||||
Next $3.45 billion | 0 | .60% | ||||
Next $250 million | 0 | .595% | ||||
Next $2.25 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2014, 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, 2014, the Adviser waived advisory fees of $80,757.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A, Class B, Class C and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
13 Invesco American Franchise Fund
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.
IDI had contractually agreed to limit Rule 12b-1 plan fees on Class B shares to 0.42% of average daily net assets, through December 31, 2014. The Distributor did not waive fees during the period under the expense limitation.
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, 2014, IDI advised the Fund that IDI retained $268,273 in front-end sales commissions from the sale of Class A shares and $2,520, $59,523 and $4,961 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2014, the Fund incurred $42,978 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available 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. |
As of February 28, 2014, all of the securities in this Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 4—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 5—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, 2014, the Fund engaged in security purchases of $8,992,009 and securities sales of $32,399,438, which resulted in net realized gains of $4,194,415.
NOTE 6—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $19,871.
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. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To
14 Invesco American Franchise Fund
compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2015 | $ | 2,422,410 | $ | — | $ | 2,422,410 | ||||||
August 31, 2016 | 49,576,090 | — | 49,576,090 | |||||||||
| $ | 51,998,500 | $ | — | $ | 51,998,500 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $3,131,854,715 and $2,843,840,027, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 3,421,558,528 | ||
Aggregate unrealized (depreciation) of investment securities | (17,297,621 | ) | ||
Net unrealized appreciation of investment securities | $ | 3,404,260,907 | ||
Cost of investments for tax purposes is $6,777,278,918.
15 Invesco American Franchise Fund
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 7,838,881 | $ | 128,498,644 | 9,792,627 | $ | 131,507,521 | ||||||||||
Class B | 140,248 | 2,270,465 | 136,087 | 1,766,668 | ||||||||||||
Class C | 835,434 | 13,241,303 | 1,034,373 | 13,366,766 | ||||||||||||
Class R | 133,381 | 2,156,827 | 251,276 | 3,336,107 | ||||||||||||
Class Y | 995,634 | 16,523,734 | 1,654,188 | 22,565,414 | ||||||||||||
Class R5 | 398,622 | 6,543,530 | 1,428,763 | 19,009,427 | ||||||||||||
Class R6(b) | 481,232 | 8,089,180 | 13,767,716 | 181,744,390 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 20,978,838 | 337,759,301 | 120,687 | 1,561,209 | ||||||||||||
Class B | 779,837 | 12,274,118 | 6,819 | 86,110 | ||||||||||||
Class C | 1,015,415 | 15,779,551 | — | — | ||||||||||||
Class R | 77,072 | 1,233,927 | — | — | ||||||||||||
Class Y | 281,452 | 4,562,336 | 18,246 | 230,140 | ||||||||||||
Class R5 | 124,583 | 2,014,511 | 52,093 | 654,994 | ||||||||||||
Class R6 | 340,156 | 5,507,125 | 43,407 | 545,579 | ||||||||||||
Issued in connection with acquisitions:(c)(d) | ||||||||||||||||
Class A | 159,648,030 | 2,468,502,143 | 28,493,895 | 414,344,182 | ||||||||||||
Class B | 3,865,089 | 58,449,775 | 240,442 | 3,419,085 | ||||||||||||
Class C | 6,095,479 | 91,112,251 | 1,148,422 | 16,170,371 | ||||||||||||
Class R | 518,148 | 7,963,354 | 100,907 | 1,459,285 | ||||||||||||
Class Y | 969,446 | 15,095,293 | 801,793 | 11,737,602 | ||||||||||||
Class R5 | 189,764 | 2,949,334 | — | — | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 2,081,782 | 34,506,319 | 4,333,763 | 57,758,261 | ||||||||||||
Class B | (2,129,394 | ) | (34,506,319 | ) | (4,429,532 | ) | (57,758,261 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (32,697,168 | ) | (535,379,420 | ) | (55,559,122 | ) | (740,980,324 | ) | ||||||||
Class B | (1,216,160 | ) | (19,447,250 | ) | (2,697,669 | ) | (35,072,399 | ) | ||||||||
Class C | (1,686,504 | ) | (26,731,354 | ) | (4,005,957 | ) | (51,646,876 | ) | ||||||||
Class R | (234,531 | ) | (3,811,048 | ) | (532,067 | ) | (7,112,878 | ) | ||||||||
Class Y | (1,340,789 | ) | (22,453,912 | ) | (4,221,766 | ) | (56,665,047 | ) | ||||||||
Class R5 | (8,074,395 | ) | (132,178,987 | ) | (15,318,838 | ) | (201,630,848 | ) | ||||||||
Class R6 | (832,437 | ) | (13,693,051 | ) | (6,170,925 | ) | (82,339,770 | ) | ||||||||
Net increase (decrease) in share activity | 159,577,145 | $ | 2,446,831,680 | (29,510,372 | ) | $ | (351,943,292 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 15% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
| (c) | As of the opening of business on July 15, 2013, the Fund acquired all the net assets of Invesco Leisure Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund and by the shareholders of the Target Fund on April 24, 2013. The acquisition was accomplished by a tax-free exchange of 30,785,459 shares of the Fund for 10,245,465 shares outstanding of the Target Fund as of the close of business on July 12, 2013. Shares of the Target Fund were exchanged for the like class of shares of the Fund, based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, July 12, 2013. The Target Fund’s net assets as of the close of business on July 12, 2013 of $447,130,525, including $168,476,621 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $5,828,287,238 and $6,275,415,763 immediately after the acquisition. |
16 Invesco American Franchise Fund
| The pro forma results of operations for the year ended August 31, 2013 assuming the reorganization had been completed on September 1, 2012, the beginning of the annual reporting period are as follows: |
Net investment income | $ | 8,281,484 | ||
Net realized/unrealized gains | 1,210,553,562 | |||
Change in net assets resulting from operations | $ | 1,218,835,046 |
| As the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since July 15, 2013. |
| (d) | As of the opening of business on September 16, 2013, the Fund acquired all the net assets of Invesco Constellation Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund and by the shareholders of the Target Fund on August 27, 2013. The acquisition was accomplished by a tax-free exchange of 171,285,956 shares of the Fund for 90,880,346 shares outstanding of the Target Fund as of the close of business on September 13, 2013. Shares of the Target Fund were exchanged for the like class of shares of the Fund, based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, September 13, 2013. The Target Fund’s net assets as of the close of business on September 13, 2013 of $2,644,072,150, including $725,175,144 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $6,558,988,103 and $9,203,060,253 immediately after the acquisition. |
| The pro forma results of operations for the six months ended February 28, 2014 assuming the reorganization had been completed on September 1, 2013, the beginning of the annual reporting period are as follows: |
Net investment income (loss) | $ | (11,364,787 | ) | |
Net realized/unrealized gains | 3,791,267,224 | |||
Change in net assets resulting from operations | $ | 3,779,902,437 |
| As the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since September 16, 2013. |
17 Invesco American Franchise Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(b) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 14.82 | $ | (0.02 | ) | $ | 3.26 | $ | 3.24 | $ | (0.02 | ) | $ | (0.68 | ) | $ | (0.70 | ) | $ | 17.36 | 22.22 | %(c) | $ | 9,098,112 | 1.07 | %(d) | 1.07 | %(d) | (0.21 | )%(d) | 40 | % | ||||||||||||||||||||||||
Year ended 08/31/13 | 12.47 | 0.02 | 2.33 | 2.35 | (0.00 | ) | — | (0.00 | ) | 14.82 | 18.89 | (c) | 5,428,321 | 1.06 | 1.14 | 0.17 | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.72 | (0.01 | ) | 0.88 | 0.87 | — | (0.12 | ) | (0.12 | ) | 12.47 | 7.55 | (c) | 4,728,364 | 1.05 | 1.18 | (0.05 | ) | 96 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 9.79 | (0.05 | ) | 1.98 | 1.93 | — | — | — | 11.72 | 19.71 | (c) | 4,894,163 | 1.06 | 1.17 | (0.43 | ) | 179 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.87 | 0.01 | 1.03 | 1.04 | (0.12 | ) | — | (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 | ||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 14.50 | (0.02 | ) | 3.19 | 3.17 | (0.02 | ) | (0.68 | ) | (0.70 | ) | 16.97 | 22.23 | (c)(f) | 289,777 | 1.07 | (d)(f) | 1.07 | (d)(f) | (0.21 | )(d)(f) | 40 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.20 | 0.02 | 2.28 | 2.30 | (0.00 | ) | — | (0.00 | ) | 14.50 | 18.90 | (c)(f) | 226,796 | 1.06 | (f) | 1.14 | (f) | 0.17 | (f) | 80 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.47 | (0.01 | ) | 0.86 | 0.85 | — | (0.12 | ) | (0.12 | ) | 12.20 | 7.54 | (c)(f) | 273,177 | 1.05 | (f) | 1.18 | (f) | (0.05 | )(f) | 96 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 9.64 | (0.08 | ) | 1.91 | 1.83 | — | — | — | 11.47 | 18.98 | (c)(f) | 373,157 | 1.28 | (f) | 1.65 | (f) | (0.64 | )(f) | 179 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.75 | (0.06 | ) | 1.01 | 0.95 | (0.06 | ) | — | (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 | )(g) | 23,466 | 2.10 | 2.16 | 0.86 | 105 | ||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 14.34 | (0.07 | ) | 3.13 | 3.06 | — | (0.68 | ) | (0.68 | ) | 16.72 | 21.72 | (c) | 421,817 | 1.82 | (d) | 1.82 | (d) | (0.96 | )(d) | 40 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.16 | (0.08 | ) | 2.26 | 2.18 | — | — | — | 14.34 | 17.93 | (c) | 271,960 | 1.81 | 1.89 | (0.58 | ) | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.51 | (0.09 | ) | 0.86 | 0.77 | — | (0.12 | ) | (0.12 | ) | 12.16 | 6.82 | (c) | 252,685 | 1.80 | 1.93 | (0.80 | ) | 96 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 9.68 | (0.11 | ) | 1.94 | 1.83 | — | — | — | 11.51 | 18.90 | (c)(h) | 266,990 | 1.60 | (h) | 1.71 | (h) | (0.97 | )(h) | 179 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.76 | (0.05 | ) | 1.03 | 0.98 | (0.06 | ) | — | (0.06 | ) | 9.68 | 11.14 | (c)(h) | 23,718 | 1.93 | (h) | 1.93 | (h) | (0.52 | )(h) | 101 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 10.10 | 0.06 | (1.30 | ) | (1.24 | ) | (0.10 | ) | (0.00 | ) | (0.10 | ) | 8.76 | (12.11 | )(i) | 25,063 | 2.16 | 2.22 | 0.78 | 105 | ||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 14.74 | (0.04 | ) | 3.23 | 3.19 | — | (0.68 | ) | (0.68 | ) | 17.25 | 22.02 | (c) | 31,437 | 1.32 | (d) | 1.32 | (d) | (0.46 | )(d) | 40 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.43 | (0.01 | ) | 2.32 | 2.31 | — | — | — | 14.74 | 18.58 | (c) | 19,576 | 1.31 | 1.39 | (0.08 | ) | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.71 | (0.04 | ) | 0.88 | 0.84 | — | (0.12 | ) | (0.12 | ) | 12.43 | 7.30 | (c) | 18,746 | 1.30 | 1.43 | (0.30 | ) | 96 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/11(j) | 12.81 | (0.02 | ) | (1.08 | ) | (1.10 | ) | — | — | — | 11.71 | (8.59 | )(c) | 17,698 | 1.30 | (k) | 1.42 | (k) | (0.66 | )(k) | 179 | |||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 14.93 | 0.00 | 3.28 | 3.28 | (0.04 | ) | (0.68 | ) | (0.72 | ) | 17.49 | 22.37 | (c) | 124,079 | 0.82 | (d) | 0.82 | (d) | 0.04 | (d) | 40 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.57 | 0.06 | 2.34 | 2.40 | (0.04 | ) | — | (0.04 | ) | 14.93 | 19.13 | (c) | 92,418 | 0.81 | 0.89 | 0.42 | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.78 | 0.02 | 0.89 | 0.91 | — | (0.12 | ) | (0.12 | ) | 12.57 | 7.86 | (c) | 99,758 | 0.80 | 0.93 | 0.20 | 96 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 9.83 | (0.02 | ) | 1.97 | 1.95 | — | — | — | 11.78 | 19.84 | (c) | 117,471 | 0.81 | 0.92 | (0.18 | ) | 179 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.91 | 0.04 | 1.02 | 1.06 | (0.14 | ) | — | (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 | )(l) | 1,451 | 1.10 | 1.18 | 1.77 | 105 | ||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 14.90 | 0.02 | 3.27 | 3.29 | (0.05 | ) | (0.68 | ) | (0.73 | ) | 17.46 | 22.46 | (c) | 48,990 | 0.68 | (d) | 0.68 | (d) | 0.18 | (d) | 40 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.55 | 0.06 | 2.34 | 2.40 | (0.05 | ) | — | (0.05 | ) | 14.90 | 19.22 | (c) | 151,535 | 0.75 | 0.75 | 0.48 | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.75 | 0.04 | 0.88 | 0.92 | — | (0.12 | ) | (0.12 | ) | 12.55 | 7.96 | (c) | 301,283 | 0.69 | 0.69 | 0.31 | 96 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11(j) | 12.07 | (0.00 | ) | (0.32 | ) | (0.32 | ) | — | — | — | 11.75 | (2.65 | )(c) | 197,097 | 0.66 | (k) | 0.66 | (k) | (0.03 | )(k) | 179 | |||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 14.92 | 0.02 | 3.27 | 3.29 | (0.06 | ) | (0.68 | ) | (0.74 | ) | 17.47 | 22.43 | (c) | 133,267 | 0.63 | (d) | 0.63 | (d) | 0.23 | (d) | 40 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13(j) | 13.03 | 0.07 | 1.87 | 1.94 | (0.05 | ) | — | (0.05 | ) | 14.92 | 14.98 | (c) | 113,955 | 0.65 | (k) | 0.65 | (k) | 0.58 | (k) | 80 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended August 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $4,947,460,310 and sold $2,251,028,915 in the effort to realign the fund’s portfolio holdings after the reorginzation of Invesco Large Cap Growth Fund, Invesco Van Kampen Capital Growth Fund and Invesco Van Kampen Enterprise Fund into the Fund. For the year ended August 31, 2013, the portfolio turnover calculation excludes the value of securities purchased of $279,161,573 and sales of $299,305,234 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Leisure Fund into the Fund. For the six months ended February 28, 2014, the portfolio turnover calculation excludes the value of securities purchased of $1,921,954,452 and sales of $875,836,165 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Constellation Fund into the Fund. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $8,363,812, $289,877, $389,458, $29,299, $118,456, $87,489 and $124,466 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 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 (loss) to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.25% and 0.47% for the six months ended February 28, 2014 and the years ended August 31, 2013, 2012 and 2011, respectively. |
| (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 0.79% and 0.88% for the years ended August 31, 2012 and 2011, respectively. |
| (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 May 23, 2011 for Class R shares, December 22, 2010 for Class R5 shares and September 24, 2012 for Class R6 shares. |
| (k) | Annualized. |
| (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 on Fund shares. |
18 Invesco 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,222.20 | $ | 5.90 | $ | 1,019.49 | $ | 5.36 | 1.07 | % | ||||||||||||
| B | 1,000.00 | 1,222.30 | 5.90 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||
| C | 1,000.00 | 1,217.20 | 10.01 | 1,015.77 | 9.10 | 1.82 | ||||||||||||||||||
| R | 1,000.00 | 1,220.20 | 7.27 | 1,018.25 | 6.61 | 1.32 | ||||||||||||||||||
| Y | 1,000.00 | 1,223.70 | 4.52 | 1,020.73 | 4.11 | 0.82 | ||||||||||||||||||
| R5 | 1,000.00 | 1,224.60 | 3.75 | 1,021.42 | 3.41 | 0.68 | ||||||||||||||||||
| R6 | 1,000.00 | 1,224.30 | 3.47 | 1,021.67 | 3.16 | 0.63 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
19 Invesco American Franchise Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
|
|
| SEC file numbers: 811-09913 and 333-36074 | VK-AMFR-SAR-1 | Invesco Distributors, Inc. |
| ||||
 | Semiannual Report to Shareholders
| February 28, 2014 | ||
| ||||
Invesco Equity and Income Fund
| ||||
| Nasdaq: | ||||
| A: ACEIX n B: ACEQX n C: ACERX n R: ACESX n Y: ACETX n R5: ACEKX n R6: IEIFX | ||||
2 |
Fund Performance | |
| 4 | Letters to Shareholders | |
| 5 | Schedule of Investments | |
| 16 | Financial Statements | |
| 18 | Notes to Financial Statements | |
| 27 | Financial Highlights | |
| 29 | 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 10.76 | % | |||
| Class B Shares | 10.45 | ||||
| Class C Shares | 10.40 | ||||
| Class R Shares | 10.68 | ||||
| Class Y Shares | 11.00 | ||||
| Class R5 Shares | 10.92 | ||||
| Class R6 Shares | 11.09 | ||||
| Russell 1000 Value Index‚ (Broad Market Index) | 13.46 | ||||
| Barclays U.S. Government/Credit Indexn (Style-Specific Index) | 2.82 |
Source(s): ‚Invesco, Russell via FactSet Research Systems Inc.; nLipper 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 U.S. Government/Credit Index includes treasuries and agencies that represent the government portion of the index, and includes publicly issued US corporate and foreign debentures and secured notes that meet specified maturity, liquidity and quality requirements.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Equity and Income Fund
| Average Annual Total Returns | |||||
| As of 2/28/14, including maximum applicable sales charges | |||||
| Class A Shares | |||||
| Inception (8/3/60) | 10.33 | % | |||
| 10 Years | 6.56 | ||||
| 5 Years | 16.19 | ||||
| 1 Year | 12.84 | ||||
| Class B Shares | |||||
| Inception (5/1/92) | 9.86 | % | |||
| 10 Years | 6.89 | ||||
| 5 Years | 16.94 | ||||
| 1 Year | 13.56 | ||||
| Class C Shares | |||||
| Inception (7/6/93) | 9.13 | % | |||
| 10 Years | 6.39 | ||||
| 5 Years | 16.64 | ||||
| 1 Year | 17.60 | ||||
| Class R Shares | |||||
| Inception (10/1/02) | 8.56 | % | |||
| 10 Years | 6.92 | ||||
| 5 Years | 17.20 | ||||
| 1 Year | 19.16 | ||||
| Class Y Shares | |||||
| Inception (12/22/04) | 7.25 | % | |||
| 5 Years | 17.79 | ||||
| 1 Year | 19.84 | ||||
| Class R5 Shares | |||||
| 10 Years | 7.32 | % | |||
| 5 Years | 17.83 | ||||
| 1 Year | 19.79 | ||||
| Class R6 Shares | |||||
| 10 Years | 7.24 | % | |||
| 5 Years | 17.66 | ||||
| 1 Year | 19.91 | ||||
Effective June 1, 2010, Class A, Class B, Class C, Class I and Class R shares of the predecessor fund, Van Kampen Equity and Income 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 (renamed Invesco 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 Equity and Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 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
| Average Annual Total Returns | |||||
| As of 12/31/13, including maximum applicable sales charges | |||||
| Class A Shares | |||||
| Inception (8/3/60) | 10.33 | % | |||
| 10 Years | 6.77 | ||||
| 5 Years | 12.80 | ||||
| 1 Year | 18.15 | ||||
| Class B Shares | |||||
| Inception (5/1/92) | 9.86 | % | |||
| 10 Years | 7.07 | ||||
| 5 Years | 13.55 | ||||
| 1 Year | 19.01 | ||||
| Class C Shares | |||||
| Inception (7/6/93) | 9.13 | % | |||
| 10 Years | 6.58 | ||||
| 5 Years | 13.27 | ||||
| 1 Year | 23.02 | ||||
| Class R Shares | |||||
| Inception (10/1/02) | 8.55 | % | |||
| 10 Years | 7.10 | ||||
| 5 Years | 13.81 | ||||
| 1 Year | 24.66 | ||||
| Class Y Shares | |||||
| Inception (12/22/04) | 7.20 | % | |||
| 5 Years | 14.39 | ||||
| 1 Year | 25.27 | ||||
| Class R5 Shares | |||||
| 10 Years | 7.51 | % | |||
| 5 Years | 14.39 | ||||
| 1 Year | 25.35 | ||||
| Class R6 Shares | |||||
| 10 Years | 7.43 | % | |||
| 5 Years | 14.22 | ||||
| 1 Year | 25.47 | ||||
fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Class R6 shares incepted on September 24, 2012. 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 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, Class R5 and Class R6 shares was 0.79%, 1.54%, 1.54%, 1.04%, 0.54%, 0.48% and 0.38%, 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, Class R5 and Class R6 shares was 0.80%, 1.55%, 1.55%, 1.05%, 0.55%, 0.49% and 0.39%, 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Had the adviser not waived fees and/or reimbursed expenses for Class B shares in the past, 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, 2014. See current prospectus for more information. |
3 Invesco Equity and Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our |
blog at blog. invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Equity and Income Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–63.43% |
| |||||||
| Aerospace & Defense–0.61% | ||||||||
General Dynamics Corp. | 724,662 | $ | 79,379,476 | |||||
| Agricultural Products–0.73% | ||||||||
Archer-Daniels-Midland Co. | 2,347,072 | 95,291,123 | ||||||
| Apparel Retail–0.62% | ||||||||
Abercrombie & Fitch Co.–Class A | 2,035,738 | 80,676,297 | ||||||
| Application Software–1.36% | ||||||||
Adobe Systems Inc.(b) | 2,576,977 | 176,806,392 | ||||||
| Asset Management & Custody Banks–1.27% | ||||||||
Northern Trust Corp. | 1,377,241 | 85,182,356 | ||||||
State Street Corp. | 1,223,994 | 80,379,686 | ||||||
| 165,562,042 | ||||||||
| Automobile Manufacturers–0.85% | ||||||||
General Motors Co. | 3,060,295 | 110,782,679 | ||||||
| Biotechnology–1.06% | ||||||||
Amgen Inc. | 1,112,266 | 137,943,229 | ||||||
| Building Products–0.19% | ||||||||
Allegion PLC(b) | 451,069 | 24,515,600 | ||||||
| Cable & Satellite–2.38% | ||||||||
Comcast Corp.–Class A | 3,281,290 | 169,609,880 | ||||||
Time Warner Cable Inc. | 998,736 | 140,172,598 | ||||||
| 309,782,478 | ||||||||
| Construction & Farm Machinery & Heavy Trucks–0.83% | ||||||||
Caterpillar Inc. | 1,114,079 | 108,032,241 | ||||||
| Consumer Finance–0.17% | ||||||||
Santander Consumer USA | 883,871 | 22,388,452 | ||||||
| Diversified Banks–1.44% | ||||||||
Comerica Inc. | 1,803,383 | 86,886,993 | ||||||
Wells Fargo & Co.(b) | 2,174,650 | 100,947,253 | ||||||
| 187,834,246 | ||||||||
| Diversified Chemicals–0.91% | ||||||||
Dow Chemical Co. (The) | 2,437,002 | 118,706,367 | ||||||
| Diversified Metals & Mining–0.45% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 1,777,702 | 57,988,639 | ||||||
| Electric Utilities–0.83% | ||||||||
Edison International | 745,457 | 39,039,583 | ||||||
Pinnacle West Capital Corp. | 1,230,418 | 68,472,762 | ||||||
| 107,512,345 | ||||||||
| Electronic Components–0.79% | ||||||||
Corning Inc. | 5,356,993 | 103,229,255 | ||||||
| Shares | Value | |||||||
| Food Distributors–0.52% | ||||||||
Sysco Corp. | 1,884,320 | $ | 67,873,206 | |||||
| Health Care Equipment–0.97% | ||||||||
Medtronic, Inc. | 2,136,821 | 126,628,012 | ||||||
| Hotels, Resorts & Cruise Lines–1.00% | ||||||||
Carnival Corp. | 3,265,352 | 129,503,860 | ||||||
| Household Products–0.98% | ||||||||
Procter & Gamble Co. (The) | 1,620,190 | 127,444,145 | ||||||
| Industrial Conglomerates–1.43% | ||||||||
General Electric Co. | 7,268,813 | 185,136,667 | ||||||
| Industrial Machinery–0.55% | ||||||||
Ingersoll-Rand PLC(b) | 1,176,966 | 71,959,701 | ||||||
| Insurance Brokers–2.25% | ||||||||
Aon PLC (United Kingdom)(b) | 941,440 | 80,587,264 | ||||||
Marsh & McLennan Cos., Inc. | 3,318,074 | 159,798,444 | ||||||
Willis Group Holdings PLC (b) | 1,264,881 | 52,062,502 | ||||||
| 292,448,210 | ||||||||
| Integrated Oil & Gas–3.20% | ||||||||
Occidental Petroleum Corp. | 1,031,841 | 99,593,293 | ||||||
Royal Dutch Shell PLC–Class A (United Kingdom) | 4,773,875 | 173,890,068 | ||||||
Total S.A. (France) | 2,195,770 | 142,364,916 | ||||||
| 415,848,277 | ||||||||
| Integrated Telecommunication Services–1.06% | ||||||||
Koninklijke (Royal) KPN N.V. (Netherlands)(b) | 3,654,478 | 13,016,321 | ||||||
Orange S.A. (France) | 1,052,659 | 13,112,410 | ||||||
Telecom Italia S.p.A. (Italy)(b) | 9,703,811 | 11,011,933 | ||||||
Telefonica S.A. (Spain) | 974,377 | 14,916,784 | ||||||
Verizon Communications Inc. | 1,797,671 | 85,533,166 | ||||||
| 137,590,614 | ||||||||
| Internet Software & Services–1.69% | ||||||||
eBay Inc.(b) | 3,725,485 | 218,946,753 | ||||||
| Investment Banking & Brokerage–3.04% | ||||||||
Charles Schwab Corp. (The) | 5,091,699 | 134,980,940 | ||||||
Goldman Sachs Group, Inc. (The) | 453,626 | 75,506,048 | ||||||
Morgan Stanley | 5,980,455 | 184,198,014 | ||||||
| 394,685,002 | ||||||||
| IT Consulting & Other Services–0.79% | ||||||||
Amdocs Ltd.(b) | 2,297,501 | 102,192,845 | ||||||
| Managed Health Care–1.89% | ||||||||
Cigna Corp. | 827,420 | 65,854,358 | ||||||
UnitedHealth Group Inc. | 1,083,617 | 83,731,086 | ||||||
WellPoint, Inc. | 1,066,555 | 96,619,217 | ||||||
| 246,204,661 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Equity and Income Fund
| Shares | Value | |||||||
| Movies & Entertainment–1.94% | ||||||||
Time Warner Inc. | 747,991 | $ | 50,212,636 | |||||
Viacom Inc.–Class B | 2,304,269 | 202,153,519 | ||||||
| 252,366,155 | ||||||||
| Multi-Utilities–0.39% | ||||||||
PG&E Corp. | 1,148,645 | 50,609,299 | ||||||
| Oil & Gas Equipment & Services–1.32% | ||||||||
Baker Hughes Inc. | 1,985,448 | 125,639,149 | ||||||
Halliburton Co. | 803,904 | 45,822,528 | ||||||
| 171,461,677 | ||||||||
| Oil & Gas Exploration & Production–2.12% | ||||||||
Anadarko Petroleum Corp. | 1,009,653 | 84,972,396 | ||||||
Apache Corp. | 1,101,720 | 87,355,379 | ||||||
Canadian Natural Resources Ltd. (Canada) | 2,834,964 | 103,750,670 | ||||||
| 276,078,445 | ||||||||
| Other Diversified Financial Services–6.23% | ||||||||
Bank of America Corp. | 5,021,572 | 83,006,585 | ||||||
Citigroup Inc. | 6,345,263 | 308,570,140 | ||||||
ING US Inc. | 1,688,089 | 60,551,752 | ||||||
JPMorgan Chase & Co. | 6,287,488 | 357,255,068 | ||||||
| 809,383,545 | ||||||||
| Packaged Foods & Meats–1.59% | ||||||||
Mondelez International Inc.–Class A | 4,342,085 | 147,761,153 | ||||||
Unilever N.V.–New York Shares (Netherlands) | 1,472,502 | 58,252,179 | ||||||
| 206,013,332 | ||||||||
| Personal Products–1.06% | ||||||||
Avon Products, Inc. | 8,882,012 | 137,404,726 | ||||||
| Pharmaceuticals–4.17% | ||||||||
Bristol-Myers Squibb Co. | 1,640,323 | 88,200,168 | ||||||
Eli Lilly and Co. | 1,389,390 | 82,821,538 | ||||||
Merck & Co., Inc. | 2,788,377 | 158,909,605 | ||||||
Novartis AG (Switzerland) | 1,327,866 | 110,703,979 | ||||||
Novartis AG–ADR (Switzerland) | 112,855 | 9,387,279 | ||||||
Pfizer Inc. | 2,867,282 | 92,068,425 | ||||||
| 542,090,994 | ||||||||
| Property & Casualty Insurance–0.40% | ||||||||
Chubb Corp. (The) | 592,062 | 51,793,584 | ||||||
| Publishing–0.42% | ||||||||
Thomson Reuters Corp. | 1,580,493 | 54,243,799 | ||||||
| Railroads–0.61% | ||||||||
CSX Corp. | 2,876,836 | 79,717,126 | ||||||
| Regional Banks–2.52% | ||||||||
BB&T Corp.(b) | 2,360,514 | 89,227,429 | ||||||
Fifth Third Bancorp | 3,367,074 | 73,048,671 | ||||||
PNC Financial Services Group, Inc. (The) | 2,018,378 | 165,062,953 | ||||||
| 327,339,053 | ||||||||
| Shares | Value | |||||||
| Security & Alarm Services–1.44% | ||||||||
ADT Corp. (The) | 2,163,480 | $ | 66,440,471 | |||||
Tyco International Ltd.(b) | 2,852,552 | 120,320,643 | ||||||
| 186,761,114 | ||||||||
| Semiconductor Equipment–1.31% | ||||||||
Applied Materials, Inc. | 8,995,038 | 170,545,921 | ||||||
| Semiconductors–0.91% | ||||||||
Broadcom Corp.–Class A | 1,034,072 | 30,732,620 | ||||||
Texas Instruments Inc. | 1,953,529 | 87,830,664 | ||||||
| 118,563,284 | ||||||||
| Specialized Finance–0.45% | ||||||||
CME Group Inc.–Class A | 792,634 | 58,512,242 | ||||||
| Specialty Chemicals–0.50% | ||||||||
PPG Industries, Inc. | 329,903 | 65,261,411 | ||||||
| Systems Software–1.52% | ||||||||
Microsoft Corp. | 2,396,605 | 91,813,938 | ||||||
Symantec Corp. | 4,906,727 | 105,396,496 | ||||||
| 197,210,434 | ||||||||
| Wireless Telecommunication Services–0.67% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 2,091,083 | 86,926,339 | ||||||
Total Common Stocks & Other Equity Interests |
| 8,245,175,294 | ||||||
| Principal Amount | ||||||||
Bonds and Notes–20.77% |
| |||||||
| Advertising–0.03% | ||||||||
Interpublic Group of Cos. Inc. (The), Sr. Unsec. Global Notes, 2.25%, 11/15/17 | $ | 4,145,000 | 4,203,380 | |||||
| Aerospace & Defense–0.03% | ||||||||
Precision Castparts Corp., Sr. Unsec. Global Notes, 2.50%, 01/15/23 | 4,150,000 | 3,899,236 | ||||||
| Agricultural Products–0.04% | ||||||||
Ingredion Inc., Sr. Unsec. Notes, 6.63%, 04/15/37 | 3,940,000 | 4,670,814 | ||||||
| Air Freight & Logistics–0.13% | ||||||||
FedEx Corp., | ||||||||
Sr. Unsec. Gtd. Bonds, 4.90%, 01/15/34 | 4,310,000 | 4,430,402 | ||||||
Sr. Unsec. Gtd. Notes, 5.10%, 01/15/44 | 8,875,000 | 9,205,459 | ||||||
United Parcel Service Inc., Sr. Unsec. Global Notes, 2.45%, 10/01/22 | 3,320,000 | 3,157,034 | ||||||
| 16,792,895 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Airlines–0.13% | ||||||||
Continental Airlines Pass Through Trust, | ||||||||
Series 2010-1, Class A, Sr. Sec. Pass Through Ctfs., 4.75%, 01/12/21 | $ | 4,169,140 | $ | 4,505,277 | ||||
Series 2012-1, Class A, Sr. Sec. Pass Through Ctfs., 4.15%, 04/11/24 | 5,608,496 | 5,801,288 | ||||||
Delta Air Lines Pass Through Trust, Series 2010-1, Class A, Sr. Sec. Pass Through Ctfs., 6.20%, 07/02/18 | 2,345,685 | 2,634,498 | ||||||
Virgin Australia Pass Through Trust (Australia), Series 2013-1, Class A, Sec. Gtd. Pass Through Ctfs., 5.00%, 10/23/23(c) | 3,200,000 | 3,415,178 | ||||||
| 16,356,241 | ||||||||
| Airport Services–0.05% | ||||||||
Heathrow Funding Ltd. (United Kingdom), Sr. Sec. Notes, 2.50%, 06/25/15(c) | 6,220,000 | 6,358,340 | ||||||
| Asset Management & Custody Banks–0.07% | ||||||||
Bank of New York Mellon Corp. (The), Series D, Jr. Unsec. Sub. Global Notes, 4.50%(d) | 7,600,000 | 6,954,000 | ||||||
Blackstone Holdings Finance Co. LLC, Sr. Unsec. Gtd. Notes, 6.25%, 08/15/42(c) | 1,970,000 | 2,296,705 | ||||||
| 9,250,705 | ||||||||
| Automobile Manufacturers–0.22% | ||||||||
Daimler Finance North America LLC (Germany), Sr. Unsec. Gtd. Notes, | ||||||||
1.88%, 09/15/14(c) | 7,170,000 | 7,212,672 | ||||||
1.88%, 01/11/18(c) | 5,220,000 | 5,255,818 | ||||||
Ford Motor Co., Sr. Unsec. Global Notes, 4.75%, 01/15/43 | 11,500,000 | 11,161,971 | ||||||
Ford Motor Credit Co. LLC., Sr. Unsec. Global Notes, 2.50%, 01/15/16 | 4,970,000 | 5,111,633 | ||||||
| 28,742,094 | ||||||||
| Automotive Retail–0.13% | ||||||||
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, | ||||||||
4.50%, 12/01/23 | 6,415,000 | 6,613,019 | ||||||
5.75%, 05/01/20 | 9,195,000 | 10,296,186 | ||||||
| 16,909,205 | ||||||||
| Biotechnology–0.60% | ||||||||
Celgene Corp., Sr. Unsec. Global Notes, 4.00%, 08/15/23 | 4,735,000 | 4,846,715 | ||||||
Cubist Pharmaceuticals Inc., | ||||||||
Sr. Unsec. Conv. Bonds, 1.88%, 09/01/20(c) | 17,424,000 | 21,888,900 | ||||||
Sr. Unsec. Conv. Notes, 1.13%, 09/01/18(c) | 10,648,000 | 13,090,385 | ||||||
| Principal Amount | Value | |||||||
| Biotechnology–(continued) | ||||||||
Gilead Sciences Inc., Series D, Sr. Unsec. Conv. Notes, 1.63%, 05/01/16 | $ | 10,367,000 | $ | 37,716,494 | ||||
| 77,542,494 | ||||||||
| Brewers–0.13% | ||||||||
Anheuser-Busch InBev Worldwide, Inc. (Belgium), Sr. Unsec. Gtd. Global Notes, | ||||||||
0.80%, 07/15/15 | 3,745,000 | 3,766,012 | ||||||
3.63%, 04/15/15 | 6,145,000 | 6,366,128 | ||||||
FBG Finance Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(c) | 6,965,000 | 7,326,362 | ||||||
| 17,458,502 | ||||||||
| Broadcasting–0.30% | ||||||||
COX Communications Inc., | ||||||||
Sr. Unsec. Global Notes, 5.45%, 12/15/14 | 128,000 | 132,932 | ||||||
Sr. Unsec. Notes, | 4,980,000 | 4,399,494 | ||||||
6.25%, 06/01/18(c) | 3,700,000 | 4,284,471 | ||||||
7.25%, 11/15/15 | 5,000,000 | 5,523,088 | ||||||
8.38%, 03/01/39(c) | 655,000 | 833,622 | ||||||
Liberty Media Corp., Sr. Unsec. Conv. Notes, 1.38%, 10/15/23(c) | 23,940,000 | 23,341,500 | ||||||
| 38,515,107 | ||||||||
| Cable & Satellite–0.36% | ||||||||
Comcast Corp., | ||||||||
Sr. Unsec. Gtd. Global Notes, 4.25%, 01/15/33 | 8,165,000 | 8,068,691 | ||||||
5.70%, 05/15/18 | 4,735,000 | 5,484,971 | ||||||
Sr. Unsec. Gtd. Notes, 6.45%, 03/15/37 | 2,465,000 | 3,035,215 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., | ||||||||
Sr. Unsec. Gtd. Global Notes, 2.40%, 03/15/17 | 2,910,000 | 2,993,041 | ||||||
5.15%, 03/15/42 | 4,730,000 | 4,467,719 | ||||||
Sr. Unsec. Gtd. Notes, 1.75%, 01/15/18 | 4,215,000 | 4,187,647 | ||||||
NBC Universal Media LLC, Sr. Unsec. Gtd. Global Notes, | ||||||||
2.10%, 04/01/14 | 3,425,000 | 3,429,453 | ||||||
5.15%, 04/30/20 | 3,320,000 | 3,801,439 | ||||||
5.95%, 04/01/41 | 3,365,000 | 3,975,361 | ||||||
Time Warner Cable, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/40 | 7,235,000 | 7,877,641 | ||||||
| 47,321,178 | ||||||||
| Casinos & Gaming–0.46% | ||||||||
MGM Resorts International, Sr. Unsec. Gtd. Conv. Notes, 4.25%, 04/15/15 | 39,077,000 | 60,325,119 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Catalog Retail–0.07% | ||||||||
Liberty Interactive LLC, Sr. Unsec. Conv. Notes, | $ | 7,303,000 | $ | 9,274,810 | ||||
| Communications Equipment–0.52% | ||||||||
Ciena Corp., Sr. Unsec. Conv. Notes, 4.00%, 12/15/20(c) | 29,353,000 | 43,699,279 | ||||||
JDS Uniphase Corp., Sr. Unsec. Conv. Notes, | 19,999,000 | 20,973,951 | ||||||
Juniper Networks Inc., Sr. Unsec. Global Notes, 4.50%, 03/15/24 | 3,010,000 | 3,024,081 | ||||||
| 67,697,311 | ||||||||
| Computer Hardware–0.08% | ||||||||
Hewlett-Packard Co., | ||||||||
Sr. Unsec. Global Bonds, 2.75%, 01/14/19 | 4,545,000 | 4,626,893 | ||||||
Sr. Unsec. Global Notes, 2.63%, 12/09/14 | 5,620,000 | 5,715,051 | ||||||
| 10,341,944 | ||||||||
| Computer Storage & Peripherals–0.45% | ||||||||
SanDisk Corp., Sr. Unsec. Conv. Notes, 0.50%, 10/15/20(c) | 55,749,000 | 58,919,724 | ||||||
| Construction & Farm Machinery & Heavy Trucks–0.21% | ||||||||
Deere & Co., Sr. Unsec. Notes, 2.60%, 06/08/22 | 14,645,000 | 14,123,568 | ||||||
Greenbrier Cos., Inc. (The), Sr. Unsec. Conv. Notes, 3.50%, 04/01/18 | 10,014,000 | 13,600,264 | ||||||
| 27,723,832 | ||||||||
| Construction Materials–0.57% | ||||||||
Cemex S.A.B. de C.V. (Mexico), Unsec. Sub. Conv. Notes, 4.88%, 03/15/15 | 60,100,000 | 74,674,250 | ||||||
| Consumer Finance–0.08% | ||||||||
SLM Corp., Sr. Unsec. Medium-Term Notes, 3.88%, 09/10/15 | 10,190,000 | 10,475,609 | ||||||
| Data Processing & Outsourced Services–0.05% | ||||||||
Computer Sciences Corp., Sr. Unsec. Global Notes, 4.45%, 09/15/22 | 4,954,000 | 5,113,151 | ||||||
Xerox Corp., Sr. Unsec. Notes, 4.25%, 02/15/15 | 820,000 | 847,856 | ||||||
| 5,961,007 | ||||||||
| Distillers & Vintners–0.02% | ||||||||
Brown-Forman Corp., Sr. Unsec. Notes, 2.25%, 01/15/23 | 3,480,000 | 3,193,210 | ||||||
| Diversified Banks–1.02% | ||||||||
Abbey National Treasury Services PLC (United Kingdom), | ||||||||
Sr. Unsec. Gtd. Global Notes, 2.88%, 04/25/14 | 2,560,000 | 2,567,763 | ||||||
Sr. Unsec. Gtd. Medium-Term Euro Notes, 3.88%, 11/10/14(c) | 9,000,000 | 9,183,280 | ||||||
| Principal Amount | Value | |||||||
| Diversified Banks–(continued) | ||||||||
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, | ||||||||
2.75%, 02/23/15 | $ | 2,535,000 | $ | 2,590,348 | ||||
6.75%, 05/22/19 | 8,500,000 | 10,294,597 | ||||||
Unsec. Sub. Global Notes, 5.14%, 10/14/20 | 5,015,000 | 5,430,168 | ||||||
Danske Bank A/S (Denmark), Sr. Unsec. Notes, 3.88%, 04/14/16(c) | 9,435,000 | 9,983,918 | ||||||
HBOS PLC (United Kingdom), Unsec. Sub. Medium-Term Global Notes, 6.75%, 05/21/18(c) | 8,535,000 | 9,695,897 | ||||||
HSBC Bank PLC (United Kingdom), Sr. Unsec. Notes, 4.13%, 08/12/20(c) | 8,540,000 | 9,189,044 | ||||||
HSBC Finance Corp., Unsec. Sub. Global Notes, 6.68%, 01/15/21 | 828,000 | 976,540 | ||||||
Korea Development Bank (The) (South Korea), Sr. Unsec. Global Notes, 4.38%, 08/10/15 | 3,460,000 | 3,638,541 | ||||||
Lloyds Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 2.30%, 11/27/18 | 5,240,000 | 5,283,324 | ||||||
National Australia Bank Ltd. (Australia), Sr. Unsec. Bonds, 3.75%, 03/02/15(c) | 3,390,000 | 3,494,721 | ||||||
Nordea Bank AB (Sweden), | ||||||||
Sr. Unsec. Notes, 4.88%, 01/27/20(c) | 4,495,000 | 5,017,862 | ||||||
Series 2, Sr. Unsec. Notes, 3.70%, 11/13/14(c) | 880,000 | 900,486 | ||||||
Rabobank Nederland N.V. (Netherlands), Sr. Unsec. Medium-Term Global Notes, 4.75%, 01/15/20(c) | 9,100,000 | 9,972,860 | ||||||
Santander U.S. Debt S.A. Unipersonal (Spain), Sr. Unsec. Gtd. Notes, 3.72%, 01/20/15(c) | 3,200,000 | 3,263,672 | ||||||
Societe Generale S.A. (France), Unsec. Sub. Notes, 5.00%, 01/17/24(c) | 11,890,000 | 11,998,618 | ||||||
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, | ||||||||
3.85%, 04/27/15(c) | 4,190,000 | 4,346,219 | ||||||
5.50%, 11/18/14(c) | 1,140,000 | 1,178,316 | ||||||
U.S. Bank N.A., Unsec. Sub. Notes, 3.78%, 04/29/20 | 8,200,000 | 8,481,678 | ||||||
Wells Fargo & Co., Sr. Unsec. Global Notes, | ||||||||
1.50%, 01/16/18 | 2,070,000 | 2,068,446 | ||||||
3.63%, 04/15/15 | 750,000 | 777,629 | ||||||
Unsec. Sub. Global Notes, 4.13%, 08/15/23 | 11,753,000 | 11,986,608 | ||||||
| 132,320,535 | ||||||||
| Diversified Capital Markets–0.18% | ||||||||
Credit Suisse AG (Switzerland), Unsec. Sub. Notes, 6.50%, 08/08/23(c) | 14,350,000 | 15,634,416 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Diversified Capital Markets–(continued) | ||||||||
UBS AG (Switzerland), | ||||||||
Sr. Unsec. Global Bank Notes, 5.88%, 12/20/17 | $ | 3,022,000 | $ | 3,485,907 | ||||
Sr. Unsec. Medium-Term Bank Notes, 3.88%, 01/15/15 | 834,000 | 859,391 | ||||||
Sr. Unsec. Medium-Term Global Bank Notes, 5.75%, 04/25/18 | 2,414,000 | 2,790,529 | ||||||
| 22,770,243 | ||||||||
| Diversified Chemicals–0.03% | ||||||||
Dow Chemical Co. (The), Sr. Unsec. Global Notes, 4.38%, 11/15/42 | 4,145,000 | 3,822,217 | ||||||
| Diversified Metals & Mining–0.30% | ||||||||
Anglo American Capital PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.38%, 04/08/19(c) | 3,185,000 | 4,114,773 | ||||||
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Global Notes, 1.40%, 02/13/15 | 5,940,000 | 5,979,602 | ||||||
Rio Tinto Finance USA Ltd. (United Kingdom), Sr. Unsec. Gtd. Global Notes, | 2,175,000 | 2,752,294 | ||||||
9.00%, 05/01/19 | 5,240,000 | 6,885,079 | ||||||
Southern Copper Corp., Sr. Unsec. Global Notes, | ||||||||
5.25%, 11/08/42 | 7,260,000 | 6,248,778 | ||||||
5.38%, 04/16/20 | 1,170,000 | 1,273,368 | ||||||
6.75%, 04/16/40 | 1,695,000 | 1,734,352 | ||||||
Xstrata Finance Canada Ltd. (Canada), Sr. Unsec. Gtd. Notes, | ||||||||
2.05%, 10/23/15(c) | 4,700,000 | 4,758,568 | ||||||
2.70%, 10/25/17(c) | 4,700,000 | 4,842,146 | ||||||
| 38,588,960 | ||||||||
| Diversified REIT’s–0.10% | ||||||||
Dexus Diversified Trust/Dexus Office Trust (Australia), Sr. Unsec. Gtd. Notes, 5.60%, 03/15/21(c) | 12,535,000 | 13,552,471 | ||||||
| Diversified Support Services–0.04% | ||||||||
Cintas Corp. No. 2, Sr. Unsec. Gtd. Notes, 2.85%, 06/01/16 | 4,605,000 | 4,785,166 | ||||||
| Drug Retail–0.08% | ||||||||
CVS Pass Through Trust, Sr. Sec. Global Pass Through Ctfs., 6.04%, 12/10/28 | 9,583,791 | 10,809,558 | ||||||
| Electric Utilities–0.28% | ||||||||
Baltimore Gas & Electric Co., Sr. Unsec. Notes, 3.35%, 07/01/23 | 6,220,000 | 6,145,406 | ||||||
Electricite de France S.A. (France), | ||||||||
Jr. Unsec. Sub. Notes, 5.63%(c)(d) | 8,670,000 | 8,670,000 | ||||||
Sr. Unsec. Notes, | ||||||||
4.60%, 01/27/20(c) | 2,150,000 | 2,368,098 | ||||||
4.88%, 01/22/44(c) | 9,110,000 | 9,038,914 | ||||||
| Principal Amount | Value | |||||||
| Electric Utilities–(continued) | ||||||||
Enel Finance International N.V. (Italy), Sr. Unsec. Gtd. Notes, 3.88%, 10/07/14(c) | $ | 600,000 | $ | 610,349 | ||||
Iberdrola Finance Ireland Ltd. (Spain), Sr. Unsec. Gtd. Notes, 3.80%, 09/11/14(c) | 2,175,000 | 2,206,156 | ||||||
Louisville Gas & Electric Co., Sr. Sec. First Mortgage Global Bonds, 1.63%, 11/15/15 | 5,525,000 | 5,631,971 | ||||||
Ohio Power Co., Series M, Sr. Unsec. Notes, 5.38%, 10/01/21 | 1,050,000 | 1,215,352 | ||||||
PPL Electric Utilities Corp., Sr. Sec. First Mortgage Bonds, 6.25%, 05/15/39 | 355,000 | 451,840 | ||||||
| 36,338,086 | ||||||||
| Electrical Components & Equipment–0.06% | ||||||||
Eaton Corp., Sr. Unsec. Gtd. Global Notes, 0.95%, 11/02/15 | 8,285,000 | 8,330,537 | ||||||
| Environmental & Facilities Services–0.05% | ||||||||
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14 | 6,205,000 | 6,213,304 | ||||||
| Fertilizers & Agricultural Chemicals–0.03% | ||||||||
Monsanto Co., Sr. Unsec. Global Notes,, 3.60%, 07/15/42 | 4,150,000 | 3,662,828 | ||||||
| Food Retail–0.10% | ||||||||
Kroger Co. (The), Sr. Unsec. Global Notes, 3.30%, 01/15/21 | 12,870,000 | 13,010,300 | ||||||
| General Merchandise Stores–0.07% | ||||||||
Target Corp., Sr. Unsec. Global Notes, 2.90%, 01/15/22 | 9,830,000 | 9,658,834 | ||||||
| Gold–0.17% | ||||||||
Barrick North America Finance LLC (Canada), Sr. Unsec. Gtd. Global Notes, 5.70%, 05/30/41 | 4,000,000 | 3,875,045 | ||||||
Gold Fields Orogen Holding BVI Ltd. (South Africa), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20(c) | 12,145,000 | 10,444,700 | ||||||
Newmont Mining Corp., Sr. Unsec. Gtd. Global Notes, 3.50%, 03/15/22 | 8,645,000 | 7,902,663 | ||||||
| 22,222,408 | ||||||||
| Health Care Equipment–0.56% | ||||||||
Edwards Lifesciences Corp., Sr. Unsec. Global Notes, 2.88%, 10/15/18 | 7,055,000 | 7,140,205 | ||||||
Medtronic Inc., Sr. Unsec. Global Notes, | ||||||||
4.00%, 04/01/43 | 5,720,000 | 5,331,530 | ||||||
4.63%, 03/15/44 | 11,495,000 | 11,678,654 | ||||||
NuVasive Inc., Sr. Unsec. Conv. Notes, 2.75%, 07/01/17 | 13,684,000 | 15,916,202 | ||||||
Volcano Corp., Sr. Unsec. Conv. Notes, 1.75%, 12/01/17 | 32,517,000 | 32,842,170 | ||||||
| 72,908,761 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Health Care Facilities–0.53% | ||||||||
Brookdale Senior Living Inc., Sr. Unsec. Conv. Notes, 2.75%, 06/15/18 | $ | 24,795,000 | $ | 33,519,741 | ||||
HealthSouth Corp., Sr. Unsec. Sub. Conv. Notes, 2.00%, 12/01/20(e) | 33,605,000 | 35,180,234 | ||||||
| 68,699,975 | ||||||||
| Health Care Services–0.67% | ||||||||
Express Scripts Holding Co., Sr. Unsec. Gtd. Notes, 3.13%, 05/15/16 | 3,800,000 | 3,984,447 | ||||||
Medco Health Solutions Inc., Sr. Unsec. Gtd. Notes, 2.75%, 09/15/15 | 3,535,000 | 3,641,304 | ||||||
Omnicare, Inc., | ||||||||
Sr. Unsec. Gtd. Sub. Conv. Notes, 3.75%, 04/01/42 | 29,270,000 | 43,886,706 | ||||||
Sr. Unsec. Sub. Conv. Notes, 3.50%, 02/15/44 | 18,351,000 | 18,534,510 | ||||||
Series OCR, Sr. Unsec. Gtd. Conv. Deb., 3.25%, 12/15/15(e) | 16,126,000 | 17,214,505 | ||||||
| 87,261,472 | ||||||||
| Homebuilding–0.07% | ||||||||
MDC Holdings, Inc., Sr. Unsec. Gtd. Notes, 6.00%, 01/15/43 | 10,130,000 | 9,178,747 | ||||||
| Hotels, Resorts & Cruise Lines–0.08% | ||||||||
Wyndham Worldwide Corp., Sr. Unsec. Notes, | ||||||||
2.95%, 03/01/17 | 1,225,000 | 1,268,950 | ||||||
5.63%, 03/01/21 | 8,170,000 | 9,013,577 | ||||||
| 10,282,527 | ||||||||
| Housewares & Specialties–0.10% | ||||||||
Tupperware Brands Corp., Sr. Unsec. Gtd. Global Notes, 4.75%, 06/01/21 | 12,185,000 | 12,590,037 | ||||||
| Hypermarkets & Super Centers–0.01% | ||||||||
Wal-Mart Stores, Inc., Sr. Unsec. Global Notes, 6.50%, 08/15/37 | 730,000 | 941,764 | ||||||
| Industrial Conglomerates–0.19% | ||||||||
General Electric Capital Corp., | ||||||||
Sr. Unsec. Medium-Term Notes, 6.00%, 08/07/19 | 8,500,000 | 10,092,086 | ||||||
Series C, Jr. Unsec. Sub. Global Bonds, 5.25%(d) | 9,400,000 | 9,188,500 | ||||||
General Electric Co., Sr. Unsec. Global Notes, 5.25%, 12/06/17 | 4,445,000 | 5,073,944 | ||||||
| 24,354,530 | ||||||||
| Industrial Machinery–0.07% | ||||||||
Pentair Finance S.A., Sr. Unsec. Gtd. Global Notes, 5.00%, 05/15/21 | 7,940,000 | 8,544,016 | ||||||
| Insurance Brokers–0.03% | ||||||||
Marsh & McLennan Cos., Inc., Sr. Unsec. Global Notes, 4.05%, 10/15/23 | 3,960,000 | 4,032,059 | ||||||
| Principal Amount | Value | |||||||
| Integrated Oil & Gas–0.20% | ||||||||
BP Capital Markets PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 2.24%, 05/10/19 | $ | 9,645,000 | $ | 9,707,264 | ||||
Chevron Corp., Sr. Unsec. Global Notes, 1.72%, 06/24/18 | 5,275,000 | 5,321,606 | ||||||
Husky Energy Inc. (Canada), Sr. Unsec. Global Notes, 3.95%, 04/15/22 | 3,630,000 | 3,718,195 | ||||||
Petrobras Global Finance B.V. (Brazil), Sr. Unsec. Gtd. Global Notes, 5.63%, 05/20/43 | 6,505,000 | 5,502,316 | ||||||
Shell International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15 | 1,965,000 | 2,037,055 | ||||||
| 26,286,436 | ||||||||
| Integrated Telecommunication Services–0.72% | ||||||||
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31 | 63,000 | 85,817 | ||||||
AT&T Inc., Sr. Unsec. Global Notes, | ||||||||
3.00%, 02/15/22 | 6,410,000 | 6,192,990 | ||||||
5.35%, 09/01/40 | 2,077,000 | 2,136,100 | ||||||
6.15%, 09/15/34 | 3,675,000 | 4,086,555 | ||||||
British Telecommunications PLC (United Kingdom), Sr. Unsec. Global Notes, 1.25%, 02/14/17 | 5,420,000 | 5,429,720 | ||||||
Deutsche Telekom International Finance B.V. (Germany), Sr. Unsec. Gtd. Global Bonds, 8.75%, 06/15/30 | 2,545,000 | 3,678,755 | ||||||
Verizon Communications, Inc., Sr. Unsec. Global Notes, | ||||||||
3.00%, 04/01/16 | 3,575,000 | 3,735,832 | ||||||
5.15%, 09/15/23 | 13,405,000 | 14,681,318 | ||||||
6.40%, 09/15/33 | 18,470,000 | 22,025,896 | ||||||
6.40%, 02/15/38 | 3,500,000 | 4,151,026 | ||||||
6.55%, 09/15/43 | 12,000,000 | 14,742,733 | ||||||
Virgin Media Secured Finance PLC (United Kingdom), Sr. Sec. Gtd. Global Notes, 6.50%, 01/15/18 | 11,540,000 | 12,076,203 | ||||||
| 93,022,945 | ||||||||
| Internet Software & Services–0.05% | ||||||||
Baidu Inc. (China), Sr. Unsec. Global Notes, 3.25%, 08/06/18 | 6,700,000 | 6,873,276 | ||||||
| Investment Banking & Brokerage–1.74% | ||||||||
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20 | 7,880,000 | 8,734,352 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Investment Banking & Brokerage–(continued) | ||||||||
Goldman Sachs Group, Inc. (The), | ||||||||
Sr. Unsec. Global Notes, | ||||||||
5.25%, 07/27/21 | $ | 5,510,000 | $ | 6,147,881 | ||||
6.15%, 04/01/18 | 10,325,000 | 11,913,816 | ||||||
Sr. Unsec. Medium-Term Global Notes, 3.70%, 08/01/15 | 1,350,000 | 1,404,966 | ||||||
Unsec. Global Notes, 2.63%, 01/31/19 | 5,200,000 | 5,228,199 | ||||||
Unsec. Sub. Global Notes, 6.75%, 10/01/37 | 4,585,000 | 5,257,168 | ||||||
Series C, Exchangeable Basket-Linked Conv. Medium-Term Notes, 1.00%, 09/28/20(c)(f) | 59,890,000 | 60,761,399 | ||||||
Sr. Unsec. Exchangeable Basket-Linked Conv. Medium-Term Notes, | 61,461,000 | 75,510,370 | ||||||
Macquarie Bank Ltd. (Australia), Sr. Unsec. Notes, 5.00%, 02/22/17(c) | 6,100,000 | 6,641,796 | ||||||
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, 6.00%, 01/14/20(c) | 950,000 | 1,065,416 | ||||||
Morgan Stanley, | ||||||||
Sr. Unsec. Global Notes, | ||||||||
3.80%, 04/29/16 | 5,560,000 | 5,876,676 | ||||||
6.38%, 07/24/42 | 8,140,000 | 10,064,786 | ||||||
Sr. Unsec. Medium-Term Global Notes, 4.00%, 07/24/15 | 12,875,000 | 13,430,533 | ||||||
Sr. Unsec. Notes, 3.45%, 11/02/15 | 9,855,000 | 10,269,103 | ||||||
5.75%, 01/25/21 | 3,135,000 | 3,615,897 | ||||||
| 225,922,358 | ||||||||
| IT Consulting & Other Services–0.00% | ||||||||
International Business Machines Corp., Sr. Unsec. Global Notes, 7.63%, 10/15/18 | 100,000 | 125,738 | ||||||
| Life & Health Insurance–0.30% | ||||||||
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15 | 3,100,000 | 3,308,434 | ||||||
Lincoln National Corp., Sr. Unsec. Global Notes, 4.00%, 09/01/23 | 4,505,000 | 4,613,616 | ||||||
MetLife, Inc., | ||||||||
Sr. Unsec. Global Notes, 4.75%, 02/08/21 | 3,565,000 | 3,998,256 | ||||||
Series D, Sr. Unsec. Notes, 4.37%, 09/15/23 | 6,408,000 | 6,786,664 | ||||||
Pacific LifeCorp., Sr. Unsec. Notes, 6.00%, 02/10/20(c) | 3,425,000 | 3,920,343 | ||||||
Prudential Financial, Inc., | ||||||||
Sr. Unsec. Medium-Term Notes, 5.10%, 08/15/43 | 4,010,000 | 4,244,540 | ||||||
7.38%, 06/15/19 | 1,020,000 | 1,271,528 | ||||||
Series D, Sr. Unsec. Medium-Term Notes, | 950,000 | 977,620 | ||||||
4.75%, 09/17/15 | 5,030,000 | 5,342,034 | ||||||
6.63%, 12/01/37 | 3,475,000 | 4,384,843 | ||||||
| 38,847,878 | ||||||||
| Principal Amount | Value | |||||||
| Managed Health Care–0.49% | ||||||||
Aetna, Inc., Sr. Unsec. Global Notes, 3.95%, 09/01/20 | $ | 9,990,000 | $ | 10,645,966 | ||||
UnitedHealth Group Inc., Sr. Unsec. Global Notes, 1.63%, 03/15/19 | 5,805,000 | 5,694,527 | ||||||
Wellpoint Inc., Sr. Unsec. Conv. Bonds, 2.75%, 10/15/42 | 34,762,000 | 47,515,308 | ||||||
| 63,855,801 | ||||||||
| Movies & Entertainment–0.02% | ||||||||
Time Warner, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16 | 2,655,000 | 2,992,417 | ||||||
| Office REIT’s–0.09% | ||||||||
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 4.50%, 07/15/15 | 5,210,000 | 5,415,675 | ||||||
Piedmont Operating Partnership L.P., Sr. Unsec. Gtd. Global Notes, 4.45%, 03/15/24 | 6,115,000 | 6,143,697 | ||||||
| 11,559,372 | ||||||||
| Oil & Gas Drilling–0.10% | ||||||||
Noble Holding International Ltd., Sr. Unsec. Gtd. Global Notes, 2.50%, 03/15/17 | 1,150,000 | 1,175,547 | ||||||
Rowan Cos. Inc., Sr. Unsec. Gtd. Notes, 5.85%, 01/15/44 | 11,390,000 | 11,515,043 | ||||||
| 12,690,590 | ||||||||
| Oil & Gas Equipment & Services–0.11% | ||||||||
Helix Energy Solutions Group, Inc., Sr. Unsec. Conv. Notes, 3.25%, 03/15/18(e) | 11,911,000 | 14,777,084 | ||||||
| Oil & Gas Exploration & Production–0.71% | ||||||||
Cobalt International Energy Inc., Sr. Unsec. Conv. Notes, 2.63%, 12/01/19 | 41,457,000 | 40,057,826 | ||||||
Noble Energy, Inc., Sr. Unsec. Global Notes, 5.25%, 11/15/43 | 7,940,000 | 8,330,961 | ||||||
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/24/22 | 7,430,000 | 7,797,706 | ||||||
Southwestern Energy Co., Sr. Unsec. Gtd. Global Notes, 4.10%, 03/15/22 | 7,500,000 | 7,716,382 | ||||||
Stone Energy Corp., Sr. Unsec. Gtd. Conv. Notes, 1.75%, 03/01/17 | 24,746,000 | 28,767,225 | ||||||
| 92,670,100 | ||||||||
| Oil & Gas Refining & Marketing–0.04% | ||||||||
Phillips 66, Sr. Unsec. Gtd. Global Notes, 1.95%, 03/05/15 | 4,760,000 | 4,827,983 | ||||||
| Oil & Gas Storage & Transportation–0.23% | ||||||||
Enterprise Products Operating LLC, | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.25%, 01/31/20 | 2,889,000 | 3,278,885 | ||||||
Sr. Unsec. Gtd. Notes, 6.45%, 09/01/40 | 555,000 | 671,332 | ||||||
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19 | 4,420,000 | 5,288,085 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Oil & Gas Storage & Transportation–(continued) | ||||||||
Plains All American Pipeline L.P./ PAA Finance Corp., Sr. Unsec. Global Notes, 3.65%, 06/01/22 | $ | 4,275,000 | $ | 4,335,244 | ||||
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 7.50%, 09/15/38 | 2,245,000 | 2,710,912 | ||||||
Texas Eastern Transmission L.P., Sr. Unsec. Notes, 7.00%, 07/15/32 | 3,835,000 | 4,851,350 | ||||||
Williams Partners L.P., Sr. Unsec. Global Notes, 5.40%, 03/04/44 | 9,000,000 | 9,121,203 | ||||||
| 30,257,011 | ||||||||
| Other Diversified Financial Services–1.08% | ||||||||
Bank of America Corp., Sr. Unsec. Global Notes, | ||||||||
2.60%, 01/15/19 | 8,220,000 | 8,323,223 | ||||||
5.75%, 12/01/17 | 2,825,000 | 3,222,421 | ||||||
Sr. Unsec. Medium-Term Notes, 1.25%, 01/11/16 | 6,465,000 | 6,515,773 | ||||||
5.00%, 01/21/44 | 2,905,000 | 3,020,255 | ||||||
6.88%, 04/25/18 | 9,445,000 | 11,246,303 | ||||||
Series L, Sr. Unsec. Medium-Term Global Notes, 5.65%, 05/01/18 | 8,680,000 | 9,938,932 | ||||||
Sr. Unsec. Medium-Term Notes, 7.38%, 05/15/14 | 315,000 | 319,332 | ||||||
Bear Stearns Cos., LLC (The), Sr. Unsec. Global Notes, 7.25%, 02/01/18 | 8,140,000 | 9,761,406 | ||||||
Citigroup Inc., | ||||||||
6.01%, 01/15/15 | 1,615,000 | 1,689,905 | ||||||
6.13%, 11/21/17 | 11,440,000 | 13,253,496 | ||||||
8.50%, 05/22/19 | 2,385,000 | 3,070,874 | ||||||
Sr. Unsec. Notes, 4.75%, 05/19/15 | 1,000,000 | 1,048,634 | ||||||
Unsec. Sub. Global Notes, 3.50%, 05/15/23 | 5,000,000 | 4,741,894 | ||||||
4.05%, 07/30/22 | 5,455,000 | 5,537,859 | ||||||
6.68%, 09/13/43 | 8,000,000 | 9,510,706 | ||||||
ING Bank N.V. (Netherlands), | ||||||||
Sr. Unsec. Notes, 3.75%, 03/07/17(c) | 9,590,000 | 10,177,150 | ||||||
Unsec. Sub. Notes, 5.80%, 09/25/23(c) | 5,840,000 | 6,268,631 | ||||||
ING US Inc., Sr. Unsec. Gtd. Global Notes, 5.50%, 07/15/22 | 7,085,000 | 7,930,484 | ||||||
JPMorgan Chase & Co., | ||||||||
Jr. Unsec. Sub. Notes, 6.75%(d) | 5,885,000 | 6,223,387 | ||||||
Sr. Unsec. Global Notes, 4.40%, 07/22/20 | 5,700,000 | 6,225,901 | ||||||
Sr. Unsec. Notes, 6.00%, 01/15/18 | 7,395,000 | 8,569,304 | ||||||
Series Q, Jr. Unsec. Sub. Global Notes, 5.15%(d) | 3,815,000 | 3,614,713 | ||||||
| 140,210,583 | ||||||||
| Principal Amount | Value | |||||||
| Packaged Foods & Meats–0.01% | ||||||||
Mondelez International Inc., Sr. Unsec. Global Notes, 6.50%, 02/09/40 | $ | 1,476,000 | $ | 1,853,079 | ||||
| Paper Packaging–0.10% | ||||||||
Packaging Corp. of America, Sr. Unsec. Global Notes, 4.50%, 11/01/23 | 11,775,000 | 12,317,564 | ||||||
| Paper Products–0.03% | ||||||||
International Paper Co., Sr. Unsec. Global Notes, 6.00%, 11/15/41 | 2,855,000 | 3,317,457 | ||||||
| Personal Products–0.01% | ||||||||
Avon Products Inc., Sr. Unsec. Global Notes, 2.38%, 03/15/16 | 1,610,000 | 1,640,420 | ||||||
| Pharmaceuticals–0.76% | ||||||||
AbbVie Inc., Sr. Unsec. Global Notes, 1.20%, 11/06/15 | 18,095,000 | 18,282,217 | ||||||
Mylan Inc., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(c) | 10,574,000 | 11,221,657 | ||||||
Novartis Capital Corp. (Switzerland), Sr. Unsec. Gtd. Global Notes, 4.40%, 05/06/44 | 12,800,000 | 12,875,681 | ||||||
Perrigo Co. PLC, Sr. Unsec. Gtd. Notes, 2.30%, 11/08/18(c) | 3,945,000 | 3,951,039 | ||||||
Salix Pharmaceuticals Ltd., Sr. Unsec. Conv. Notes, 1.50%, 03/15/19 | 25,242,000 | 44,757,221 | ||||||
Teva Pharmaceutical Finance Co. B.V. (Israel), Sr. Unsec. Gtd. Global Notes, 2.95%, 12/18/22 | 3,900,000 | 3,631,597 | ||||||
Zoetis Inc., Sr. Unsec. Global Notes, 4.70%, 02/01/43 | 4,101,000 | 4,073,963 | ||||||
| 98,793,375 | ||||||||
| Property & Casualty Insurance–0.33% | ||||||||
Burlington Northern Santa Fe, LLC, Sr. Unsec. Notes, 5.15%, 09/01/43 | 19,380,000 | 20,725,553 | ||||||
CNA Financial Corp., | ||||||||
Sr. Unsec. Global Bonds, 5.88%, 08/15/20 | 4,915,000 | 5,731,102 | ||||||
Sr. Unsec. Notes, 7.35%, 11/15/19 | 425,000 | 529,027 | ||||||
Markel Corp., Sr. Unsec. Notes, 5.00%, 03/30/43 | 4,185,000 | 4,226,909 | ||||||
Travelers Cos., Inc. (The), Sr. Unsec. Global Notes, 4.60%, 08/01/43 | 6,455,000 | 6,634,446 | ||||||
WR Berkley Corp., Sr. Unsec. Global Notes, 4.63%, 03/15/22 | 5,040,000 | 5,323,031 | ||||||
| 43,170,068 | ||||||||
| Railroads–0.06% | ||||||||
CSX Corp., Sr. Unsec. Notes, 5.50%, 04/15/41 | 1,660,000 | 1,842,672 | ||||||
Union Pacific Corp., Sr. Unsec. Notes, 4.85%, 06/15/44 | 5,560,000 | 5,812,044 | ||||||
| 7,654,716 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Regional Banks–0.13% | ||||||||
Nationwide Building Society (United Kingdom), Sr. Unsec. Notes, 6.25%, 02/25/20(c) | $ | 8,845,000 | $ | 10,335,040 | ||||
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 02/08/20 | 5,305,000 | 6,086,286 | ||||||
| 16,421,326 | ||||||||
| Reinsurance–0.06% | ||||||||
Reinsurance Group of America Inc., Sr. Unsec. Medium-Term Notes, 4.70%, 09/15/23 | 7,510,000 | 7,893,479 | ||||||
| Retail REIT’s–0.05% | ||||||||
WEA Finance LLC (Australia), Sr. Unsec. Gtd. Notes, 7.13%, 04/15/18(c) | 5,290,000 | 6,328,127 | ||||||
| Semiconductor Equipment–0.50% | ||||||||
Lam Research Corp., Series B, Sr. Unsec. Conv. Notes, 1.25%, 05/15/18 | 33,039,000 | 39,584,852 | ||||||
Novellus Systems Inc., Sr. Unsec. Gtd. Conv. Notes, 2.63%, 05/15/41 | 15,729,000 | 25,618,609 | ||||||
| 65,203,461 | ||||||||
| Semiconductors–1.18% | ||||||||
Linear Technology Corp., | ||||||||
Sr. Unsec. Conv. Notes, 3.00%, 05/01/14(c)(e) | 36,420,000 | 42,133,388 | ||||||
Series A, Sr. Unsec. Conv. Global Notes, 3.00%, 05/01/14(e) | 10,661,000 | 12,333,444 | ||||||
Micron Technology Inc., Series G, Sr. Unsec. Conv. Bonds, 3.00%, 11/15/28(e) | 31,699,000 | 35,344,385 | ||||||
NVIDIA Corp., Sr. Unsec. Conv. Notes, 1.00%, 12/01/18(c) | 23,837,000 | 26,622,949 | ||||||
Xilinx Inc., Jr. Unsec. Sub. Conv. Notes, 3.13%, 03/15/37(c) | 20,622,000 | 36,823,159 | ||||||
| 153,257,325 | ||||||||
| Soft Drinks–0.09% | ||||||||
PepsiCo, Inc., Sr. Unsec. Global Notes, 3.60%, 03/01/24 | 11,445,000 | 11,491,306 | ||||||
| Sovereign Debt–0.16% | ||||||||
Brazilian Government International Bond (Brazil), Sr. Unsec. Global Bonds, 6.00%, 01/17/17 | 16,505,000 | 18,485,600 | ||||||
Peruvian Government International Bond (Peru), Sr. Unsec. Global Notes, 7.13%, 03/30/19 | 1,650,000 | 1,998,562 | ||||||
| 20,484,162 | ||||||||
| Specialized Finance–0.12% | ||||||||
International Lease Finance Corp., Sr. Unsec. Global Notes, 5.88%, 08/15/22 | 3,315,000 | 3,565,697 | ||||||
Moody’s Corp., Sr. Unsec. Global Notes,, 4.50%, 09/01/22 | 9,185,000 | 9,538,599 | ||||||
| Principal Amount | Value | |||||||
| Specialized Finance–(continued) | ||||||||
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Collateral Trust Bonds, 3.05%, 02/15/22 | $ | 2,550,000 | $ | 2,562,251 | ||||
| 15,666,547 | ||||||||
| Specialized REIT’s–0.42% | ||||||||
American Tower Corp., | ||||||||
3.40%, 02/15/19 | 7,235,000 | 7,513,798 | ||||||
4.63%, 04/01/15 | 2,425,000 | 2,524,718 | ||||||
5.00%, 02/15/24 | 5,500,000 | 5,762,676 | ||||||
Sr. Unsec. Notes, 4.50%, 01/15/18 | 4,620,000 | 5,047,924 | ||||||
EPR Properties, Sr. Unsec. Gtd. Notes, 5.25%, 07/15/23 | 6,060,000 | 6,198,392 | ||||||
Health Care REIT, Inc., Sr. Unsec. Global Notes, 4.50%, 01/15/24 | 5,990,000 | 6,200,371 | ||||||
HCP INC, Sr. Unsec. Global Notes, 4.20%, 03/01/24 | 4,690,000 | 4,800,884 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 6,620,000 | 6,888,938 | ||||||
Ventas Realty L.P., Sr. Unsec. Gtd. Notes, 5.70%, 09/30/43 | 2,080,000 | 2,302,857 | ||||||
Ventas Realty L.P./Ventas Capital Corp., Sr. Unsec. Gtd. Notes, | ||||||||
2.70%, 04/01/20 | 4,710,000 | 4,648,798 | ||||||
4.25%, 03/01/22 | 2,635,000 | 2,723,105 | ||||||
| 54,612,461 | ||||||||
| Steel–0.46% | ||||||||
ArcelorMittal (Luxembourg), | ||||||||
Sr. Unsec. Global Bonds, 10.35%, 06/01/19 | 7,005,000 | 8,920,312 | ||||||
Sr. Unsec. Global Notes, 4.25%, 08/05/15 | 8,775,000 | 9,114,267 | ||||||
6.13%, 06/01/18 | 390,000 | 431,131 | ||||||
7.25%, 03/01/41 | 2,225,000 | 2,289,350 | ||||||
United States Steel Corp., Sr. Unsec. Conv. Notes, 2.75%, 04/01/19 | 24,343,000 | 29,363,744 | ||||||
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, | ||||||||
4.63%, 09/15/20 | 320,000 | 335,048 | ||||||
5.63%, 09/15/19 | 4,655,000 | 5,187,101 | ||||||
Vale S.A. (Brazil), Sr. Unsec. Global Notes, 5.63%, 09/11/42 | 4,075,000 | 3,824,585 | ||||||
| 59,465,538 | ||||||||
| Thrifts & Mortgage Finance–0.43% | ||||||||
MGIC Investment Corp., Sr. Unsec. Conv. Notes, | ||||||||
2.00%, 04/01/20 | 4,060,000 | 5,988,500 | ||||||
5.00%, 05/01/17 | 24,396,000 | 28,543,320 | ||||||
Radian Group Inc., Sr. Unsec. Conv. Notes, | ||||||||
2.25%, 03/01/19 | 4,063,000 | 6,391,607 | ||||||
3.00%, 11/15/17 | 10,019,000 | 15,203,832 | ||||||
| 56,127,259 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Tobacco–0.13% | ||||||||
Altria Group, Inc., Sr. Unsec. Gtd. Global Notes, 4.13%, 09/11/15 | $ | 715,000 | $ | 753,260 | ||||
Philip Morris International Inc., Sr. Unsec. Global Notes, | ||||||||
3.60%, 11/15/23 | 3,940,000 | 3,936,172 | ||||||
4.88%, 11/15/43 | 11,740,000 | 12,062,712 | ||||||
| 16,752,144 | ||||||||
| Trucking–0.09% | ||||||||
Penske Truck Leasing Co., L.P./PTL Finance Corp., Sr. Unsec. Notes, 2.50%, 03/15/16(c) | 7,435,000 | 7,627,099 | ||||||
Ryder System, Inc., Sr. Unsec. Medium-Term Notes, 3.15%, 03/02/15 | 4,030,000 | 4,129,164 | ||||||
| 11,756,263 | ||||||||
| Wireless Telecommunication Services–0.22% | ||||||||
America Movil S.A.B. de C.V. (Mexico), | ||||||||
Sr. Unsec. Global Notes, 4.38%, 07/16/42 | 6,610,000 | 5,806,091 | ||||||
Sr. Unsec. Gtd. Global Notes, 2.38%, 09/08/16 | 4,450,000 | 4,594,527 | ||||||
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, | ||||||||
3.21%, 08/15/15(c) | 5,295,000 | 5,399,359 | ||||||
6.11%, 01/15/20(c) | 6,300,000 | 7,142,625 | ||||||
Rogers Communications Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 4.50%, 03/15/43 | 6,080,000 | 5,694,743 | ||||||
| 28,637,345 | ||||||||
Total Bonds and Notes |
| 2,699,249,336 | ||||||
U.S. Treasury Securities–6.51% |
| |||||||
| U.S. Treasury Bills–0.02% | ||||||||
0.03%, 05/01/14(h)(i) | 400,000 | 399,980 | ||||||
0.09%, 05/01/14(h)(i) | 425,000 | 424,979 | ||||||
0.10%, 05/01/14(h)(i) | 200,000 | 199,990 | ||||||
0.11%, 05/01/14(h)(i) | 1,500,000 | 1,499,926 | ||||||
| 2,524,875 | ||||||||
| U.S. Treasury Notes–6.49% | ||||||||
1.75%, 03/31/14 | 12,000,000 | 12,015,047 | ||||||
2.63%, 07/31/14 | 95,125,000 | 96,122,837 | ||||||
2.38%, 10/31/14 | 206,415,000 | 209,518,132 | ||||||
2.13%, 11/30/14 | 77,385,000 | 78,536,600 | ||||||
2.25%, 01/31/15 | 19,650,000 | 20,028,560 | ||||||
2.50%, 03/31/15 | 495,000 | 507,479 | ||||||
2.13%, 05/31/15 | 4,445,000 | 4,552,933 | ||||||
0.38%, 01/31/16 | 21,000,000 | 21,031,536 | ||||||
2.00%, 04/30/16 | 17,445,000 | 18,051,560 | ||||||
1.75%, 05/31/16 | 950,000 | 978,284 | ||||||
0.63%, 02/15/17 | 66,980,000 | 66,882,676 | ||||||
0.88%, 04/30/17 | 2,000,000 | 2,005,859 | ||||||
| Principal Amount | Value | |||||||
| U.S. Treasury Notes–(continued) | ||||||||
0.63%, 05/31/17 | $ | 4,410,000 | $ | 4,381,586 | ||||
1.25%, 01/31/19 | 23,000,000 | 22,740,354 | ||||||
1.50%, 01/31/19 | 141,693,000 | 141,776,153 | ||||||
3.63%, 08/15/19 | 58,350,000 | 64,329,774 | ||||||
3.38%, 11/15/19 | 10,000,000 | 10,899,859 | ||||||
2.75%, 02/15/24 | 67,303,000 | 67,864,543 | ||||||
3.75%, 11/15/43 | 1,284,000 | 1,322,818 | ||||||
| 843,546,590 | ||||||||
Total U.S. Treasury Securities |
| 846,071,465 | ||||||
U.S. Government Sponsored Agency Securities–0.94% |
| |||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–0.56% | ||||||||
Sr. Unsec. Global Notes, | ||||||||
3.00%, 07/28/14 | 23,700,000 | 23,969,838 | ||||||
6.75%, 03/15/31 | 7,000,000 | 9,596,303 | ||||||
Unsec. Global Notes, 4.88%, 06/13/18 | 33,680,000 | 38,553,036 | ||||||
| 72,119,177 | ||||||||
| Federal National Mortgage Association (FNMA)–0.38% | ||||||||
Sr. Unsec. Global Bonds, 6.63%, 11/15/30 | 6,315,000 | 8,585,252 | ||||||
Sr. Unsec. Global Notes, 4.38%, 10/15/15 | 38,850,000 | 41,407,821 | ||||||
| 49,993,073 | ||||||||
Total U.S. Government Sponsored Agency Securities (Cost $121,199,497) |
| 122,112,250 | ||||||
| Shares | ||||||||
Preferred Stocks–0.92% |
| |||||||
| Asset Management & Custody Banks–0.07% | ||||||||
State Street Corp., Series D, 5.90% Pfd. | 360,000 | 9,144,000 | ||||||
| Diversified Banks–0.09% | ||||||||
Wells Fargo & Co., 5.85% Pfd. | 476,600 | 11,814,914 | ||||||
| Oil & Gas Storage & Transportation–0.34% | ||||||||
El Paso Energy Capital Trust I, $2.38, Jr. Unsec. Sub. Gtd. Conv. Pfd. | 875,900 | 44,811,044 | ||||||
| Regional Banks–0.42% | ||||||||
KeyCorp, Series A, $7.75 Conv. Pfd. | 427,098 | 54,561,770 | ||||||
Total Preferred Stocks |
| 120,331,728 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
Municipal Obligations–0.10% |
| |||||||
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); | ||||||||
Series 2010, Build America RB, 6.66%, 04/01/57 | $ | 4,980,000 | $ | 5,591,444 | ||||
Series 2010 A, Taxable Build America RB, 6.64%, 04/01/57 | 2,600,000 | 2,933,086 | ||||||
Texas (State of) Transportation Commission; Series 2010 B, Taxable First Tier Build America RB, 5.03%, 04/01/26 | 3,450,000 | 3,923,996 | ||||||
Total Municipal Obligations |
| 12,448,526 | ||||||
U.S. Government Sponsored Mortgage-Backed Securities–0.00% |
| |||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–0.00% | ||||||||
Pass Through Ctfs., | ||||||||
6.50%, 05/01/29 | 2 | 3 | ||||||
5.50%, 02/01/37 | 146 | 161 | ||||||
| 164 | ||||||||
| Federal National Mortgage Association (FNMA)–0.00% | ||||||||
Pass Through Ctfs., | ||||||||
7.00%, 07/01/18 to 07/01/32 | 68,658 | 76,083 | ||||||
5.50%, 03/01/21 | 153 | 168 | ||||||
| Principal Amount | Value | |||||||
| Federal National Mortgage Association (FNMA)–(continued) | ||||||||
8.00%, 08/01/21 | $ | 4,262 | $ | 4,609 | ||||
| 80,860 | ||||||||
| Government National Mortgage Association (GNMA)–0.00% | ||||||||
Pass Through Ctfs., | ||||||||
8.00%, 04/15/26 to 01/20/31 | 38,337 | 41,870 | ||||||
7.50%, 12/20/30 | 2,603 | 3,148 | ||||||
| 45,018 | ||||||||
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $117,990) |
| 126,042 | ||||||
| Shares | ||||||||
Money Market Funds–7.00% |
| |||||||
Liquid Assets Portfolio–Institutional Class(j) | 454,930,136 | 454,930,136 | ||||||
Premier Portfolio–Institutional Class(j) | 454,930,136 | 454,930,136 | ||||||
Total Money Market Funds |
| 909,860,272 | ||||||
TOTAL INVESTMENTS–99.67% |
| 12,955,374,913 | ||||||
OTHER ASSETS LESS LIABILITIES–0.33% |
| 43,480,236 | ||||||
NET ASSETS–100.00% |
| $ | 12,998,855,149 | |||||
Investment Abbreviations:
| ADR | – American Depositary Receipt | |
| Conv. | – Convertible | |
| Ctfs. | – Certificates | |
| Deb. | – Debentures | |
| 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 “1933 Act”). 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, 2014 was $708,966,242, which represented 5.45% of the Fund’s Net Assets. |
| (d) | Perpetual bond with no specified maturity date. |
| (e) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
| (f) | Exchangeable for a basket of five common shares. |
| (g) | Exchangeable for a basket of four common stocks and one ordinary share. |
| (h) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
| (i) | 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. |
| (j) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By security type, based on Net Assets
as of February 28, 2014
Common Stocks & Other Equity Interests | 63.4 | % | ||
Bonds and Notes | 20.8 | |||
U.S. Treasury Securities | 6.5 | |||
U.S. Government Sponsored Agency Securities | 1.0 | |||
Security types each less than 1% of portfolio | 1.0 | |||
Money Market Funds Plus Other Assets Less Liabilities | 7.3 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Equity and Income Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $9,566,312,708) | $ | 12,045,514,641 | ||
Investments in affiliated money market funds, at value and cost | 909,860,272 | |||
Total investments, at value (Cost $10,476,172,980) | 12,955,374,913 | |||
Foreign currencies, at value (Cost $250,815) | 253,053 | |||
Receivable for: | ||||
Investments sold | 19,324,643 | |||
Variation margin | 337,539 | |||
Fund shares sold | 22,803,705 | |||
Dividends and interest | 68,997,888 | |||
Investment for trustee deferred compensation and retirement plans | 1,191,007 | |||
Other assets | 106,122 | |||
Total assets | 13,068,388,870 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 35,838,285 | |||
Fund shares reacquired | 15,067,486 | |||
Forward foreign currency contracts outstanding | 8,090,328 | |||
Accrued fees to affiliates | 8,529,152 | |||
Accrued trustees’ and officers’ fees and benefits | 24,019 | |||
Accrued other operating expenses | 545,610 | |||
Trustee deferred compensation and retirement plans | 1,438,841 | |||
Total liabilities | 69,533,721 | |||
Net assets applicable to shares outstanding | $ | 12,998,855,149 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 10,064,453,691 | ||
Undistributed net investment income | 89,449,407 | |||
Undistributed net realized gain | 374,161,579 | |||
Net unrealized appreciation | 2,470,790,472 | |||
| $ | 12,998,855,149 | |||
Net Assets: |
| |||
Class A | $ | 9,678,063,269 | ||
Class B | $ | 516,157,345 | ||
Class C | $ | 1,498,876,147 | ||
Class R | $ | 213,049,991 | ||
Class Y | $ | 615,697,452 | ||
Class R5 | $ | 394,976,808 | ||
Class R6 | $ | 82,034,137 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 894,306,108 | |||
Class B | 48,709,759 | |||
Class C | 140,759,736 | |||
Class R | 19,605,754 | |||
Class Y | 56,874,822 | |||
Class R5 | 36,468,684 | |||
Class R6 | 7,577,407 | |||
Class A: | ||||
Net asset value per share | $ | 10.82 | ||
Maximum offering price per share | ||||
(Net asset value of $10.82 ¸ 94.50%) | $ | 11.45 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.60 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.65 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.87 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.83 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.83 | ||
Class R6: | ||||
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.
16 Invesco Equity and Income Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $1,666,701) | $ | 156,154,084 | ||
Dividends from affiliated money market funds | 180,406 | |||
Interest | 52,781,454 | |||
Total investment income | 209,115,944 | |||
Expenses: | ||||
Advisory fees | 21,662,199 | |||
Administrative services fees | 422,109 | |||
Custodian fees | 62,771 | |||
Distribution fees: | ||||
Class A | 11,500,928 | |||
Class B | 2,757,344 | |||
Class C | 6,955,925 | |||
Class R | 512,297 | |||
Transfer agent fees — A, B, C, R and Y | 8,703,997 | |||
Transfer agent fees — R5 | 151,106 | |||
Transfer agent fees — R6 | 1,501 | |||
Trustees’ and officers’ fees and benefits | 332,980 | |||
Other | 908,717 | |||
Total expenses | 53,971,874 | |||
Less: Fees waived and expense offset arrangement(s) | (486,968 | ) | ||
Net expenses | 53,484,906 | |||
Net investment income | 155,631,038 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 649,271,803 | |||
Foreign currencies | 60,899 | |||
Forward foreign currency contracts | (5,616,472 | ) | ||
Futures contracts | (4,418,957 | ) | ||
| 639,297,273 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 466,302,080 | |||
Foreign currencies | 70,393 | |||
Forward foreign currency contracts | (9,700,905 | ) | ||
Futures contracts | (260,127 | ) | ||
| 456,411,441 | ||||
Net realized and unrealized gain | 1,095,708,714 | |||
Net increase in net assets resulting from operations | $ | 1,251,339,752 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Equity and Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 155,631,038 | $ | 180,139,165 | ||||
Net realized gain | 639,297,273 | 610,922,992 | ||||||
Change in net unrealized appreciation | 456,411,441 | 986,558,488 | ||||||
Net increase in net assets resulting from operations | 1,251,339,752 | 1,777,620,645 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (96,266,007 | ) | (177,192,280 | ) | ||||
Class B | (3,821,145 | ) | (9,850,781 | ) | ||||
Class C | (9,406,073 | ) | (16,986,784 | ) | ||||
Class R | (1,896,263 | ) | (3,445,076 | ) | ||||
Class Y | (6,315,938 | ) | (10,171,497 | ) | ||||
Class R5 | (3,347,104 | ) | (5,604,640 | ) | ||||
Class R6 | (733,461 | ) | (1,344,016 | ) | ||||
Total distributions from net investment income | (121,785,991 | ) | (224,595,074 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (493,452,475 | ) | — | |||||
Class B | (29,777,478 | ) | — | |||||
Class C | (75,974,395 | ) | — | |||||
Class R | (10,930,124 | ) | — | |||||
Class Y | (30,498,503 | ) | — | |||||
Class R5 | (15,792,758 | ) | — | |||||
Class R6 | (3,739,507 | ) | — | |||||
Total distributions from net realized gains | (660,165,240 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 569,345,478 | (291,238,977 | ) | |||||
Class B | (75,808,687 | ) | (266,029,232 | ) | ||||
Class C | 163,154,423 | (40,820,681 | ) | |||||
Class R | 11,395,441 | (8,690,407 | ) | |||||
Class Y | 119,636,171 | 9,342,497 | ||||||
Class R5 | 141,775,814 | (29,202,753 | ) | |||||
Class R6 | 42,656,602 | 29,344,576 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 972,155,242 | (597,294,977 | ) | |||||
Net increase in net assets | 1,441,543,763 | 955,730,594 | ||||||
Net assets: | ||||||||
Beginning of period | 11,557,311,386 | 10,601,580,792 | ||||||
End of period (includes undistributed net investment income of $89,449,407 and $55,604,360, respectively) | $ | 12,998,855,149 | $ | 11,557,311,386 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco 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 twelve 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 current income and, secondarily, capital appreciation.
18 Invesco Equity and Income Fund
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
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.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. 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.
19 Invesco 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, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
| J. | Forward Foreign Currency Contracts — The Fund may enter into forward foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the |
20 Invesco Equity and Income Fund
| price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
| 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 designated 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.50%, 2.25%, 2.25%, 1.75%, 1.25%, 1.25% and 1.25% 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 total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $480,430.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
21 Invesco Equity and Income Fund
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 not reimburse IDI for any such expenses.
For the six months ended February 28, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $1,538,824 in front-end sales commissions from the sale of Class A shares and $7,785, $94,866 and $20,617 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2014, the Fund incurred $18,199 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available 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, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 8,787,206,882 | $ | 488,160,412 | $ | — | $ | 9,275,367,294 | ||||||||
U.S. Treasury Securities | — | 846,071,465 | — | 846,071,465 | ||||||||||||
Corporate Debt Securities | — | 2,678,765,174 | — | 2,678,765,174 | ||||||||||||
U.S. Government Sponsored Securities | — | 122,238,292 | — | 122,238,292 | ||||||||||||
Municipal Obligations | — | 12,448,526 | — | 12,448,526 | ||||||||||||
Foreign Sovereign Debt Securities | — | 20,484,162 | — | 20,484,162 | ||||||||||||
| 8,787,206,882 | 4,168,168,031 | — | 12,955,374,913 | |||||||||||||
Forward Foreign Currency Contracts* | — | (8,090,328 | ) | — | (8,090,328 | ) | ||||||||||
Futures* | (392,184 | ) | — | — | (392,184 | ) | ||||||||||
Total Investments | $ | 8,786,814,698 | $ | 4,160,077,703 | $ | — | $ | 12,946,892,401 | ||||||||
| * | Unrealized appreciation (depreciation). |
22 Invesco Equity and Income Fund
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of February 28, 2014:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk | $ | — | $ | (8,090,328 | ) | |||
Forward foreign currency contracts(a) | ||||||||
Interest rate risk | — | (392,184 | ) | |||||
Futures contracts(b) | ||||||||
Total | $ | — | $ | (8,482,512 | ) | |||
| (a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
| (b) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
Effect of Derivative Investments for the six months ended February 28, 2014
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain (Loss) on Statement of Operations | ||||||||
| Futures* | Forward Foreign Currency Contracts* | |||||||
Realized Gain (Loss) | ||||||||
Currency risk | $ | — | $ | (5,616,472 | ) | |||
Interest rate risk | (4,418,857 | ) | — | |||||
Change in Unrealized Appreciation (Depreciation) | ||||||||
Currency risk | — | (9,700,905 | ) | |||||
Interest rate risk | (260,127 | ) | — | |||||
Total | $ | (4,678,984 | ) | $ | (15,317,377 | ) | ||
| * | The average notional value of futures contracts and forward foreign currency contracts during the period was $198,532,896 and $526,642,850, respectively. |
| Open Forward Foreign Currency Contracts at Period-End | ||||||||||||||||||||||||||
Settlement | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||||
| Counterparty | Deliver | Receive | ||||||||||||||||||||||||
03/21/14 | Bank of New York | CAD | 67,216,206 | USD | 60,584,069 | $ | 60,675,404 | $ | (91,335) | |||||||||||||||||
03/21/14 | State Street Bank and Trust Co. | CAD | 60,711,686 | USD | 54,759,098 | 54,803,838 | (44,740) | |||||||||||||||||||
03/21/14 | Bank of New York | CHF | 39,653,045 | USD | 44,326,722 | 45,098,561 | (771,839) | |||||||||||||||||||
03/21/14 | State Street Bank and Trust Co. | CHF | 38,397,344 | USD | 42,937,082 | 43,670,416 | (733,334) | |||||||||||||||||||
03/21/14 | Bank of New York | EUR | 78,618,009 | USD | 107,498,335 | 108,517,759 | (1,019,424) | |||||||||||||||||||
03/21/14 | State Street Bank and Trust Co. | EUR | 49,865,142 | USD | 68,182,603 | 68,829,693 | (647,090) | |||||||||||||||||||
03/21/14 | Bank of New York | GBP | 62,650,463 | USD | 102,743,627 | 104,893,728 | (2,150,101) | |||||||||||||||||||
03/21/14 | State Street Bank and Trust Co. | GBP | 76,705,744 | USD | 125,793,584 | 128,426,049 | (2,632,465) | |||||||||||||||||||
Total open forward foreign currency contracts | $ | (8,090,328) | ||||||||||||||||||||||||
Currency Abbreviations:
| CAD | – Canadian Dollar | |
| CHF | – Swiss Franc | |
| EUR | – Euro | |
| GBP | – British Pound Sterling | |
| USD | – U.S. Dollar |
| Open Futures Contracts at Period-End | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
U.S. Treasury 5 Year Notes | Short | 771 | June-2014 | $ | (92,411,578 | ) | $ | (116,095 | ) | |||||||||||
U.S. Treasury 10 Year Notes | Short | 1,130 | June-2014 | (140,720,313 | ) | (276,089 | ) | |||||||||||||
Total Futures Contracts — Interest Rate Risk | $ | (392,184 | ) | |||||||||||||||||
23 Invesco Equity and Income Fund
Offsetting Assets and Liabilities
Effective with the beginning of the Fund’s fiscal year, the Fund has adopted Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. This update is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Fund’s counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of February 28, 2014.
| Liabilities: | ||||||||||||||||||||||||
| Gross amounts presented in Statement of Assets & Liabilities* | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of liabilities presented in the Statement of Assets and Liabilities | Collateral Pledged | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of New York | $ | 4,032,699 | $ | — | $ | 4,032,699 | $ | — | $ | — | $ | 4,032,699 | ||||||||||||
Goldman Sachs & Co. | 392,184 | — | 392,184 | (392,184 | ) | — | — | |||||||||||||||||
State Street Bank and Trust Co. | 4,057,629 | — | 4,057,629 | — | — | 4,057,629 | ||||||||||||||||||
Total | $ | 8,482,512 | $ | — | $ | 8,482,512 | $ | (392,184 | ) | $ | — | $ | 8,090,328 | |||||||||||
| * | Includes cumulative appreciation (depreciation) of futures contracts. |
NOTE 5—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, 2014, the Fund engaged in securities purchases of $13,837,417.
NOTE 6—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $6,538.
NOTE 7—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
24 Invesco Equity and Income Fund
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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 40,907,811 | $ | — | $ | 40,907,811 | ||||||
August 31, 2017 | 10,092,098 | — | 10,092,098 | |||||||||
| $ | 50,999,909 | $ | — | $ | 50,999,909 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $2,047,655,302 and $2,347,993,528, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $1,201,125,825 and $1,111,825,732, 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 | $ | 2,557,542,716 | ||
Aggregate unrealized (depreciation) of investment securities | (126,018,857 | ) | ||
Net unrealized appreciation of investment securities | $ | 2,431,523,859 | ||
Cost of investments for tax purposes is $10,523,851,054.
25 Invesco Equity and Income Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 69,018,672 | $ | 740,896,241 | 87,700,842 | $ | 873,364,044 | ||||||||||
Class B | 457,858 | 4,812,241 | 823,802 | 8,051,441 | ||||||||||||
Class C | 15,896,842 | 168,179,117 | 12,109,400 | 121,759,085 | ||||||||||||
Class R | 3,431,525 | 37,059,213 | 4,574,200 | 45,460,476 | ||||||||||||
Class Y | 14,483,780 | 156,734,864 | 16,892,433 | 170,702,836 | ||||||||||||
Class R5 | 14,309,864 | 152,928,676 | 6,739,690 | 64,982,296 | ||||||||||||
Class R6(b) | 3,979,805 | 43,181,764 | 10,147,759 | 98,261,438 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 53,215,563 | 552,656,857 | 17,150,441 | 163,264,966 | ||||||||||||
Class B | 3,173,359 | 32,292,497 | 995,825 | 9,235,728 | ||||||||||||
Class C | 7,565,165 | 77,347,216 | 1,579,331 | 14,763,683 | ||||||||||||
Class R | 1,229,175 | 12,823,650 | 352,640 | 3,369,248 | ||||||||||||
Class Y | 3,279,860 | 34,063,279 | 997,253 | 9,485,943 | ||||||||||||
Class R5 | 1,842,681 | 19,139,057 | 540,105 | 5,162,156 | ||||||||||||
Class R6 | 431,315 | 4,472,968 | 138,720 | 1,344,016 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 6,602,211 | 71,059,771 | 17,617,079 | 173,428,532 | ||||||||||||
Class B | (6,734,673 | ) | (71,059,771 | ) | (17,961,899 | ) | (173,428,532 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (74,038,477 | ) | (795,267,391 | ) | (154,007,991 | ) | (1,501,296,519 | ) | ||||||||
Class B | (3,973,412 | ) | (41,853,654 | ) | (11,491,060 | ) | (109,887,869 | ) | ||||||||
Class C | (7,780,695 | ) | (82,371,910 | ) | (18,523,803 | ) | (177,343,449 | ) | ||||||||
Class R | (3,552,490 | ) | (38,487,422 | ) | (5,914,742 | ) | (57,520,131 | ) | ||||||||
Class Y | (6,643,914 | ) | (71,161,972 | ) | (17,512,155 | ) | (170,846,282 | ) | ||||||||
Class R5 | (2,831,215 | ) | (30,291,919 | ) | (10,465,023 | ) | (99,347,205 | ) | ||||||||
Class R6 | (465,596 | ) | (4,998,130 | ) | (6,654,596 | ) | (70,260,878 | ) | ||||||||
Net increase (decrease) in share activity | 92,897,203 | $ | 972,155,242 | (64,171,749 | ) | $ | (597,294,977 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 32% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
26 Invesco 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.
Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized | Total distributions | Net asset value, end of period | Total return | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income net assets | Portfolio turnover(b) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 10.43 | $ | 0.14 | $ | 0.95 | $ | 1.09 | $ | (0.11 | ) | $ | (0.59 | ) | $ | (0.70 | ) | $ | 10.82 | 10.76 | %(c) | $ | 9,678,063 | 0.77 | %(d) | 0.78 | %(d) | 2.64 | %(d) | 28 | % | |||||||||||||||||||||||||
Year ended 08/31/13 | 9.05 | 0.17 | 1.42 | 1.59 | (0.21 | ) | — | (0.21 | ) | 10.43 | 17.80 | (c) | 8,752,700 | 0.78 | 0.79 | 1.74 | 26 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.19 | 0.17 | 0.85 | 1.02 | (0.16 | ) | — | (0.16 | ) | 9.05 | 12.67 | (c) | 7,878,694 | 0.80 | 0.81 | 2.05 | 21 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.53 | 0.15 | 0.66 | 0.81 | (0.15 | ) | — | (0.15 | ) | 8.19 | 10.78 | (c) | 7,908,623 | 0.81 | 0.81 | 1.74 | 22 | |||||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.79 | 0.10 | (0.28 | ) | (0.18 | ) | (0.08 | ) | — | (0.08 | ) | 7.53 | (2.40 | )(c) | 7,560,462 | 0.78 | (e) | 0.78 | (e) | 1.89 | (e) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.45 | 0.15 | 1.34 | 1.49 | (0.15 | ) | — | (0.15 | ) | 7.79 | 23.51 | (f) | 8,395,716 | 0.82 | 0.82 | 2.15 | 78 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.84 | 0.20 | (2.36 | ) | (2.16 | ) | (0.22 | ) | (0.01 | ) | (0.23 | ) | 6.45 | (24.78 | )(f) | 8,214,093 | 0.79 | 0.79 | 2.59 | 56 | ||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.22 | 0.10 | 0.94 | 1.04 | (0.07 | ) | (0.59 | ) | (0.66 | ) | 10.60 | 10.45 | (c) | 516,157 | 1.52 | (d) | 1.53 | (d) | 1.89 | (d) | 28 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.87 | 0.09 | 1.39 | 1.48 | (0.13 | ) | — | (0.13 | ) | 10.22 | 16.90 | (c) | 570,146 | 1.53 | 1.54 | 0.99 | 26 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.04 | 0.15 | 0.83 | 0.98 | (0.15 | ) | — | (0.15 | ) | 8.87 | 12.36 | (c) | 739,631 | 1.02 | 1.56 | 1.83 | 21 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.39 | 0.14 | 0.65 | 0.79 | (0.14 | ) | — | (0.14 | ) | 8.04 | 10.69 | (c)(g) | 1,014,527 | 0.84 | (g) | 0.98 | (g) | 1.71 | (g) | 22 | ||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.64 | 0.09 | (0.27 | ) | (0.18 | ) | (0.07 | ) | — | (0.07 | ) | 7.39 | (2.40 | )(c)(g) | 1,278,734 | 0.91 | (e)(g) | 0.91 | (e)(g) | 1.76 | (e)(g) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.33 | 0.14 | 1.32 | 1.46 | (0.15 | ) | — | (0.15 | ) | 7.64 | 23.48 | (h)(i) | 1,594,135 | 0.82 | (i) | 0.82 | (i) | 2.16 | (i) | 78 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.68 | 0.20 | (2.32 | ) | (2.12 | ) | (0.22 | ) | (0.01 | ) | (0.23 | ) | 6.33 | (24.78 | )(h)(i) | 1,693,758 | 0.79 | (i) | 0.79 | (i) | 2.59 | (i) | 56 | |||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.27 | 0.10 | 0.94 | 1.04 | (0.07 | ) | (0.59 | ) | (0.66 | ) | 10.65 | 10.40 | (c) | 1,498,876 | 1.52 | (d) | 1.53 | (d) | 1.89 | (d) | 28 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 8.91 | 0.10 | 1.40 | 1.50 | (0.14 | ) | — | (0.14 | ) | 10.27 | 16.95 | (c) | 1,284,225 | 1.53 | 1.54 | 0.99 | 26 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.07 | 0.11 | 0.83 | 0.94 | (0.10 | ) | — | (0.10 | ) | 8.91 | 11.77 | (c)(j) | 1,157,325 | 1.54 | (j) | 1.54 | (j) | 1.31 | (j) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.42 | 0.09 | 0.65 | 0.74 | (0.09 | ) | — | (0.09 | ) | 8.07 | 9.95 | (c)(j) | 1,216,936 | 1.54 | (j) | 1.54 | (j) | 1.01 | (j) | 22 | ||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.68 | 0.06 | (0.27 | ) | (0.21 | ) | (0.05 | ) | — | (0.05 | ) | 7.42 | (2.81 | )(c)(j) | 1,211,089 | 1.52 | (e)(j) | 1.52 | (e)(j) | 1.15 | (e)(j) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.36 | 0.09 | 1.33 | 1.42 | (0.10 | ) | — | (0.10 | ) | 7.68 | 22.63 | (i)(k) | 1,375,516 | 1.56 | (i) | 1.56 | (i) | 1.40 | (i) | 78 | ||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.72 | 0.14 | (2.32 | ) | (2.18 | ) | (0.17 | ) | (0.01 | ) | (0.18 | ) | 6.36 | (25.33 | )(i)(k) | 1,340,367 | 1.50 | (i) | 1.50 | (i) | 1.88 | (i) | 56 | |||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.47 | 0.13 | 0.96 | 1.09 | (0.10 | ) | (0.59 | ) | (0.69 | ) | 10.87 | 10.68 | (c) | 213,050 | 1.02 | (d) | 1.03 | (d) | 2.39 | (d) | 28 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 9.08 | 0.15 | 1.43 | 1.58 | (0.19 | ) | — | (0.19 | ) | 10.47 | 17.57 | (c) | 193,610 | 1.03 | 1.04 | 1.49 | 26 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.23 | 0.15 | 0.85 | 1.00 | (0.15 | ) | — | (0.15 | ) | 9.08 | 12.23 | (c) | 176,940 | 1.05 | 1.06 | 1.80 | 21 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.57 | 0.13 | 0.66 | 0.79 | (0.13 | ) | — | (0.13 | ) | 8.23 | 10.45 | (c) | 182,135 | 1.06 | 1.06 | 1.49 | 22 | |||||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.83 | 0.09 | (0.28 | ) | (0.19 | ) | (0.07 | ) | — | (0.07 | ) | 7.57 | (2.51 | )(c) | 172,143 | 1.03 | (e) | 1.03 | (e) | 1.64 | (e) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.48 | 0.13 | 1.35 | 1.48 | (0.13 | ) | — | (0.13 | ) | 7.83 | 23.25 | (l) | 169,713 | 1.07 | 1.07 | 1.88 | 78 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.87 | 0.18 | (2.36 | ) | (2.18 | ) | (0.20 | ) | (0.01 | ) | (0.21 | ) | 6.48 | (24.89 | )(l) | 148,399 | 1.04 | 1.04 | 2.35 | 56 | ||||||||||||||||||||||||||||||||||||
Class Y (m) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.43 | 0.15 | 0.97 | 1.12 | (0.13 | ) | (0.59 | ) | (0.72 | ) | 10.83 | 11.00 | (c) | 615,697 | 0.52 | (d) | 0.53 | (d) | 2.89 | (d) | 28 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 9.05 | 0.20 | 1.41 | 1.61 | (0.23 | ) | — | (0.23 | ) | 10.43 | 18.10 | (c) | 477,207 | 0.53 | 0.54 | 1.99 | 26 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.20 | 0.20 | 0.84 | 1.04 | (0.19 | ) | — | (0.19 | ) | 9.05 | 12.83 | (c) | 410,600 | 0.55 | 0.56 | 2.30 | 21 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.54 | 0.17 | 0.67 | 0.84 | (0.18 | ) | — | (0.18 | ) | 8.20 | 11.04 | (c) | 422,009 | 0.56 | 0.56 | 1.99 | 22 | |||||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.79 | 0.11 | (0.28 | ) | (0.17 | ) | (0.08 | ) | — | (0.08 | ) | 7.54 | (2.15 | )(c) | 414,203 | 0.53 | (e) | 0.53 | (e) | 2.15 | (e) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 | 6.45 | 0.16 | 1.35 | 1.51 | (0.17 | ) | — | (0.17 | ) | 7.79 | 23.82 | (n) | 530,010 | 0.57 | 0.57 | 2.34 | 78 | |||||||||||||||||||||||||||||||||||||||
Year ended 12/31/08 | 8.84 | 0.22 | (2.36 | ) | (2.14 | ) | (0.24 | ) | (0.01 | ) | (0.25 | ) | 6.45 | (24.60 | )(n) | 358,154 | 0.54 | 0.54 | 2.85 | 56 | ||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.43 | 0.16 | 0.96 | 1.12 | (0.13 | ) | (0.59 | ) | (0.72 | ) | 10.83 | 11.03 | (c) | 394,977 | 0.47 | (d) | 0.48 | (d) | 2.94 | (d) | 28 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 9.05 | 0.20 | 1.42 | 1.62 | (0.24 | ) | — | (0.24 | ) | 10.43 | 18.17 | (c) | 241,540 | 0.47 | 0.48 | 2.05 | 26 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 8.20 | 0.21 | 0.84 | 1.05 | (0.20 | ) | — | (0.20 | ) | 9.05 | 12.96 | (c) | 238,392 | 0.44 | 0.44 | 2.41 | 21 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.54 | 0.19 | 0.65 | 0.84 | (0.18 | ) | — | (0.18 | ) | 8.20 | 11.16 | (c) | 156,096 | 0.39 | 0.39 | 2.16 | 22 | |||||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10(o) | 7.59 | 0.03 | (0.04 | ) | (0.01 | ) | (0.04 | ) | — | (0.04 | ) | 7.54 | (0.13 | )(c) | 63,598 | 0.45 | (e) | 0.45 | (e) | 1.79 | (e) | 24 | ||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.43 | 0.16 | 0.97 | 1.13 | (0.14 | ) | (0.59 | ) | (0.73 | ) | 10.83 | 11.09 | (c) | 82,034 | 0.38 | (d) | 0.39 | (d) | 3.03 | (d) | 28 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 9.27 | 0.21 | 1.14 | 1.35 | (0.19 | ) | — | (0.19 | ) | 10.43 | 14.81 | (c) | 37,884 | 0.37 | (e) | 0.38 | (e) | 2.15 | (e) | 26 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended August 31, 2011 the portfolio turnover calculation excludes the value of securities purchased of $602,192,170 and sold of $70,835,642 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Balanced Fund and Invesco Basic Balanced into the Fund. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $9,284,420, $556,039, $1,402,714, $206,617, $553,438, $307,906 and $62,707 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Annualized. |
| (f) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (g) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.28% and 0.38% for the year ended August 31, 2011 and eight months ended August 31, 2010, respectively. |
| (h) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
27 Invesco Equity and Income Fund
| (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 less than 1%. |
| (j) | 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 0.99%, 0.97% and 0.99% for the years ended August 31, 2012, August 31, 2011 and the eight months ended August 31, 2010, respectively. |
| (k) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (l) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
| (m) | On June 1, 2010, Class I shares of Van Kampen Equity and Income Fund were reorganized into Class Y shares. |
| (n) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
| (o) | Commencement date of June 1, 2010 and September 24, 2012 for Class R5 and Class R6 shares, respectively. |
28 Invesco 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,107.60 | $ | 4.02 | $ | 1,020.98 | $ | 3.86 | 0.77 | % | ||||||||||||
B | 1,000.00 | 1,104.50 | 7.93 | 1,017.26 | 7.60 | 1.52 | ||||||||||||||||||
C | 1,000.00 | 1,104.00 | 7.93 | 1,017.26 | 7.60 | 1.52 | ||||||||||||||||||
R | 1,000.00 | 1,106.80 | 5.33 | 1,019.74 | 5.11 | 1.02 | ||||||||||||||||||
Y | 1,000.00 | 1,110.00 | 2.72 | 1,022.22 | 2.61 | 0.52 | ||||||||||||||||||
R5 | 1,000.00 | 1,109.20 | 2.46 | 1,022.46 | 2.36 | 0.47 | ||||||||||||||||||
R6 | 1,000.00 | 1,110.90 | 1.99 | 1,022.91 | 1.91 | 0.38 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
29 Invesco Equity and Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 VK-EQI-SAR-1 Invesco Distributors, Inc. | ||||
| Semiannual Report to Shareholders | February 28, 2014 |
Invesco Growth and Income Fund
Nasdaq:
A: ACGIX n B: ACGJX n C: ACGKX n R: ACGLX n Y: ACGMX
n R5: ACGQX n R6: GIFFX
| 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 12.98 | % | |||
| Class B Shares | 12.98 | ||||
| Class C Shares | 12.55 | ||||
| Class R Shares | 12.83 | ||||
| Class Y Shares | 13.11 | ||||
| Class R5 Shares | 13.14 | ||||
| Class R6 Shares | 13.24 | ||||
| S&P 500 Index‚ (Broad Market Index) | 15.07 | ||||
| Russell 1000 Value Indexn (Style-Specific Index) | 13.46 | ||||
| Lipper Large-Cap Value Funds Index¿ (Peer Group Index) | 13.38 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.;
nInvesco, Russell via FactSet Research Systems Inc.; ¿Lipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US stock market.
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Growth and Income Fund
| Average Annual Total Returns | |||||
As of 2/28/14, including maximum applicable sales charges
|
| ||||
| Class A Shares | |||||
| Inception (8/1/46) | 9.53 | % | |||
| 10 Years | 6.91 | ||||
| 5 Years | 20.08 | ||||
| 1 Year | 17.94 | ||||
| Class B Shares | |||||
| Inception (8/2/93) | 9.83 | % | |||
| 10 Years | 7.35 | ||||
| 5 Years | 21.26 | ||||
| 1 Year | 19.83 | ||||
| Class C Shares | |||||
| Inception (8/2/93) | 9.34 | % | |||
| 10 Years | 6.73 | ||||
| 5 Years | 20.56 | ||||
| 1 Year | 22.87 | ||||
| Class R Shares | |||||
| Inception (10/1/02) | 9.40 | % | |||
| 10 Years | 7.25 | ||||
| 5 Years | 21.15 | ||||
| 1 Year | 24.53 | ||||
| Class Y Shares | |||||
| Inception (10/19/04) | 8.47 | % | |||
| 5 Years | 21.74 | ||||
| 1 Year | 25.09 | ||||
| Class R5 Shares | |||||
| 10 Years | 7.67 | % | |||
| 5 Years | 21.79 | ||||
| 1 Year | 25.22 | ||||
| Class R6 Shares | |||||
| 10 Years | 7.58 | % | |||
| 5 Years | 21.59 | ||||
| 1 Year | 25.33 | ||||
Effective June 1, 2010, Class A, Class B, Class C, Class R and Class I shares of the predecessor fund, Van Kampen Growth and Income 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 (renamed Invesco 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 Growth and Income Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 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
| Average Annual Total Returns | ||||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | ||||
| Class A Shares | ||||
| Inception (8/1/46) | 9.54 | % | ||
| 10 Years | 7.21 | |||
| 5 Years | 14.72 | |||
| 1 Year | 26.48 | |||
| Class B Shares | ||||
| Inception (8/2/93) | 9.85 | % | ||
| 10 Years | 7.63 | |||
| 5 Years | 15.77 | |||
| 1 Year | 28.89 | |||
| Class C Shares | ||||
| Inception (8/2/93) | 9.37 | % | ||
| 10 Years | 7.02 | |||
| 5 Years | 15.16 | |||
| 1 Year | 31.89 | |||
| Class R Shares | ||||
| Inception (10/1/02) | 9.45 | % | ||
| 10 Years | 7.54 | |||
| 5 Years | 15.73 | |||
| 1 Year | 33.55 | |||
| Class Y Shares | ||||
| Inception (10/19/04) | 8.49 | % | ||
| 5 Years | 16.30 | |||
| 1 Year | 34.17 | |||
| Class R5 Shares | ||||
| 10 Years | 7.97 | % | ||
| 5 Years | 16.33 | |||
| 1 Year | 34.31 | |||
| Class R6 Shares | ||||
| 10 Years | 7.88 | % | ||
| 5 Years | 16.14 | |||
| 1 Year | 34.42 | |||
fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Class R6 shares incepted on September 24, 2012. 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 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, Class R5 and Class R6 shares was 0.82%, 0.82%, 1.57%, 1.07%, 0.57%, 0.48% and 0.39%, 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, Class R5 and Class R6 shares was 0.83%, 0.83%, 1.58%, 1.08%, 0.58%, 0.49%, and 0.40%, 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
| 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, 2014. See current prospectus for more information. |
3 Invesco Growth and Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can |
access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Growth and Income Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–96.14% |
| |||||||
| Aerospace & Defense–0.88% | ||||||||
General Dynamics Corp. | 731,692 | $ | 80,149,542 | |||||
| Agricultural Products–1.08% | ||||||||
Archer-Daniels-Midland Co. | 2,438,244 | 98,992,706 | ||||||
| Apparel Retail–0.91% | ||||||||
Abercrombie & Fitch Co.–Class A | 2,100,227 | 83,231,996 | ||||||
| Application Software–2.10% | ||||||||
Adobe Systems Inc.(b) | 2,804,304 | 192,403,297 | ||||||
| Asset Management & Custody Banks–1.93% | ||||||||
Northern Trust Corp. | 1,468,659 | 90,836,559 | ||||||
State Street Corp. | 1,308,676 | 85,940,753 | ||||||
| 176,777,312 | ||||||||
| Automobile Manufacturers–1.25% | ||||||||
General Motors Co. | 3,159,842 | 114,386,280 | ||||||
| Biotechnology–1.71% | ||||||||
Amgen Inc. | 1,261,064 | 156,397,157 | ||||||
| Building Products–0.29% | ||||||||
Allegion PLC(b) | 490,884 | 26,679,545 | ||||||
| Cable & Satellite–3.51% | ||||||||
Comcast Corp.–Class A | 3,468,047 | 179,263,349 | ||||||
Time Warner Cable Inc. | 1,015,057 | 142,463,250 | ||||||
| 321,726,599 | ||||||||
| Construction & Farm Machinery & Heavy Trucks–1.20% | ||||||||
Caterpillar Inc. | 1,132,188 | 109,788,270 | ||||||
| Consumer Finance–0.25% | ||||||||
Santander Consumer USA | 903,881 | 22,895,306 | ||||||
| Diversified Banks–2.27% | ||||||||
Comerica Inc. | 2,062,023 | 99,348,268 | ||||||
Wells Fargo & Co. | 2,333,070 | 108,301,110 | ||||||
| 207,649,378 | ||||||||
| Diversified Chemicals–1.32% | ||||||||
Dow Chemical Co. (The) | 2,477,537 | 120,680,827 | ||||||
| Diversified Metals & Mining–0.64% | ||||||||
Freeport-McMoRan Copper & Gold Inc. | 1,807,287 | 58,953,702 | ||||||
| Electric Utilities–1.34% | ||||||||
Edison International | 855,150 | 44,784,206 | ||||||
Pinnacle West Capital Corp. | 1,396,020 | 77,688,513 | ||||||
| 122,472,719 | ||||||||
| Electronic Components–1.23% | ||||||||
Corning Inc. | 5,847,411 | 112,679,610 | ||||||
| Shares | Value | |||||||
| Food Distributors–0.75% | ||||||||
Sysco Corp. | 1,902,369 | $ | 68,523,331 | |||||
| Health Care Equipment–1.54% | ||||||||
Medtronic, Inc. | 2,377,498 | 140,890,532 | ||||||
| Hotels, Resorts & Cruise Lines–1.53% | ||||||||
Carnival Corp. | 3,542,078 | 140,478,814 | ||||||
| Household Products–1.50% | ||||||||
Procter & Gamble Co. (The) | 1,746,367 | 137,369,228 | ||||||
| Industrial Conglomerates–2.15% | ||||||||
General Electric Co. | 7,746,707 | 197,308,627 | ||||||
| Industrial Machinery–0.79% | ||||||||
Ingersoll-Rand PLC | 1,189,408 | 72,720,405 | ||||||
| Insurance Brokers–3.42% | ||||||||
Aon PLC (United Kingdom) | 1,006,573 | 86,162,649 | ||||||
Marsh & McLennan Cos., Inc. | 3,547,637 | 170,854,198 | ||||||
Willis Group Holdings PLC | 1,370,602 | 56,413,978 | ||||||
| 313,430,825 | ||||||||
| Integrated Oil & Gas–4.75% | ||||||||
Occidental Petroleum Corp. | 1,118,792 | 107,985,804 | ||||||
Royal Dutch Shell PLC–Class A (United Kingdom) | 4,930,822 | 179,606,917 | ||||||
Total S.A. (France) | 2,267,961 | 147,045,491 | ||||||
| 434,638,212 | ||||||||
| Integrated Telecommunication Services–1.59% | ||||||||
Koninklijke (Royal) KPN N.V. (Netherlands)(b) | 3,693,112 | 13,153,926 | ||||||
Orange S.A. (France) | 1,064,070 | 13,254,551 | ||||||
Telecom Italia S.p.A. (Italy) | 10,088,638 | 11,448,636 | ||||||
Telefonica S.A. (Spain) | 984,678 | 15,074,483 | ||||||
Verizon Communications Inc. | 1,944,646 | 92,526,277 | ||||||
| 145,457,873 | ||||||||
| Internet Software & Services–2.46% | ||||||||
eBay Inc.(b) | 3,838,428 | 225,584,414 | ||||||
| Investment Banking & Brokerage–4.87% | ||||||||
Charles Schwab Corp. (The) | 5,821,952 | 154,339,948 | ||||||
Goldman Sachs Group, Inc. (The) | 484,599 | 80,661,504 | ||||||
Morgan Stanley | 6,848,963 | 210,948,060 | ||||||
| 445,949,512 | ||||||||
| IT Consulting & Other Services–1.18% | ||||||||
Amdocs Ltd. | 2,429,728 | 108,074,301 | ||||||
| Managed Health Care–2.88% | ||||||||
Cigna Corp. | 887,528 | 70,638,354 | ||||||
UnitedHealth Group Inc. | 1,162,338 | 89,813,857 | ||||||
WellPoint, Inc. | 1,144,037 | 103,638,312 | ||||||
| 264,090,523 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Growth and Income Fund
| Shares | Value | |||||||
| Movies & Entertainment–2.97% | ||||||||
Time Warner Inc. | 839,189 | $ | 56,334,758 | |||||
Viacom Inc.–Class B | 2,456,047 | 215,469,003 | ||||||
| 271,803,761 | ||||||||
| Multi-Utilities–0.57% | ||||||||
PG&E Corp. | 1,194,141 | 52,613,852 | ||||||
| Oil & Gas Equipment & Services–2.03% | ||||||||
Baker Hughes Inc. | 2,115,080 | 133,842,262 | ||||||
Halliburton Co. | 909,886 | 51,863,502 | ||||||
| 185,705,764 | ||||||||
| Oil & Gas Exploration & Production–3.24% | ||||||||
Anadarko Petroleum Corp. | 1,075,750 | 90,535,120 | ||||||
Apache Corp. | 1,109,094 | 87,940,064 | ||||||
Canadian Natural Resources Ltd. (Canada) | 3,235,226 | 118,398,986 | ||||||
| 296,874,170 | ||||||||
| Other Diversified Financial Services–9.20% | ||||||||
Bank of America Corp. | 5,364,451 | 88,674,375 | ||||||
Citigroup Inc. | 6,414,052 | 311,915,349 | ||||||
ING US Inc. | 1,528,206 | 54,816,749 | ||||||
JPMorgan Chase & Co. | 6,822,213 | 387,638,143 | ||||||
| 843,044,616 | ||||||||
| Packaged Foods & Meats–2.42% | ||||||||
Mondelez International Inc.–Class A | 4,735,034 | 161,133,207 | ||||||
Unilever N.V.–New York Shares (Netherlands) | 1,529,702 | 60,515,011 | ||||||
| 221,648,218 | ||||||||
| Personal Products–1.71% | ||||||||
Avon Products, Inc. | 10,123,178 | 156,605,564 | ||||||
| Pharmaceuticals–6.35% | ||||||||
Bristol-Myers Squibb Co. | 1,667,606 | 89,667,175 | ||||||
Eli Lilly and Co. | 1,510,758 | 90,056,284 | ||||||
Merck & Co., Inc. | 3,127,746 | 178,250,245 | ||||||
Novartis AG (Switzerland) | 1,446,008 | 120,553,459 | ||||||
Novartis AG–ADR (Switzerland) | 119,384 | 9,930,361 | ||||||
Pfizer Inc. | 2,914,974 | 93,599,815 | ||||||
| 582,057,339 | ||||||||
| Property & Casualty Insurance–0.61% | ||||||||
Chubb Corp. (The) | 633,024 | 55,376,940 | ||||||
| Publishing–0.60% | ||||||||
Thomson Reuters Corp. | 1,603,067 | 55,018,557 | ||||||
| Shares | Value | |||||||
| Railroads–0.91% | ||||||||
CSX Corp. | 2,991,095 | $ | 82,883,242 | |||||
| Regional Banks–3.82% | ||||||||
BB&T Corp. | 2,532,770 | 95,738,706 | ||||||
Fifth Third Bancorp | 3,596,979 | 78,036,459 | ||||||
PNC Financial Services Group, Inc. (The) | 2,158,019 | 176,482,794 | ||||||
| 350,257,959 | ||||||||
| Security & Alarm Services–2.11% | ||||||||
ADT Corp. (The) | 2,346,646 | 72,065,499 | ||||||
Tyco International Ltd. | 2,880,405 | 121,495,483 | ||||||
| 193,560,982 | ||||||||
| Semiconductor Equipment–2.11% | ||||||||
Applied Materials, Inc. | 10,203,405 | 193,456,559 | ||||||
| Semiconductors–1.41% | ||||||||
Broadcom Corp.–Class A | 1,043,299 | 31,006,846 | ||||||
Texas Instruments Inc. | 2,190,533 | 98,486,364 | ||||||
| 129,493,210 | ||||||||
| Specialized Finance–0.69% | ||||||||
CME Group Inc.–Class A | 853,896 | 63,034,603 | ||||||
| Specialty Chemicals–0.72% | ||||||||
PPG Industries, Inc. | 335,392 | 66,347,245 | ||||||
| Systems Software–2.33% | ||||||||
Microsoft Corp. | 2,616,008 | 100,219,266 | ||||||
Symantec Corp. | 5,285,970 | 113,542,636 | ||||||
| 213,761,902 | ||||||||
| Wireless Telecommunication Services–1.02% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 2,243,416 | 93,258,796 | ||||||
Total Common Stocks & Other Equity Interests |
| 8,807,184,122 | ||||||
Money Market Funds–4.02% |
| |||||||
Liquid Assets Portfolio–Institutional Class(c) | 184,274,740 | 184,274,740 | ||||||
Premier Portfolio– | 184,274,741 | 184,274,741 | ||||||
Total Money Market Funds |
| 368,549,481 | ||||||
TOTAL INVESTMENTS–100.16% (Cost $6,599,680,339) |
| 9,175,733,603 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.16)% |
| (14,674,831 | ) | |||||
NET ASSETS–100.00% |
| $ | 9,161,058,772 | |||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Growth and Income Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
| (a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
| (b) | Non-income producing security. |
| (c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2014
Financials | 27.0 | % | ||
Information Technology | 12.8 | |||
Health Care | 12.5 | |||
Consumer Discretionary | 10.8 | |||
Energy | 10.0 | |||
Industrials | 8.3 | |||
Consumer Staples | 7.5 | |||
Materials | 2.7 | |||
Telecommunication Services | 2.6 | |||
Utilities | 1.9 | |||
Money Market Funds Plus Other Assets Less Liabilities | 3.9 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Growth and Income Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $6,231,130,858) | $ | 8,807,184,122 | ||
Investments in affiliated money market funds, at value and cost | 368,549,481 | |||
Total investments, at value (Cost $6,599,680,339) | 9,175,733,603 | |||
Foreign currencies, at value (Cost $74) | 74 | |||
Receivable for: | ||||
Fund shares sold | 13,419,582 | |||
Dividends | 41,499,180 | |||
Investment for trustee deferred compensation and retirement plans | �� | 585,904 | ||
Other assets | 66,432 | |||
Total assets | 9,231,304,775 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 9,696,753 | |||
Fund shares reacquired | 45,067,090 | |||
Forward foreign currency contracts outstanding | 8,532,705 | |||
Accrued fees to affiliates | 5,875,324 | |||
Accrued trustees’ and officers’ fees and benefits | 16,418 | |||
Accrued other operating expenses | 339,614 | |||
Trustee deferred compensation and retirement plans | 718,099 | |||
Total liabilities | 70,246,003 | |||
Net assets applicable to shares outstanding | $ | 9,161,058,772 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 6,325,677,843 | ||
Undistributed net investment income | 96,491,505 | |||
Undistributed net realized gain | 171,296,667 | |||
Net unrealized appreciation | 2,567,592,757 | |||
| $ | 9,161,058,772 | |||
Net Assets: |
| |||
Class A | $ | 5,148,275,937 | ||
Class B | $ | 94,894,726 | ||
Class C | $ | 322,309,789 | ||
Class R | $ | 186,424,534 | ||
Class Y | $ | 2,044,396,848 | ||
Class R5 | $ | 854,794,579 | ||
Class R6 | $ | 509,962,359 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 188,582,044 | |||
Class B | 3,500,901 | |||
Class C | 11,923,845 | |||
Class R | 6,826,798 | |||
Class Y | 74,825,150 | |||
Class R5 | 31,256,641 | |||
Class R6 | 18,641,074 | |||
Class A: | ||||
Net asset value and offering price per share | $ | 27.30 | ||
Maximum offering price per share | ||||
(Net asset value of $27.30 ¸ 94.50%) | $ | 28.89 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 27.11 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 27.03 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 27.31 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 27.32 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 27.35 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 27.36 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Growth and Income Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $1,748,154) | $ | 162,501,317 | ||
Dividends from affiliated money market funds | 86,095 | |||
Total investment income | 162,587,412 | |||
Expenses: | ||||
Advisory fees | 15,450,517 | |||
Administrative services fees | 368,866 | |||
Custodian fees | 154,012 | |||
Distribution fees: | ||||
Class A | 6,260,057 | |||
Class B | 125,366 | |||
Class C | 1,536,917 | |||
Class R | 447,477 | |||
Transfer agent fees — A, B, C, R and Y | 7,301,808 | |||
Transfer agent fees — R5 | 392,708 | |||
Transfer agent fees — R6 | 11,737 | |||
Trustees’ and officers’ fees and benefits | 241,778 | |||
Other | 616,647 | |||
Total expenses | 32,907,890 | |||
Less: Fees waived and expense offset arrangement(s) | (244,997 | ) | ||
Net expenses | 32,662,893 | |||
Net investment income | 129,924,519 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 312,975,378 | |||
Foreign currencies | 29,726 | |||
Forward foreign currency contracts | (5,455,502 | ) | ||
| 307,549,602 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 635,406,619 | |||
Foreign currencies | 71,060 | |||
Forward foreign currency contracts | (10,166,943 | ) | ||
| 625,310,736 | ||||
Net realized and unrealized gain | 932,860,338 | |||
Net increase in net assets resulting from operations | $ | 1,062,784,857 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Growth and Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income | $ | 129,924,519 | $ | 108,443,047 | ||||
Net realized gain | 307,549,602 | 349,587,687 | ||||||
Change in net unrealized appreciation | 625,310,736 | 1,112,776,078 | ||||||
Net increase in net assets resulting from operations | 1,062,784,857 | 1,570,806,812 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (36,226,540 | ) | (67,443,335 | ) | ||||
Class B | (733,633 | ) | (1,795,917 | ) | ||||
Class C | (1,064,124 | ) | (2,104,718 | ) | ||||
Class R | (1,067,997 | ) | (1,994,383 | ) | ||||
Class Y | (16,265,266 | ) | (28,763,044 | ) | ||||
Class R5 | (6,912,979 | ) | (11,863,944 | ) | ||||
Class R6 | (3,353,158 | ) | (2,246,832 | ) | ||||
Total distributions from net investment income | (65,623,697 | ) | (116,212,173 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (117,716,443 | ) | — | |||||
Class B | (2,338,436 | ) | — | |||||
Class C | (7,258,150 | ) | — | |||||
Class R | (4,191,643 | ) | — | |||||
Class Y | (45,186,746 | ) | — | |||||
Class R5 | (18,438,457 | ) | — | |||||
Class R6 | (8,430,934 | ) | — | |||||
Total distributions from net realized gains | (203,560,809 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | (74,619,464 | ) | (374,596,526 | ) | ||||
Class B | (16,145,349 | ) | (45,861,702 | ) | ||||
Class C | 5,012,585 | (17,556,960 | ) | |||||
Class R | (545,976 | ) | (7,843,983 | ) | ||||
Class Y | 42,944,230 | (1,106,001 | ) | |||||
Class R5 | 65,131,932 | (101,402,342 | ) | |||||
Class R6 | 135,937,562 | 308,180,509 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 157,715,520 | (240,187,005 | ) | |||||
Net increase in net assets | 951,315,871 | 1,214,407,634 | ||||||
Net assets: | ||||||||
Beginning of period | 8,209,742,901 | 6,995,335,267 | ||||||
End of period (includes undistributed net investment income of $96,491,505 and $32,190,683, respectively) | $ | 9,161,058,772 | $ | 8,209,742,901 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco 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 twelve 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 through growth of capital and current income.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to
10 Invesco Growth and Income Fund
contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and
11 Invesco Growth and Income Fund
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, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
| J. | Forward Foreign Currency Contracts — The Fund may enter into forward foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
12 Invesco Growth 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75% 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 total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $242,796.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A, Class B, Class C and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended February 28, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $277,781 in front-end sales commissions from the sale of Class A shares and $796, $18,147 and $3,328 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2014, the Fund incurred $24,253 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
13 Invesco Growth and 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, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 8,675,596,140 | $ | 500,137,463 | $ | — | $ | 9,175,733,603 | ||||||||
Forward Foreign Currency Contracts* | — | (8,532,705 | ) | — | (8,532,705 | ) | ||||||||||
Total Investments | $ | 8,675,596,140 | $ | 491,604,758 | $ | — | $ | 9,167,200,898 | ||||||||
| * | Unrealized appreciation (depreciation). |
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of February 28, 2014:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency Risk | ||||||||
Forward Foreign Currency Contracts(a) | $ | — | $ | (8,532,705 | ) | |||
| (a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
Effect of Derivative Investments for the six months ended February 28, 2014
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain (Loss) on Statement of Operations | ||||
| Forward Foreign Currency Contracts* | ||||
Realized Gain (Loss) | ||||
Currency Risk | $ | (5,455,502 | ) | |
Change in Unrealized Appreciation (Depreciation) | ||||
Currency Risk | (10,166,943 | ) | ||
Total | $ | (15,622,445 | ) | |
| * | The average notional value of forward foreign currency contracts outstanding during the period was $551,202,067. |
14 Invesco Growth and Income Fund
| Open Forward Foreign Currency Contracts at Period-End | ||||||||||||||||||||||||||
Settlement | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
| Deliver | Receive | |||||||||||||||||||||||||
03/21/14 | Bank of New York Mellon (The) | CAD | 73,542,382 | USD | 66,286,048 | $ | 66,385,980 | $ | (99,932 | ) | ||||||||||||||||
03/21/14 | State Street Bank & Trust Co. | CAD | 66,425,676 | USD | 59,912,850 | 59,961,800 | (48,950 | ) | ||||||||||||||||||
03/21/14 | Bank of New York Mellon (The) | CHF | 41,719,513 | USD | 46,652,032 | 47,448,815 | (796,783 | ) | ||||||||||||||||||
03/21/14 | State Street Bank & Trust Co. | CHF | 43,083,855 | USD | 48,161,902 | 49,000,521 | (838,619 | ) | ||||||||||||||||||
03/21/14 | Bank of New York Mellon (The) | EUR | 51,484,857 | USD | 70,397,304 | 71,065,413 | (668,109 | ) | ||||||||||||||||||
03/21/14 | State Street Bank & Trust Co. | EUR | 81,171,673 | USD | 110,990,087 | 112,042,624 | (1,052,537 | ) | ||||||||||||||||||
03/21/14 | Bank of New York Mellon (The) | GBP | 65,862,647 | USD | 108,011,448 | 110,271,788 | (2,260,340 | ) | ||||||||||||||||||
03/21/14 | State Street Bank & Trust Co. | GBP | 80,638,565 | USD | 132,243,215 | 135,010,650 | (2,767,435 | ) | ||||||||||||||||||
Total forward foreign currency contracts | $ | (8,532,705 | ) | |||||||||||||||||||||||
Currency Abbreviations:
| CAD | – Canadian Dollar | |
| CHF | – Swiss Franc | |
| EUR | – Euro | |
| GBP | – British Pound Sterling | |
| USD | – U.S. Dollar |
Offsetting Assets and Liabilities
Effective with the beginning of the Fund’s fiscal year, the Fund has adopted Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. This update is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Fund’s counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of February 28, 2014.
| Liabilities: | ||||||||||||||||||||||||
| Gross amounts presented in Consolidated | Gross amounts offset in Consolidated | Net amounts of liabilities presented in Consolidated | Collateral Pledged | |||||||||||||||||||||
| Counterparty | Statement of Assets & Liabilities | Statement of Assets & Liabilities | Statement of Assets and Liabilities | Financial Instruments | Cash | Net Amount | ||||||||||||||||||
Bank of New York Mellon (The) | $ | (3,825,164 | ) | $ | — | $ | (3,825,164 | ) | $ | — | $ | — | $ | (3,825,164 | ) | |||||||||
State Street Bank & Trust Co. | (4,707,541 | ) | — | (4,707,541 | ) | — | — | (4,707,541 | ) | |||||||||||||||
Total | $ | (8,532,705 | ) | $ | — | $ | (8,532,705 | ) | $ | — | $ | — | $ | (8,532,705 | ) | |||||||||
NOTE 5—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, 2014, the Fund engaged in securities purchases of $3,466,198.
NOTE 6—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $2,201.
15 Invesco Growth and Income Fund
NOTE 7—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 3,545,948 | $ | — | $ | 3,545,948 | ||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $1,223,456,498 and $1,327,408,263, 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 | $ | 2,662,157,961 | ||
Aggregate unrealized (depreciation) of investment securities | (91,808,406 | ) | ||
Net unrealized appreciation of investment securities | $ | 2,570,349,555 | ||
Cost of investments for tax purposes is $6,605,384,048.
16 Invesco Growth and Income Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 12,094,602 | $ | 317,822,775 | 21,889,645 | $ | 507,265,364 | ||||||||||
Class B | 37,092 | 971,217 | 80,985 | 1,873,907 | ||||||||||||
Class C | 631,744 | 16,545,199 | 893,335 | 20,882,198 | ||||||||||||
Class R | 889,748 | 23,629,341 | 1,604,065 | 37,088,413 | ||||||||||||
Class Y | 9,446,105 | 250,410,992 | 16,183,091 | 373,292,940 | ||||||||||||
Class R5 | 4,976,517 | 132,095,213 | 11,429,384 | 261,754,743 | ||||||||||||
Class R6(b) | 5,908,666 | 154,650,212 | 14,418,821 | 332,177,637 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 5,646,390 | 146,726,241 | 2,888,899 | 63,304,665 | ||||||||||||
Class B | 113,853 | 2,938,126 | 78,113 | 1,692,792 | ||||||||||||
Class C | 294,283 | 7,584,244 | 87,511 | 1,872,237 | ||||||||||||
Class R | 202,226 | 5,258,835 | 91,211 | 1,994,223 | ||||||||||||
Class Y | 2,275,123 | 59,146,297 | 1,250,788 | 27,518,735 | ||||||||||||
Class R5 | 974,391 | 25,350,913 | 539,320 | 11,863,653 | ||||||||||||
Class R6 | 452,926 | 11,784,092 | 97,673 | 2,246,832 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 493,430 | 13,133,008 | 1,358,676 | 30,970,994 | ||||||||||||
Class B | (496,884 | ) | (13,133,008 | ) | (1,368,129 | ) | (30,970,994 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (20,912,212 | ) | (552,301,488 | ) | (43,134,152 | ) | (976,137,549 | ) | ||||||||
Class B | (263,084 | ) | (6,921,684 | ) | (822,250 | ) | (18,457,407 | ) | ||||||||
Class C | (729,600 | ) | (19,116,858 | ) | (1,805,148 | ) | (40,311,395 | ) | ||||||||
Class R | (1,111,931 | ) | (29,434,152 | ) | (2,054,646 | ) | (46,926,619 | ) | ||||||||
Class Y | (10,125,837 | ) | (266,613,059 | ) | (17,592,305 | ) | (401,917,676 | ) | ||||||||
Class R5 | (3,486,291 | ) | (92,314,194 | ) | (17,151,492 | ) | (375,020,738 | ) | ||||||||
Class R6 | (1,156,214 | ) | (30,496,742 | ) | (1,080,798 | ) | (26,243,960 | ) | ||||||||
Net increase (decrease) in share activity | 6,155,043 | $ | 157,715,520 | (12,117,403 | ) | $ | (240,187,005 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and own, in the aggregate, 31% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
17 Invesco Growth and Income Fund
NOTE 12—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(b) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 24.92 | $ | 0.38 | (c) | $ | 2.81 | $ | 3.19 | $ | (0.19 | ) | $ | (0.62 | ) | $ | (0.81 | ) | $ | 27.30 | 12.98 | %(d) | $ | 5,148,276 | 0.82 | %(e) | 0.83 | %(e) | 2.91 | %(c)(e) | 15 | % | ||||||||||||||||||||||||
Year ended 08/31/13 | 20.48 | 0.31 | 4.47 | 4.78 | (0.34 | ) | — | (0.34 | ) | 24.92 | 23.57 | (d) | 4,766,860 | 0.81 | 0.82 | 1.37 | 29 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 18.01 | 0.32 | 2.42 | 2.74 | (0.27 | ) | — | (0.27 | ) | 20.48 | 15.33 | (d) | 4,266,135 | 0.83 | 0.84 | 1.66 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.06 | 0.24 | 1.91 | 2.15 | (0.20 | ) | — | (0.20 | ) | 18.01 | 13.37 | (d) | 4,149,537 | 0.83 | 0.84 | 1.23 | 23 | |||||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.19 | 0.18 | (1.13 | ) | (0.95 | ) | (0.18 | ) | — | (0.18 | ) | 16.06 | (5.60 | )(d) | 4,122,779 | 0.74 | (f) | 0.74 | (f) | 1.36 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Year ended 11/30/09 | 13.87 | 0.23 | 3.34 | 3.57 | (0.25 | ) | — | (0.25 | ) | 17.19 | 26.24 | (g) | 4,496,159 | 0.88 | 0.88 | 1.58 | 51 | |||||||||||||||||||||||||||||||||||||||
Year ended 11/30/08 | 22.72 | 0.33 | (7.86 | ) | (7.53 | ) | (0.37 | ) | (0.95 | ) | (1.32 | ) | 13.87 | (35.05 | )(g) | 4,416,052 | 0.79 | 0.79 | 1.78 | 42 | ||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 24.75 | 0.38 | (c) | 2.79 | 3.17 | (0.19 | ) | (0.62 | ) | (0.81 | ) | 27.11 | 12.98 | (d)(h) | 94,895 | 0.82 | (e)(h) | 0.83 | (e)(h) | 2.91 | (c)(e)(h) | 15 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.34 | 0.31 | 4.44 | 4.75 | (0.34 | ) | — | (0.34 | ) | 24.75 | 23.57 | (d)(h) | 101,723 | 0.81 | (h) | 0.82 | (h) | 1.37 | (h) | 29 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 17.88 | 0.31 | 2.41 | 2.72 | (0.26 | ) | — | (0.26 | ) | 20.34 | 15.37 | (d)(h) | 124,930 | 0.81 | (h) | 0.82 | (h) | 1.68 | (h) | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 15.93 | 0.23 | 1.90 | 2.13 | (0.18 | ) | — | (0.18 | ) | 17.88 | 13.36 | (d)(h) | 173,129 | 0.83 | (h) | 0.84 | (h) | 1.23 | (h) | 23 | ||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.05 | 0.16 | (1.12 | ) | (0.96 | ) | (0.16 | ) | — | (0.16 | ) | 15.93 | (5.69 | )(d)(h) | 231,193 | 0.89 | (f)(h) | 0.89 | (f)(h) | 1.21 | (f)(h) | 23 | ||||||||||||||||||||||||||||||||||
Year ended 11/30/09 | 13.76 | 0.22 | 3.32 | 3.54 | (0.25 | ) | — | (0.25 | ) | 17.05 | 26.32 | (i)(j) | 320,577 | 0.89 | (j) | 0.89 | (j) | 1.59 | (j) | 51 | ||||||||||||||||||||||||||||||||||||
Year ended 11/30/08 | 22.57 | 0.32 | (7.81 | ) | (7.49 | ) | (0.37 | ) | (0.95 | ) | (1.32 | ) | 13.76 | (35.09 | )(i)(j) | 365,277 | 0.84 | (j) | 0.84 | (j) | 1.72 | (j) | 42 | |||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 24.68 | 0.28 | (c) | 2.78 | 3.06 | (0.09 | ) | (0.62 | ) | (0.71 | ) | 27.03 | 12.55 | (d) | 322,310 | 1.57 | (e) | 1.58 | (e) | 2.16 | (c)(e) | 15 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.29 | 0.14 | 4.42 | 4.56 | (0.17 | ) | — | (0.17 | ) | 24.68 | 22.63 | (d) | 289,458 | 1.56 | 1.57 | 0.62 | 29 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 17.84 | 0.18 | 2.40 | 2.58 | (0.13 | ) | — | (0.13 | ) | 20.29 | 14.53 | (d)(k) | 254,679 | 1.55 | (k) | 1.56 | (k) | 0.94 | (k) | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 15.91 | 0.09 | 1.90 | 1.99 | (0.06 | ) | — | (0.06 | ) | 17.84 | 12.52 | (d)(k) | 258,606 | 1.57 | (k) | 1.58 | (k) | 0.49 | (k) | 23 | ||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.03 | 0.08 | (1.12 | ) | (1.04 | ) | (0.08 | ) | — | (0.08 | ) | 15.91 | (6.13 | )(d) | 269,051 | 1.49 | (f) | 1.49 | (f) | 0.61 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Year ended 11/30/09 | 13.74 | 0.12 | 3.32 | 3.44 | (0.15 | ) | — | (0.15 | ) | 17.03 | 25.36 | (j)(l) | 316,283 | 1.62 | (j) | 1.62 | (j) | 0.84 | (j) | 51 | ||||||||||||||||||||||||||||||||||||
Year ended 11/30/08 | 22.53 | 0.20 | (7.81 | ) | (7.61 | ) | (0.23 | ) | (0.95 | ) | (1.18 | ) | 13.74 | (35.54 | )(j)(l) | 301,306 | 1.51 | (j) | 1.51 | (j) | 1.06 | (j) | 42 | |||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 24.93 | 0.35 | (c) | 2.81 | 3.16 | (0.16 | ) | (0.62 | ) | (0.78 | ) | 27.31 | 12.83 | (d) | 186,425 | 1.07 | (e) | 1.08 | (e) | 2.66 | (c)(e) | 15 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.49 | 0.25 | 4.47 | 4.72 | (0.28 | ) | — | (0.28 | ) | 24.93 | 23.26 | (d) | 170,691 | 1.06 | 1.07 | 1.12 | 29 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 18.02 | 0.27 | 2.42 | 2.69 | (0.22 | ) | — | (0.22 | ) | 20.49 | 15.03 | (d) | 147,659 | 1.08 | 1.09 | 1.41 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.07 | 0.19 | 1.92 | 2.11 | (0.16 | ) | — | (0.16 | ) | 18.02 | 13.08 | (d) | 147,453 | 1.08 | 1.09 | 0.98 | 23 | |||||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.19 | 0.14 | (1.11 | ) | (0.97 | ) | (0.15 | ) | — | (0.15 | ) | 16.07 | (5.72 | )(d) | 122,188 | 0.99 | (f) | 0.99 | (f) | 1.11 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Year ended 11/30/09 | 13.87 | 0.18 | 3.35 | 3.53 | (0.21 | ) | — | (0.21 | ) | 17.19 | 26.00 | (m) | 107,371 | 1.13 | 1.13 | 1.29 | 51 | |||||||||||||||||||||||||||||||||||||||
Year ended 11/30/08 | 22.73 | 0.29 | (7.88 | ) | (7.59 | ) | (0.32 | ) | (0.95 | ) | (1.27 | ) | 13.87 | (35.25 | )(m) | 78,522 | 1.04 | 1.04 | 1.53 | 42 | ||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 24.94 | 0.41 | (c) | 2.81 | 3.22 | (0.22 | ) | (0.62 | ) | (0.84 | ) | 27.32 | 13.11 | (d) | 2,044,397 | 0.57 | (e) | 0.58 | (e) | 3.16 | (c)(e) | 15 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.50 | 0.37 | 4.47 | 4.84 | (0.40 | ) | — | (0.40 | ) | 24.94 | 23.86 | (d) | 1,826,646 | 0.56 | 0.57 | 1.62 | 29 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 18.03 | 0.36 | 2.42 | 2.78 | (0.31 | ) | — | (0.31 | ) | 20.50 | 15.60 | (d) | 1,504,586 | 0.58 | 0.59 | 1.91 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.08 | 0.28 | 1.92 | 2.20 | (0.25 | ) | — | (0.25 | ) | 18.03 | 13.64 | (d) | 1,544,968 | 0.58 | 0.59 | 1.48 | 23 | |||||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10 | 17.21 | 0.21 | (1.13 | ) | (0.92 | ) | (0.21 | ) | — | (0.21 | ) | 16.08 | (5.41 | )(d) | 1,206,652 | 0.49 | (f) | 0.49 | (f) | 1.61 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Year ended 11/30/09 | 13.88 | 0.26 | 3.35 | 3.61 | (0.28 | ) | — | (0.28 | ) | 17.21 | 26.60 | (n) | 1,095,692 | 0.63 | 0.63 | 1.81 | 51 | |||||||||||||||||||||||||||||||||||||||
Year ended 11/30/08 | 22.74 | 0.38 | (7.87 | ) | (7.49 | ) | (0.42 | ) | (0.95 | ) | (1.37 | ) | 13.88 | (34.90 | )(n) | 844,058 | 0.54 | 0.54 | 2.04 | 42 | ||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 24.97 | 0.43 | (c) | 2.81 | 3.24 | (0.24 | ) | (0.62 | ) | (0.86 | ) | 27.35 | 13.14 | (d) | 854,795 | 0.48 | (e) | 0.49 | (e) | 3.25 | (c)(e) | 15 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.53 | 0.39 | 4.47 | 4.86 | (0.42 | ) | — | (0.42 | ) | 24.97 | 23.96 | (d) | 718,816 | 0.47 | 0.48 | 1.71 | 29 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 18.05 | 0.39 | 2.43 | 2.82 | (0.34 | ) | — | (0.34 | ) | 20.53 | 15.80 | (d) | 697,346 | 0.46 | 0.47 | 2.03 | 25 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.08 | 0.32 | 1.92 | 2.24 | (0.27 | ) | — | (0.27 | ) | 18.05 | 13.87 | (d) | 307,338 | 0.39 | 0.40 | 1.67 | 23 | |||||||||||||||||||||||||||||||||||||||
Nine months ended 08/31/10(o) | 16.48 | 0.05 | (0.39 | ) | (0.34 | ) | (0.06 | ) | — | (0.06 | ) | 16.08 | (2.05 | )(d) | 41,861 | 0.45 | (f) | 0.45 | (f) | 1.31 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 24.97 | 0.44 | (c) | 2.82 | 3.26 | (0.25 | ) | (0.62 | ) | (0.87 | ) | 27.36 | 13.24 | (d) | 509,962 | 0.38 | (e) | 0.39 | (e) | 3.35 | (c)(e) | 15 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 21.23 | 0.43 | 3.66 | 4.09 | (0.35 | ) | — | (0.35 | ) | 24.97 | 19.45 | (d) | 335,549 | 0.38 | (f) | 0.39 | (f) | 1.80 | (f) | 29 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended August 31, 2011, the portfolio calculation excludes the value of securities purchased of $138,016,999 and sold of $13,000,923 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Fundamental Value Fund & Invesco Large Cap Relative Value Fund into the Fund. |
| (c) | Net investment income per share and the ratio of net investment income to average net assets include significant dividends received during the period. Net investment income per share and the ratio of net investment income to average net assets excluding the significant dividends are $0.17 and 1.27%, $0.17 and 1.27%, $0.07 and 0.52%, $0.14 and 1.02%, $0.20 and 1.52%, $0.22 and 1.61% and $0.23 and 1.71% for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (d) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $5,053,592, $101,124, $309,931, $180,474, $1,939,884, $797,968 and $411,920 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (f) | Annualized. |
| (g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (h) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.23%, 0.25% and 0.40% for the six months ended February 28, 2014, the years ended August 31, 2013, 2012 and 2011 and the nine months ended August 31, 2010, respectively. |
18 Invesco Growth and Income Fund
| (i) | 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. |
| (j) | 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%. |
| (k) | 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 0.97% and 0.99% for the years ended August 31, 2012 and 2011, respectively. |
| (l) | 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. |
| (m) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
| (n) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
| (o) | Commencement date of June 1, 2010 and September 24, 2012 for Class R5 and Class R6 shares, respectively. |
19 Invesco 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,129.80 | $ | 4.33 | $ | 1,020.73 | $ | 4.11 | 0.82 | % | ||||||||||||
| B | 1,000.00 | 1,129.80 | 4.33 | 1,020.73 | 4.11 | 0.82 | ||||||||||||||||||
| C | 1,000.00 | 1,125.50 | 8.27 | 1,017.01 | 7.85 | 1.57 | ||||||||||||||||||
| R | 1,000.00 | 1,128.30 | 5.65 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||
| Y | 1,000.00 | 1,131.10 | 3.01 | 1,021.97 | 2.86 | 0.57 | ||||||||||||||||||
| R5 | 1,000.00 | 1,131.40 | 2.54 | 1,022.41 | 2.41 | 0.48 | ||||||||||||||||||
| R6 | 1,000.00 | 1,132.40 | 2.01 | 1,022.91 | 1.91 | 0.38 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
20 Invesco Growth and Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | VK-GRI-SAR-1 | Invesco Distributors, Inc. |
| ||||
 | Semiannual Report to Shareholders
| February 28, 2014 | ||
| ||||
Invesco Pennsylvania Tax Free Income Fund
| ||||
| Nasdaq: | ||||
| A: VKMPX n B: VKPAX n C: VKPCX n 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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 5.45 | % | |||
| Class B Shares | 5.51 | ||||
| Class C Shares | 5.12 | ||||
| Class Y Shares | 5.64 | ||||
| S&P Municipal Bond Index‚ (Broad Market Index)* | 6.09 | ||||
| Barclays Municipal Bond Indexn (Former Broad Market Index) | 5.71 | ||||
| Barclays Pennsylvania Municipal Index¿ (Style-Specific Index) | 5.79 | ||||
| Lipper Pennsylvania Municipal Debt Funds Indexn (Peer Group Index)** | 6.14 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.; nLipper Inc.;
¿Barclays via FactSet Research Systems Inc.
| * | The Fund has elected to use the S&P Municipal Bond Index to represent its broad-based securities market benchmark rather than the Barclays Municipal Bond Index because the S&P Municipal Bond Index more closely reflects the performance of the broad US municipal bond market. |
| ** | The Fund has elected to use three benchmark indexes: the S&P Municipal Bond Index, the Barclays Pennsylvania Municipal Index and the Lipper Pennsylvania Municipal Debt Funds Index. The Lipper Pennsylvania Municipal Debt Funds Index is the peer group benchmark and is the proxy that most appropriately reflects the Fund’s investable universe. |
The S&P Municipal Bond Index is a broad, market value-weighted index that seeks to measure the performance of the US municipal bond market.
The Barclays Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.
The Barclays Pennsylvania Municipal Index is an unmanaged index considered representative of Pennsylvania investment-grade municipal bonds.
The Lipper Pennsylvania Municipal Debt Funds Index is an unmanaged index considered representative of funds that limit assets to those securities that are exempt from taxation in Pennsylvania.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Pennsylvania Tax Free Income Fund
Average Annual Total Returns | |||||
As of 2/28/14, including maximum applicable sales charges
|
| ||||
| Class A Shares | |||||
| Inception (5/1/87) | 5.64 | % | |||
| 10 Years | 2.87 | ||||
| 5 Years | 5.80 | ||||
| 1 Year | -7.56 | ||||
| Class B Shares | |||||
| Inception (5/3/93) | 4.09 | % | |||
| 10 Years | 2.94 | ||||
| 5 Years | 6.36 | ||||
| 1 Year | -8.03 | ||||
| Class C Shares | |||||
| Inception (8/13/93) | 3.50 | % | |||
| 10 Years | 2.56 | ||||
| 5 Years | 5.93 | ||||
| 1 Year | -5.04 | ||||
| Class Y Shares | |||||
| 10 Years | 3.43 | % | |||
| 5 Years | 6.94 | ||||
1 Year
|
| -3.15
|
| ||
Effective June 1, 2010, Class A, Class B and Class C shares of the predecessor fund, Van Kampen Pennsylvania Tax Free Income 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 (renamed Invesco 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 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. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of
| Average Annual Total Returns | |||||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | |||||
| Class A Shares | |||||
| Inception (5/1/87) | 5.53 | % | |||
| 10 Years | 2.70 | ||||
| 5 Years | 6.46 | ||||
| 1 Year | -10.13 | ||||
| Class B Shares | |||||
| Inception (5/3/93) | 3.93 | % | |||
| 10 Years | 2.73 | ||||
| 5 Years | 6.95 | ||||
| 1 Year | -10.68 | ||||
| Class C Shares | |||||
| Inception (8/13/93) | 3.34 | % | |||
| 10 Years | 2.39 | ||||
| 5 Years | 6.58 | ||||
| 1 Year | -7.78 | ||||
| Class Y Shares | |||||
| 10 Years | 3.25 | % | |||
| 5 Years | 7.59 | ||||
1 Year
|
| -5.89
|
| ||
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 1.03%, 1.03%, 1.78% and 0.78%, 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 4.25% 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.
3 Invesco Pennsylvania Tax Free Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional |
investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our |
investment leaders, market strategists, economists and retirement experts on the go.
Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Pennsylvania Tax Free Income Fund
Schedule of Investments
February 28, 2014
(Unaudited)
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
Municipal Obligations–102.06% | ||||||||||||||||
| Pennsylvania–96.79% | ||||||||||||||||
Allegheny (County of) Higher Education Building Authority (Chatham University); Series 2012 A, University RB | 5.00 | % | 09/01/35 | $ | 1,000 | $ | 992,830 | |||||||||
Allegheny (County of) Higher Education Building Authority (Duquesne University); |
| |||||||||||||||
Series 1998, Ref. University RB (INS–AMBAC)(a) | 5.50 | % | 03/01/20 | 1,750 | 2,049,722 | |||||||||||
Series 2011 A, University RB | 5.50 | % | 03/01/31 | 550 | 606,876 | |||||||||||
Allegheny (County of) Higher Education Building Authority (Robert Morris University); Series 2008 A, University RB | 6.00 | % | 10/15/38 | 1,000 | 1,014,180 | |||||||||||
Allegheny (County of) Hospital Development Authority (Ohio Valley General Hospital); Series 2005 A, RB | 5.00 | % | 04/01/25 | 1,600 | 1,433,904 | |||||||||||
Allegheny (County of) Hospital Development Authority (University of Pittsburgh Medical Center); Series 2009, RB | 5.63 | % | 08/15/39 | 1,250 | 1,386,550 | |||||||||||
Allegheny (County of) Industrial Development Authority (Residential Resources, Inc.); Series 2006, Lease RB | 5.10 | % | 09/01/26 | 980 | 960,919 | |||||||||||
Allegheny (County of) Redevelopment Authority (Pittsburgh Mills); Series 2004, Tax Allocation RB | 5.60 | % | 07/01/23 | 1,220 | 1,252,074 | |||||||||||
Allegheny (County of) Residential Finance Authority; Series 2006 TT, Single Family Mortgage RB (CEP–GNMA)(b) | 5.00 | % | 05/01/35 | 870 | 877,786 | |||||||||||
Allegheny (County of); Series 2008 C 61, Unlimited Tax GO Bonds (INS–AGC)(a) | 5.00 | % | 12/01/33 | 500 | 533,015 | |||||||||||
Allegheny Valley Joint School District; Series 2004 A, Unlimited Tax GO Bonds (INS-NATL)(a) | 5.00 | % | 11/01/28 | 1,500 | 1,537,800 | |||||||||||
Beaver (County of) Industrial Development Authority (FirstEnergy Nuclear Generation Corp.); Series 2008 A, Ref. PCR | 2.15 | % | 03/01/17 | 700 | 690,340 | |||||||||||
Beaver (County of) Industrial Development Authority (FirstEnergy Nuclear Generation Corp.); Series 2006 B, Ref. VRD PCR (LOC–Citibank, N.A.)(c)(d) | 0.04 | % | 03/19/14 | 500 | 500,000 | |||||||||||
Beaver (County of) Industrial Development Authority; Series 2008 A, Ref. PCR(e) | 2.70 | % | 04/02/18 | 230 | 231,373 | |||||||||||
Beaver (County of); Series 2009, Unlimited Tax GO Notes (INS–AGM)(a) | 5.55 | % | 11/15/31 | 1,390 | 1,536,756 | |||||||||||
Berks (County of) Industrial Development Authority (One Douglassville); Series 2007 A, Ref. RB(b) | 6.13 | % | 11/01/34 | 450 | 416,021 | |||||||||||
Berks (County of) Municipal Authority (Albright College); Series 2004, RB | 5.50 | % | 10/01/18 | 1,895 | 1,904,096 | |||||||||||
Berks (County of) Municipal Authority (Reading Hospital Medical Center); Series 2012 A, RB | 5.00 | % | 11/01/40 | 1,000 | 1,032,790 | |||||||||||
Bethlehem Area School District; Series 2010, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.25 | % | 01/15/26 | 1,000 | 1,091,820 | |||||||||||
Bucks (County of) Industrial Development Authority (Lutheran Community Telford Center); Series 2007, RB | 5.75 | % | 01/01/37 | 2,000 | 1,921,280 | |||||||||||
Central Bradford Progress Authority (Guthrie Healthcare System); Series 2011, RB | 5.38 | % | 12/01/41 | 1,100 | 1,159,048 | |||||||||||
Centre (County of) Hospital Authority (Mt. Nittany Medical Center); |
| |||||||||||||||
Series 2009, RB(e)(f) | 6.13 | % | 11/15/14 | 1,000 | 1,042,890 | |||||||||||
Series 2011, RB | 6.25 | % | 11/15/41 | 500 | 550,635 | |||||||||||
Chartiers Valley Industrial & Commercial Development Authority (Asbury Health Center); |
| |||||||||||||||
Series 2006, Ref. First Mortgage RB | 5.25 | % | 12/01/15 | 500 | 517,235 | |||||||||||
Series 2006, Ref. First Mortgage RB | 5.75 | % | 12/01/22 | 900 | 920,835 | |||||||||||
Chester (County of) Industrial Development Authority (University Student Housing, LLC at West Chester University of Pennsylvania); Series 2013, Student Housing RB | 5.00 | % | 08/01/45 | 250 | 229,998 | |||||||||||
Clairton (City of) Municipal Authority; Series 2012 B, RB | 5.00 | % | 12/01/42 | 1,000 | 996,270 | |||||||||||
Cumberland (County of) Municipal Authority (Asbury Pennsylvania Obligated Group); Series 2010, RB | 6.00 | % | 01/01/40 | 870 | 879,727 | |||||||||||
Cumberland (County of) Municipal Authority (Association of Independent Colleges & Universities of Pennsylvania Financing Program-Dickinson College); Series 2009, RB | 5.00 | % | 11/01/39 | 750 | 786,345 | |||||||||||
Cumberland (County of) Municipal Authority (Diakon Lutheran Ministries); Series 2007, RB | 5.00 | % | 01/01/36 | 1,000 | 1,003,610 | |||||||||||
Cumberland (County of) Municipal Authority (Messiah Village); Series 2008 A, RB | 5.63 | % | 07/01/28 | 1,000 | 1,028,560 | |||||||||||
Dauphin (County of) General Authority (Pinnacle Health System); Series 2009 A, Health System RB | 6.00 | % | 06/01/36 | 2,215 | 2,406,642 | |||||||||||
Dauphin (County of) General Authority (Riverfront Office); Series 1998, Office & Parking RB | 6.00 | % | 01/01/25 | 1,000 | 1,000,070 | |||||||||||
Delaware (County of) Authority (Cabrini College); Series 1999, College RB (INS–Radian)(a) | 5.75 | % | 07/01/23 | 220 | 220,271 | |||||||||||
Delaware (County of) Authority (Neumann College); Series 2008, College RB | 6.25 | % | 10/01/38 | 175 | 176,757 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Pennsylvania Tax Free Income Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Pennsylvania–(continued) | ||||||||||||||||
Delaware (County of) Industrial Development Authority (Aqua Pennsylvania, Inc.); Series 2005 A, Water Facilities RB (INS–NATL)(a)(b) | 5.00 | % | 11/01/38 | $ | 1,500 | $ | 1,516,590 | |||||||||
Delaware River Port Authority (Port District); |
| |||||||||||||||
Series 2012, Ref. RB | 5.00 | % | 01/01/25 | 540 | 573,653 | |||||||||||
Series 2012, Ref. RB | 5.00 | % | 01/01/27 | 535 | 556,282 | |||||||||||
Delaware River Port Authority; Series 2010 D, RB | 5.00 | % | 01/01/40 | 1,000 | 1,048,130 | |||||||||||
Delaware Valley Regional Financial Authority; |
| |||||||||||||||
Series 2002, RB | 5.75 | % | 07/01/17 | 3,535 | 3,974,153 | |||||||||||
Series 2002, RB | 5.75 | % | 07/01/32 | 1,000 | 1,102,650 | |||||||||||
Doylestown (City of) Hospital Authority; Series 2013 A, RB (INS–AGM)(a) | 5.00 | % | 07/01/24 | 1,000 | 1,092,760 | |||||||||||
East Hempfield (Township of) Industrial Development Authority (Student Services Inc. Student Housing); |
| |||||||||||||||
Series 2013, RB | 5.00 | % | 07/01/35 | 500 | 485,910 | |||||||||||
Series 2013, RB | 5.00 | % | 07/01/45 | 750 | 704,850 | |||||||||||
Erie (City of) Higher Education Building Authority (Mercyhurst College); |
| |||||||||||||||
Series 2004 B, Ref. College RB | 5.00 | % | 03/15/23 | 1,000 | 1,001,250 | |||||||||||
Series 2008, College RB | 5.50 | % | 03/15/38 | 500 | 513,620 | |||||||||||
Franklin (County of) Industrial Development Authority (Chambersburg Hospital); Series 2010, RB | 5.38 | % | 07/01/42 | 1,000 | 1,032,710 | |||||||||||
Geisinger Authority (Geisinger Health System Foundation); |
| |||||||||||||||
Series 2011 A-1, Health System RB | 5.13 | % | 06/01/41 | 500 | 523,070 | |||||||||||
Series 2011 C, VRD Health System RB(d) | 0.03 | % | 06/01/41 | 750 | 750,000 | |||||||||||
Lancaster (County of) Hospital Authority (Brethren Village); Series 2008 A, RB | 6.50 | % | 07/01/40 | 350 | 353,297 | |||||||||||
Lancaster (County of) Hospital Authority (Lancaster General Hospital); Series 2012, Health System RB | 5.00 | % | 07/01/42 | 1,000 | 1,029,670 | |||||||||||
Lehigh (County of) Authority; Series 2013 A, Water & Sewer RB | 5.00 | % | 12/01/38 | 930 | 967,451 | |||||||||||
Lehigh (County of) General Purpose Authority (Bible Fellowship Church Homes, Inc.); Series 2013, RB | 5.25 | % | 07/01/42 | 825 | 713,559 | |||||||||||
Lehigh (County of) General Purpose Authority (KidsPeace Obligated Group); Series 1998, RB(g) | 6.00 | % | 11/01/23 | 1,760 | 704,176 | |||||||||||
Lycoming (County of) Authority (Pennsylvania College of Technology); Series 2011, RB | 5.00 | % | 07/01/30 | 750 | 796,530 | |||||||||||
Lycoming (County of) Authority (Susquehanna Health System); Series 2009 A, Heath System RB | 5.75 | % | 07/01/39 | 1,250 | 1,298,125 | |||||||||||
Monroe (County of) Hospital Authority (Pocono Medical Center); Series 2007, RB | 5.13 | % | 01/01/37 | 1,500 | 1,522,260 | |||||||||||
Montgomery (County of) Higher Education & Health Authority (Abington Memorial Hospital Obligated Group); Series 2012, RB | 5.00 | % | 06/01/31 | 1,400 | 1,469,412 | |||||||||||
Montgomery (County of) Industrial Development Authority (ACTS Retirement-Life Communities, Inc.); |
| |||||||||||||||
Series 2009 A-1, RB | 6.25 | % | 11/15/29 | 1,000 | 1,112,220 | |||||||||||
Series 2012, Ref. RB | 5.00 | % | 11/15/28 | 900 | 925,569 | |||||||||||
Montgomery (County of) Industrial Development Authority (Philadelphia Presbytery Homes, Inc.); Series 2010, RB | 6.63 | % | 12/01/30 | 1,500 | 1,645,410 | |||||||||||
Montgomery (County of) Industrial Development Authority (Whitemarsh Community); Series 2008, Mortgage RB | 7.00 | % | 02/01/36 | 500 | 526,755 | |||||||||||
Montgomery (County of) Industrial Development Authority (Whitemarsh Continuing Care); Series 2005, Mortgage RB | 6.13 | % | 02/01/28 | 1,100 | 1,110,208 | |||||||||||
Northampton (County of) General Purpose Authority (Lehigh University); Series 2009, Higher Education RB | 5.50 | % | 11/15/33 | 1,000 | 1,088,290 | |||||||||||
Northampton (County of) General Purpose Authority (St. Luke’s Hospital); |
| |||||||||||||||
Series 2008 A, Hospital RB | 5.50 | % | 08/15/35 | 1,000 | 1,023,770 | |||||||||||
Series 2010 C, Hospital RB(e) | 4.50 | % | 08/15/16 | 1,000 | 1,070,980 | |||||||||||
Northampton (County of) Industrial Development Authority (Morningstar Senior Living, Inc.); Series 2012, RB | 5.00 | % | 07/01/32 | 535 | 496,715 | |||||||||||
Pennsylvania (State of) Economic Development Financing Agency (Forum Place); Series 2012, Governmental Lease RB | 5.00 | % | 03/01/34 | 500 | 522,980 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Amtrak); Series 2012 A, Ref. Exempt Facilities RB(b) | 5.00 | % | 11/01/41 | 1,200 | 1,232,640 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Philadelphia Biosolids Facility); Series 2009, Sewage Sludge Disposal RB | 6.25 | % | 01/01/32 | 1,000 | 1,015,060 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Shippingport); Series 2006 A, Exempt Facilities RB(e) | 2.55 | % | 12/03/18 | 1,500 | 1,502,610 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Pennsylvania Tax Free Income Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Pennsylvania–(continued) | ||||||||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Waste Management, Inc.); Series 2005 A, Solid Waste Disposal RB(b) | 5.10 | % | 10/01/27 | $ | 1,300 | $ | 1,348,087 | |||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (AICUP Financing Program-Del Valley College); Series 2012, RB | 5.00 | % | 11/01/42 | 535 | 502,445 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Edinboro University Foundation); | ||||||||||||||||
Series 2008, RB | 5.88 | % | 07/01/38 | 750 | 750,360 | |||||||||||
Series 2010, RB | 6.00 | % | 07/01/43 | 500 | 502,595 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (La Salle University); Series 2012, RB | 5.00 | % | 05/01/42 | 1,180 | 1,188,590 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Shippensburg University Student Services); Series 2012, RB | 5.00 | % | 10/01/35 | 1,300 | 1,254,994 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (St. Joseph’s University); | ||||||||||||||||
Series 2010 A, RB | 5.00 | % | 11/01/34 | 500 | 519,650 | |||||||||||
Series 2010 A, RB | 5.00 | % | 11/01/40 | 500 | 512,940 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Temple University); First Series 2012, RB | 5.00 | % | 04/01/42 | 1,170 | 1,227,470 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Trustees of the University of Pennsylvania); Series 2005 C, RB(h) | 5.00 | % | 07/15/38 | 4,700 | 4,918,550 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (University Properties, Inc.); Series 2010, Student Housing RB | 5.00 | % | 07/01/42 | 1,000 | 919,160 | |||||||||||
Pennsylvania (State of) Turnpike Commission; | ||||||||||||||||
Series 2008 B-1, Sub. RB | 5.50 | % | 06/01/33 | 1,000 | 1,093,580 | |||||||||||
Series 2009 C, Sub. Conv. CAB RB (INS–AGM)(a)(i) | 6.25 | % | 06/01/33 | 2,000 | 2,101,160 | |||||||||||
Series 2009 E, Sub. Conv. CAB RB(i) | 6.38 | % | 12/01/38 | 1,435 | 1,380,700 | |||||||||||
Series 2010 A 1, Motor License Fund Special RB | 5.00 | % | 12/01/38 | 500 | 522,190 | |||||||||||
Series 2010 A-2, Motor License Fund Special Conv. CAB RB(i) | 5.50 | % | 12/01/34 | 1,000 | 971,940 | |||||||||||
Series 2010 B 2, Conv. CAB RB(i) | 5.00 | % | 12/01/30 | 625 | 604,500 | |||||||||||
Series 2010 B 2, Conv. CAB RB(i) | 5.13 | % | 12/01/35 | 500 | 476,510 | |||||||||||
Philadelphia (City of) Hospitals & Higher Education Facilities Authority (Children’s Hospital of Philadelphia); Series 2002 B, VRD RB(d) | 0.03 | % | 07/01/25 | 700 | 700,000 | |||||||||||
Philadelphia (City of) Hospitals & Higher Education Facilities Authority (Jefferson Health System); Series 2010 B, RB | 5.00 | % | 05/15/40 | 1,500 | 1,538,940 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Architecture & Design Charter High School); Series 2013, RB | 6.13 | % | 03/15/43 | 585 | 531,812 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Discovery Charter School); Series 2012, RB | 6.25 | % | 04/01/42 | 1,000 | 1,000,560 | |||||||||||
Philadelphia (City of) Industrial Development Authority (First Philadelphia Preparatory Charter School); Series 2014 A, RB | 7.00 | % | 06/15/33 | 875 | 881,886 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Independence Charter School); Series 2007 A, RB | 5.50 | % | 09/15/37 | 1,235 | 1,137,213 | |||||||||||
Philadelphia (City of) Industrial Development Authority (MaST Charter School); Series 2010, RB | 6.00 | % | 08/01/35 | 700 | 745,346 | |||||||||||
Philadelphia (City of) Industrial Development Authority (New Foundations Charter School); Series 2012, RB | 6.63 | % | 12/15/41 | 750 | 768,848 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Performing Arts Charter School); Series 2013, RB(j) | 6.50 | % | 06/15/33 | 945 | 952,144 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Please Touch Museum); Series 2006, RB(g) | 5.25 | % | 09/01/31 | 1,250 | 487,475 | |||||||||||
Philadelphia (City of) Industrial Development Authority; Series 1990, Commercial Development RB(b) | 7.75 | % | 12/01/17 | 2,505 | 2,511,939 | |||||||||||
Philadelphia (City of); | ||||||||||||||||
Ninth Series 2010, Gas Works RB | 5.25 | % | 08/01/40 | 1,000 | 1,028,760 | |||||||||||
Series 2005 A, Airport RB (INS–NATL)(a)(b) | 5.00 | % | 06/15/25 | 1,000 | 1,047,080 | |||||||||||
Series 2009 A, Ref. Unlimited Tax GO Bonds (INS–AGC)(a) | 5.50 | % | 08/01/24 | 1,000 | 1,123,260 | |||||||||||
Series 2010 C, Water & Wastewater RB (INS–AGM)(a) | 5.00 | % | 08/01/35 | 1,250 | 1,316,187 | |||||||||||
Series 2011, Unlimited Tax GO Bonds | 6.00 | % | 08/01/36 | 500 | 555,400 | |||||||||||
Philadelphia School District; Series 2008 E, Limited Tax GO Bonds (INS–BHAC)(a) | 5.13 | % | 09/01/23 | 1,500 | 1,714,365 | |||||||||||
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 | 1,064,000 | |||||||||||
Pittsburgh (City of) Water & Sewer Authority; Series 2013 A, Ref. First Lien RB | 5.00 | % | 09/01/31 | 500 | 539,430 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Pennsylvania Tax Free Income Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Pennsylvania–(continued) | ||||||||||||||||
Radnor Township School District; | ||||||||||||||||
Series 2005 B, Unlimited Tax GO Bonds(e)(f) | 5.00 | % | 08/15/15 | $ | 435 | $ | 465,572 | |||||||||
Series 2005 B, Unlimited Tax GO Bonds(e)(f) | 5.00 | % | 08/15/15 | 130 | 139,136 | |||||||||||
Series 2005 B, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 02/15/35 | 435 | 456,080 | |||||||||||
State Public School Building Authority (Harrisburg School District); Series 2009 A, RB (INS–AGC)(a) | 5.00 | % | 11/15/33 | 1,000 | 1,035,390 | |||||||||||
Susquehanna Area Regional Airport Authority; Series 2012 A, Airport System RB(b) | 5.00 | % | 01/01/27 | 750 | 772,643 | |||||||||||
Union (County of) Hospital Authority (Evangelical Community Hospital); Series 2011, Ref. & Improvement RB | 7.00 | % | 08/01/41 | 1,000 | 1,146,760 | |||||||||||
Washington (County of) Industrial Development Authority (Washington Jefferson College); Series 2010, College RB | 5.25 | % | 11/01/30 | 500 | 534,290 | |||||||||||
Washington (County of) Redevelopment Authority (Victory Centre Tanger Outlet Development); Series 2006 A, Tax Allocation RB(e) | 5.45 | % | 07/01/17 | 1,425 | 1,414,227 | |||||||||||
Westmoreland (County of) Industrial Development Authority (Redstone Presbyterian Senior Care Obligated Group); | ||||||||||||||||
Series 2005 A, Retirement Community RB(e)(f) | 5.75 | % | 01/01/16 | 2,500 | 2,738,600 | |||||||||||
Series 2005 A, Retirement Community RB(e)(f) | 5.88 | % | 01/01/16 | 900 | 987,948 | |||||||||||
Westmoreland (County of) Municipal Authority; Series 2013, RB | 5.00 | % | 08/15/31 | 750 | 802,800 | |||||||||||
Wilkes-Barre (City of) Finance Authority (University of Scranton); Series 2010, RB | 5.00 | % | 11/01/40 | 850 | 881,407 | |||||||||||
| 123,707,259 | ||||||||||||||||
| Guam–3.18% | ||||||||||||||||
Guam (Territory of) (Section 30); Series 2009 A, Limited Obligation RB | 5.75 | % | 12/01/34 | 1,250 | 1,324,812 | |||||||||||
Guam (Territory of) Power Authority; | ||||||||||||||||
Series 2010 A, RB | 5.50 | % | 10/01/40 | 410 | 421,185 | |||||||||||
Series 2012 A, Ref. RB | 5.00 | % | 10/01/34 | 520 | 518,981 | |||||||||||
Guam (Territory of) Waterworks Authority; Series 2010, Water & Wastewater System RB | 5.63 | % | 07/01/40 | 1,000 | 1,008,660 | |||||||||||
Guam (Territory of); Series 2011 A, Business Privilege Tax RB | 5.13 | % | 01/01/42 | 785 | 797,607 | |||||||||||
| 4,071,245 | ||||||||||||||||
| Virgin Islands–1.05% | ||||||||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 750 | 828,368 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note); Series 2010 A, Sr. Lien RB | 5.00 | % | 10/01/29 | 500 | 513,100 | |||||||||||
| 1,341,468 | ||||||||||||||||
| Puerto Rico–1.04% | ||||||||||||||||
Puerto Rico (Commonwealth of) Infrastructure Financing Authority; Series 2005 C, Ref. Special Tax RB (INS–AMBAC)(a) | 5.50 | % | 07/01/28 | 600 | 491,934 | |||||||||||
Puerto Rico Sales Tax Financing Corp.; | ||||||||||||||||
First Subseries 2010, Conv. CAB RB(i) | 6.25 | % | 08/01/33 | 1,065 | 578,050 | |||||||||||
Series 2011 C, RB | 5.25 | % | 08/01/40 | 310 | 260,341 | |||||||||||
| 1,330,325 | ||||||||||||||||
TOTAL INVESTMENTS(k)–102.06% (Cost $127,500,216) | 130,450,297 | |||||||||||||||
FLOATING RATE NOTE OBLIGATIONS–(2.45)% | ||||||||||||||||
Note with an interest and fee rate of 0.56% at 02/28/14 and contractual maturity of collateral of 07/15/38 (See Note 1K)(l) | (3,135,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–0.39% |
| 496,537 | ||||||||||||||
NET ASSETS–100.00% |
| $ | 127,811,834 | |||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Pennsylvania Tax Free Income Fund
Investment Abbreviations:
| AGC | – Assured Guaranty Corp. | |
| AGM | – Assured Guaranty Municipal Corp. | |
| AMBAC | – American Municipal Bond Assurance Corp. | |
| BHAC | – Berkshire Hathaway Assurance Corp. | |
| CAB | – Capital Appreciation Bonds | |
| CEP | – Credit Enhancement Provider | |
| Conv. | – Convertible | |
| GNMA | – Government National Mortgage Association | |
| GO | – General Obligation | |
| INS | – Insurer | |
| LOC | – Letter of Credit | |
| NATL | – National Public Finance Guarantee Corp. | |
| PCR | – Pollution Control Revenue Bonds | |
| Radian | – Radian Asset Assurance, Inc. | |
| 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) | Security subject to the alternative minimum tax. |
| (c) | Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary. |
| (d) | 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, 2014. |
| (e) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
| (f) | Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral. |
| (g) | 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, 2014 was $1,191,651, which represented less than 1% of the Fund’s Net Assets. |
| (h) | Underlying security related to Dealer Trusts entered into by the Fund. See Note 1K. |
| (i) | Convertible CAB. The interest rate shown represents the coupon rate at which the bond will accrue at a specified future date. |
| (j) | Security purchased or received in transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at February 28, 2014 represented less than 1% of the Fund’s Net Assets. |
| (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. |
| Entity | Percentage | |||
Assured Guaranty Municipal Corp. | 6.6 | % | ||
| (l) | Floating rate note obligations related to securities held. The interest and fee rates shown reflect the rates in effect at February 28, 2014. At February 28, 2014, the Fund’s investments with a value of $4,918,550 are held by Dealer Trusts and serve as collateral for the $3,135,000 in the floating rate note obligations outstanding at that date. |
Portfolio Composition
By credit sector, based on Total Investments
As of February 28, 2014
Revenue Bonds | 87.8 | % | ||
General Obligation Bonds | 6.6 | |||
Advanced Refunded | 4.1 | |||
Other | 1.5 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Pennsylvania Tax Free Income Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: | ||||
Investments, at value (Cost $127,500,216) | $ | 130,450,297 | ||
Receivable for: | ||||
Fund shares sold | 27,996 | |||
Interest | 1,538,849 | |||
Investment for trustee deferred compensation and retirement plans | 29,301 | |||
Other assets | 3,175 | |||
Total assets | 132,049,618 | |||
Liabilities: | ||||
Floating rate note obligations | 3,135,000 | |||
Payable for: | ||||
Fund shares reacquired | 159,543 | |||
Amount due custodian | 684,942 | |||
Dividends | 153,670 | |||
Accrued fees to affiliates | 41,065 | |||
Accrued trustees’ and officers’ fees and benefits | 3,210 | |||
Accrued other operating expenses | 28,156 | |||
Trustee deferred compensation and retirement plans | 32,198 | |||
Total liabilities | 4,237,784 | |||
Net assets applicable to shares outstanding | $ | 127,811,834 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 133,950,408 | ||
Undistributed net investment income | 316,604 | |||
Undistributed net realized gain (loss) | (9,405,259 | ) | ||
Net unrealized appreciation | 2,950,081 | |||
| $ | 127,811,834 | |||
Net Assets: | ||||
Class A | $ | 113,868,879 | ||
Class B | $ | 1,521,799 | ||
Class C | $ | 10,061,818 | ||
Class Y | $ | 2,359,338 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 7,151,180 | |||
Class B | 95,371 | |||
Class C | 630,900 | |||
Class Y | 148,040 | |||
Class A: | ||||
Net asset value per share | $ | 15.92 | ||
Maximum offering price per share | ||||
(Net asset value of $15.92 ¸ 95.75%) | $ | 16.63 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 15.96 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 15.95 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 15.94 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Pennsylvania Tax Free Income Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Interest | $ | 3,247,593 | ||
Expenses: | ||||
Advisory fees | 386,959 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 2,581 | |||
Distribution fees: | ||||
Class A | 142,917 | |||
Class B | 2,008 | |||
Class C | 52,049 | |||
Interest, facilities and maintenance fees | 8,933 | |||
Transfer agent fees | 39,256 | |||
Trustees’ and officers’ fees and benefits | 16,105 | |||
Other | 51,338 | |||
Total expenses | 726,941 | |||
Net investment income | 2,520,652 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from investment securities | (2,245,330 | ) | ||
Change in net unrealized appreciation of investment securities | 6,611,768 | |||
Net realized and unrealized gain | 4,366,438 | |||
Net increase in net assets resulting from operations | $ | 6,887,090 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Pennsylvania Tax Free Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 2,520,652 | $ | 5,512,379 | ||||
Net realized gain (loss) | (2,245,330 | ) | (50,752 | ) | ||||
Change in net unrealized appreciation (depreciation) | 6,611,768 | (14,712,745 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 6,887,090 | (9,251,118 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (2,233,235 | ) | (5,070,822 | ) | ||||
Class B | (31,334 | ) | (82,884 | ) | ||||
Class C | (164,003 | ) | (363,194 | ) | ||||
Class Y | (50,872 | ) | (89,080 | ) | ||||
Total distributions from net investment income | (2,479,444 | ) | (5,605,980 | ) | ||||
Share transactions–net: | ||||||||
Class A | (8,988,646 | ) | (5,082,518 | ) | ||||
Class B | (250,675 | ) | (517,802 | ) | ||||
Class C | (1,128,355 | ) | 1,080,821 | |||||
Class Y | (281,889 | ) | 1,535,814 | |||||
Net increase (decrease) in net assets resulting from share transactions | (10,649,565 | ) | (2,983,685 | ) | ||||
Net increase (decrease) in net assets | (6,241,919 | ) | (17,840,783 | ) | ||||
Net assets: | ||||||||
Beginning of period | 134,053,753 | 151,894,536 | ||||||
End of period (includes undistributed net investment income of $316,604 and $275,396, respectively) | $ | 127,811,834 | $ | 134,053,753 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco 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 twelve 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 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 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 to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to 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, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
12 Invesco Pennsylvania Tax Free Income Fund
Securities for which market quotations either are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. 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.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. 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 declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable 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. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
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. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
| G. | 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. |
| H. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
13 Invesco Pennsylvania Tax Free Income Fund
| I. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| J. | 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. | 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 interests 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. |
Recently published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”) prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, “covered funds.” These rules may preclude banking entities from sponsoring and/or providing services for existing TOB trust programs. There can be no assurances that TOB trusts can be restructured substantially similar to their present form, that new sponsors of TOB trusts would begin providing these services, or that alternative forms of leverage will be available to the Fund in order to maintain current levels of leverage. Any alternative forms of leverage may be less advantageous to the Fund, and may adversely affect the Fund’s net asset value, distribution rate and ability to achieve its investment objective. The ultimate impact of these rules on the TOBs market and the municipal market generally is not yet certain.
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 (the “1933 Act”), 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.
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||
First $500 million | 0.60% | |||
Over $500 million | 0.50% | |||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the
14 Invesco Pennsylvania Tax Free Income Fund
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, 2014, to waive advisory fees and/or reimburse expenses 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 1.50%, 2.25%, 2.25% and 1.25% 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 total annual fund operating expenses after fee waiver 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, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, the expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). 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, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $1,479 in front-end sales commissions from the sale of Class A shares and $892 and $28 from Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
As of February 28, 2014, all of the securities in this Fund were valued based on Level 2 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 4—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former
15 Invesco Pennsylvania Tax Free Income Fund
Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 5—Cash Balances and Borrowings
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company (“SSB”), the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
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 fee rate related to inverse floating rate note obligations during the six months ended February 28, 2014 were $3,135,000 and 0.57%, 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 GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2017 | $ | 5,564,499 | $ | — | $ | 5,564,499 | ||||||
August 31, 2018 | 1,085,533 | — | 1,085,533 | |||||||||
| $ | 6,650,032 | $ | — | $ | 6,650,032 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2014 was $2,110,964 and $11,048,868, 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 | $ | 6,822,332 | ||
Aggregate unrealized (depreciation) of investment securities | (3,682,795 | ) | ||
Net unrealized appreciation of investment securities | $ | 3,139,537 | ||
Cost of investments for tax purposes is $127,310,760.
16 Invesco Pennsylvania Tax Free Income Fund
NOTE 8—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 131,785 | $ | 2,049,868 | 450,184 | $ | 7,639,044 | ||||||||||
Class B | — | — | 5,503 | 93,969 | ||||||||||||
Class C | 23,534 | 366,239 | 184,917 | 3,140,149 | ||||||||||||
Class Y | 20,518 | 319,933 | 101,607 | 1,723,234 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 87,176 | 1,364,430 | 180,058 | 3,021,259 | ||||||||||||
Class B | 931 | 14,606 | 2,552 | 43,042 | ||||||||||||
Class C | 6,694 | 104,935 | 14,232 | 238,987 | ||||||||||||
Class Y | 1,602 | 25,100 | 2,657 | 44,358 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 10,599 | 165,656 | 22,964 | 390,112 | ||||||||||||
Class B | (10,573 | ) | (165,656 | ) | (22,918 | ) | (390,112 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (808,189 | ) | (12,568,600 | ) | (964,811 | ) | (16,132,933 | ) | ||||||||
Class B | (6,370 | ) | (99,625 | ) | (15,957 | ) | (264,701 | ) | ||||||||
Class C | (102,596 | ) | (1,599,529 | ) | (141,067 | ) | (2,298,315 | ) | ||||||||
Class Y | (40,454 | ) | (626,922 | ) | (13,921 | ) | (231,778 | ) | ||||||||
Net increase (decrease) in share activity | (685,343 | ) | $ | (10,649,565 | ) | (194,000 | ) | $ | (2,983,685 | ) | ||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 54% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
17 Invesco Pennsylvania 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.
| Net asset value, beginning of period | Net investment income(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Supplemental ratio of expenses to average net assets (excluding interest, facilities and maintenance fees(b) | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 15.39 | $ | 0.31 | $ | 0.52 | $ | 0.83 | $ | (0.30 | ) | $ | — | $ | (0.30 | ) | $ | 15.92 | 5.45 | %(d) | $ | 113,869 | 1.07 | %(e) | 1.06 | %(e) | 3.97 | %(e) | 2 | % | ||||||||||||||||||||||||||
Year ended 08/31/13 | 17.05 | 0.63 | (1.65 | ) | (1.02 | ) | (0.64 | ) | — | (0.64 | ) | 15.39 | (6.24 | )(d) | 118,936 | 1.03 | 1.01 | 3.72 | 17 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 15.85 | 0.68 | 1.19 | 1.87 | (0.67 | ) | — | (0.67 | ) | 17.05 | 12.04 | (d) | 137,146 | 1.03 | 1.01 | 4.13 | 11 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.29 | 0.70 | (0.47 | ) | 0.23 | (0.67 | ) | — | (0.67 | ) | 15.85 | 1.58 | (d) | 130,344 | 1.02 | 1.00 | 4.47 | 13 | ||||||||||||||||||||||||||||||||||||||
Period ended 08/31/10 | 15.93 | 0.66 | 0.38 | 1.04 | (0.68 | ) | — | (0.68 | ) | 16.29 | 6.74 | (d) | 141,406 | 1.14 | (f) | 1.10 | (f) | 4.54 | (f) | 15 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/09 | 14.76 | 0.73 | 1.18 | 1.91 | (0.74 | ) | — | (0.74 | ) | 15.93 | 13.60 | (g) | 141,191 | 1.21 | 1.13 | 5.05 | 17 | |||||||||||||||||||||||||||||||||||||||
Year ended 09/30/08 | 16.84 | 0.72 | (2.03 | ) | (1.31 | ) | (0.73 | ) | (0.04 | ) | (0.77 | ) | 14.76 | (8.02 | )(g) | 137,435 | 1.32 | 1.06 | 4.43 | 25 | ||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 15.42 | 0.31 | 0.53 | 0.84 | (0.30 | ) | — | (0.30 | ) | 15.96 | 5.51 | (d)(h) | 1,522 | 1.07 | (e)(h) | 1.06 | (e)(h) | 3.97 | (e)(h) | 2 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.09 | 0.63 | (1.66 | ) | (1.03 | ) | (0.64 | ) | — | (0.64 | ) | 15.42 | (6.28 | )(d)(h) | 1,717 | 1.03 | (h) | 1.01 | (h) | 3.72 | (h) | 17 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 15.86 | 0.71 | 1.19 | 1.90 | (0.67 | ) | — | (0.67 | ) | 17.09 | 12.22 | (d) | 2,430 | 0.86 | 0.84 | 4.30 | 11 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.23 | 0.70 | (0.45 | ) | 0.25 | (0.62 | ) | — | (0.62 | ) | 15.86 | 1.68 | (d)(h) | 3,062 | 1.02 | (h) | 1.00 | (h) | 4.47 | (h) | 13 | |||||||||||||||||||||||||||||||||||
Period ended 08/31/10 | 15.89 | 0.59 | 0.38 | 0.97 | (0.63 | ) | — | (0.63 | ) | 16.23 | 6.27 | (d)(h) | 4,682 | 1.64 | (f)(h) | 1.60 | (f)(h) | 4.05 | (f)(h) | 15 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/09 | 14.72 | 0.68 | 1.18 | 1.86 | (0.69 | ) | — | (0.69 | ) | 15.89 | 13.21 | (i)(j) | 5,364 | 1.57 | (j) | 1.49 | (j) | 4.70 | (j) | 17 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/08 | 16.78 | 0.63 | (2.01 | ) | (1.38 | ) | (0.64 | ) | (0.04 | ) | (0.68 | ) | 14.72 | (8.46 | )(i)(j) | 6,161 | 1.81 | (j) | 1.55 | (j) | 3.94 | (j) | 25 | |||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 15.41 | 0.25 | 0.53 | 0.78 | (0.24 | ) | — | (0.24 | ) | 15.95 | 5.12 | (d) | 10,062 | 1.82 | (e) | 1.81 | (e) | 3.22 | (e) | 2 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.08 | 0.50 | (1.66 | ) | (1.16 | ) | (0.51 | ) | — | (0.51 | ) | 15.41 | (7.00 | )(d) | 10,838 | 1.78 | 1.76 | 2.97 | 17 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 15.88 | 0.56 | 1.19 | 1.75 | (0.55 | ) | — | (0.55 | ) | 17.08 | 11.19 | (d) | 11,020 | 1.78 | 1.76 | 3.38 | 11 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.31 | 0.58 | (0.45 | ) | 0.13 | (0.56 | ) | — | (0.56 | ) | 15.88 | 0.89 | (d) | 9,670 | 1.77 | 1.75 | 3.72 | 13 | ||||||||||||||||||||||||||||||||||||||
Period ended 08/31/10 | 15.95 | 0.55 | 0.38 | 0.93 | (0.57 | ) | — | (0.57 | ) | 16.31 | 6.01 | (d) | 11,083 | 1.89 | (f) | 1.85 | (f) | 3.79 | (f) | 15 | ||||||||||||||||||||||||||||||||||||
Year ended 09/30/09 | 14.78 | 0.62 | 1.18 | 1.80 | (0.63 | ) | — | (0.63 | ) | 15.95 | 12.74 | (k) | 6,776 | 1.96 | 1.89 | 4.28 | 17 | |||||||||||||||||||||||||||||||||||||||
Year ended 09/30/08 | 16.86 | 0.59 | (2.02 | ) | (1.43 | ) | (0.61 | ) | (0.04 | ) | (0.65 | ) | 14.78 | (8.71 | )(k) | 4,546 | 2.07 | 1.81 | 3.68 | 25 | ||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 15.40 | 0.33 | 0.53 | 0.86 | (0.32 | ) | — | (0.32 | ) | 15.94 | 5.64 | (d) | 2,359 | 0.82 | (e) | 0.81 | (e) | 4.22 | (e) | 2 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.06 | 0.67 | (1.65 | ) | (0.98 | ) | (0.68 | ) | — | (0.68 | ) | 15.40 | (6.00 | )(d) | 2,562 | 0.78 | 0.76 | 3.97 | 17 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 15.86 | 0.73 | 1.18 | 1.91 | (0.71 | ) | — | (0.71 | ) | 17.06 | 12.31 | (d) | 1,298 | 0.78 | 0.76 | 4.38 | 11 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 16.30 | 0.74 | (0.47 | ) | 0.27 | (0.71 | ) | — | (0.71 | ) | 15.86 | 1.84 | (d) | 179 | 0.77 | 0.75 | 4.72 | 13 | ||||||||||||||||||||||||||||||||||||||
Period ended 08/31/10(l) | 15.94 | 0.19 | 0.36 | 0.55 | (0.19 | ) | — | (0.19 | ) | 16.30 | 3.49 | (d) | 167 | 0.85 | (f) | 0.81 | (f) | 4.75 | (f) | 15 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | For the years ended September 30, 2009 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) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $115,466, $1,620, $10,496 and $2,474 for Class A, Class B, Class C and Class Y shares, respectively. |
| (f) | Annualized. |
| (g) | 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. |
| (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 0.25%, 0.25%, 0.25% and 0.74% for the six months ended February 28, 2014, the years ended August 31, 2013 and August 31, 2011 and the period ended August 31, 2010, respectively. |
| (i) | 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. |
| (j) | 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%. |
| (k) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (l) | Commencement date of June 1, 2010. |
18 Invesco 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, 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, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,054.50 | $ | 5.45 | $ | 1,019.49 | $ | 5.36 | 1.07 | % | ||||||||||||
| B | 1,000.00 | 1,055.10 | 5.45 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||
| C | 1,000.00 | 1,051.20 | 9.26 | 1,015.77 | 9.10 | 1.82 | ||||||||||||||||||
| Y | 1,000.00 | 1,056.40 | 4.18 | 1,020.73 | 4.11 | 0.82 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
19 Invesco Pennsylvania Tax Free Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
| SEC file numbers: 811-09913 and 333-36074 | VK-PTFI-SAR-1 | Invesco Distributors, Inc. |
| ||||
 | Semiannual Report to Shareholders
| February 28, 2014 | ||
Invesco Small Cap Discovery Fund | ||||
Nasdaq: | ||||
| A:VASCX ¡ B: VBSCX ¡ C: VCSCX ¡ Y: VISCX ¡ R5: VESCX ¡ R6: VFSCX | ||||
| ||||
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, 8/31/13 to 2/28/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | 17.64 | % | |||
| Class B Shares | 17.53 | ||||
| Class C Shares | 17.16 | ||||
| Class Y Shares | 17.70 | ||||
| Class R5 Shares | 17.76 | ||||
| Class R6 Shares | 17.84 | ||||
| S&P 500 Index‚ (Broad Market Index) | 15.07 | ||||
| Russell 2000 Growth Indexn (Style-Specific Index) | 19.20 | ||||
| Lipper Small-Cap Growth Funds Index¿ (Peer Group Index) | 17.64 |
Source(s): ‚Invesco, S&P-Dow Jones via FactSet Research Systems Inc.;
nInvesco, Russell via FactSet Research Systems Inc.; ¿Lipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US 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 Lipper Small-Cap Growth Funds Index is an unmanaged index considered representative of small-cap growth funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Small Cap Discovery Fund
Average Annual Total Returns |
| |||
| As of 2/28/14, including maximum applicable sales charges | ||||
| Class A Shares | ||||
| Inception (11/27/00) | 4.48 | % | ||
| 10 Years | 9.66 | |||
| 5 Years | 20.87 | |||
| 1 Year | 26.45 | |||
| Class B Shares | ||||
| Inception (11/27/00) | 4.47 | % | ||
| 10 Years | 9.85 | |||
| 5 Years | 22.01 | |||
| 1 Year | 28.69 | |||
| Class C Shares | ||||
| Inception (11/27/00) | 4.15 | % | ||
| 10 Years | 9.46 | |||
| 5 Years | 21.37 | |||
| 1 Year | 31.73 | |||
| Class Y Shares | ||||
| Inception (2/2/06) | 8.49 | % | ||
| 5 Years | 22.56 | |||
| 1 Year | 33.99 | |||
| Class R5 Shares | ||||
| 10 Years | 10.33 | % | ||
| 5 Years | 22.37 | |||
| 1 Year | 34.16 | |||
| Class R6 Shares | ||||
| 10 Years | 10.34 | % | ||
| 5 Years | 22.39 | |||
| 1 Year | 34.25 | |||
Average Annual Total Returns |
| |||
| As of 12/31/13, the most recent calendar quarter end, including maximum applicable sales charges | ||||
| Class A Shares | ||||
| Inception (11/27/00) | 4.25 | % | ||
| 10 Years | 9.92 | |||
| 5 Years | 16.36 | |||
| 1 Year | 29.69 | |||
| Class B Shares | ||||
| Inception (11/27/00) | 4.24 | % | ||
| 10 Years | 10.10 | |||
| 5 Years | 17.36 | |||
| 1 Year | 32.21 | |||
| Class C Shares | ||||
| Inception (11/27/00) | 3.93 | % | ||
| 10 Years | 9.73 | |||
| 5 Years | 16.80 | |||
| 1 Year | 35.22 | |||
| Class Y Shares | ||||
| Inception (2/2/06) | 8.18 | % | ||
| 5 Years | 17.96 | |||
| 1 Year | 37.74 | |||
| Class R5 Shares | ||||
| 10 Years | 10.59 | % | ||
| 5 Years | 17.79 | |||
| 1 Year | 37.80 | |||
| Class R6 Shares | ||||
| 10 Years | 10.60 | % | ||
| 5 Years | 17.81 | |||
| 1 Year | 37.90 | |||
Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund, Van Kampen Small Cap Growth 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 (renamed Invesco Small Cap Discovery Fund). Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Small Cap Discovery Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on September 24, 2012. Performance shown prior to that date is that of the Fund’s and 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.
Class R6 shares incepted on September 24, 2012. Performance shown prior to that date is that of the Fund’s and 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. 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 Y, Class R5 and Class R6 shares was 1.33%, 1.33%, 2.08%, 1.08%, 0.94% and 0.84%, 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 Y, Class R5 and Class R6 shares was 1.34%, 1.34%, 2.09%, 1.09%, 0.95% and 0.85%, 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
| 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, 2014. See current prospectus for more information. |
3 Invesco Small Cap Discovery Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can |
access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Small Cap Discovery Fund
Schedule of Investments(a)
February 28, 2014
(Unaudited)
| Shares | Value | |||||||
Common Stocks–97.63% |
| |||||||
| Aerospace & Defense–1.27% | ||||||||
TASER International, Inc.(b) | 666,548 | $ | 12,817,718 | |||||
| Airlines–0.71% | ||||||||
Alaska Air Group, Inc. | 82,277 | 7,128,479 | ||||||
| Apparel Retail–1.29% | ||||||||
DSW Inc.–Class A | 167,507 | 6,445,670 | ||||||
Genesco Inc.(b) | 88,629 | 6,580,703 | ||||||
| 13,026,373 | ||||||||
| Apparel, Accessories & Luxury Goods–1.03% | ||||||||
Tumi Holdings Inc.(b) | 234,618 | 5,199,135 | ||||||
Under Armour, Inc.–Class A(b)(c) | 46,087 | 5,214,744 | ||||||
| 10,413,879 | ||||||||
| Application Software–6.58% | ||||||||
Aspen Technology, Inc.(b) | 291,319 | 13,677,427 | ||||||
Bottomline Technologies (de), Inc.(b) | 186,403 | 6,652,723 | ||||||
Cadence Design Systems, Inc.(b) | 564,258 | 8,650,075 | ||||||
Guidewire Software Inc.(b) | 228,526 | 12,251,279 | ||||||
Manhattan Associates, Inc.(b) | 274,897 | 10,415,847 | ||||||
PTC Inc.(b) | 141,158 | 5,548,921 | ||||||
Qlik Technologies Inc.(b) | 296,376 | 9,039,468 | ||||||
| 66,235,740 | ||||||||
| Asset Management & Custody Banks–0.86% | ||||||||
Affiliated Managers Group, Inc.(b) | 46,274 | 8,701,826 | ||||||
| Auto Parts & Equipment–2.16% | ||||||||
Tenneco Inc.(b) | 206,958 | 12,467,150 | ||||||
TRW Automotive Holdings Corp.(b) | 112,567 | 9,266,515 | ||||||
| 21,733,665 | ||||||||
| Biotechnology–5.86% | ||||||||
BioMarin Pharmaceutical Inc.(b) | 109,965 | 8,907,165 | ||||||
Celldex Therapeutics Inc.(b) | 80,624 | 2,355,833 | ||||||
Clovis Oncology Inc.(b) | 59,557 | 4,741,929 | ||||||
Cubist Pharmaceuticals, Inc.(b) | 157,089 | 12,491,717 | ||||||
Intercept Pharmaceuticals Inc.(b) | 9,418 | 3,866,089 | ||||||
Medivation Inc.(b)(c) | 138,248 | 9,941,414 | ||||||
NPS Pharmaceuticals, Inc.(b) | 337,144 | 11,793,297 | ||||||
TESARO, Inc.(b) | 149,690 | 4,941,267 | ||||||
| 59,038,711 | ||||||||
| Broadcasting–0.62% | ||||||||
Nexstar Broadcasting Group, Inc.–Class A | 145,471 | 6,208,702 | ||||||
| Building Products–3.60% | ||||||||
A.O. Smith Corp. | 256,458 | 12,745,963 | ||||||
Lennox International Inc. | 150,149 | 13,795,690 | ||||||
Trex Co., Inc.(b) | 123,777 | 9,681,837 | ||||||
| 36,223,490 | ||||||||
| Shares | Value | |||||||
| Commodity Chemicals–0.77% | ||||||||
Methanex Corp. (Canada) | 109,807 | $ | 7,722,726 | |||||
| Communications Equipment–0.64% | ||||||||
Aruba Networks, Inc.(b) | 315,444 | 6,469,756 | ||||||
| Construction & Engineering–2.17% | ||||||||
Foster Wheeler AG (Switzerland)(b) | 320,405 | 10,291,409 | ||||||
MasTec Inc.(b) | 281,291 | 11,516,053 | ||||||
| 21,807,462 | ||||||||
| Construction & Farm Machinery & Heavy Trucks–1.10% | ||||||||
Manitowoc Co., Inc. (The)(c) | 356,767 | 11,038,371 | ||||||
| Consumer Electronics–1.01% | ||||||||
Harman International Industries, Inc. | 97,226 | 10,182,479 | ||||||
| Data Processing & Outsourced Services–4.22% | ||||||||
Cardtronics, Inc.(b) | 302,826 | 12,270,510 | ||||||
Euronet Worldwide, Inc.(b) | 279,581 | 10,696,769 | ||||||
Jack Henry & Associates, Inc. | 129,568 | 7,531,788 | ||||||
MAXIMUS, Inc. | 251,412 | 12,014,979 | ||||||
| 42,514,046 | ||||||||
| Electronic Components–1.08% | ||||||||
Belden Inc. | 151,164 | 10,903,459 | ||||||
| Electronic Equipment & Instruments–0.69% | ||||||||
Cognex Corp.(b) | 185,899 | 7,000,956 | ||||||
| Electronic Manufacturing Services–0.53% | ||||||||
IPG Photonics Corp.(b)(c) | 74,026 | 5,312,846 | ||||||
| Environmental & Facilities Services–1.28% | ||||||||
Clean Harbors, Inc.(b) | 144,531 | 6,830,535 | ||||||
Waste Connections, Inc. | 139,592 | 6,040,146 | ||||||
| 12,870,681 | ||||||||
| Footwear–0.85% | ||||||||
Steven Madden, Ltd.(b) | 235,846 | 8,596,587 | ||||||
| General Merchandise Stores–0.94% | ||||||||
Tuesday Morning Corp.(b) | 606,930 | 9,492,385 | ||||||
| Health Care Equipment–3.73% | ||||||||
DexCom Inc.(b) | 110,085 | 4,964,833 | ||||||
Insulet Corp.(b) | 231,468 | 10,973,898 | ||||||
Sirona Dental Systems, Inc.(b) | 124,710 | 8,787,067 | ||||||
Thoratec Corp.(b) | 166,382 | 6,179,427 | ||||||
Wright Medical Group, Inc.(b) | 208,545 | 6,635,902 | ||||||
| 37,541,127 | ||||||||
| Health Care Facilities–1.69% | ||||||||
Acadia Healthcare Co., Inc.(b) | 168,175 | 8,314,572 | ||||||
Tenet Healthcare Corp.(b) | 197,423 | 8,710,303 | ||||||
| 17,024,875 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Small Cap Discovery Fund
| Shares | Value | |||||||
| Health Care Services–2.62% | ||||||||
MEDNAX, Inc.(b) | 150,032 | $ | 9,124,946 | |||||
Premier Inc.–Class A(b) | 201,884 | 6,753,020 | ||||||
Team Health Holdings, Inc.(b) | 232,994 | 10,489,390 | ||||||
| 26,367,356 | ||||||||
| Health Care Supplies–0.64% | ||||||||
Endologix, Inc.(b) | 479,151 | 6,468,538 | ||||||
| Home Furnishings–0.59% | ||||||||
La-Z-Boy Inc. | 232,156 | 5,929,264 | ||||||
| Homebuilding–0.59% | ||||||||
Taylor Morrison Home Corp.–Class A(b) | 235,246 | 5,909,380 | ||||||
| Homefurnishing Retail–0.58% | ||||||||
Restoration Hardware Holdings Inc.(b) | 86,334 | 5,846,538 | ||||||
| Housewares & Specialties–0.74% | ||||||||
Jarden Corp.(b) | 120,565 | 7,411,131 | ||||||
| Human Resource & Employment Services–1.02% | ||||||||
TrueBlue, Inc.(b) | 361,050 | 10,282,704 | ||||||
| Industrial Conglomerates–1.27% | ||||||||
Carlisle Cos. Inc. | 160,736 | 12,749,580 | ||||||
| Industrial Machinery–3.61% | ||||||||
Actuant Corp.–Class A | 145,408 | 5,098,004 | ||||||
EnPro Industries, Inc.(b) | 120,236 | 8,612,505 | ||||||
ITT Corp. | 250,871 | 11,013,237 | ||||||
TriMas Corp.(b) | 88,260 | 2,966,418 | ||||||
Woodward Inc. | 198,981 | 8,673,582 | ||||||
| 36,363,746 | ||||||||
| Internet Software & Services–4.44% | ||||||||
CoStar Group Inc.(b) | 49,816 | 10,015,009 | ||||||
Dealertrack Technologies Inc.(b) | 238,330 | 12,886,503 | ||||||
Marketo, Inc.(b) | 181,159 | 7,427,519 | ||||||
Web.com Group Inc.(b) | 300,207 | 10,942,545 | ||||||
Yelp Inc.(b) | 37,014 | 3,494,862 | ||||||
| 44,766,438 | ||||||||
| Investment Banking & Brokerage–2.00% | ||||||||
Evercore Partners Inc.–Class A | 190,115 | 10,577,999 | ||||||
Stifel Financial Corp.(b) | 199,873 | 9,611,892 | ||||||
| 20,189,891 | ||||||||
| IT Consulting & Other Services–1.11% | ||||||||
Acxiom Corp.(b) | 174,594 | 6,500,135 | ||||||
InterXion Holding N.V. (Netherlands)(b) | 196,047 | 4,703,167 | ||||||
| 11,203,302 | ||||||||
| Leisure Products–1.07% | ||||||||
Brunswick Corp. | 239,644 | 10,733,655 | ||||||
| Life Sciences Tools & Services–3.68% | ||||||||
Bruker Corp.(b) | 422,445 | 9,606,399 | ||||||
Fluidigm Corp.(b) | 193,231 | 9,052,873 | ||||||
PAREXEL International Corp.(b) | 184,283 | 9,872,040 | ||||||
| Shares | Value | |||||||
| Life Sciences Tools & Services–(continued) | ||||||||
Techne Corp. | 96,395 | $ | 8,563,732 | |||||
| 37,095,044 | ||||||||
| Marine–0.67% | ||||||||
Kirby Corp.(b) | 64,175 | 6,713,347 | ||||||
| Metal & Glass Containers–0.17% | ||||||||
Greif Inc.–Class A | 34,524 | 1,728,271 | ||||||
| Movies & Entertainment–2.11% | ||||||||
Cinemark Holdings, Inc. | 361,121 | 10,624,180 | ||||||
Lions Gate Entertainment Corp.(c) | 345,017 | 10,609,273 | ||||||
| 21,233,453 | ||||||||
| Office Services & Supplies–1.85% | ||||||||
Herman Miller, Inc. | 231,928 | 6,535,731 | ||||||
Steelcase Inc.–Class A | 811,323 | 12,064,373 | ||||||
| 18,600,104 | ||||||||
| Oil & Gas Equipment & Services–0.65% | ||||||||
Dril-Quip, Inc.(b) | 60,992 | 6,560,300 | ||||||
| Oil & Gas Exploration & Production–2.85% | ||||||||
Gulfport Energy Corp.(b) | 159,610 | 10,550,221 | ||||||
Laredo Petroleum Inc.(b) | 240,252 | 6,268,175 | ||||||
PDC Energy, Inc.(b) | 190,519 | 11,836,945 | ||||||
| 28,655,341 | ||||||||
| Oil & Gas Refining & Marketing–0.57% | ||||||||
Delek US Holdings, Inc. | 207,068 | 5,748,208 | ||||||
| Packaged Foods & Meats–3.18% | ||||||||
Annie’s, Inc.(b) | 176,474 | 6,614,246 | ||||||
B&G Foods Inc. | 222,888 | 6,677,724 | ||||||
TreeHouse Foods, Inc.(b) | 91,933 | 6,551,146 | ||||||
WhiteWave Foods Co.–Class A(b) | 429,541 | 12,156,010 | ||||||
| 31,999,126 | ||||||||
| Pharmaceuticals–1.03% | ||||||||
Mallinckrodt PLC (b) | 153,876 | 10,415,866 | ||||||
| Regional Banks–3.33% | ||||||||
East West Bancorp, Inc. | 305,268 | 10,895,015 | ||||||
Signature Bank(b) | 84,781 | 11,100,376 | ||||||
SVB Financial Group(b) | 91,505 | 11,521,395 | ||||||
| 33,516,786 | ||||||||
| Restaurants–0.86% | ||||||||
Papa John’s International, Inc. | 170,437 | 8,675,243 | ||||||
| Semiconductor Equipment–1.12% | ||||||||
Teradyne, Inc.(c) | 555,836 | 11,272,354 | ||||||
| Semiconductors–1.05% | ||||||||
Cavium Inc.(b) | 126,450 | 5,327,339 | ||||||
Silicon Laboratories Inc.(b) | 101,858 | 5,293,560 | ||||||
| 10,620,899 | ||||||||
| Specialized Consumer Services–0.31% | ||||||||
LifeLock, Inc.(b) | 155,069 | 3,087,424 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Small Cap Discovery Fund
| Shares | Value | |||||||
| Specialty Chemicals–2.68% | ||||||||
Cytec Industries Inc. | 99,743 | $ | 9,442,670 | |||||
PolyOne Corp. | 229,659 | 8,612,213 | ||||||
Rockwood Holdings Inc. | 113,671 | 8,966,368 | ||||||
| 27,021,251 | ||||||||
| Specialty Stores–0.78% | ||||||||
Container Store Group, Inc. (The)(b)(c) | 86,264 | 3,089,114 | ||||||
Tractor Supply Co. | 67,472 | 4,760,824 | ||||||
| 7,849,938 | ||||||||
| Steel–0.80% | ||||||||
Commercial Metals Co. | 416,698 | 8,063,106 | ||||||
| Systems Software–2.66% | ||||||||
CommVault Systems, Inc.(b) | 95,145 | 6,553,588 | ||||||
Infoblox, Inc.(b) | 167,607 | 3,868,370 | ||||||
MICROS Systems, Inc.(b) | 92,448 | 5,131,788 | ||||||
Proofpoint, Inc.(b) | 271,698 | 11,261,882 | ||||||
| 26,815,628 | ||||||||
| Trading Companies & Distributors–1.28% | ||||||||
MRC Global Inc.(b) | 204,363 | 5,256,216 | ||||||
WESCO International, Inc.(b)(c) | 88,972 | 7,670,276 | ||||||
| 12,926,492 | ||||||||
| Shares | Value | |||||||
| Trucking–1.04% | ||||||||
Knight Transportation, Inc. | 122,734 | $ | 2,636,327 | |||||
Werner Enterprises, Inc. | 303,565 | 7,847,155 | ||||||
| 10,483,482 | ||||||||
Total Common Stocks |
| 983,309,525 | ||||||
Money Market Funds–3.41% |
| |||||||
Liquid Assets Portfolio–Institutional Class(d) | 17,149,455 | 17,149,455 | ||||||
Premier Portfolio–Institutional Class(d) | 17,149,455 | 17,149,455 | ||||||
Total Money Market Funds |
| 34,298,910 | ||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–101.04% (Cost $708,643,502) |
| 1,017,608,435 | ||||||
Investments Purchased with Cash Collateral from Securities on Loan |
| |||||||
Money Market Funds–3.03% |
| |||||||
Liquid Assets Portfolio–Institutional Class (Cost $30,565,735)(d)(e) | 30,565,735 | 30,565,735 | ||||||
TOTAL INVESTMENTS–104.07% |
| 1,048,174,170 | ||||||
OTHER ASSETS LESS LIABILITIES–(4.07)% |
| (41,035,596 | ) | |||||
NET ASSETS–100.00% |
| $ | 1,007,138,574 | |||||
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, 2014. |
| (d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
| (e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I. The following table presents the Fund’s gross and net amount of assets available for offset by the Fund as of February 28, 2014. |
| Counterparty | Gross Amount of Securities on Loan at Value | Cash Collateral Received for Securities Loaned* | Net Amount | |||||||||
Brown Brothers Harriman | $ | 29,438,095 | $ | (29,438,095 | ) | $ | — | |||||
| * | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2014
Industrials | 22.9 | % | ||
Information Technology | 20.8 | |||
Health Care | 19.3 | |||
Consumer Discretionary | 15.5 | |||
Financials | 7.4 | |||
Materials | 4.4 | |||
Energy | 4.1 | |||
Consumer Staples | 3.2 | |||
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 Small Cap Discovery Fund
Statement of Assets and Liabilities
February 28, 2014
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $674,344,592)* | $ | 983,309,525 | ||
Investments in affiliated money market funds, at value and cost | 64,864,645 | |||
Total investments, at value (Cost $739,209,237) | 1,048,174,170 | |||
Receivable for: | ||||
Investments sold | 20,112,852 | |||
Fund shares sold | 1,563,512 | |||
Dividends | 363,575 | |||
Investment for trustee deferred compensation and retirement plans | 98,451 | |||
Other assets | 51,882 | |||
Total assets | 1,070,364,442 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 29,228,213 | |||
Fund shares reacquired | 2,525,075 | |||
Collateral upon return of securities loaned | 30,565,735 | |||
Accrued fees to affiliates | 704,948 | |||
Accrued trustees’ and officers’ fees and benefits | 4,545 | |||
Accrued other operating expenses | 79,822 | |||
Trustee deferred compensation and retirement plans | 117,530 | |||
Total liabilities | 63,225,868 | |||
Net assets applicable to shares outstanding | $ | 1,007,138,574 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 673,663,446 | ||
Undistributed net investment income (loss) | (8,692,277 | ) | ||
Undistributed net realized gain | 33,202,472 | |||
Net unrealized appreciation | 308,964,933 | |||
| $ | 1,007,138,574 | |||
Net Assets: |
| |||
Class A | $ | 618,191,954 | ||
Class B | $ | 12,698,356 | ||
Class C | $ | 62,864,346 | ||
Class Y | $ | 180,911,695 | ||
Class R5 | $ | 53,136,531 | ||
Class R6 | $ | 79,335,692 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 50,277,928 | |||
Class B | 1,136,766 | |||
Class C | 5,910,843 | |||
Class Y | 14,284,625 | |||
Class R5 | 4,186,502 | |||
Class R6 | 6,245,597 | |||
Class A: | ||||
Net asset value and offering price per share | $ | 12.30 | ||
Maximum offering price per share | ||||
(Net asset value of $12.30 ¸ 94.50%) | $ | 13.02 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.17 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.64 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 12.66 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 12.69 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 12.70 | ||
| * | At February 28, 2014, securities with an aggregate value of $29,438,095 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Small Cap Discovery Fund
Statement of Operations
For the six months ended February 28, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $12,617) | $ | 2,116,654 | ||
Dividends from affiliated money market funds (includes securities lending income of $178,634) | 187,215 | |||
Total investment income | 2,303,869 | |||
Expenses: | ||||
Advisory fees | 3,674,130 | |||
Administrative services fees | 121,269 | |||
Custodian fees | 14,068 | |||
Distribution fees: | ||||
Class A | 725,401 | |||
Class B | 16,008 | |||
Class C | 290,447 | |||
Transfer agent fees — A, B, C and Y | 897,386 | |||
Transfer agent fees — R5 | 24,019 | |||
Transfer agent fees — R6 | 370 | |||
Trustees’ and officers’ fees and benefits | 35,796 | |||
Other | 114,977 | |||
Total expenses | 5,913,871 | |||
Less: Fees waived and expense offset arrangement(s) | (28,245 | ) | ||
Net expenses | 5,885,626 | |||
Net investment income (loss) | (3,581,757 | ) | ||
Realized and unrealized gain from: | ||||
Net realized gain from investment securities | 68,379,961 | |||
Change in net unrealized appreciation of investment securities | 88,279,911 | |||
Net realized and unrealized gain | 156,659,872 | |||
Net increase in net assets resulting from operations | $ | 153,078,115 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Small Cap Discovery Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2014 and the year ended August 31, 2013
(Unaudited)
| February 28, 2014 | August 31, 2013 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (3,581,757 | ) | $ | (5,883,310 | ) | ||
Net realized gain | 68,379,961 | 129,642,296 | ||||||
Change in net unrealized appreciation | 88,279,911 | 67,156,020 | ||||||
Net increase in net assets resulting from operations | 153,078,115 | 190,915,006 | ||||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (83,192,368 | ) | (58,971,398 | ) | ||||
Class B | (1,952,149 | ) | (1,402,434 | ) | ||||
Class C | (9,359,746 | ) | (5,257,156 | ) | ||||
Class Y | (24,205,240 | ) | (19,373,899 | ) | ||||
Class R5 | (6,651,766 | ) | (981 | ) | ||||
Class R6 | (10,227,636 | ) | (981 | ) | ||||
Total distributions from net realized gains | (135,588,905 | ) | (85,006,849 | ) | ||||
Share transactions–net: | ||||||||
Class A | 66,738,818 | (135,546,440 | ) | |||||
Class B | 11,913 | (2,685,853 | ) | |||||
Class C | 9,524,638 | (469,868 | ) | |||||
Class Y | 13,768,821 | (68,806,533 | ) | |||||
Class R5 | 7,953,559 | 43,871,511 | ||||||
Class R6 | 9,026,058 | 64,674,752 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 107,023,807 | (98,962,431 | ) | |||||
Net increase in net assets | 124,513,017 | 6,945,726 | ||||||
Net assets: | ||||||||
Beginning of period | 882,625,557 | 875,679,831 | ||||||
End of period (includes undistributed net investment income (loss) of $(8,692,277) and $(5,110,520), respectively) | $ | 1,007,138,574 | $ | 882,625,557 | ||||
Notes to Financial Statements
February 28, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Small Cap Discovery 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 twelve 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 capital appreciation.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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
10 Invesco Small Cap Discovery Fund
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund invests in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| 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 Small Cap Discovery Fund
| D. | Distributions — Distributions from income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
First $500 million | 0 | .80% | ||||
Next $500 million | 0 | .75% | ||||
Over $1 billion | 0 | .70% | ||||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2014, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 1.75%, 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 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, including litigation expenses; and (5) expenses
12 Invesco Small Cap Discovery Fund
that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2014. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least December 31, 2014, 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, 2014, the Adviser waived advisory fees of $27,806.
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, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2014, the expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). 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, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended February 28, 2014, IDI advised the Fund that IDI retained $74,615 in front-end sales commissions from the sale of Class A shares and $68, $2,617 and $757 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2014, the Fund incurred $9,596 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available 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. |
As of February 28, 2014, all of the securities in this Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 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, 2014, the Fund engaged in securities purchases of $183,285.
13 Invesco Small Cap Discovery 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 used by the transfer agent for clearing shareholder transactions. For the six months ended February 28, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $439.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2013.
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, 2014 was $370,007,882 and $390,270,487, 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 | $ | 313,969,267 | ||
Aggregate unrealized (depreciation) of investment securities | (7,677,543 | ) | ||
Net unrealized appreciation of investment securities | $ | 306,291,724 | ||
Cost of investments for tax purposes is $741,882,446.
14 Invesco Small Cap Discovery Fund
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2014(a) | Year ended August 31, 2013 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 6,375,459 | $ | 80,045,335 | 10,723,043 | $ | 120,331,339 | ||||||||||
Class B | 32,296 | 365,560 | 30,854 | 327,642 | ||||||||||||
Class C | 755,989 | 8,229,550 | 681,254 | 6,809,246 | ||||||||||||
Class Y | 1,938,382 | 24,808,976 | 4,691,321 | 53,193,049 | ||||||||||||
Class R5(b) | 301,846 | 3,879,286 | 3,527,315 | 44,000,899 | ||||||||||||
Class R6(b) | 233,869 | 2,982,009 | 5,622,923 | 66,633,393 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 7,095,938 | 80,255,054 | 5,757,455 | 56,653,360 | ||||||||||||
Class B | 182,436 | 1,873,622 | 145,907 | 1,323,375 | ||||||||||||
Class C | 906,196 | 8,880,723 | 566,705 | 4,975,669 | ||||||||||||
Class Y | 2,050,361 | 23,866,200 | 1,902,498 | 19,139,132 | ||||||||||||
Class R5 | 570,337 | 6,650,122 | — | — | ||||||||||||
Class R6 | 876,263 | 10,225,992 | — | — | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 92,084 | 1,148,690 | 203,114 | 2,258,894 | ||||||||||||
Class B | (100,742 | ) | (1,148,690 | ) | (219,824 | ) | (2,258,894 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (7,611,693 | ) | (94,710,261 | ) | (28,300,197 | ) | (314,790,033 | ) | ||||||||
Class B | (93,242 | ) | (1,078,579 | ) | (204,268 | ) | (2,077,976 | ) | ||||||||
Class C | (697,081 | ) | (7,585,635 | ) | (1,238,776 | ) | (12,254,783 | ) | ||||||||
Class Y | (2,745,076 | ) | (34,906,355 | ) | (12,205,730 | ) | (141,138,714 | ) | ||||||||
Class R5 | (202,518 | ) | (2,575,849 | ) | (10,478 | ) | (129,388 | ) | ||||||||
Class R6 | (328,026 | ) | (4,181,943 | ) | (159,432 | ) | (1,958,641 | ) | ||||||||
Net increase (decrease) in share activity | 9,633,078 | $ | 107,023,807 | (8,486,316 | ) | $ | (98,962,431 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 42% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| (b) | Commencement date of September 24, 2012. |
15 Invesco Small Cap Discovery Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Distributions from net realized gains | Net asset value, end of period | Total return | Net assets, end of period (000’s omitted) | Ratio of with fee waivers | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(b) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | $ | 12.20 | $ | (0.05 | ) | $ | 2.04 | $ | 1.99 | $ | (1.89 | ) | $ | 12.30 | 17.64 | %(c) | $ | 618,192 | 1.29 | %(d) | 1.30 | %(d) | (0.81 | )%(d) | 40 | % | ||||||||||||||||||||||
Year ended 08/31/13 | 10.85 | (0.08 | ) | 2.56 | 2.48 | (1.13 | ) | 12.20 | 25.31 | (c) | 540,979 | 1.32 | 1.33 | (0.72 | ) | 70 | ||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.56 | (0.08 | ) | 1.47 | 1.39 | (1.10 | ) | 10.85 | (e) | 14.33 | (c) | 607,073 | 1.38 | 1.43 | (0.80 | ) | 78 | |||||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.74 | (0.11 | ) | 1.93 | 1.82 | — | 10.56 | (e) | 20.82 | (c) | 820,988 | 1.38 | 1.42 | (1.01 | ) | 114 | ||||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 9.62 | (0.04 | ) | (0.84 | ) | (0.88 | ) | — | 8.74 | (e) | (9.15 | )(c) | 691,456 | 1.34 | (f) | 1.34 | (f) | (1.04 | )(f) | 63 | ||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.93 | (0.09 | ) | 2.78 | 2.69 | — | 9.62 | (e) | 38.82 | (g) | 748,998 | 1.39 | 1.39 | (1.04 | ) | 234 | ||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 10.15 | (0.09 | ) | (3.13 | ) | (3.22 | ) | — | 6.93 | (e) | (31.72 | )(g) | 402,611 | 1.40 | 1.40 | (1.00 | ) | 219 | ||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 11.25 | (0.04 | ) | 1.85 | 1.81 | (1.89 | ) | 11.17 | 17.53 | (c)(h) | 12,698 | 1.29 | (d)(h) | 1.30 | (d)(h) | (0.81 | )(d)(h) | 40 | % | |||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.09 | (0.07 | ) | 2.36 | 2.29 | (1.13 | ) | 11.25 | 25.34 | (c)(h) | 12,554 | 1.32 | (h) | 1.33 | (h) | (0.72 | )(h) | 70 | ||||||||||||||||||||||||||||||
Year ended 08/31/12 | 9.89 | (0.08 | ) | 1.38 | 1.30 | (1.10 | ) | 10.09 | (e) | 14.40 | (c)(h) | 13,754 | 1.38 | (h) | 1.43 | (h) | (0.80 | )(h) | 78 | |||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.18 | (0.11 | ) | 1.82 | 1.71 | — | 9.89 | (e) | 20.90 | (c)(h) | 16,910 | 1.40 | (h) | 1.44 | (h) | (1.03 | )(h) | 114 | ||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 9.03 | (0.05 | ) | (0.80 | ) | (0.85 | ) | — | 8.18 | (e) | (9.41 | )(c)(h) | 19,249 | 1.63 | (f)(h) | 1.63 | (f)(h) | (1.33 | )(f)(h) | 63 | ||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.51 | (0.09 | ) | 2.61 | 2.52 | — | 9.03 | (e) | 38.71 | (i)(j) | 23,169 | 1.53 | (j) | 1.53 | (j) | (1.19 | )(j) | 234 | ||||||||||||||||||||||||||||||
Year ended 03/31/09 | 9.59 | (0.14 | ) | (2.94 | ) | (3.08 | ) | — | 6.51 | (e) | (32.12 | )(i)(j) | 22,044 | 2.04 | (j) | 2.04 | (j) | (1.65 | )(j) | 219 | ||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 10.83 | (0.08 | ) | 1.78 | 1.70 | (1.89 | ) | 10.64 | 17.16 | (c) | 62,864 | 2.04 | (d) | 2.05 | (d) | (1.56 | )(d) | 40 | ||||||||||||||||||||||||||||||
Year ended 08/31/13 | 9.82 | (0.15 | ) | 2.29 | 2.14 | (1.13 | ) | 10.83 | 24.43 | (c) | 53,560 | 2.07 | 2.08 | (1.47 | ) | 70 | ||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 9.73 | (0.15 | ) | 1.34 | 1.19 | (1.10 | ) | 9.82 | (e) | 13.43 | (c) | 48,486 | 2.13 | 2.18 | (1.55 | ) | 78 | |||||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.10 | (0.17 | ) | 1.80 | 1.63 | — | 9.73 | (e) | 20.12 | (c)(k) | 51,212 | 2.06 | (k) | 2.10 | (k) | (1.69 | )(k) | 114 | ||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 8.95 | (0.07 | ) | (0.78 | ) | (0.85 | ) | — | 8.10 | (e) | (9.50 | )(c) | 53,673 | 2.09 | (f) | 2.09 | (f) | (1.79 | )(f) | 63 | ||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.50 | (0.14 | ) | 2.59 | 2.45 | — | 8.95 | (e) | 37.69 | (l) | 62,523 | 2.14 | 2.14 | (1.79 | ) | 234 | ||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 9.58 | (0.14 | ) | (2.94 | ) | (3.08 | ) | — | 6.50 | (e) | (32.15 | )(l) | 39,064 | 2.14 | 2.14 | (1.75 | ) | 219 | ||||||||||||||||||||||||||||||
Class Y(m) | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 12.50 | (0.04 | ) | 2.09 | 2.05 | (1.89 | ) | 12.66 | 17.70 | (c) | 180,912 | 1.04 | (d) | 1.05 | (d) | (0.56 | )(d) | 40 | ||||||||||||||||||||||||||||||
Year ended 08/31/13 | 11.06 | (0.05 | ) | 2.62 | 2.57 | (1.13 | ) | 12.50 | 25.67 | (c) | 163,072 | 1.07 | 1.08 | (0.47 | ) | 70 | ||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 10.72 | (0.06 | ) | 1.50 | 1.44 | (1.10 | ) | 11.06 | (e) | 14.60 | (c) | 206,367 | 1.13 | 1.18 | (0.55 | ) | 78 | |||||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.84 | (0.09 | ) | 1.97 | 1.88 | — | 10.72 | (e) | 21.27 | (c) | 233,467 | 1.13 | 1.17 | (0.76 | ) | 114 | ||||||||||||||||||||||||||||||||
Five months ended 08/31/10 | 9.73 | (0.03 | ) | (0.86 | ) | (0.89 | ) | — | 8.84 | (e) | (9.15 | )(c) | 199,603 | 1.09 | (f) | 1.09 | (f) | (0.80 | )(f) | 63 | ||||||||||||||||||||||||||||
Year ended 03/31/10 | 6.99 | (0.06 | ) | 2.80 | 2.74 | — | 9.73 | (e) | 39.20 | (n) | 267,593 | 1.14 | 1.14 | (0.76 | ) | 234 | ||||||||||||||||||||||||||||||||
Year ended 03/31/09 | 10.20 | (0.07 | ) | (3.14 | ) | (3.21 | ) | — | 6.99 | (e) | (31.47 | )(n) | 91,594 | 1.15 | 1.15 | (0.75 | ) | 219 | ||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 12.52 | (0.03 | ) | 2.09 | 2.06 | (1.89 | ) | 12.69 | 17.76 | (c) | 53,137 | 0.93 | (d) | 0.94 | (d) | (0.45 | )(d) | 40 | ||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 11.48 | (0.04 | ) | 2.21 | 2.17 | (1.13 | ) | 12.52 | 21.25 | (c) | 44,037 | 0.93 | (f) | 0.94 | (f) | (0.33 | )(f) | 70 | ||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/14 | 12.52 | (0.02 | ) | 2.09 | 2.07 | (1.89 | ) | 12.70 | 17.84 | (c) | 79,336 | 0.83 | (d) | 0.84 | (d) | (0.35 | )(d) | 40 | ||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 11.48 | (0.03 | ) | 2.20 | 2.17 | (1.13 | ) | 12.52 | 21.25 | (c) | 68,425 | 0.83 | (f) | 0.84 | (f) | (0.23 | )(f) | 70 | ||||||||||||||||||||||||||||||
| (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) of $585,130, $12,912, $58,571, $174,754, $48,460 and $74,726 for Class A, Class B, Class C, Class Y, Class R5 and Class R6, respectively. |
| (e) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share. |
| (f) | Annualized. |
| (g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (h) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.25%, 0.27% and 0.54% for the six months ended February 28, 2014, the years ended August 31, 2013, August 31, 2012, August 31, 2011 and the five months ended August 31, 2010, respectively. |
| (i) | 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. |
| (j) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of less than 1%. |
| (k) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.93% for the year ended August 31, 2011. |
| (l) | 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. |
| (m) | On June 1, 2010, the Fund’s former Class I shares were reorganized into Class Y shares. |
| (n) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
| (o) | Commencement date of September 24, 2012 for Class R5 and Class R6 shares. |
16 Invesco Small Cap Discovery Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 1, 2013 through February 28, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Class | Beginning Account Value (09/01/13) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/14)1 | Expenses Paid During Period2 | Ending Account Value (02/28/14) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,176.40 | $ | 6.96 | $ | 1,018.40 | $ | 6.46 | 1.29 | % | ||||||||||||
B | 1,000.00 | 1,175.30 | 6.96 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||
C | 1,000.00 | 1,171.60 | 10.98 | 1,014.68 | 10.19 | 2.04 | ||||||||||||||||||
Y | 1,000.00 | 1,177.00 | 5.61 | 1,019.64 | 5.21 | 1.04 | ||||||||||||||||||
R5 | 1,000.00 | 1,177.60 | 5.02 | 1,020.18 | 4.66 | 0.93 | ||||||||||||||||||
R6 | 1,000.00 | 1,178.40 | 4.48 | 1,020.68 | 4.16 | 0.83 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2013 through February 28, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half year. |
17 Invesco Small Cap Discovery Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |  |
SEC file numbers: 811-09913 and 333-36074 VK-SCD-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 February 12, 2014, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of February 12, 2014, the Registrant’s disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is |
| recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. |
| (b) | There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
| ITEM 12. | EXHIBITS. |
| 12(a) (1) | Not applicable. |
| 12(a) (2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
| 12(a) (3) | Not applicable. |
| 12(b) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM Counselor Series Trust (Invesco Counselor Series Trust)
| By: | /s/ Philip A. Taylor | |
Philip A. Taylor Principal Executive Officer | ||
Date: May 9, 2014
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By: | /s/ Philip A. Taylor | |
Philip A. Taylor Principal Executive Officer | ||
Date: May 9, 2014
| By: | /s/ Sheri Morris | |
Sheri Morris Principal Financial Officer | ||
Date: May 9, 2014
EXHIBIT INDEX
| 12(a) (1) | Not applicable. | |
| 12(a) (2) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
| 12(a) (3) | Not applicable. | |
| 12(b) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. | |