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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: 2/28/15
Item 1. Report to Stockholders.
| ||||
 |
Semiannual Report to Shareholders
|
February 28, 2015 | ||
| ||||
Invesco American Franchise Fund
| ||||
| Nasdaq: | ||||
| A: VAFAX ¡ B: VAFBX ¡ C: VAFCX ¡ R: VAFRX ¡ Y: VAFIX ¡ R5: VAFNX ¡ R6: VAFFX | ||||
| ||||
| ||||
| 2 | Fund Performance | |||
| 4 | Letters to Shareholders | |||
| 5 | Schedule of Investments | |||
| 7 | Financial Statements | |||
| 9 | Notes to Financial Statements | |||
| 16 | Financial Highlights | |||
| 17 | Fund Expenses | |||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Performance summary
| ||
Fund vs. Indexes | ||
Cumulative total returns, 8/31/14 to 2/28/15, 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 | 6.59% | |
Class B Shares | 6.57 | |
Class C Shares | 6.22 | |
Class R Shares | 6.53 | |
Class Y Shares | 6.76 | |
Class R5 Shares | 6.83 | |
Class R6 Shares | 6.88 | |
S&P 500 Indexq (Broad Market Index) | 6.12 | |
Russell 1000 Growth Indexq (Style-Specific Index) | 8.46 | |
Lipper Large-Cap Growth Funds Indexn (Peer Group Index) | 7.43 | |
Source(s): qFactSet Research Systems Inc.; nLipper Inc. | ||
The S&P 500® Index is an unmanaged index considered representative of the US stock market. |
The Russell 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 2/28/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (6/23/05) | 8.37 | % | ||
5 Years | 14.27 | |||
1 Year | 4.86 | |||
Class B Shares | ||||
Inception (6/23/05) | 8.48 | % | ||
5 Years | 15.11 | |||
1 Year | 5.91 | |||
Class C Shares | ||||
Inception (6/23/05) | 8.21 | % | ||
5 Years | 14.75 | |||
1 Year | 9.16 | |||
Class R Shares | ||||
Inception | 8.73 | % | ||
5 Years | 15.28 | |||
1 Year | 10.73 | |||
Class Y Shares | ||||
Inception (6/23/05) | 9.25 | % | ||
5 Years | 15.83 | |||
1 Year | 11.22 | |||
Class R5 Shares | ||||
Inception | 9.18 | % | ||
5 Years | 15.92 | |||
1 Year | 11.36 | |||
Class R6 Shares | ||||
Inception | 9.12 | % | ||
5 Years | 15.81 | |||
1 Year | 11.47 | |||
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 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges |
Class A Shares | ||||
Inception (6/23/05) | 7.94 | % | ||
5 Years | 12.87 | |||
1 Year | 2.39 | |||
Class B Shares | ||||
Inception (6/23/05) | 8.06 | % | ||
5 Years | 13.66 | |||
1 Year | 3.35 | |||
Class C Shares | ||||
Inception (6/23/05) | 7.80 | % | ||
5 Years | 13.35 | |||
1 Year | 6.54 | |||
Class R Shares | ||||
Inception | 8.31 | % | ||
5 Years | 13.86 | |||
1 Year | 8.00 | |||
Class Y Shares | ||||
Inception (6/23/05) | 8.84 | % | ||
5 Years | 14.42 | |||
1 Year | 8.62 | |||
Class R5 Shares | ||||
Inception | 8.76 | % | ||
5 Years | 14.49 | |||
1 Year | 8.76 | |||
Class R6 Shares | ||||
Inception | 8.69 | % | ||
5 Years | 14.37 | |||
1 Year | 8.74 |
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 1.08%, 1.08%, 1.83%, 1.33%, 0.83%, 0.70% and 0.63%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 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
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. | |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee. | ||
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. | ||
Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. | ||
Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. | ||
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it. | ||
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. | ||
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. | ||
| Sincerely, | ||
 | ||
| Philip Taylor | ||
| Senior Managing Director, Invesco Ltd. | ||
iPhone and iPad are trademarks 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
February 28, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–99.29% |
| |||||||
| Aerospace & Defense–1.92% | ||||||||
Honeywell International Inc. | 1,421,039 | $ | 146,054,388 | |||||
Raytheon Co. | 461,341 | 50,180,061 | ||||||
| 196,234,449 | ||||||||
| Agricultural Products–0.54% | ||||||||
Archer-Daniels-Midland Co. | 1,156,035 | 55,350,956 | ||||||
| Airlines–0.87% | ||||||||
Southwest Airlines Co. | 2,062,708 | 89,191,494 | ||||||
| Apparel, Accessories & Luxury Goods–1.19% | ||||||||
Michael Kors Holdings Ltd.(b) | 1,804,433 | 121,636,829 | ||||||
| Application Software–3.33% | ||||||||
salesforce.com, inc.(b) | 4,904,264 | 340,257,836 | ||||||
| Asset Management & Custody Banks–1.64% | ||||||||
Ameriprise Financial, Inc. | 1,254,483 | 167,636,563 | ||||||
| Biotechnology–13.28% | ||||||||
Alkermes PLC(b) | 3,733,365 | 262,268,892 | ||||||
Amgen Inc. | 1,249,632 | 197,091,959 | ||||||
Biogen Idec Inc.(b) | 550,251 | 225,377,307 | ||||||
Celgene Corp.(b) | 3,181,355 | 386,630,073 | ||||||
Gilead Sciences, Inc.(b) | 2,390,472 | 247,485,566 | ||||||
Vertex Pharmaceuticals Inc.(b) | 338,409 | 40,416,187 | ||||||
| 1,359,269,984 | ||||||||
| Cable & Satellite–6.79% | ||||||||
Comcast Corp.–Class A | 1,589,866 | 94,406,243 | ||||||
DISH Network Corp.–Class A(b) | 5,031,720 | 377,580,269 | ||||||
Time Warner Cable Inc. | 1,443,611 | 222,388,274 | ||||||
| 694,374,786 | ||||||||
| Communications Equipment–1.69% | ||||||||
Cisco Systems, Inc. | 3,109,815 | 91,770,641 | ||||||
Palo Alto Networks, Inc.(b) | 567,684 | 80,736,018 | ||||||
| 172,506,659 | ||||||||
| Construction & Engineering–0.75% | ||||||||
Quanta Services, Inc.(b) | 2,652,511 | 76,339,267 | ||||||
| Construction Materials–0.39% | ||||||||
Martin Marietta Materials, Inc. | 279,601 | 39,795,610 | ||||||
| Consumer Electronics–1.49% | ||||||||
Harman International Industries, Inc. | 1,108,356 | 152,942,045 | ||||||
| Data Processing & Outsourced Services–4.04% | ||||||||
Alliance Data Systems Corp.(b) | 117,185 | 32,637,194 | ||||||
MasterCard, Inc.–Class A | 4,229,437 | 381,199,157 | ||||||
| 413,836,351 | ||||||||
| Distillers & Vintners–0.75% | ||||||||
Constellation Brands, Inc.–Class A(b) | 666,592 | 76,471,434 | ||||||
| Diversified Chemicals–0.94% | ||||||||
Dow Chemical Co. (The) | 1,950,346 | 96,035,037 | ||||||
| Shares | Value | |||||||
| Drug Retail–1.27% | ||||||||
CVS Health Corp. | 1,255,436 | $ | 130,402,137 | |||||
| Fertilizers & Agricultural Chemicals–1.15% | ||||||||
Monsanto Co. | 978,537 | 117,845,211 | ||||||
| General Merchandise Stores–0.86% | ||||||||
Dollar General Corp.(b) | 1,207,319 | 87,675,506 | ||||||
| Health Care Distributors–0.90% | ||||||||
McKesson Corp. | 403,780 | 92,344,486 | ||||||
| Health Care Equipment–0.30% | ||||||||
Medtronic PLC | 389,292 | 30,205,166 | ||||||
| Health Care Facilities–0.41% | ||||||||
HCA Holdings, Inc.(b) | 588,187 | 42,078,898 | ||||||
| Home Improvement Retail–3.50% | ||||||||
Lowe’s Cos., Inc. | 4,836,075 | 358,304,797 | ||||||
| Hotels, Resorts & Cruise Lines–2.95% | ||||||||
Carnival Corp. | 5,705,141 | 250,969,153 | ||||||
Royal Caribbean Cruises Ltd. | 659,775 | 50,420,005 | ||||||
| 301,389,158 | ||||||||
| Household Appliances–1.56% | ||||||||
Whirlpool Corp. | 754,562 | 159,929,416 | ||||||
| Industrial Conglomerates–1.73% | ||||||||
Danaher Corp. | 1,065,072 | 92,959,484 | ||||||
Roper Industries, Inc. | 502,605 | 84,221,520 | ||||||
| 177,181,004 | ||||||||
| Insurance Brokers–0.75% | ||||||||
Aon PLC | 763,759 | 76,650,853 | ||||||
| Internet Retail–3.15% | ||||||||
Amazon.com, Inc.(b) | 407,656 | 154,974,505 | ||||||
Priceline Group Inc. (The)(b) | 135,560 | 167,752,789 | ||||||
| 322,727,294 | ||||||||
| Internet Software & Services–10.12% | ||||||||
Alibaba Group Holding Ltd.– | 1,534,990 | 130,658,349 | ||||||
Baidu, Inc.–ADR (China)(b) | 245,684 | 50,058,115 | ||||||
Facebook Inc.–Class A(b) | 5,110,234 | 403,555,179 | ||||||
Google Inc.–Class A(b) | 590,360 | 332,154,246 | ||||||
Google Inc.–Class C(b) | 111,642 | 62,340,893 | ||||||
LinkedIn Corp.–Class A(b) | 210,724 | 56,305,453 | ||||||
| 1,035,072,235 | ||||||||
| Investment Banking & Brokerage–1.60% | ||||||||
Morgan Stanley | 4,577,975 | 163,845,725 | ||||||
| Life Sciences Tools & Services–1.03% | ||||||||
Thermo Fisher Scientific, Inc. | 808,675 | 105,127,750 | ||||||
| Movies & Entertainment–1.51% | ||||||||
Twenty-First Century Fox, Inc.–Class A | 2,469,358 | 86,427,530 | ||||||
Walt Disney Co. (The) | 649,952 | 67,647,004 | ||||||
| 154,074,534 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco American Franchise Fund
| Shares | Value | |||||||
| Oil & Gas Equipment & Services–0.24% | ||||||||
Baker Hughes Inc. | 388,462 | $ | 24,282,760 | |||||
| Oil & Gas Exploration & Production–2.87% | ||||||||
Anadarko Petroleum Corp. | 1,355,275 | 114,154,813 | ||||||
Devon Energy Corp. | 1,086,587 | 66,922,893 | ||||||
Pioneer Natural Resources Co. | 558,745 | 85,219,788 | ||||||
Whiting Petroleum Corp.(b) | 817,488 | 27,655,619 | ||||||
| 293,953,113 | ||||||||
| Oil & Gas Storage & Transportation–0.84% | ||||||||
Kinder Morgan Inc. | 2,086,370 | 85,562,034 | ||||||
| Pharmaceuticals–3.26% | ||||||||
Actavis PLC(b) | 803,595 | 234,135,439 | ||||||
Bristol-Myers Squibb Co. | 1,631,749 | 99,406,149 | ||||||
| 333,541,588 | ||||||||
| Railroads–1.23% | ||||||||
Canadian Pacific Railway Ltd. (Canada) | 280,297 | 52,589,323 | ||||||
Union Pacific Corp. | 611,995 | 73,598,519 | ||||||
| 126,187,842 | ||||||||
| Restaurants–1.15% | ||||||||
Starbucks Corp. | 1,253,534 | 117,186,626 | ||||||
| Semiconductor Equipment–1.25% | ||||||||
Applied Materials, Inc. | 5,094,624 | 127,620,331 | ||||||
| Semiconductors–3.43% | ||||||||
Micron Technology, Inc.(b) | 4,689,068 | 143,813,715 | ||||||
NXP Semiconductors | 2,438,851 | 207,046,256 | ||||||
| 350,859,971 | ||||||||
| Shares | Value | |||||||
| Soft Drinks–1.00% | ||||||||
Monster Beverage Corp.(b) | 726,914 | $ | 102,582,104 | |||||
| Specialized Finance–0.40% | ||||||||
McGraw Hill Financial, Inc. | 397,604 | 40,992,972 | ||||||
| Specialized REIT’s–0.96% | ||||||||
American Tower Corp. | 989,012 | 98,050,650 | ||||||
| Systems Software–3.01% | ||||||||
Check Point Software Technologies Ltd. (Israel)(b) | 1,165,951 | 97,345,249 | ||||||
Oracle Corp. | 780,769 | 34,213,297 | ||||||
ServiceNow, Inc.(b) | 2,319,837 | 176,910,770 | ||||||
| 308,469,316 | ||||||||
| Technology Hardware, Storage & Peripherals–6.01% | ||||||||
Apple Inc. | 4,790,080 | 615,333,677 | ||||||
| Wireless Telecommunication Services–1.24% | ||||||||
Sprint Corp.(b) | 24,805,998 | 127,006,710 | ||||||
Total Common Stocks & Other Equity Interests |
| 10,158,363,164 | ||||||
Money Market Funds–0.81% |
| |||||||
Liquid Assets Portfolio–Institutional Class(c) | 41,690,427 | 41,690,427 | ||||||
Premier Portfolio–Institutional | 41,690,426 | 41,690,426 | ||||||
Total Money Market Funds | 83,380,853 | |||||||
TOTAL INVESTMENTS–100.10% (Cost $6,940,748,761) |
| 10,241,744,017 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.10)% |
| (10,270,917 | ) | |||||
NET ASSETS–100.00% |
| $ | 10,231,473,100 | |||||
Investment Abbreviations:
| ADR | – American Depositary Receipt | |
| REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
| (a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
| (b) | Non-income producing security. |
| (c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2015
Information Technology | 32.9 | % | ||
Consumer Discretionary | 24.5 | |||
Health Care | 19.2 | |||
Industrials | 6.5 | |||
Financials | 5.0 | |||
Energy | 3.9 | |||
Consumer Staples | 3.6 | |||
Materials | 2.5 | |||
Telecommunication Services | 1.2 | |||
Money Market Funds Plus Other Assets Less Liabilities | 0.7 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco American Franchise Fund
Statement of Assets and Liabilities
February 28, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $6,857,367,908) | $ | 10,158,363,164 | ||
Investments in affiliated money market funds, at value and cost | 83,380,853 | |||
Total investments, at value (Cost $6,940,748,761) | 10,241,744,017 | |||
Receivable for: | ||||
Investments sold | 63,830,215 | |||
Fund shares sold | 7,832,294 | |||
Dividends | 6,603,815 | |||
Investment for trustee deferred compensation and retirement plans | 2,604,444 | |||
Other assets | 306,780 | |||
Total assets | 10,322,921,565 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 68,070,885 | |||
Fund shares reacquired | 13,580,879 | |||
Accrued fees to affiliates | 6,416,987 | |||
Accrued trustees’ and officers’ fees and benefits | 21,793 | |||
Accrued other operating expenses | 351,039 | |||
Trustee deferred compensation and retirement plans | 3,006,882 | |||
Total liabilities | 91,448,465 | |||
Net assets applicable to shares outstanding | $ | 10,231,473,100 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 7,012,690,960 | ||
Undistributed net investment income (loss) | (39,700,004 | ) | ||
Undistributed net realized gain (loss) | (42,508,181 | ) | ||
Net unrealized appreciation | 3,300,990,325 | |||
| $ | 10,231,473,100 | |||
Net Assets: | ||||
Class A | $ | 9,207,086,105 | ||
Class B | $ | 216,877,304 | ||
Class C | $ | 422,750,521 | ||
Class R | $ | 33,389,590 | ||
Class Y | $ | 162,120,568 | ||
Class R5 | $ | 50,792,989 | ||
Class R6 | $ | 138,456,023 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 525,227,648 | |||
Class B | 12,687,951 | |||
Class C | 25,331,267 | |||
Class R | 1,922,838 | |||
Class Y | 9,148,037 | |||
Class R5 | 2,868,383 | |||
Class R6 | 7,805,937 | |||
Class A: | ||||
Net asset value per share | $ | 17.53 | ||
Maximum offering price per share | ||||
(Net asset value of $17.53 ¸ 94.50%) | $ | 18.55 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 17.09 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 16.69 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 17.36 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 17.72 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 17.71 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 17.74 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco American Franchise Fund
Statement of Operations
For the six months ended February 28, 2015
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $175,342) | $ | 37,017,360 | ||
Dividends from affiliated money market funds (includes securities lending income of $107,623) | 125,713 | |||
Total investment income | 37,143,073 | |||
Expenses: | ||||
Advisory fees | 28,775,930 | |||
Administrative services fees | 385,003 | |||
Custodian fees | 120,233 | |||
Distribution fees: | ||||
Class A | 11,005,814 | |||
Class B | 283,722 | |||
Class C | 2,027,999 | |||
Class R | 77,974 | |||
Transfer agent fees — A, B, C, R and Y | 9,757,011 | |||
Transfer agent fees — R5 | 20,788 | |||
Transfer agent fees — R6 | 2,622 | |||
Trustees’ and officers’ fees and benefits | 161,990 | |||
Other | 613,489 | |||
Total expenses | 53,232,575 | |||
Less: Fees waived and expense offset arrangement(s) | (84,847 | ) | ||
Net expenses | 53,147,728 | |||
Net investment income (loss) | (16,004,655 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 398,331,479 | |||
Foreign currencies | (6,029 | ) | ||
| 398,325,450 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 253,304,896 | |||
Foreign currencies | (5,964 | ) | ||
| 253,298,932 | ||||
Net realized and unrealized gain | 651,624,382 | |||
Net increase in net assets resulting from operations | $ | 635,619,727 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco American Franchise Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (16,004,655 | ) | $ | (27,492,665 | ) | ||
Net realized gain | 398,325,450 | 1,356,621,426 | ||||||
Change in net unrealized appreciation | 253,298,932 | 853,805,517 | ||||||
Net increase in net assets resulting from operations | 635,619,727 | 2,182,934,278 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | — | (8,146,047 | ) | |||||
Class B | — | (284,805 | ) | |||||
Class Y | — | (287,210 | ) | |||||
Class R5 | — | (126,411 | ) | |||||
Class R6 | — | (414,675 | ) | |||||
Total distributions from net investment income | — | (9,259,148 | ) | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (784,833,752 | ) | (349,819,587 | ) | ||||
Class B | (20,473,572 | ) | (12,230,508 | ) | ||||
Class C | (37,732,924 | ) | (16,851,639 | ) | ||||
Class R | (2,796,858 | ) | (1,234,648 | ) | ||||
Class Y | (13,159,645 | ) | (4,914,966 | ) | ||||
Class R5 | (4,625,060 | ) | (1,888,689 | ) | ||||
Class R6 | (11,435,482 | ) | (5,092,450 | ) | ||||
Total distributions from net realized gains | (875,057,293 | ) | (392,032,487 | ) | ||||
Share transactions–net: | ||||||||
Class A | 385,239,285 | 2,022,415,364 | ||||||
Class B | (23,934,462 | ) | (32,429,104 | ) | ||||
Class C | 18,045,550 | 74,675,675 | ||||||
Class R | 2,417,077 | 6,673,587 | ||||||
Class Y | 23,995,873 | 25,320,157 | ||||||
Class R5 | (20,326 | ) | (119,562,564 | ) | ||||
Class R6 | 3,515,385 | (1,645,431 | ) | |||||
Net increase in net assets resulting from share transactions | 409,258,382 | 1,975,447,684 | ||||||
Net increase in net assets | 169,820,816 | 3,757,090,327 | ||||||
Net assets: | ||||||||
Beginning of period | 10,061,652,284 | 6,304,561,957 | ||||||
End of period (includes undistributed net investment income (loss) of $(39,700,004) and $(23,695,349), respectively) | $ | 10,231,473,100 | $ | 10,061,652,284 | ||||
February 28, 2015
(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 thirteen 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.
9 Invesco American Franchise 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. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and
10 Invesco American Franchise Fund
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 net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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 |
11 Invesco American Franchise Fund
| investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
| K. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (“Counterparties”) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.59%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $54,922.
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, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
12 Invesco American Franchise 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, 2015, 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.
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, 2015, IDI advised the Fund that IDI retained $261,652 in front-end sales commissions from the sale of Class A shares and $6,567, $19,206 and $3,876 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2015, the Fund incurred $248,253 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.
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, 2015, 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—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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $29,925.
NOTE 5—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
13 Invesco American Franchise 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 carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2015 | $ | 967,126 | $ | — | $ | 967,126 | ||||||
August 31, 2016 | 2,612,897 | — | 2,612,897 | |||||||||
August 31, 2017 | 382,595,510 | — | 382,595,510 | |||||||||
| $ | 386,175,533 | $ | — | $ | 386,175,533 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 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, 2015 was $3,453,441,322 and $3,920,847,272, 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 | $ | 3,348,898,308 | ||
Aggregate unrealized (depreciation) of investment securities | (57,895,451 | ) | ||
Net unrealized appreciation of investment securities | $ | 3,291,002,857 | ||
Cost of investments for tax purposes is $6,950,741,160.
14 Invesco American Franchise Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 5,921,584 | $ | 102,697,881 | 13,434,382 | $ | 224,500,898 | ||||||||||
Class B | 71,640 | 1,223,468 | 194,996 | 3,185,824 | ||||||||||||
Class C | 759,359 | 12,572,519 | 1,375,112 | 22,116,190 | ||||||||||||
Class R | 245,492 | 4,171,302 | 288,299 | 4,772,689 | ||||||||||||
Class Y | 1,720,973 | 30,206,880 | 2,508,529 | 42,978,258 | ||||||||||||
Class R5 | 400,078 | 6,974,004 | 772,745 | 13,042,930 | ||||||||||||
Class R6 | 180,344 | 3,131,885 | 901,334 | 15,272,963 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 45,566,920 | 740,462,440 | 20,978,874 | 337,759,873 | ||||||||||||
Class B | 1,268,110 | 20,099,547 | 779,837 | 12,274,118 | ||||||||||||
Class C | 2,276,605 | 35,287,376 | 1,015,415 | 15,779,551 | ||||||||||||
Class R | 173,585 | 2,796,462 | 77,072 | 1,233,927 | ||||||||||||
Class Y | 691,279 | 11,350,785 | 281,452 | 4,562,336 | ||||||||||||
Class R5 | 281,944 | 4,623,889 | 124,583 | 2,014,511 | ||||||||||||
Class R6 | 696,012 | 11,435,482 | 340,156 | 5,507,125 | ||||||||||||
Issued in connection with acquisitions:(b) | ||||||||||||||||
Class A | — | — | 159,648,030 | 2,468,502,143 | ||||||||||||
Class B | — | — | 3,865,089 | 58,449,775 | ||||||||||||
Class C | — | — | 6,095,479 | 91,112,251 | ||||||||||||
Class R | — | — | 518,148 | 7,963,354 | ||||||||||||
Class Y | — | — | 969,446 | 15,095,293 | ||||||||||||
Class R5 | — | — | 189,764 | 2,949,334 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 1,859,335 | 32,523,329 | 4,281,870 | 72,109,330 | ||||||||||||
Class B | (1,904,746 | ) | (32,523,329 | ) | (4,380,637 | ) | (72,109,330 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (28,210,336 | ) | (490,444,365 | ) | (64,487,337 | ) | (1,080,456,880 | ) | ||||||||
Class B | (749,664 | ) | (12,734,148 | ) | (2,096,465 | ) | (34,229,491 | ) | ||||||||
Class C | (1,795,602 | ) | (29,814,345 | ) | (3,357,178 | ) | (54,332,317 | ) | ||||||||
Class R | (267,477 | ) | (4,550,687 | ) | (440,363 | ) | (7,296,383 | ) | ||||||||
Class Y | (1,006,586 | ) | (17,561,792 | ) | (2,205,531 | ) | (37,315,730 | ) | ||||||||
Class R5 | (679,731 | ) | (11,618,219 | ) | (8,388,466 | ) | (137,569,339 | ) | ||||||||
Class R6 | (617,380 | ) | (11,051,982 | ) | (1,334,727 | ) | (22,425,519 | ) | ||||||||
Net increase in share activity | 26,881,738 | $ | 409,258,382 | 131,949,908 | $ | 1,975,447,684 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 14% 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) | 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 year ended August 31, 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) | $ | (28,410,833) | ||
Net realized/unrealized gains | 4,238,871,492 | |||
Change in net assets resulting from operations | $ | 4,210,460,659 |
| 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. |
15 Invesco American Franchise Fund
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | $ | 18.07 | $ | (0.02 | ) | $ | 1.09 | $ | 1.07 | $ | — | $ | (1.61 | ) | $ | (1.61 | ) | $ | 17.53 | 6.59 | % | $ | 9,207,086 | 1.07 | %(d) | 1.07 | %(d) | (0.31 | )%(d) | 35 | % | |||||||||||||||||||||||||
Year ended 08/31/14 | 14.82 | (0.04 | ) | 3.99 | 3.95 | (0.02 | ) | (0.68 | ) | (0.70 | ) | 18.07 | 27.22 | 9,034,217 | 1.08 | 1.08 | (0.27 | ) | 77 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.47 | 0.02 | 2.33 | 2.35 | (0.00 | ) | — | (0.00 | ) | 14.82 | 18.89 | 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 | 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 | 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 | 168,731 | 1.30 | 1.30 | 0.11 | 101 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 17.66 | (0.02 | ) | 1.06 | 1.04 | — | (1.61 | ) | (1.61 | ) | 17.09 | 6.57 | 216,877 | 1.07 | (d) | 1.07 | (d) | (0.31 | )(d) | 35 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 14.50 | (0.04 | ) | 3.90 | 3.86 | (0.02 | ) | (0.68 | ) | (0.70 | ) | 17.66 | 27.20 | (e) | 247,220 | 1.08 | (e) | 1.08 | (e) | (0.27 | )(e) | 77 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.20 | 0.02 | 2.28 | 2.30 | (0.00 | ) | — | (0.00 | ) | 14.50 | 18.90 | (e) | 226,796 | 1.06 | (e) | 1.14 | (e) | 0.17 | (e) | 80 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/12 | 11.47 | (0.01 | ) | 0.86 | 0.85 | — | (0.12 | ) | (0.12 | ) | 12.20 | 7.54 | (e) | 273,177 | 1.05 | (e) | 1.18 | (e) | (0.05 | )(e) | 96 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 9.64 | (0.08 | ) | 1.91 | 1.83 | — | — | — | 11.47 | 18.98 | (e) | 373,157 | 1.28 | (e) | 1.65 | (e) | (0.64 | )(e) | 179 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.75 | (0.06 | ) | 1.01 | 0.95 | (0.06 | ) | — | (0.06 | ) | 9.64 | 10.89 | 22,332 | 2.05 | 2.05 | (0.64 | ) | 101 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 17.34 | (0.08 | ) | 1.04 | 0.96 | — | (1.61 | ) | (1.61 | ) | 16.69 | 6.22 | 422,751 | 1.82 | (d) | 1.82 | (d) | (1.06 | )(d) | 35 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 14.34 | (0.16 | ) | 3.84 | 3.68 | — | (0.68 | ) | (0.68 | ) | 17.34 | 26.23 | 417,687 | 1.83 | 1.83 | (1.02 | ) | 77 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.16 | (0.08 | ) | 2.26 | 2.18 | — | — | — | 14.34 | 17.93 | 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 | 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 | (f) | 266,990 | 1.60 | (f) | 1.71 | (f) | (0.97 | )(f) | 179 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/10 | 8.76 | (0.05 | ) | 1.03 | 0.98 | (0.06 | ) | — | (0.06 | ) | 9.68 | 11.14 | (f) | 23,718 | 1.93 | (f) | 1.93 | (f) | (0.52 | )(f) | 101 | |||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 17.93 | (0.04 | ) | 1.08 | 1.04 | — | (1.61 | ) | (1.61 | ) | 17.36 | 6.47 | 33,390 | 1.32 | (d) | 1.32 | (d) | (0.56 | )(d) | 35 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 14.74 | (0.09 | ) | 3.96 | 3.87 | — | (0.68 | ) | (0.68 | ) | 17.93 | 26.83 | 31,760 | 1.33 | 1.33 | (0.52 | ) | 77 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.43 | (0.01 | ) | 2.32 | 2.31 | — | — | — | 14.74 | 18.58 | 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 | 18,746 | 1.30 | 1.43 | (0.30 | ) | 96 | ||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11(g) | 12.81 | (0.02 | ) | (1.08 | ) | (1.10 | ) | — | — | — | 11.71 | (8.59 | ) | 17,698 | 1.30 | (h) | 1.42 | (h) | (0.66 | )(h) | 179 | |||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 18.22 | (0.00 | ) | 1.11 | 1.11 | — | (1.61 | ) | (1.61 | ) | 17.72 | 6.76 | 162,121 | 0.82 | (d) | 0.82 | (d) | (0.06 | )(d) | 35 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 14.93 | (0.00 | ) | 4.01 | 4.01 | (0.04 | ) | (0.68 | ) | (0.72 | ) | 18.22 | 27.48 | 141,094 | 0.83 | 0.83 | (0.02 | ) | 77 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.57 | 0.06 | 2.34 | 2.40 | (0.04 | ) | — | (0.04 | ) | 14.93 | 19.13 | 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 | 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 | 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 | 2,592 | 1.05 | 1.05 | 0.35 | 101 | ||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 18.20 | 0.01 | 1.11 | 1.12 | — | (1.61 | ) | (1.61 | ) | 17.71 | 6.83 | 50,793 | 0.70 | (d) | 0.70 | (d) | 0.06 | (d) | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 14.90 | 0.02 | 4.01 | 4.03 | (0.05 | ) | (0.68 | ) | (0.73 | ) | 18.20 | 27.65 | 52,164 | 0.70 | 0.70 | 0.11 | 77 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.55 | 0.06 | 2.34 | 2.40 | (0.05 | ) | — | (0.05 | ) | 14.90 | 19.22 | 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 | 301,283 | 0.69 | 0.69 | 0.31 | 96 | ||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/11(g) | 12.07 | (0.00 | ) | (0.32 | ) | (0.32 | ) | — | — | — | 11.75 | (2.65 | ) | 197,097 | 0.66 | (h) | 0.66 | (h) | (0.03 | )(h) | 179 | |||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 18.22 | 0.01 | 1.12 | 1.13 | — | (1.61 | ) | (1.61 | ) | 17.74 | 6.88 | 138,456 | 0.62 | (d) | 0.62 | (d) | 0.14 | (d) | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 14.92 | 0.03 | 4.01 | 4.04 | (0.06 | ) | (0.68 | ) | (0.74 | ) | 18.22 | 27.69 | 137,509 | 0.63 | 0.63 | 0.18 | 77 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(g) | 13.03 | 0.07 | 1.87 | 1.94 | (0.05 | ) | — | (0.05 | ) | 14.92 | 14.98 | 113,955 | 0.65 | (h) | 0.65 | (h) | 0.58 | (h) | 80 | |||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year August 31, 2014, the portfolio turnover calculation excludes the value of securities purchased of $1,921,954,452 and sales of $1,568,687,370 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Constellation Fund into the Fund. For the year 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 year August 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $4,947,460,310 and sales of $2,251,028,915 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Large Cap Growth Fund, Invesco Van Kampen Capital Growth Fund and Invesco Van Kampen Enterprise Fund into the Fund. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $8,877,618, $228,859, $408,961, $31,448, $149,190, $51,182 and $132,340 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25,%, 0.25%, 0.25% and 0.47% for the years ended August 31, 2014, 2013, 2012 and 2011 respectively. |
| (f) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.79% and 0.88% for the years ended August 31, 2011 and 2010 respectively. |
| (g) | 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. |
| (h) | Annualized. |
16 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,065.90 | $ | 5.48 | $ | 1,019.49 | $ | 5.36 | 1.07 | % | ||||||||||||
| B | 1,000.00 | 1,065.70 | 5.48 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||
| C | 1,000.00 | 1,062.20 | 9.31 | 1,015.77 | 9.10 | 1.82 | ||||||||||||||||||
| R | 1,000.00 | 1,065.30 | 6.76 | 1,018.25 | 6.61 | 1.32 | ||||||||||||||||||
| Y | 1,000.00 | 1,067.60 | 4.20 | 1,020.73 | 4.11 | 0.82 | ||||||||||||||||||
| R5 | 1,000.00 | 1,068.30 | 3.59 | 1,021.32 | 3.51 | 0.70 | ||||||||||||||||||
| R6 | 1,000.00 | 1,068.80 | 3.18 | 1,021.72 | 3.11 | 0.62 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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 American Franchise Fund
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its 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, 2015 | ||
| ||||
Invesco California Tax-Free Income Fund
| ||||
| Nasdaq: | ||||
| A: CLFAX ¡ B: CLFBX ¡ C: CLFCX ¡ Y: CLFDX | ||||
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| ||||
| 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 | ||||
Performance summary
| ||
Fund vs. Indexes | ||
Cumulative total returns, 8/31/14 to 2/28/15, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance. | ||
Class A Shares | 3.04% | |
Class B Shares | 3.04 | |
Class C Shares | 2.77 | |
Class Y Shares | 3.16 | |
S&P Municipal Bond Indexq (Broad Market Index) | 2.17 | |
S&P Municipal Bond California 5+ Year Investment Grade Indexq (Style-Specific Index)* | 2.85 | |
Barclays California Municipal Indexq (Former Style-Specific Index)* | 2.29 | |
Lipper California Municipal Debt Funds Index¢ (Peer Group Index) | 3.16 | |
Source(s): qFactSet Research Systems Inc.; ¢Lipper, Inc | ||
* The Fund has elected to use the S&P Municipal Bond California 5+ Year Investment Grade Index as its style-specific benchmark rather than the Barclays California Municipal Index because the S&P Municipal Bond California 5+ Year Investment Grade Index more closely reflects the performance of the types of securities in which the Fund invests. | ||
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 S&P Municipal Bond California 5+ Year Investment Grade Index is a sub-set of the broad S&P Municipal Bond Index. This index of market value-weighted investment-grade US municipal bonds seeks to measure the performance of California-issued US municipals whose maturities are greater than or equal to five years. | ||
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 2/28/15, including maximum applicable sales charges | ||
Class A Shares | ||
Inception (7/28/97) | 4.43% | |
10 Years | 4.07 | |
5 Years | 5.17 | |
1 Year | 4.34 | |
Class B Shares | ||
Inception (7/11/84) | 6.30% | |
10 Years | 4.57 | |
5 Years | 5.80 | |
1 Year | 3.93 | |
Class C Shares | ||
Inception (7/28/97) | 4.18% | |
10 Years | 4.01 | |
5 Years | 5.56 | |
1 Year | 7.39 | |
Class Y Shares | ||
Inception (7/28/97) | 4.95% | |
10 Years | 4.78 | |
5 Years | 6.35 | |
1 Year | 9.21 | |
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 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges | ||
Class A Shares | ||
Inception (7/28/97) | 4.42% | |
10 Years | 4.04 | |
5 Years | 5.34 | |
1 Year | 7.40 | |
Class B Shares | ||
Inception (7/11/84) | 6.31% | |
10 Years | 4.55 | |
5 Years | 6.00 | |
1 Year | 7.14 | |
Class C Shares | ||
Inception (7/28/97) | 4.18% | |
10 Years | 3.98 | |
5 Years | 5.76 | |
1 Year | 10.71 | |
Class Y Shares | ||
Inception (7/28/97) | 4.94% | |
10 Years | 4.75 | |
5 Years | 6.52 | |
1 Year | 12.46 | |
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 0.93%, 0.93%, 1.43% and 0.69%, 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 |
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. | |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee. 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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. | |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it. 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. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. | ||
| Sincerely, |
Philip Taylor |
| Senior Managing Director, Invesco Ltd. |
iPhone and iPad are trademarks 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
February 28, 2015
(Unaudited)
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
Municipal Obligations–106.59% |
| |||||||||||||||
| California–101.86% | ||||||||||||||||
ABAG Finance Authority For Nonprofit Corps. (Sharp HealthCare); Series 2014 A, RB | 5.00 | % | 08/01/43 | $ | 500 | $ | 564,435 | |||||||||
Alhambra (City of) (Atherton Baptist Homes); Series 2010 A, RB | 7.63 | % | 01/01/40 | 1,575 | 1,698,496 | |||||||||||
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 | 1,716,099 | |||||||||||
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 | 4,211,440 | |||||||||||
Anaheim (City of) Public Financing Authority (Electric System Distribution Facilities); | 5.38 | % | 10/01/36 | 2,500 | 2,966,450 | |||||||||||
Arcadia Unified School District (Election of 2006); Series 2007 A, Unlimited Tax GO Bonds | 5.00 | % | 08/01/37 | 1,500 | 1,613,655 | |||||||||||
Bakersfield (City of); Series 2007 A, Wastewater RB (INS–AGM)(a) | 5.00 | % | 09/15/32 | 2,215 | 2,421,372 | |||||||||||
Bay Area Governments Association (California Capital); Series 2001 A, Lease RB | 5.25 | % | 07/01/17 | 1,040 | 1,081,974 | |||||||||||
Bay Area Toll Authority (San Francisco Bay Area); | ||||||||||||||||
Series 2008 F-1, Toll Bridge RB(c)(d)(e) | 5.00 | % | 04/01/18 | 1,250 | 1,410,150 | |||||||||||
Series 2008 F-1, Toll Bridge RB(c)(d) | 5.00 | % | 04/01/18 | 2,500 | 2,820,300 | |||||||||||
Series 2009 F-1, Toll Bridge RB(c)(d)(e) | 5.13 | % | 04/01/19 | 1,500 | 1,752,540 | |||||||||||
Series 2009 F-1, Toll Bridge RB(c)(d)(e) | 5.25 | % | 04/01/19 | 4,685 | 5,497,285 | |||||||||||
Series 2009 F-1, Toll Bridge RB(c)(d)(e) | 5.25 | % | 04/01/19 | 5,205 | 6,107,443 | |||||||||||
Bay Area Water Supply & Conservation Agency; Series 2013 A, RB | 5.00 | % | 10/01/34 | 1,500 | 1,739,850 | |||||||||||
Beverly Hills Unified School District (Election of 2008); | ||||||||||||||||
Series 2009, Unlimited Tax CAB GO Bonds(b) | 0.00 | % | 08/01/26 | 1,465 | 1,085,096 | |||||||||||
Series 2009, Unlimited Tax CAB GO Bonds(b) | 0.00 | % | 08/01/32 | 3,045 | 1,725,723 | |||||||||||
Brea Olinda Unified School District; Series 2002 A, Ref. COP (INS–AGM)(a) | 5.50 | % | 08/01/18 | 1,090 | 1,094,818 | |||||||||||
California (State of) (Green Bonds); Series 2014, Various Purpose Unlimited Tax GO Bonds | 5.00 | % | 10/01/37 | 1,745 | 2,029,313 | |||||||||||
California (State of) Educational Facilities Authority (California College of the Arts); Series 2005, RB | 5.00 | % | 06/01/35 | 2,000 | 2,010,440 | |||||||||||
California (State of) Educational Facilities Authority (Claremont McKenna College); Series 2007, RB(e) | 5.00 | % | 01/01/38 | 2,100 | 2,303,259 | |||||||||||
California (State of) Educational Facilities Authority (Pitzer College); | ||||||||||||||||
Series 2005 A, RB | 5.00 | % | 04/01/35 | 2,000 | 2,007,620 | |||||||||||
Series 2009, RB | 6.00 | % | 04/01/40 | 2,000 | 2,385,620 | |||||||||||
California (State of) Educational Facilities Authority (University of Southern California); Series 2009 B, RB(e) | 5.25 | % | 10/01/39 | 1,800 | 2,033,460 | |||||||||||
California (State of) Health Facilities Financing Authority (Adventist Health System West); Series 2009 A, RB | 5.75 | % | 09/01/39 | 500 | 580,025 | |||||||||||
California (State of) Health Facilities Financing Authority (Catholic Healthcare West); | ||||||||||||||||
Series 2009 A, RB | 6.00 | % | 07/01/39 | 500 | 582,355 | |||||||||||
Series 2011 A, RB | 5.25 | % | 03/01/41 | 2,500 | 2,797,800 | |||||||||||
California (State of) Health Facilities Financing Authority (Cedars-Sinai Medical Center); Series 2009, RB | 5.00 | % | 08/15/39 | 1,050 | 1,160,743 | |||||||||||
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 | 3,334,473 | |||||||||||
California (State of) Health Facilities Financing Authority (Kaiser Permanente); Series 2006 A, RB | 5.25 | % | 04/01/39 | 2,000 | 2,071,300 | |||||||||||
California (State of) Health Facilities Financing Authority (Providence Health & Services); | ||||||||||||||||
Series 2008, RB(c)(d) | 6.50 | % | 10/01/18 | 20 | 23,980 | |||||||||||
Series 2008, RB(c)(d) | 6.50 | % | 10/01/18 | 980 | 1,175,010 | |||||||||||
California (State of) Health Facilities Financing Authority (Scripps Health); Series 2010 A, RB | 5.00 | % | 11/15/36 | 4,000 | 4,536,680 | |||||||||||
California (State of) Health Facilities Financing Authority (St. Joseph Health System); Series 2013 A, RB | 5.00 | % | 07/01/37 | 1,000 | 1,137,930 | |||||||||||
California (State of) Health Facilities Financing Authority (Stanford Hospital); Series 2008 A-2, Ref. RB | 5.25 | % | 11/15/40 | 2,000 | 2,350,220 | |||||||||||
California (State of) Health Facilities Financing Authority (Sutter Health); Series 2011 B, RB | 5.50 | % | 08/15/26 | 1,000 | 1,184,370 | |||||||||||
California (State of) Municipal Finance Authority (American Heritage Education Foundation); Series 2006 A, Education RB | 5.25 | % | 06/01/26 | 1,000 | 1,001,490 | |||||||||||
California (State of) Municipal Finance Authority (Caritas Affordable Housing, Inc.); | ||||||||||||||||
Series 2012 A, Mobile Home Park RB | 5.50 | % | 08/15/47 | 1,500 | 1,643,955 | |||||||||||
Series 2014 A, Sr. Mobile Home Park RB | 5.25 | % | 08/15/39 | 1,200 | 1,324,200 | |||||||||||
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) Municipal Finance Authority (Community Hospitals of Central California Obligated Group); | ||||||||||||||||
Series 2007, COP | 5.00 | % | 02/01/20 | $ | 2,385 | $ | 2,549,112 | |||||||||
Series 2007, COP | 5.25 | % | 02/01/37 | 500 | 524,745 | |||||||||||
California (State of) Municipal Finance Authority (Eisenhower Medical Center); | ||||||||||||||||
Series 2010 A, RB | 5.50 | % | 07/01/30 | 1,000 | 1,103,070 | |||||||||||
Series 2010 A, RB | 5.75 | % | 07/01/40 | 1,500 | 1,668,150 | |||||||||||
California (State of) Municipal Finance Authority (Emerson College); Series 2011, RB | 5.75 | % | 01/01/33 | 1,315 | 1,523,099 | |||||||||||
California (State of) Municipal Finance Authority (Touro College and University System); Series 2014 A, RB | 5.25 | % | 01/01/34 | 620 | 703,272 | |||||||||||
California (State of) Municipal Finance Authority (University of La Verne); Series 2010 A, RB | 6.13 | % | 06/01/30 | 1,000 | �� | 1,181,270 | ||||||||||
California (State of) Pollution Control Finance Authority; Series 2012, Water Furnishing RB(f)(g) | 5.00 | % | 07/01/37 | 3,000 | 3,280,950 | |||||||||||
California (State of) Pollution Control Financing Authority (Waste Management Inc.); Series 2002 A, Ref. Solid Waste Disposal RB(f) | 5.00 | % | 01/01/22 | 2,000 | 2,108,920 | |||||||||||
California (State of) Public Works Board (Various Capital); | ||||||||||||||||
Series 2011 A, Lease RB | 5.13 | % | 10/01/31 | 2,000 | 2,301,560 | |||||||||||
Series 2014 E, Lease RB | 5.00 | % | 09/01/39 | 600 | 689,016 | |||||||||||
California (State of) Public Works Board (Various Correctional Facilities); Series 2014 A, Lease RB | 5.00 | % | 09/01/39 | 1,735 | 1,992,405 | |||||||||||
California (State of) Public Works Board (Various State Universities); Series 2013 H, Lease RB | 5.00 | % | 09/01/38 | 1,000 | 1,135,570 | |||||||||||
California (State of) School Finance Authority (Alliance for College-Ready Public Schools); Series 2013 A, School Facility RB | 6.30 | % | 07/01/43 | 840 | 963,992 | |||||||||||
California (State of) Statewide Communities Development Authority (Adventist Health System/West); Series 2005 A, Health Facility RB | 5.00 | % | 03/01/30 | 5,000 | 5,010,700 | |||||||||||
California (State of) Statewide Communities Development Authority (Alliance for College-Ready Public Schools); Series 2012, School Facility RB | 6.10 | % | 07/01/32 | 820 | 887,896 | |||||||||||
California (State of) Statewide Communities Development Authority (American Baptist Homes of the West); Series 2010, RB | 6.25 | % | 10/01/39 | 2,000 | 2,275,580 | |||||||||||
California (State of) Statewide Communities Development Authority (California Baptist University); | ||||||||||||||||
Series 2007 A, RB | 5.40 | % | 11/01/27 | 1,785 | 1,868,966 | |||||||||||
Series 2014 A, RB | 5.13 | % | 11/01/23 | 715 | 783,604 | |||||||||||
California (State of) Statewide Communities Development Authority (Cottage Health System Obligation); | ||||||||||||||||
Series 2015, Ref. RB | 5.00 | % | 11/01/27 | 455 | 536,859 | |||||||||||
Series 2015, Ref. RB | 5.00 | % | 11/01/43 | 1,000 | 1,143,820 | |||||||||||
California (State of) Statewide Communities Development Authority (Cottage Health System Obligated Group); Series 2010, RB | 5.25 | % | 11/01/30 | 1,675 | 1,932,682 | |||||||||||
California (State of) Statewide Communities Development Authority (Henry Mayo Newhall Memorial Hospital); Series 2014 A, RB (INS–AGM)(a) | 5.25 | % | 10/01/43 | 600 | 682,044 | |||||||||||
California (State of) Statewide Communities Development Authority (Huntington Memorial Hospital); Series 2014 B, Ref. RB | 5.00 | % | 07/01/44 | 750 | 839,288 | |||||||||||
California (State of) Statewide Communities Development Authority (Loma Linda University Medical Center); Series 2014, RB | 5.50 | % | 12/01/54 | 1,500 | 1,660,440 | |||||||||||
California (State of) Statewide Communities Development Authority (Methodist Hospital); Series 2009, RB (CEP–FHA) | 6.75 | % | 02/01/38 | 445 | 536,003 | |||||||||||
California (State of) Statewide Communities Development Authority (Southern California Presbyterian Homes); | ||||||||||||||||
Series 2009, Senior Living RB(g) | 6.25 | % | 11/15/19 | 2,000 | 2,224,960 | |||||||||||
Series 2009, Senior Living RB(g) | 7.25 | % | 11/15/41 | 500 | 597,765 | |||||||||||
California (State of) Statewide Communities Development Authority (Terraces at San Joaquin Garden); Series 2012, RB | 5.63 | % | 10/01/32 | 1,000 | 1,072,140 | |||||||||||
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 | 2,242,760 | |||||||||||
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 (State of); | ||||||||||||||||
Series 2003 A-2, VRD Unlimited Tax GO Bonds (LOC–Bank of Montreal)(h)(i) | 0.01 | % | 05/01/33 | $ | 2,250 | $ | 2,250,000 | |||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 5.75 | % | 04/01/31 | 5,000 | 5,884,350 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 6.00 | % | 11/01/35 | 1,750 | 2,142,595 | |||||||||||
Series 2009, Various Purpose Unlimited Tax GO Bonds | 6.00 | % | 04/01/38 | 1,250 | 1,501,225 | |||||||||||
Series 2010, Unlimited Tax GO Bonds | 5.25 | % | 11/01/40 | 3,000 | 3,515,490 | |||||||||||
Series 2011, Various Purpose Unlimited Tax GO Bonds | 5.00 | % | 09/01/32 | 2,450 | 2,795,376 | |||||||||||
Series 2011, Various Purpose Unlimited Tax GO Bonds | 5.00 | % | 10/01/41 | 2,500 | 2,824,200 | |||||||||||
Series 2012, Ref. Unlimited Tax GO Bonds | 5.25 | % | 02/01/30 | 1,000 | 1,178,090 | |||||||||||
California Infrastructure & Economic Development Bank (Broad Museum); Series 2011 A, RB | 5.00 | % | 06/01/21 | 2,000 | 2,432,740 | |||||||||||
California State University; | ||||||||||||||||
Series 2009 A, Systemwide RB (INS–AGC)(a) | 5.25 | % | 11/01/38 | 1,000 | 1,150,710 | |||||||||||
Series 2012 A, Systemwide RB(e) | 5.00 | % | 11/01/37 | 6,750 | 7,719,165 | |||||||||||
Chino Basin Regional Financing Authority (Inland Empire Utilities Agency); Series 2008 A, RB (INS–AMBAC)(a) | 5.00 | % | 11/01/33 | 725 | 789,743 | |||||||||||
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 | 445,844 | |||||||||||
Desert Community College District (Election of 2004); Series 2007 C, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.00 | % | 08/01/37 | 2,500 | 2,719,075 | |||||||||||
East Bay Municipal Utility District; Series 2010 A, Ref. Sub. Water System RB | 5.00 | % | 06/01/36 | 2,000 | 2,324,200 | |||||||||||
Eden (Township of) Healthcare District; Series 2010, COP | 6.13 | % | 06/01/34 | 1,000 | 1,085,770 | |||||||||||
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 | 1,134,840 | |||||||||||
El Segundo Unified School District (Election of 2008); Series 2009 A, Unlimited Tax CAB GO Bonds(b) | 0.00 | % | 08/01/33 | 4,430 | 2,102,655 | |||||||||||
Emeryville (City of) Public Financing Authority (Alameda County); | ||||||||||||||||
Series 2014 A, Ref. Tax Allocation RB (INS–AGM)(a) | 5.00 | % | 09/01/32 | 445 | 514,580 | |||||||||||
Series 2014 A, Ref. Tax Allocation RB (INS–AGM)(a) | 5.00 | % | 09/01/33 | 385 | 444,513 | |||||||||||
Series 2014 A, Ref. Tax Allocation RB (INS–AGM)(a) | 5.00 | % | 09/01/34 | 500 | 575,070 | |||||||||||
Fairfield (City of) Community Facilities District No. 3 (North Cordelia General Improvements); Series 2008, Special Tax RB | 6.00 | % | 09/01/32 | 1,800 | 2,021,670 | |||||||||||
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 | 1,503,390 | |||||||||||
Fontana (City of) Redevelopment Agency (Downtown Redevelopment); Series 2000, Ref. Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 09/01/21 | 1,480 | 1,482,679 | |||||||||||
Foothill-Eastern Transportation Corridor Agency; Series 2015, Ref. CAB Toll Road RB (INS–AGM)(a)(b) | 0.00 | % | 01/15/35 | 2,745 | 1,170,056 | |||||||||||
Fullerton (City of) Community Facilities District No. 1 (Amerige Heights); | ||||||||||||||||
Series 2012, Ref. Special Tax RB | 5.00 | % | 09/01/26 | 1,960 | 2,245,004 | |||||||||||
Series 2012, Ref. Special Tax RB | 5.00 | % | 09/01/32 | 1,090 | 1,207,033 | |||||||||||
Gilroy Unified School District (Election of 2008); | ||||||||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds(b)(d) | 0.00 | % | 08/01/29 | 615 | 425,168 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds(b)(d) | 0.00 | % | 08/01/31 | 2,235 | 1,418,912 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(b) | 0.00 | % | 08/01/29 | 4,735 | 2,851,938 | |||||||||||
Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(b) | 0.00 | % | 08/01/31 | 1,415 | 759,346 | |||||||||||
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 | 2,434,724 | |||||||||||
Golden State Tobacco Securitization Corp.; | ||||||||||||||||
Series 2007 A-1, Sr. Tobacco Settlement Asset-Backed RB | 4.50 | % | 06/01/27 | 2,740 | 2,669,007 | |||||||||||
Series 2007 A-1, Sr. Tobacco Settlement Asset-Backed RB | 5.00 | % | 06/01/33 | 3,440 | 2,912,201 | |||||||||||
Series 2013 A, Enhanced Tobacco Settlement Asset-Backed RB | 5.00 | % | 06/01/30 | 2,000 | 2,278,120 | |||||||||||
Inglewood (City of) Redevelopment Agency (Merged Redevelopment); Series 1998 A, Ref. Tax Allocation RB (INS–AMBAC)(a) | 5.25 | % | 05/01/23 | 1,000 | 1,111,930 | |||||||||||
Irvine (City of) Community Facilities District No. 2013-3 (Great Park Improvement Area No. 1); | ||||||||||||||||
Series 2014, Special Tax RB | 5.00 | % | 09/01/44 | 445 | 504,381 | |||||||||||
Series 2014, Special Tax RB | 5.00 | % | 09/01/49 | 445 | 504,381 | |||||||||||
Irvine Unified School District (Community Facilities District No. 06-1- Portola Springs); Series 2010, Special Tax RB | 6.70 | % | 09/01/35 | 515 | 613,241 | |||||||||||
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) | ||||||||||||||||
Irvine Unified School District; Series 2015, Ref. Special Tax RB | 5.00 | % | 09/01/38 | $ | 3,500 | $ | 4,039,245 | |||||||||
Kern (County of) (Capital Improvments); Series 2009 A, COP (INS–AGC)(a) | 5.75 | % | 08/01/35 | 1,000 | 1,148,060 | |||||||||||
Kern (County of) Water Agency Improvement District No. 4; Series 2008 A, COP (INS–AGC)(a) | 5.00 | % | 05/01/28 | 1,700 | 1,891,250 | |||||||||||
Lake Elsinore (City of) Public Financing Authority; Series 2015, Ref. Special Tax RB | 5.00 | % | 09/01/40 | 2,000 | 2,183,400 | |||||||||||
Lodi (City of); Series 2007 A, Wastewater System Revenue COP (INS–AGM)(a) | 5.00 | % | 10/01/37 | 1,000 | 1,089,520 | |||||||||||
Long Beach (City of) Bond Finance Authority (Aquarium of the Pacific); Series 2012, Ref. RB | 5.00 | % | 11/01/29 | 2,000 | 2,274,040 | |||||||||||
Long Beach (City of) Bond Finance Authority (Natural Gas Purchase); Series 2007 A, RB | 5.50 | % | 11/15/32 | 1,105 | 1,351,979 | |||||||||||
Long Beach (City of) Financing Authority; Series 1992, RB (INS–AMBAC)(a) | 6.00 | % | 11/01/17 | 9,575 | 10,034,504 | |||||||||||
Long Beach (City of); Series 2010 A, Sr. Airport RB | 5.00 | % | 06/01/40 | 2,500 | 2,770,450 | |||||||||||
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 | 405 | 405,895 | |||||||||||
Los Angeles (City of) Community Facilities District No. 4 (Playa Vista–Phase 1); Series 2014, Ref. Special Tax RB | 5.00 | % | 09/01/31 | 600 | 679,542 | |||||||||||
Los Angeles (City of) Department of Airports (Los Angeles International Airport); | ||||||||||||||||
Series 2010 A, Sr. RB | 5.00 | % | 05/15/35 | 2,500 | 2,858,450 | |||||||||||
Series 2010 B, Sub. RB | 5.00 | % | 05/15/40 | 1,000 | 1,126,370 | |||||||||||
Series 2013, RB(f) | 5.00 | % | 05/15/43 | 3,000 | 3,325,560 | |||||||||||
Los Angeles (City of) Department of Airports; Series 2015 C, Ref. Sub. RB | 5.00 | % | 05/15/38 | 1,000 | 1,161,440 | |||||||||||
Los Angeles (City of) Department of Water & Power; | ||||||||||||||||
Series 2011 A, Power System RB(e) | 5.00 | % | 07/01/22 | 1,800 | 2,190,834 | |||||||||||
Series 2011 A, Water System RB | 5.25 | % | 07/01/39 | 1,500 | 1,698,540 | |||||||||||
Subseries 2006 A-1, Water System RB (INS–AMBAC)(a) | 5.00 | % | 07/01/36 | 1,485 | 1,567,299 | |||||||||||
Subseries 2007 A-1, Power System RB (INS–AMBAC)(a) | 5.00 | % | 07/01/37 | 1,000 | 1,093,190 | |||||||||||
Subseries 2008 A-1, Power System RB | 5.25 | % | 07/01/38 | 2,000 | 2,245,480 | |||||||||||
Los Angeles (City of) Harbor Department; Series 2014 A, Ref. RB(f) | 5.00 | % | 08/01/36 | 1,000 | 1,143,720 | |||||||||||
Los Angeles (County of) Metropolitan Transportation Authority (Proposition A); | ||||||||||||||||
Series 2005, First Tier Sales Tax RB(c)(d) | 5.00 | % | 07/01/15 | 835 | 849,070 | |||||||||||
Series 2005, First Tier Sales Tax RB (INS–AMBAC)(a) | 5.00 | % | 07/01/35 | 165 | 167,802 | |||||||||||
Los Angeles Community College District (Election of 2003); Series 2008 F-1, Unlimited Tax GO Bonds(c)(d)(e) | 5.00 | % | 08/01/18 | 2,000 | 2,280,160 | |||||||||||
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 | 943,538 | |||||||||||
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 | 1,088,800 | |||||||||||
Series 2009 I, Unlimited Tax GO Bonds (INS–AGC)(a) | 5.00 | % | 01/01/34 | 3,000 | 3,406,800 | |||||||||||
M-S-R Energy Authority; Series 2009 B, Gas RB | 6.13 | % | 11/01/29 | 1,600 | 2,053,152 | |||||||||||
Madera (County of) (Valley Children’s Hospital); Series 1995, COP (INS–NATL)(a) | 6.50 | % | 03/15/15 | 1,695 | 1,698,831 | |||||||||||
Menifee Union School District (Election of 2008); Series 2009 C, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(b) | 0.00 | % | 08/01/35 | 940 | 390,250 | |||||||||||
Montclair (City of) Redevelopment Agency (Montclair Redevelopment Project No. V); Series 2001, Ref. Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 10/01/20 | 1,310 | 1,313,039 | |||||||||||
Montebello Unified School District (Election of 2004); Series 2009 A-1, Unlimited Tax GO Bonds (INS–AGC)(a) | 5.25 | % | 08/01/34 | 1,000 | 1,111,110 | |||||||||||
Moorpark Unified School District (Election of 2008); Series 2009 A, Unlimited Tax CAB GO Bonds (INS–AGC)(a)(b) | 0.00 | % | 08/01/31 | 840 | 425,040 | |||||||||||
Morongo Band of Mission Indians (The) (Enterprise Casino); Series 2008 B, RB(g) | 6.50 | % | 03/01/28 | 1,000 | 1,138,700 | |||||||||||
National City (City of) Community Development Commission (National City Redevelopment); Series 2011, Tax Allocation RB | 7.00 | % | 08/01/32 | 1,500 | 1,908,615 | |||||||||||
Norco (City of) Financing Authority; Series 2009, Ref. Enterprise RB (INS–AGM)(a) | 5.63 | % | 10/01/34 | 1,000 | 1,149,690 | |||||||||||
Palomar Pomerado Health; Series 2009, COP | 6.75 | % | 11/01/39 | 2,000 | 2,219,780 | |||||||||||
Panama-Buena Vista Union School District (School Construction); Series 2006, COP (INS–NATL)(a) | 5.00 | % | 09/01/30 | 1,045 | 1,073,623 | |||||||||||
Paramount Unified School District (Election of 2006); Series 2007, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.25 | % | 08/01/30 | 1,600 | 1,705,328 | |||||||||||
Pittsburg Unified School District (Election of 2006); Series 2009 B, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.50 | % | 08/01/31 | 1,000 | 1,134,380 | |||||||||||
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) | ||||||||||||||||
Pomona (City of) Public Financing Authority (Merged Redevelopment); | ||||||||||||||||
Series 2001 AD, Tax Allocation RB (INS–NATL)(a) | 5.00 | % | 02/01/16 | $ | 1,110 | $ | 1,113,974 | |||||||||
Series 2007 AW, Sub. RB | 5.13 | % | 02/01/33 | 1,075 | 1,079,493 | |||||||||||
Port Hueneme (City of) (Capital Improvement Program); Series 1992, Ref. COP (INS–NATL)(a) | 6.00 | % | 04/01/19 | 1,025 | 1,122,006 | |||||||||||
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 | 1,084,790 | |||||||||||
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 | 1,038,680 | |||||||||||
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 | 1,405,278 | |||||||||||
Regents of the University of California; | ||||||||||||||||
Series 2009 E, Medical Center Pooled RB | 5.50 | % | 05/15/27 | 2,500 | 2,777,925 | |||||||||||
Series 2009 O, General RB(e) | 5.75 | % | 05/15/23 | 705 | 845,824 | |||||||||||
Series 2009 O, General RB(e) | 5.75 | % | 05/15/25 | 1,050 | 1,255,695 | |||||||||||
Series 2009 Q, General RB(e)(j) | 5.00 | % | 05/15/34 | 920 | 1,005,312 | |||||||||||
Riverside (City of); | ||||||||||||||||
Series 2008 B, Water RB (INS–AGM)(a) | 5.00 | % | 10/01/33 | 1,000 | 1,110,240 | |||||||||||
Series 2008 D, Electric RB (INS–AGM)(a) | 5.00 | % | 10/01/38 | 1,800 | 2,001,078 | |||||||||||
Riverside (County of) Transportation Commission; Series 2010 A, Limited Sales Tax RB | 5.00 | % | 06/01/32 | 1,500 | 1,739,880 | |||||||||||
Sacramento (County of) Sanitation Districts Financing Authority (Sacramento Regional County Sanitation District); Series 2006, RB(c)(d) | 5.00 | % | 06/01/16 | 2,000 | 2,120,280 | |||||||||||
Sacramento (County of); | ||||||||||||||||
Series 2008 A, Sr. Airport System RB (INS–AGM)(a) | 5.00 | % | 07/01/32 | 1,000 | 1,105,980 | |||||||||||
Series 2008 A, Sr. Airport System RB (INS–AGM)(a) | 5.00 | % | 07/01/41 | 1,015 | 1,122,570 | |||||||||||
Series 2010, Sr. Airport System RB | 5.00 | % | 07/01/40 | 2,200 | 2,478,894 | |||||||||||
San Buenaventura (City of) (Community Memorial Health System); Series 2011, RB | 7.50 | % | 12/01/41 | 2,000 | 2,459,520 | |||||||||||
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 | 2,625,854 | |||||||||||
San Diego (City of) Public Facilities Financing Authority; Subseries 2012 A, Ref. Water RB | 5.00 | % | 08/01/32 | 2,215 | 2,546,120 | |||||||||||
San Diego (County of) Regional Transportation Commission; Series 2014 A, Sales & Use Tax RB | 5.00 | % | 04/01/48 | 2,980 | 3,438,413 | |||||||||||
San Diego Community College District (Election of 2002); Series 2009, Unlimited Tax GO Bonds(e) | 5.25 | % | 08/01/33 | 1,500 | 1,735,155 | |||||||||||
San Diego Community College District (Election of 2006); Series 2011, Unlimited Tax GO Bonds | 5.00 | % | 08/01/31 | 2,500 | 2,910,725 | |||||||||||
San Francisco (City & County of) Airport Commission (San Francisco International Airport); | ||||||||||||||||
Series 2009 E, Second Series RB | 6.00 | % | 05/01/39 | 1,000 | 1,183,640 | |||||||||||
Series 2011 C, Ref. Second Series RB(f) | 5.00 | % | 05/01/23 | 5,000 | 5,803,500 | |||||||||||
Series 2011 G, Second Series RB | 5.25 | % | 05/01/28 | 2,000 | 2,316,280 | |||||||||||
San Francisco (City & County of) Public Utilities Commission (Water System Improvement Program); Subseries 2011 A, Water RB | 5.00 | % | 11/01/36 | 4,000 | 4,606,600 | |||||||||||
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 | 1,226,230 | |||||||||||
San Francisco (City & County of) Redevelopment Financing Authority (Mission Bay South Redevelopment); Series 2011 D, Tax Allocation RB | 7.00 | % | 08/01/33 | 500 | 609,800 | |||||||||||
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 | 1,175,932 | |||||||||||
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 Tax RB | 5.00 | % | 08/01/33 | 500 | 560,560 | |||||||||||
San Francisco (City of) Bay Area Rapid Transit District; Series 2012 A, RB | 5.00 | % | 07/01/36 | 1,000 | 1,137,980 | |||||||||||
San Joaquin Hills Transportation Corridor Agency; Series 2014 B, Ref. Jr. Toll Road RB | 5.25 | % | 01/15/44 | 2,000 | 2,198,920 | |||||||||||
San Jose (City of); Series 2014 A, Ref. Airport RB(f) | 5.00 | % | 03/01/25 | 1,050 | 1,238,989 | |||||||||||
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 | 1,710,158 | |||||||||||
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 | 1,680,675 | |||||||||||
Santa Clara (County of) Financing Authority (Multiple Facilities); Series 2008 L, Ref. Lease RB | 5.25 | % | 05/15/36 | 3,000 | 3,334,140 | |||||||||||
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) | ||||||||||||||||
Santa Margarita Water District (Community Facilities District No. 2013-1); | ||||||||||||||||
Series 2013, Special Tax RB | 5.63 | % | 09/01/36 | $ | 1,000 | $ | 1,151,000 | |||||||||
Series 2013, Special Tax RB | 5.63 | % | 09/01/43 | 1,000 | 1,144,420 | |||||||||||
Santaluz Community Facilities District No. 2 (Improvement Area No. 1); | ||||||||||||||||
Series 2011 A, Ref. Special Tax RB | 5.00 | % | 09/01/28 | 825 | 916,261 | |||||||||||
Series 2011 A, Ref. Special Tax RB | 5.00 | % | 09/01/29 | 715 | 791,877 | |||||||||||
Series 2011 A, Ref. Special Tax RB | 5.10 | % | 09/01/30 | 465 | 515,518 | |||||||||||
Sierra View Local Health Care District; Series 2007, RB | 5.25 | % | 07/01/32 | 1,500 | 1,590,495 | |||||||||||
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 | 2,188,259 | |||||||||||
Series 2007 C, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(b) | 0.00 | % | 08/01/30 | 2,765 | 1,522,547 | |||||||||||
South Orange (County of) Public Financing Authority (Ladera Ranch); Series 2014 A, Ref. Sr. Lien Special Tax RB | 5.00 | % | 08/15/34 | 895 | 1,009,175 | |||||||||||
Southern California Metropolitan Water District; | ||||||||||||||||
Series 2005 A, RB (INS–AGM)(a) | 5.00 | % | 07/01/35 | 1,520 | 1,545,810 | |||||||||||
Series 2009 B, Ref. RB(e) | 5.00 | % | 07/01/27 | 8,585 | 9,935,850 | |||||||||||
Southern California Public Power Authority (Mead-Adelanto); Series 1994 A, RB (INS–AMBAC)(a)(k) | 9.76 | % | 07/01/15 | 1,300 | 1,336,062 | |||||||||||
Southern California Public Power Authority (Mead-Phoenix); Series 1994 A, RB (INS–AMBAC)(a)(k) | 9.76 | % | 07/01/15 | 200 | 205,548 | |||||||||||
Southern California Public Power Authority (Milford Wind Corridor Phase II); | ||||||||||||||||
Series 2011 1, RB(e) | 5.25 | % | 07/01/31 | 2,100 | 2,460,360 | |||||||||||
Series 2011-1, RB(e) | 5.25 | % | 07/01/29 | 2,100 | 2,483,439 | |||||||||||
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 | 2,167,759 | |||||||||||
Tustin (City of) Public Financing Authority; Series 2011 A, Water RB | 5.00 | % | 04/01/41 | 1,000 | 1,118,290 | |||||||||||
Val Verde Unified School District; Series 2009 A, Ref. COP (INS–AGC)(a) | 5.13 | % | 03/01/36 | 1,475 | 1,641,262 | |||||||||||
Walnut (City of) Energy Center Authority; Series 2010 A, Ref. RB | 5.00 | % | 01/01/35 | 3,000 | 3,371,430 | |||||||||||
West Contra Costa Unified School District; Series 2005, Unlimited Tax CAB GO Bonds | 0.00 | % | 08/01/25 | 2,500 | 1,785,775 | |||||||||||
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 | 1,147,400 | |||||||||||
Whittier (City of) (Presbyterian Intercommunity Hospital, Inc.); Series 2014, Health Facility RB | 5.00 | % | 06/01/44 | 1,500 | 1,684,800 | |||||||||||
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 | 3,546,732 | |||||||||||
| 383,349,054 | ||||||||||||||||
| Guam–1.47% | ||||||||||||||||
Guam (Territory of) (Section 30); | ||||||||||||||||
Series 2009 A, Limited Obligation RB | 5.38 | % | 12/01/24 | 1,000 | 1,115,750 | |||||||||||
Series 2009 A, Limited Obligation RB | 5.63 | % | 12/01/29 | 660 | 732,277 | |||||||||||
Guam (Territory of) International Airport Authority; Series 2013 C, General RB(f) | 6.25 | % | 10/01/34 | 1,000 | 1,182,990 | |||||||||||
Guam (Territory of) Waterworks Authority; Series 2014 A, Ref. Water & Wastewater System RB | 5.00 | % | 07/01/35 | 765 | 855,752 | |||||||||||
Guam (Territory of); Series 2011 A, Business Privilege Tax RB | 5.13 | % | 01/01/42 | 1,500 | 1,657,710 | |||||||||||
| 5,544,479 | ||||||||||||||||
| Puerto Rico–1.34% | ||||||||||||||||
Puerto Rico (Commonwealth of) Public Buildings Authority; Series 2002 D, RB(c)(d) | 5.45 | % | 07/01/17 | 3,680 | 4,095,325 | |||||||||||
Puerto Rico Sales Tax Financing Corp.; Series 2011 C, RB | 5.25 | % | 08/01/40 | 1,310 | 963,898 | |||||||||||
| 5,059,223 | ||||||||||||||||
| Virgin Islands–1.92% | ||||||||||||||||
Virgin Islands (Government of) Port Authority; | ||||||||||||||||
Series 2014 A, Ref. Marine RB(f) | 5.00 | % | 09/01/29 | 1,645 | 1,840,327 | |||||||||||
Series 2014 A, Ref. RB(f) | 5.00 | % | 09/01/33 | 1,500 | 1,648,830 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 1,675 | 1,913,637 | |||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco California Tax-Free Income Fund
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
| Virgin Islands–(continued) | ||||||||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note); Series 2010 A, Sr. Lien RB | 5.00 | % | 10/01/25 | $ | 1,600 | $ | 1,803,138 | |||||||||
| 7,205,932 | ||||||||||||||||
TOTAL INVESTMENTS(l)–106.59% (Cost $359,906,621) | 401,158,688 | |||||||||||||||
FLOATING RATE NOTE OBLIGATIONS–(7.74)% | ||||||||||||||||
Notes with interest and fee rates ranging from 0.54% to 0.64% at 02/28/15 and contractual maturities of collateral ranging from 07/01/22 to 10/01/39 (See Note 1K)(m) | (29,120,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–1.15% | 4,312,373 | |||||||||||||||
NET ASSETS–100.00% | $ | 376,351,061 | ||||||||||||||
Investment Abbreviations:
| AGC | – Assured Guaranty Corp. | |
| AGM | – Assured Guaranty Municipal Corp. | |
| AMBAC | – American Municipal Bond Assurance Corp. | |
| CAB | – Capital Appreciation Bonds | |
| CEP | – Credit Enhancement Provider | |
| COP | – Certificates of Participation | |
| FHA | – Federal Housing Administration | |
| GO | – General Obligation | |
| INS | – Insurer |
| Jr. | – Junior | |
| LOC | – Letter of Credit | |
| NATL | – National Public Finance Guarantee Corp. | |
| 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) | 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 TOB Trusts entered into by the Fund. See Note 1K. |
| (f) | Security subject to the alternative minimum tax. |
| (g) | 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, 2015 was $7,242,375, which represented 1.92% of the Fund’s Net Assets. |
| (h) | 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, 2015. |
| (i) | Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary. |
| (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 TOB 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 TOB 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 $1,541,610, which represented less than 1% 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. |
| Entity | Percentage | |||
Assured Guaranty Municipal Corp. | 11.0 | %�� | ||
| (m) | Floating rate note obligations related to securities held. The interest and fee rates shown reflect the rates in effect at February 28, 2015. At February 28, 2015, the Fund’s investments with a value of $51,015,931 are held by TOB Trusts and serve as collateral for the $29,120,000 in the floating rate note obligations outstanding at that date. |
Portfolio Composition
By credit sector, based on total investments
as of February 28, 2015
Revenue Bonds | 76.3 | % | ||
General Obligation Bonds | 15.6 | |||
Pre-Refunded Bonds | 7.5 | |||
Other | 0.6 |
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, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $359,906,621) | $ | 401,158,688 | ||
Cash | 4,043,375 | |||
Receivable for: | ||||
Investments sold | 1,847,994 | |||
Fund shares sold | 690,065 | |||
Interest | 5,074,203 | |||
Investment for trustee deferred compensation and retirement plans | 58,197 | |||
Other assets | 41,913 | |||
Total assets | 412,914,435 | |||
Liabilities: | ||||
Floating rate note obligations | 29,120,000 | |||
Payable for: | ||||
Investments purchased | 6,172,815 | |||
Fund shares reacquired | 466,568 | |||
Dividends | 477,026 | |||
Accrued fees to affiliates | 153,992 | |||
Accrued trustees’ and officers’ fees and benefits | 3,748 | |||
Accrued other operating expenses | 43,594 | |||
Trustee deferred compensation and retirement plans | 125,631 | |||
Total liabilities | 36,563,374 | |||
Net assets applicable to shares outstanding | $ | 376,351,061 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 367,067,473 | ||
Undistributed net investment income | 1,263,280 | |||
Undistributed net realized gain (loss) | (33,231,759 | ) | ||
Net unrealized appreciation | 41,252,067 | |||
| $ | 376,351,061 | |||
Net Assets: | ||||
Class A | $ | 308,986,421 | ||
Class B | $ | 15,787,590 | ||
Class C | $ | 26,960,839 | ||
Class Y | $ | 24,616,211 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 25,166,086 | |||
Class B | 1,273,760 | |||
Class C | 2,181,642 | |||
Class Y | 1,997,044 | |||
Class A: | ||||
Net asset value per share | $ | 12.28 | ||
Maximum offering price per share | ||||
(Net asset value of $12.28 ¸ 95.75%) | $ | 12.83 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 12.39 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 12.36 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 12.33 | ||
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, 2015
(Unaudited)
Investment income: | ||||
Interest | $ | 8,779,751 | ||
Expenses: | ||||
Advisory fees | 852,975 | |||
Administrative services fees | 49,180 | |||
Custodian fees | 3,041 | |||
Distribution fees: | ||||
Class A | 372,996 | |||
Class B | 18,142 | |||
Class C | 85,136 | |||
Interest, facilities and maintenance fees | 83,385 | |||
Transfer agent fees | 92,368 | |||
Trustees’ and officers’ fees and benefits | 16,111 | |||
Other | 78,654 | |||
Total expenses | 1,651,988 | |||
Net investment income | 7,127,763 | |||
Realized and unrealized gain from: | ||||
Net realized gain from investment securities | 344,891 | |||
Change in net unrealized appreciation of investment securities | 3,328,432 | |||
Net realized and unrealized gain | 3,673,323 | |||
Net increase in net assets resulting from operations | $ | 10,801,086 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 7,127,763 | $ | 14,854,955 | ||||
Net realized gain (loss) | 344,891 | (3,637,228 | ) | |||||
Change in net unrealized appreciation | 3,328,432 | 32,124,016 | ||||||
Net increase in net assets resulting from operations | 10,801,086 | 43,341,743 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (5,862,627 | ) | (11,020,336 | ) | ||||
Class B | (312,898 | ) | (2,113,675 | ) | ||||
Class C | (384,801 | ) | (751,172 | ) | ||||
Class Y | (480,128 | ) | (926,911 | ) | ||||
Total distributions from net investment income | (7,040,454 | ) | (14,812,094 | ) | ||||
Share transactions–net: | ||||||||
Class A | 9,649,561 | 110,057,457 | ||||||
Class B | (801,954 | ) | (143,702,426 | ) | ||||
Class C | 6,258,416 | (2,708,476 | ) | |||||
Class Y | 2,001,057 | 137,694 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 17,107,080 | (36,215,751 | ) | |||||
Net increase (decrease) in net assets | 20,867,712 | (7,686,102 | ) | |||||
Net assets: | ||||||||
Beginning of period | 355,483,349 | 363,169,451 | ||||||
End of period (includes undistributed net investment income of $1,263,280 and $1,175,971, respectively) | $ | 376,351,061 | $ | 355,483,349 | ||||
February 28, 2015
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 thirteen 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 may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any), 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 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 net investment income, if any, 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 |
15 Invesco California Tax-Free Income Fund
| 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 Tender Option Bonds (“TOBs”), for investment purposes and to enhance the yield of the Fund. Such securities may be purchased in the secondary market without first owning an underlying bond but generally are created through the sale of fixed rate bonds by the Fund to special purpose trusts established by a broker dealer or by the Fund (“TOB Trusts”) in exchange for cash and residual interests in the TOB Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The TOB 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 TOB Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the TOB Trusts for redemption at par at each reset date. The residual interests held by the Fund (inverse floating rate securities) 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 TOB Trust to the Fund, thereby collapsing the TOB Trust. Inverse floating rate securities 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. |
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 decreases in the value of such securities in response to changes in interest rates to a greater extent than fixed rate securities 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 notes created by the TOB Trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such notes for repayment of principal, may not be able to be remarketed to third parties. In such cases, the TOB Trust holding the fixed rate bonds may be collapsed with the entity that contributed the fixed rate bonds to the TOB Trust. In the case where a TOB Trust is collapsed with the Fund, the Fund will be required to repay the principal amount of the tendered securities, which may require the Fund to sell other portfolio holdings to raise cash to meet that obligation. The Fund could therefore be required to sell other portfolio holdings at a disadvantageous time or price to raise cash to meet this obligation, which risk will be heightened during times of market volatility, illiquidity or uncertainty. The embedded leverage in the TOB Trust could cause the Fund to lose more money than the value of the asset it has contributed to the TOB Trust and greater levels of leverage create the potential for greater losses.
The Fund accounts for the transfer of fixed rate bonds to the TOB 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 TOB Trusts as a component of Interest, facilities and maintenance fees on the Statement of Operations.
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. The Fund expects to utilize a Volcker Rule-compliant TOB structure that is substantially similar to the current structure where the residual holder, such as the Fund, would serve as sponsor of the TOB Trust. There currently can be no assurances however, that the Fund’s TOB Trusts can be restructured this way 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 atypical, 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.
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% | ||||
16 Invesco California Tax-Free Income Fund
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.47%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
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, 2015, 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, 2015, 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% 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $20,767 in front-end sales commissions from the sale of Class A shares and $1,010, $6,163 and $3,438 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. |
As of February 28, 2015, 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
17 Invesco California Tax-Free Income Fund
their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 5—Cash Balances and Borrowings
The Trust 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 Trust 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 TOB 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, 2015 were $29,135,000 and 0.58%, 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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, 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 | 2,006,819 | 6,518,057 | 8,524,876 | |||||||||
| $ | 25,256,927 | $ | 6,518,057 | $ | 31,774,984 | |||||||
| * | 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, 2015 was $29,563,623 and $13,742,125, 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 | $ | 43,967,574 | ||
Aggregate unrealized (depreciation) of investment securities | (2,430,687 | ) | ||
Net unrealized appreciation of investment securities | $ | 41,536,887 | ||
Cost of investments for tax purposes is $359,621,801
18 Invesco California Tax-Free Income Fund
NOTE 8—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 1,783,765 | $ | 21,889,567 | 12,738,568 | $ | 145,897,191 | ||||||||||
Class B | 10,083 | 126,061 | 11,680 | 138,829 | ||||||||||||
Class C | 640,375 | 7,908,804 | 293,547 | 3,474,609 | ||||||||||||
Class Y | 219,746 | 2,714,414 | 371,700 | 4,380,591 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 290,480 | 3,401,080 | 531,097 | 6,254,004 | ||||||||||||
Class B | 12,611 | 148,301 | 54,886 | 649,950 | ||||||||||||
Class C | 18,408 | 213,929 | 29,514 | 350,041 | ||||||||||||
Class Y | 18,013 | 196,686 | 29,763 | 352,317 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 18,332 | 224,591 | 390,948 | 4,608,714 | ||||||||||||
Class B | (18,160 | ) | (224,591 | ) | (387,175 | ) | (4,608,714 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (1,310,190 | ) | (15,865,677 | ) | (4,023,477 | ) | (46,702,452 | ) | ||||||||
Class B | (69,694 | ) | (851,725 | ) | (12,162,839 | ) | (139,882,491 | ) | ||||||||
Class C | (152,570 | ) | (1,864,317 | ) | (560,471 | ) | (6,533,126 | ) | ||||||||
Class Y | (75,855 | ) | (910,043 | ) | (396,116 | ) | (4,595,214 | ) | ||||||||
Net increase (decrease) in share activity | 1,385,344 | $ | 17,107,080 | (3,078,375 | ) | $ | (36,215,751 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 62% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The 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
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 | 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/or expenses 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 02/28/15 | $ | 12.15 | $ | 0.24 | (d) | $ | 0.13 | $ | 0.37 | $ | (0.24 | ) | $ | 12.28 | 3.04 | % | $ | 308,986 | 0.90 | %(e) | 0.90 | %(e) | 0.85 | %(e) | 3.94 | %(e) | 4 | % | ||||||||||||||||||||||||
Year ended 08/31/14 | 11.20 | 0.49 | (d) | 0.95 | 1.44 | (0.49 | ) | 12.15 | 13.14 | 296,200 | 0.93 | 0.93 | 0.87 | 4.25 | 12 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.28 | 0.49 | (d) | (1.08 | ) | (0.59 | ) | (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 | ) | 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 | ) | 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 | ) | 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 | ) | 11.21 | 14.74 | 24,377 | 0.86 | 0.92 | 0.85 | 4.65 | 19 | ||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 12.26 | 0.24 | (d) | 0.13 | 0.37 | (0.24 | ) | 12.39 | 3.04 | (g) | 15,788 | 0.88 | (e)(g) | 0.88 | (e)(g) | 0.83 | (e)(g) | 3.96 | (e)(g) | 4 | ||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 11.28 | 0.50 | (d) | 0.98 | 1.48 | (0.50 | ) | 12.26 | 13.35 | (g) | 16,419 | 0.93 | (g) | 0.93 | (g) | 0.87 | (g) | 4.25 | (g) | 12 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.37 | 0.49 | (d) | (1.09 | ) | (0.60 | ) | (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 | ) | 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 | ) | 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 | ) | 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 | ) | 11.28 | 14.68 | 266,270 | 0.85 | 0.94 | 0.84 | 4.66 | 19 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 12.23 | 0.21 | (d) | 0.13 | 0.34 | (0.21 | ) | 12.36 | 2.77 | (h) | 26,961 | 1.39 | (e)(h) | 1.39 | (e)(h) | 1.34 | (e)(h) | 3.45 | (e)(h) | 4 | ||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 11.27 | 0.44 | (d) | 0.96 | 1.40 | (0.44 | ) | 12.23 | 12.62 | (h) | 20,485 | 1.43 | (h) | 1.43 | (h) | 1.37 | (h) | 3.75 | (h) | 12 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.36 | 0.43 | (d) | (1.09 | ) | (0.66 | ) | (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 | ) | 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 | ) | 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 | ) | 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 | ) | 11.27 | 14.11 | 17,245 | 1.36 | 1.42 | 1.35 | 4.15 | 19 | ||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 12.20 | 0.26 | (d) | 0.12 | 0.38 | (0.25 | ) | 12.33 | 3.16 | 24,616 | 0.65 | (e) | 0.65 | (e) | 0.60 | (e) | 4.19 | (e) | 4 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 11.24 | 0.52 | (d) | 0.96 | 1.48 | (0.52 | ) | 12.20 | 13.48 | 22,380 | 0.69 | 0.69 | 0.63 | 4.49 | 12 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 12.33 | 0.52 | (d) | (1.09 | ) | (0.57 | ) | (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 | ) | 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 | ) | 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 | ) | 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 | ) | 11.25 | 15.10 | 27,388 | 0.61 | 0.67 | 0.60 | 4.90 | 19 | ||||||||||||||||||||||||||||||||||||||
| (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 $303,513, $16,090, $23,011 and $23,362 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 0.23%, 0.24%, 0.27%, 0.25% and 0.25% for the six months ended February 28, 2015 and the years ended August 31, 2014, 2013, 2012 and 2011, respectively. |
| (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 0.75% and 0.74%, for the six months ended February 28, 2015 and the year ended August 31, 2014. |
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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,030.40 | $ | 4.53 | $ | 1,020.33 | $ | 4.51 | 0.90 | % | ||||||||||||
B | 1,000.00 | 1,030.40 | 4.43 | 1,020.43 | 4.41 | 0.88 | ||||||||||||||||||
C | 1,000.00 | 1,027.70 | 6.99 | 1,017.90 | 6.95 | 1.39 | ||||||||||||||||||
Y | 1,000.00 | 1,031.60 | 3.27 | 1,021.57 | 3.26 | 0.65 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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
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This service is provided by Invesco Investment Services, Inc.
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its 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, 2015 | ||
| ||||
Invesco Core Plus Bond Fund
| ||||
| Nasdaq: | ||||
| A: ACPSX ¡ B: CPBBX ¡ C: CPCFX ¡ R: CPBRX ¡ Y: CPBYX ¡ R5: CPIIX ¡ R6: CPBFX | ||||
| ||||
| ||||
| 2 | Fund Performance | |||
| 4 | Letters to Shareholders | |||
| 5 | Schedule of Investments | |||
| 24 | Financial Statements | |||
| 26 | Notes to Financial Statements | |||
| 39 | Financial Highlights | |||
| 40 | Fund Expenses | |||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Performance summary
| ||||
Fund vs. Indexes Cumulative total returns, 8/31/14 to 2/28/15, 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 | 2.71% | |||
Class B Shares | 2.42 | |||
Class C Shares | 2.42 | |||
Class R Shares | 2.67 | |||
Class Y Shares | 2.93 | |||
Class R5 Shares | 2.84 | |||
Class R6 Shares | 2.86 | |||
Barclays U.S. Aggregate Indexq (Broad Market/Style-Specific Index) | 2.25 | |||
Lipper Core Plus Bond Funds Indexn (Peer Group Index) | 2.17 | |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc. | ||||
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 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 2/28/15, including maximum applicable sales charges
| ||
Class A Shares | ||
Inception (6/3/09) | 5.25% | |
5 Year | 4.37 | |
1 Year | 1.99 | |
Class B Shares | ||
Inception (6/3/09) | 5.11% | |
5 Year | 4.16 | |
1 Year | 0.75 | |
Class C Shares | ||
Inception (6/3/09) | 5.25% | |
5 Year | 4.50 | |
1 Year | 4.75 | |
Class R Shares | ||
Inception (6/3/09) | 5.78% | |
5 Year | 5.02 | |
1 Year | 6.28 | |
Class Y Shares | ||
Inception (6/3/09) | 6.32% | |
5 Year | 5.56 | |
1 Year | 6.80 | |
Class R5 Shares | ||
Inception (6/3/09) | 6.29% | |
5 Year | 5.52 | |
1 Year | 6.81 | |
Class R6 Shares | ||
Inception | 6.16% | |
5 Year | 5.42 | |
1 Year | 6.86 | |
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
Average Annual Total Returns | ||
As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges | ||
Class A Shares | ||
Inception (6/3/09) | 5.03% | |
5 Year | 4.38 | |
1 Year | 2.45 | |
Class B Shares | ||
Inception (6/3/09) | 4.89% | |
5 Year | 4.14 | |
1 Year | 1.11 | |
Class C Shares | ||
Inception (6/3/09) | 5.04% | |
5 Year | 4.48 | |
1 Year | 5.11 | |
Class R Shares | ||
Inception (6/3/09) | 5.56% | |
5 Year | 5.00 | |
1 Year | 6.64 | |
Class Y Shares | ||
Inception (6/3/09) | 6.11% | |
5 Year | 5.54 | |
1 Year | 7.17 | |
Class R5 Shares | ||
Inception (6/3/09) | 6.09% | |
5 Year | 5.52 | |
1 Year | 7.27 | |
Class R6 Shares | ||
Inception | 5.96% | |
5 Year | 5.41 | |
1 Year | 7.32 | |
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 0.86%, 1.61%, 1.61%, 1.11%, 0.61%, 0.60% and 0.56%, respectively.1,2 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 1.03%, 1.78%, 1.78%, 1.28%, 0.78%, 0.60% 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 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, 2015. See current prospectus for more information. |
| 2 | Total annual Fund operating expenses after any contractual fee waivers by the adviser in effect through at least June 30, 2016. See current prospectus for more information. |
3 Invesco Core Plus Bond Fund
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. | |||
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee. | ||||
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. | |||
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it. | ||||
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. | ||||
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. | ||||
Sincerely,
|
|
| Philip Taylor |
| Senior Managing Director, Invesco Ltd. |
iPhone and iPad are trademarks 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
February 28, 2015
(Unaudited)
| Principal Amount | Value | |||||||
U.S. Dollar Denominated Bonds and Notes–46.95% |
| |||||||
| Aerospace & Defense–0.47% | ||||||||
Bombardier Inc. (Canada), Sr. Unsec. Notes, 7.50%, 03/15/18(b) | $ | 70,000 | $ | 74,988 | ||||
7.50%, 03/15/25(b) | 48,000 | 49,080 | ||||||
7.75%, 03/15/20(b) | 108,000 | 112,995 | ||||||
Unsec. Notes, 5.50%, 09/15/18(b) | 48,000 | 48,660 | ||||||
DigitalGlobe Inc., Sr. Unsec. Gtd. Bonds, 5.25%, 02/01/21(b) | 61,000 | 59,475 | ||||||
GenCorp Inc., Sec. Gtd. Global Notes, 7.13%, 03/15/21 | 204,000 | 216,750 | ||||||
L-3 Communications Corp., Sr. Unsec. Gtd. Global Notes, 3.95%, 05/28/24 | 1,540,000 | 1,574,480 | ||||||
Sr. Unsec. Gtd. Notes, 4.95%, 02/15/21 | 679,000 | 747,651 | ||||||
Moog Inc., Sr. Unsec. Gtd. Notes, 5.25%, 12/01/22(b) | 50,000 | 51,750 | ||||||
Northrop Grumman Corp., Sr. Unsec. Global Notes, 3.85%, 04/15/45 | 948,000 | 930,672 | ||||||
TransDigm Inc., Sr. Unsec. Gtd. Sub. Global Notes, 5.50%, 10/15/20 | 130,000 | 129,350 | ||||||
| 3,995,851 | ||||||||
| Agricultural & Farm Machinery–0.01% | ||||||||
Titan International Inc., Sr. Sec. Gtd. Global Notes, 6.88%, 10/01/20 | 74,000 | 67,710 | ||||||
| Agricultural Products–0.00% | ||||||||
Darling Ingredients, Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 01/15/22 | 37,000 | 37,555 | ||||||
| Airlines–0.23% | ||||||||
Air Canada (Canada), | 30,000 | 33,431 | ||||||
Sr. Unsec. Gtd. Notes, 7.75%, 04/15/21(b) | 130,000 | 139,587 | ||||||
American Airlines Group Inc., Sr. Unsec. Notes, 4.63%, 03/01/20(b) | 36,000 | 36,225 | ||||||
American Airlines Pass Through Trust, Series 2011-1, Class B, Sec. Pass Through Ctfs., 7.00%, 01/31/18(b) | 67,119 | 72,950 | ||||||
Continental Airlines Pass Through Trust, | 1,007,783 | 1,108,562 | ||||||
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17 | 2,460 | 2,720 | ||||||
Series 2012-1, Class A, Sr. Sec. Pass Through Ctfs., 4.15%, 04/11/24 | 463,086 | 493,187 | ||||||
| Principal Amount | Value | |||||||
| Airlines–(continued) | ||||||||
US Airways Pass Through Trust, Series 1998-1, Class C, Sec. Pass Through Ctfs., 6.82%, 01/30/19 | $ | 6,102 | $ | 6,163 | ||||
Series 2012-1, Class B, Sec. Pass Through Ctfs., 8.00%, 10/01/19 | 8,955 | 10,228 | ||||||
| 1,903,053 | ||||||||
| Alternative Carriers–0.04% | ||||||||
Level 3 Communications, Inc., Sr. Unsec. Global Notes, 5.75%, 12/01/22 | 125,000 | 129,062 | ||||||
Level 3 Financing, Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 08/15/22 | 200,000 | 208,500 | ||||||
| 337,562 | ||||||||
| Aluminum–0.02% | ||||||||
China Hongqiao Group Ltd. (China), REGS, Sr. Unsec. Gtd. Euro Notes, 7.63%, 06/26/17(b) | 203,000 | 206,822 | ||||||
| Apparel Retail–0.06% | ||||||||
Hot Topic, Inc., Sr. Sec. Gtd. Notes, 9.25%, 06/15/21(b) | 166,000 | 181,978 | ||||||
L Brands, Inc., Sr. Unsec. Gtd. Notes, 6.63%, 04/01/21 | 170,000 | 195,287 | ||||||
Men’s Wearhouse Inc. (The), Sr. Unsec. Gtd. Notes, 7.00%, 07/01/22(b) | 88,000 | 93,280 | ||||||
Neiman Marcus Group Ltd. LLC, | 43,000 | 45,365 | ||||||
| 515,910 | ||||||||
| Apparel, Accessories & Luxury Goods–0.01% | ||||||||
William Carter Co. (The), Sr. Unsec. Gtd. Global Notes, | 41,000 | 43,153 | ||||||
| Application Software–0.01% | ||||||||
Nuance Communications Inc., Sr. Unsec. Gtd. Notes, 5.38%, 08/15/20(b) | 78,000 | 80,340 | ||||||
| Asset Management & Custody Banks–1.04% | ||||||||
Affiliated Managers Group, Inc., | 2,865,000 | 3,031,872 | ||||||
Alphabet Holding Co., Inc., Sr. Unsec. PIK Global Notes, 7.75%, 11/01/17(c) | 55,000 | 54,175 | ||||||
Apollo Management Holdings L.P., | 965,000 | 997,354 | ||||||
Blackstone Holdings Finance Co. LLC, Sr. Unsec. Gtd. Notes, 5.00%, 06/15/44(b) | 2,645,000 | 2,895,486 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Asset Management & Custody Banks–(continued) | ||||||||
Carlyle Holdings II Finance LLC, Sr. Sec. Gtd. Notes, 5.63%, 03/30/43(b) | $ | 1,545,000 | $ | 1,781,184 | ||||
| 8,760,071 | ||||||||
| Auto Parts & Equipment–0.49% | ||||||||
CTP Transportation Products LLC/CTP Finance Inc., Sr. Sec. Notes, 8.25%, 12/15/19(b) | 90,000 | 94,838 | ||||||
Dana Holding Corp., Sr. Unsec. Notes, 5.38%, 09/15/21 | 128,000 | 134,720 | ||||||
5.50%, 12/15/24 | 24,000 | 24,930 | ||||||
Johnson Controls, Inc., Sr. Unsec. Global Notes, 4.95%, 07/02/64 | 615,000 | 653,816 | ||||||
Stackpole International Intermediate Co. S.A./Stackpole International Powder Metal (Canada), Sr. Sec. Gtd. Notes, 7.75%, 10/15/21(b) | 148,000 | 150,220 | ||||||
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 12/15/24 | 55,000 | 57,613 | ||||||
TRW Automotive Inc., Sr. Unsec. Gtd. Notes, 4.50%, 03/01/21(b) | 3,000,000 | 3,036,562 | ||||||
| 4,152,699 | ||||||||
| Automobile Manufacturers–0.94% | ||||||||
General Motors Co., Sr. Unsec. Global Notes, 3.50%, 10/02/18 | 2,355,000 | 2,429,182 | ||||||
General Motors Financial Co., Inc., | 2,429,000 | 2,456,705 | ||||||
3.50%, 07/10/19 | 924,000 | 951,143 | ||||||
Jaguar Land Rover Automotive PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 4.25%, 11/15/19(b) | 2,019,000 | 2,109,855 | ||||||
| 7,946,885 | ||||||||
| Automotive Retail–0.01% | ||||||||
CST Brands, Inc., Sr. Unsec. Gtd. Global Notes, 5.00%, 05/01/23 | 82,000 | 85,280 | ||||||
| Broadcasting–0.09% | ||||||||
Clear Channel Worldwide Holdings Inc., Series B, Sr. Unsec. Gtd. Global Notes, 6.50%, 11/15/22 | 74,000 | 78,255 | ||||||
iHeartCommunications, Inc., | 46,000 | 44,678 | ||||||
Sr. Sec. Gtd. Notes, 10.63%, 03/15/23(b) | 20,000 | 20,550 | ||||||
Sr. Unsec. Global Notes, 10.00%, 01/15/18 | 60,000 | 53,550 | ||||||
Sinclair Television Group Inc., Sr. Unsec. Gtd. Notes, 5.63%, 08/01/24(b) | 160,000 | 162,800 | ||||||
Starz LLC/Starz Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.00%, 09/15/19 | 5,000 | 5,181 | ||||||
| Principal Amount | Value | |||||||
| Broadcasting–(continued) | ||||||||
TV Azteca S.A.B. de C.V. (Mexico), REGS, Sr. Unsec. Gtd. Medium-Term Euro Notes, 7.63%, 09/18/20(b) | $ | 350,000 | $ | 370,235 | ||||
| 735,249 | ||||||||
| Building Products–0.11% | ||||||||
Builders FirstSource Inc., Sr. Sec. Notes, 7.63%, 06/01/21(b) | 215,000 | 219,300 | ||||||
Building Materials Holding Corp., Sr. Sec. Notes, 9.00%, 09/15/18(b) | 126,000 | 133,245 | ||||||
Gibraltar Industries Inc., Sr. Unsec. Gtd. Sub. Global Notes, 6.25%, 02/01/21 | 180,000 | 184,500 | ||||||
NCI Building Systems, Inc., Sr. Unsec. Gtd. Notes, 8.25%, 01/15/23(b) | 20,000 | 20,900 | ||||||
Norbord Inc. (Canada), Sr. Sec. Notes, 5.38%, 12/01/20(b) | 89,000 | 87,220 | ||||||
Nortek Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 04/15/21 | 211,000 | 227,352 | ||||||
USG Corp., Sr. Unsec. Gtd. Notes, 5.50%, 03/01/25(b) | 48,000 | 49,320 | ||||||
5.88%, 11/01/21(b) | 24,000 | 25,440 | ||||||
| 947,277 | ||||||||
| Cable & Satellite–0.64% | ||||||||
Altice S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 7.75%, 05/15/22(b) | 300,000 | 310,875 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp., Sr. Unsec. Gtd. Global Notes, | 147,000 | 152,145 | ||||||
5.25%, 09/30/22 | 35,000 | 36,138 | ||||||
CCOH Safari LLC, Sr. Unsec. Gtd. Notes, 5.50%, 12/01/22 | 35,000 | 36,225 | ||||||
Cox Communications, Inc., | 1,220,000 | 1,755,414 | ||||||
9.38%, 01/15/19(b) | 25,000 | 31,527 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Notes, 4.45%, 04/01/24 | 1,090,000 | 1,163,643 | ||||||
DISH DBS Corp., Sr. Unsec. Gtd. Global Notes, | 272,000 | 275,740 | ||||||
5.88%, 11/15/24 | 70,000 | 69,825 | ||||||
Hughes Satellite Systems Corp., | 59,000 | 65,785 | ||||||
Intelsat Luxembourg S.A. (Luxembourg), Sr. Unsec. Gtd. Global Bonds, | 250,000 | 232,813 | ||||||
8.13%, 06/01/23 | 120,000 | 112,200 | ||||||
Numericable-SFR S.A. (France), Sr. Sec. Gtd. Bonds, 6.00%, 05/15/22(b) | 206,000 | 210,635 | ||||||
Time Warner Cable, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 02/01/20 | 680,000 | 756,843 | ||||||
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) | ||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH (Germany), Sr. Sec. Gtd. Bonds, 5.00%, 01/15/25(b) | $ | 200,000 | $ | 206,000 | ||||
| 5,415,808 | ||||||||
| Casinos & Gaming–0.04% | ||||||||
Boyd Gaming Corp., Sr. Unsec. Gtd. Global Notes, 9.00%, 07/01/20 | 105,000 | 113,662 | ||||||
Caesars Entertainment Resort Properties LLC, | 10,000 | 10,150 | ||||||
Sec. Gtd. Notes, 11.00%, 10/01/21(b) | 29,000 | 25,810 | ||||||
MGM Resorts International, | 45,000 | 48,713 | ||||||
Sr. Unsec. Gtd. Notes, 7.75%, 03/15/22 | 136,000 | 156,060 | ||||||
| 354,395 | ||||||||
| Catalog Retail–0.76% | ||||||||
QVC, Inc., Sr. Sec. Gtd. Global Notes, | 1,736,000 | 1,794,997 | ||||||
4.45%, 02/15/25 | 2,800,000 | 2,835,575 | ||||||
5.45%, 08/15/34 | 1,815,000 | 1,805,533 | ||||||
| 6,436,105 | ||||||||
| Coal & Consumable Fuels–0.03% | ||||||||
Cloud Peak Energy Resources LLC / Cloud Peak Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/15/19 | 44,000 | 44,880 | ||||||
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes, 5.88%, 04/15/22 | 140,000 | 135,800 | ||||||
Peabody Energy Corp., Sr. Unsec. Gtd. Notes, 6.50%, 09/15/20 | 48,000 | 40,920 | ||||||
| 221,600 | ||||||||
| Commercial Printing–0.02% | ||||||||
Multi-Color Corp., Sr. Unsec. Gtd. Notes, 6.13%, 12/01/22(b) | 53,000 | 55,253 | ||||||
RR Donnelley & Sons Co., Sr. Unsec. Global Notes, 7.88%, 03/15/21 | 90,000 | 102,600 | ||||||
| 157,853 | ||||||||
| Commodity Chemicals–0.24% | ||||||||
LyondellBasell Industries N.V., Sr. Unsec. Bonds, 4.63%, 02/26/55 | 2,005,000 | 1,990,341 | ||||||
| Communications Equipment–0.02% | ||||||||
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b) | 65,000 | 65,975 | ||||||
9.00%, 04/01/19(b) | 133,000 | 138,653 | ||||||
| 204,628 | ||||||||
| Computer & Electronics Retail–0.01% | ||||||||
Rent-A-Center, Inc., Sr. Unsec. Gtd. Global Notes, 4.75%, 05/01/21 | 111,000 | 96,015 | ||||||
| Principal Amount | Value | |||||||
| Construction & Engineering–0.02% | ||||||||
AECOM, Sr. Unsec. Gtd. Notes, 5.75%, 10/15/22(b) | $ | 40,000 | $ | 42,354 | ||||
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 01/15/21 | 105,000 | 110,775 | ||||||
| 153,129 | ||||||||
| Construction Machinery & Heavy Trucks–0.09% | ||||||||
Allied Specialty Vehicles, Inc., Sr. Sec. Notes, 8.50%, 11/01/19(b) | 162,000 | 171,720 | ||||||
Commercial Vehicle Group Inc., Sec. Gtd. Global Notes, 7.88%, 04/15/19 | 204,000 | 211,650 | ||||||
Meritor Inc., Sr. Unsec. Gtd. Notes, | 59,000 | 60,327 | ||||||
6.75%, 06/15/21 | 34,000 | 35,573 | ||||||
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21 | 128,000 | 130,240 | ||||||
Oshkosh Corp., | 142,000 | 145,727 | ||||||
Sr. Unsec. Gtd. Notes, 5.38%, 03/01/25(b) | 30,000 | 30,825 | ||||||
| 786,062 | ||||||||
| Construction Materials–0.10% | ||||||||
Building Materials Corp. of America, Sr. Unsec. Notes, 5.38%, 11/15/24(b) | 155,000 | 160,134 | ||||||
Cemex S.A.B. de C.V. (Mexico), REGS, Sr. Sec. Gtd. Euro Notes, 5.70%, 01/11/25(b) | 350,000 | 344,050 | ||||||
CPG Merger Sub LLC, Sr. Unsec. Gtd. Notes, 8.00%, 10/01/21(b) | 30,000 | 30,600 | ||||||
Unifrax I LLC/Unifrax Holding Co., Sr. Unsec. Gtd. Notes, 7.50%, 02/15/19(b) | 170,000 | 170,850 | ||||||
US Concrete, Inc., Sr. Sec. Gtd. Global Notes, 8.50%, 12/01/18 | 101,000 | 107,565 | ||||||
| 813,199 | ||||||||
| Consumer Finance–0.08% | ||||||||
Ally Financial Inc., Sr. Unsec. Global Notes, 5.13%, 09/30/24 | 274,000 | 290,440 | ||||||
Navient Corp., Sr. Unsec. Medium-Term Global Notes, 6.25%, 01/25/16 | 355,000 | 367,425 | ||||||
| 657,865 | ||||||||
| Data Processing & Outsourced Services–0.06% | ||||||||
CoreLogic, Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/01/21 | 103,000 | 110,210 | ||||||
First Data Corp., | 37,000 | 44,308 | ||||||
Sr. Unsec. Gtd. Sub. Global Notes, 11.75%, 08/15/21 | 281,000 | 327,716 | ||||||
| 482,234 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Department Stores–0.53% | ||||||||
1011778 BC ULC/ New Red Finance, Inc. (Canada), Sec. Notes, 6.00%, 04/01/22(b) | $ | 3,343,000 | $ | 3,485,077 | ||||
El Puerto de Liverpool, S.A.B. de C.V. (Mexico), | 275,000 | 273,625 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 3.95%, 10/02/24(b) | 200,000 | 201,750 | ||||||
Golden Eagle Retail Group Ltd. (China), REGS, Sr. Unsec. Euro Notes, 4.63%, 05/21/23(b) | 220,000 | 194,398 | ||||||
SACI Falabella (Chile), Sr. Unsec. Notes, 4.38%, 01/27/25(b) | 300,000 | 310,315 | ||||||
| 4,465,165 | ||||||||
| Distillers & Vintners–0.28% | ||||||||
CEDC Finance Corp. International Inc. (Poland), Sr. Sec. Gtd. Global Notes, 10.00%, 04/30/18(d) | 49,281 | 42,382 | ||||||
Constellation Brands Inc., Sr. Unsec. Gtd. Notes, 3.88%, 11/15/19 | 2,275,000 | 2,366,000 | ||||||
| 2,408,382 | ||||||||
| Diversified Banks–6.71% | ||||||||
Akbank TAS (Turkey), Sr. Unsec. Notes, 4.00%, 01/24/20(b) | 200,000 | 197,599 | ||||||
Banco de Credito e Inversiones (Chile), Sr. Unsec. Notes, | 200,000 | 205,918 | ||||||
4.00%, 02/11/23(b) | 500,000 | 506,674 | ||||||
Banco Inbursa S.A. Institucion de Banca Multiple (Mexico), Sr. Unsec. Notes, 4.13%, 06/06/24(b) | 1,390,000 | 1,383,954 | ||||||
Banco Santander Mexico S.A. Institucion de Banca Multiple Grupo Financiero Santander (Mexico), Unsec. Sub. Notes, 5.95%, 01/30/24(b) | 400,000 | 422,250 | ||||||
Bancolombia S.A. (Colombia), Unsec. Sub. Global Notes, 5.13%, 09/11/22 | 140,000 | 142,697 | ||||||
Bank of America Corp., | 1,645,000 | 1,700,519 | ||||||
Series Z, Jr. Unsec. Sub. Notes, 6.50%(e) | 3,360,000 | 3,578,400 | ||||||
Bank of China Ltd. (China), Unsec. Sub. Notes, 5.00%, 11/13/24(b) | 2,585,000 | 2,733,024 | ||||||
BBVA Bancomer S.A. (Mexico), | 1,385,000 | 1,444,499 | ||||||
Unsec. Sub. Notes, | 600,000 | 684,907 | ||||||
Citigroup Inc., | 2,970,000 | 3,357,397 | ||||||
Series A, Jr. Unsec. Sub. Global Notes, 5.95%(e) | 1,495,000 | 1,517,425 | ||||||
Series N, Jr. Unsec. Sub. Global Notes, 5.80%(e) | 2,225,000 | 2,261,156 | ||||||
| Principal Amount | Value | |||||||
| Diversified Banks–(continued) | ||||||||
Credit Agricole S.A. (France), Jr. Unsec. Sub. Notes, 7.88%(b)(e) | $ | 1,395,000 | $ | 1,482,188 | ||||
Credit Suisse (Switzerland), Sr. Unsec. Notes, 3.00%, 10/29/21 | 1,518,000 | 1,545,869 | ||||||
Eurasian Development Bank (Supranational), Sr. Unsec. Notes, 4.77%, 09/20/22(b) | 200,000 | 171,000 | ||||||
Grupo Aval Ltd. (Colombia), Sr. Unsec. Gtd. Notes, 4.75%, 09/26/22(b) | 400,000 | 405,788 | ||||||
Hana Bank (South Korea), | 700,000 | 737,908 | ||||||
Unsec. Sub. Notes, 4.38%, 09/30/24(b) | 990,000 | 1,051,518 | ||||||
HBOS PLC (United Kingdom), Unsec. Sub. Medium-Term Global Notes, 6.75%, 05/21/18(b) | 1,360,000 | 1,525,944 | ||||||
HSBC Holdings PLC (United Kingdom), | 1,050,000 | 1,134,069 | ||||||
Unsec. Sub. Global Notes, 5.25%, 03/14/44 | 1,475,000 | 1,679,410 | ||||||
Industrial & Commercial Bank of China Ltd. (China), Jr. Unsec. Sub. Notes, 6.00%(b)(e) | 2,258,000 | 2,358,458 | ||||||
Intesa Sanpaolo SpA (Italy), Sr. Unsec. Gtd. Notes, 3.88%, 01/15/19 | 2,840,000 | 2,985,715 | ||||||
JPMorgan Chase & Co., Series R, Jr. Unsec. Sub. Global Notes, 6.00%(e) | 2,980,000 | 3,061,950 | ||||||
Nordea Bank AB (Sweden), Jr. Unsec. Sub. Notes, | 2,140,000 | 2,204,200 | ||||||
6.13%(b)(e) | 1,300,000 | 1,326,000 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Unsec. Sub. Yankee Notes, 6.13%, 12/15/22 | 95,000 | 107,722 | ||||||
Russian Agricultural Bank OJSC Via RSHB Capital S.A. (Russia), REGS, Sr. Unsec. Euro Notes, 5.10%, 07/25/18(b) | 200,000 | 173,500 | ||||||
Societe Generale S.A. (France), Jr. Unsec. Sub. Bonds, 7.88%(b)(e) | 1,309,000 | 1,328,635 | ||||||
Standard Chartered PLC (United Kingdom), | 775,000 | 778,778 | ||||||
Unsec. Sub. Notes, | 960,000 | 1,067,139 | ||||||
Sumitomo Mitsui Financial Group Inc. (Japan), Unsec. Sub. Bonds, 4.44%, 04/02/24(b) | 2,525,000 | 2,696,200 | ||||||
U.S. Bank N.A., Unsec. Sub. Notes, 3.78%, 04/29/20 | 1,400,000 | 1,406,728 | ||||||
VTB Bank OJSC Via VTB Capital S.A. (Russia), Sr. Unsec. Notes, 6.00%, 04/12/17(b) | 200,000 | 186,500 | ||||||
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) | ||||||||
Wells Fargo & Co., | $ | 3,500,000 | $ | 4,149,691 | ||||
Series U, Jr. Unsec. Sub. Global Notes, 5.88%(e) | 2,835,000 | 2,998,012 | ||||||
| 56,699,341 | ||||||||
| Diversified Capital Markets–0.28% | ||||||||
Credit Suisse Group AG (Switzerland), Jr. Unsec. Sub. Notes, 6.25%(b)(e) | 2,410,000 | 2,397,950 | ||||||
| Diversified Chemicals–0.21% | ||||||||
Eastman Chemical Co., Sr. Unsec. Global Notes, 2.70%, 01/15/20 | 1,755,000 | 1,776,817 | ||||||
| Diversified Metals & Mining–0.45% | ||||||||
FMG Resources (August 2006) Pty. Ltd. (Australia), Sr. Unsec. Gtd. Notes, | 20,000 | 20,238 | ||||||
8.25%, 11/01/19(b) | 1,800,000 | 1,701,000 | ||||||
HudBay Minerals, Inc. (Canada), | 49,000 | 50,715 | ||||||
Sr. Unsec. Gtd. Notes, 9.50%, 10/01/20(b) | 30,000 | 30,900 | ||||||
Rio Tinto Finance USA Ltd. (United Kingdom), Sr. Unsec. Gtd. Global Notes, 7.13%, 07/15/28 | 565,000 | 763,145 | ||||||
Southern Copper Corp., Sr. Unsec. Global Notes, | 1,074,000 | 974,514 | ||||||
6.75%, 04/16/40 | 225,000 | 239,147 | ||||||
| 3,779,659 | ||||||||
| Diversified Real Estate Activities–0.20% | ||||||||
Brookfield Asset Management Inc. (Canada), Sr. Unsec. Notes, 4.00%, 01/15/25 | 1,705,000 | 1,711,642 | ||||||
| Diversified REIT’s–0.82% | ||||||||
Select Income REIT, Sr. Unsec. Global Notes, 4.50%, 02/01/25 | 1,570,000 | 1,567,282 | ||||||
W.P. Carey Inc., Sr. Unsec. Notes, | 5,375,000 | 5,352,405 | ||||||
| 6,919,687 | ||||||||
| Electric Utilities–0.24% | ||||||||
Electricite de France S.A. (France), Jr. Unsec. Sub. Notes, 5.63%(b)(e) | 1,535,000 | 1,667,010 | ||||||
Majapahit Holding B.V. (Indonesia), | 100,000 | 117,887 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.75%, 01/20/20(b) | 200,000 | 235,750 | ||||||
| 2,020,647 | ||||||||
| Principal Amount | Value | |||||||
| Electrical Components & Equipment–0.00% | ||||||||
Sensata Technologies B.V. (Netherlands), Sr. Unsec. Gtd. Notes, 4.88%, 10/15/23(b) | $ | 40,000 | $ | 41,600 | ||||
| Environmental & Facilities Services–0.01% | ||||||||
ADS Waste Holdings, Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 10/01/20 | 53,000 | 54,855 | ||||||
| Gas Utilities–0.40% | ||||||||
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global Notes, | 120,000 | 121,800 | ||||||
6.75%, 01/15/22 | 30,000 | 30,450 | ||||||
Kinder Morgan Finance Co. LLC, Sr. Unsec. Gtd. Notes, 6.00%, 01/15/18(b) | 2,851,000 | 3,125,446 | ||||||
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., | 31,000 | 31,698 | ||||||
Sr. Unsec. Global Notes, | 40,000 | 40,800 | ||||||
| 3,350,194 | ||||||||
| General Merchandise Stores–0.22% | ||||||||
Dollar General Corp., Sr. Unsec. Global Notes, 3.25%, 04/15/23 | 1,729,000 | 1,672,316 | ||||||
Family Tree Escrow LLC, Sr. Unsec. Notes, 5.75%, 03/01/23(b) | 216,000 | 228,420 | ||||||
| 1,900,736 | ||||||||
| Gold–0.45% | ||||||||
Kinross Gold Corp. (Canada), Sr. Unsec. Gtd. Global Notes, 5.95%, 03/15/24 | 1,365,000 | 1,358,025 | ||||||
New Gold Inc. (Canada), Sr. Unsec. Notes, 6.25%, 11/15/22(b) | 111,000 | 112,387 | ||||||
Newcrest Finance Pty. Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.75%, 11/15/41(b) | 815,000 | 754,364 | ||||||
Yamana Gold Inc. (Canada), Sr. Unsec. Global Notes, 4.95%, 07/15/24 | 1,585,000 | 1,577,695 | ||||||
| 3,802,471 | ||||||||
| Health Care Distributors–0.54% | ||||||||
AmerisourceBergen Corp., | 880,000 | 888,876 | ||||||
Sr. Unsec. Notes, | 1,436,000 | 1,499,974 | ||||||
McKesson Corp., Sr. Unsec. Global Notes, 3.80%, 03/15/24 | 2,085,000 | 2,210,092 | ||||||
| 4,598,942 | ||||||||
| Health Care Equipment–0.57% | ||||||||
CareFusion Corp., Sr. Unsec. Global Notes, | 1,385,000 | 1,447,516 | ||||||
4.88%, 05/15/44 | 1,989,000 | 2,194,397 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Health Care Equipment–(continued) | ||||||||
Medtronic Inc., Sr. Unsec. Gtd. Global Notes, 4.63%, 03/15/44 | $ | 971,000 | $ | 1,097,489 | ||||
Universal Hospital Services Inc., Sec. Gtd. Global Notes, 7.63%, 08/15/20 | 90,000 | 77,400 | ||||||
| 4,816,802 | ||||||||
| Health Care Facilities–0.20% | ||||||||
Acadia Healthcare Co., Inc., Sr. Unsec. Gtd. Notes, 5.63%, 02/15/23(b) | 97,000 | 100,638 | ||||||
Community Health Systems, Inc., | 33,000 | 34,609 | ||||||
Sr. Unsec. Gtd. Global Notes, | 69,737 | 74,967 | ||||||
HCA Holdings, Inc., Sr. Unsec. Notes, 6.25%, 02/15/21 | 130,000 | 143,000 | ||||||
HCA, Inc., | 186,000 | 209,250 | ||||||
6.50%, 02/15/20 | 675,000 | 769,078 | ||||||
Sr. Sec. Gtd. Notes, | 40,000 | 44,100 | ||||||
Sr. Unsec. Gtd. Bonds, | 92,000 | 98,095 | ||||||
Tenet Healthcare Corp., | 93,000 | 101,602 | ||||||
Sr. Unsec. Global Notes, | 40,000 | 43,100 | ||||||
8.13%, 04/01/22 | 83,000 | 94,309 | ||||||
| 1,712,748 | ||||||||
| Health Care REIT’s–0.34% | ||||||||
HCP, Inc., Sr. Unsec. Global Notes, 4.25%, 11/15/23 | 1,305,000 | 1,382,665 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 1,495,000 | 1,525,835 | ||||||
| 2,908,500 | ||||||||
| Health Care Services–0.89% | ||||||||
Express Scripts Holding Co., Sr. Unsec. Gtd. Global Notes, 3.50%, 06/15/24 | 958,000 | 984,655 | ||||||
Laboratory Corp. of America Holdings, Sr. Unsec. Notes, 3.60%, 02/01/25 | 3,974,000 | 4,026,424 | ||||||
4.70%, 02/01/45 | 2,261,000 | 2,337,239 | ||||||
MPH Acquisition Holdings LLC, Sr. Unsec. Gtd. Notes, 6.63%, 04/01/22(b) | 139,000 | 148,209 | ||||||
Omnicare Inc., Sr. Unsec. Gtd. Notes, 5.00%, 12/01/24 | 40,000 | 42,350 | ||||||
| 7,538,877 | ||||||||
| Home Improvement Retail–0.02% | ||||||||
Hillman Group Inc. (The), Sr. Unsec. Notes, 6.38%, 07/15/22(b) | 172,000 | 170,280 | ||||||
| Principal Amount | Value | |||||||
| Homebuilding–0.40% | ||||||||
Ashton Woods USA LLC/Ashton Woods Finance Co., Sr. Unsec. Notes, 6.88%, 02/15/21(b) | $ | 201,000 | $ | 180,649 | ||||
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/21 | 136,000 | 133,620 | ||||||
K. Hovnanian Enterprises Inc., | 26,000 | 27,300 | ||||||
Sr. Unsec. Gtd. Notes, | 165,000 | 156,750 | ||||||
KB Home, Sr. Unsec. Gtd. Notes, | 42,000 | 42,315 | ||||||
7.50%, 09/15/22 | 20,000 | 20,300 | ||||||
Lennar Corp., Sr. Unsec. Gtd. Notes, 4.50%, 11/15/19 | 1,493,000 | 1,534,057 | ||||||
MDC Holdings, Inc., Sr. Unsec. Gtd. Notes, 6.00%, 01/15/43 | 1,470,000 | 1,217,502 | ||||||
Ryland Group Inc. (The), Sr. Unsec. Gtd. Notes, 5.38%, 10/01/22 | 69,000 | 67,275 | ||||||
| 3,379,768 | ||||||||
| Hotels, Resorts & Cruise Lines–0.01% | ||||||||
Choice Hotels International, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 07/01/22 | 40,000 | 43,700 | ||||||
NCL Corp. Ltd., Sr. Unsec. Notes, 5.25%, 11/15/19(b) | 20,000 | 20,650 | ||||||
| 64,350 | ||||||||
| Household Products–0.04% | ||||||||
Reynolds Group Issuer Inc./LLC, | 147,000 | 153,615 | ||||||
Sr. Unsec. Gtd. Global Notes, 8.25%, 02/15/21 | 200,000 | 211,500 | ||||||
| 365,115 | ||||||||
| Hypermarkets & Super Centers–0.24% | ||||||||
Cencosud S.A. (Chile), | 200,000 | 203,039 | ||||||
Sr. Unsec. Gtd. Notes, 5.15%, 02/12/25(b) | 1,272,000 | 1,294,594 | ||||||
6.63%, 02/12/45(b) | 506,000 | 508,283 | ||||||
| 2,005,916 | ||||||||
| Independent Power Producers & Energy Traders–0.08% | ||||||||
AES Corp., Sr. Unsec. Global Notes, 7.38%, 07/01/21 | 181,000 | 203,172 | ||||||
8.00%, 10/15/17 | 1,000 | 1,129 | ||||||
Calpine Corp., | 11,000 | 11,949 | ||||||
Sr. Unsec. Global Notes, | 118,000 | 120,065 | ||||||
5.50%, 02/01/24 | 102,000 | 102,637 | ||||||
NRG Energy Inc., Sr. Unsec. Gtd. Global Notes, 6.25%, 07/15/22 | 199,000 | 207,955 | ||||||
| 646,907 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Industrial Conglomerates–0.11% | ||||||||
Grupo KUO, S.A.B. de C.V. (Mexico), | $ | 400,000 | $ | 405,000 | ||||
REGS, Sr. Unsec. Gtd. Euro Notes, 6.25%, 12/04/22(b) | 300,000 | 306,450 | ||||||
Hutchison Whampoa International (10) Ltd. (Hong Kong), Unsec. Gtd. Sub. Notes, 6.00%(b)(e) | 200,000 | 205,500 | ||||||
| 916,950 | ||||||||
| Industrial Machinery–0.98% | ||||||||
EnPro Industries, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 09/15/22(b) | 11,000 | 11,358 | ||||||
Ingersoll-Rand Luxembourg Finance S.A., Sr. Unsec. Gtd. Global Notes, | 664,000 | 664,116 | ||||||
3.55%, 11/01/24 | 3,186,000 | 3,222,161 | ||||||
4.65%, 11/01/44 | 1,321,000 | 1,398,278 | ||||||
Valmont Industries, Inc., Sr. Unsec. Gtd. Global Notes, 5.25%, 10/01/54 | 2,916,000 | 2,861,669 | ||||||
Waterjet Holdings, Inc., Sr. Sec. Gtd. Notes, 7.63%, 02/01/20(b) | 116,000 | 121,655 | ||||||
| 8,279,237 | ||||||||
| Industrial REIT’s–0.18% | ||||||||
Prologis L.P., Sr. Unsec. Gtd. Global Notes, 4.25%, 08/15/23 | 1,415,000 | 1,516,452 | ||||||
| Integrated Oil & Gas–0.86% | ||||||||
BP Capital Markets PLC (United Kingdom), Sr. Unsec. Gtd. Global Bonds, 3.54%, 11/04/24 | 1,730,000 | 1,780,501 | ||||||
California Resources Corp., Sr. Unsec. Gtd. Notes, 5.50%, 09/15/21(b) | 176,000 | 161,480 | ||||||
Ecopetrol S.A. (Colombia), Sr. Unsec. Global Notes, 5.88%, 05/28/45 | 1,360,000 | 1,309,000 | ||||||
Gazprom OAO Via Gaz Capital S.A. (Russia), Sr. Unsec. Bonds, 4.30%, 11/12/15(b) | 1,317,000 | 1,315,354 | ||||||
KazMunayGas National Co. JSC (Kazakhstan), | 200,000 | 182,000 | ||||||
7.00%, 05/05/20(b) | 210,000 | 217,350 | ||||||
Unsec. Bonds, 6.00%, 11/07/44(b) | 400,000 | 347,000 | ||||||
REGS, Sr. Unsec. Medium-Term Euro Notes, 4.40%, 04/30/23(b) | 200,000 | 180,000 | ||||||
Lukoil International Finance B.V. (Russia), REGS, Sr. Unsec. Gtd. Euro Notes, 4.56%, 04/24/23(b) | 400,000 | 335,000 | ||||||
Petrobras Global Finance B.V. (Brazil), | 530,000 | 479,438 | ||||||
6.25%, 03/17/24 | 38,000 | 35,058 | ||||||
Petroleos de Venezuela S.A. (Venezuela), | 737,357 | 245,835 | ||||||
Sr. Unsec. Gtd. Euro Notes, 9.00%, 11/17/21(b) | 475,000 | 186,865 | ||||||
| Principal Amount | Value | |||||||
| Integrated Oil & Gas–(continued) | ||||||||
Petroleos Mexicanos (Mexico), | $ | 100,000 | $ | 114,371 | ||||
Sr. Unsec. Gtd. Notes, 3.50%, 07/23/20(b) | 220,000 | 225,051 | ||||||
5.63%, 01/23/46(b) | 140,000 | 144,917 | ||||||
| 7,259,220 | ||||||||
| Integrated Telecommunication Services–1.53% | ||||||||
CenturyLink, Inc., Series V, Sr. Unsec. Global Notes, 5.63%, 04/01/20 | 50,000 | 53,765 | ||||||
Digicel Group Ltd. (Jamaica), REGS, Sr. Unsec. Euro Notes, 7.13%, 04/01/22(b) | 460,000 | 439,300 | ||||||
Telecom Italia S.p.A. (Italy), Sr. Unsec. Notes, 5.30%, 05/30/24(b) | 340,000 | 358,700 | ||||||
Verizon Communications, Inc., Sr. Unsec. Global Notes, | 3,250,000 | 3,558,451 | ||||||
5.15%, 09/15/23 | 665,000 | 764,265 | ||||||
6.40%, 09/15/33 | 4,665,000 | 5,939,699 | ||||||
Sr. Unsec. Notes, | 1,698,000 | 1,785,195 | ||||||
| 12,899,375 | ||||||||
| Internet Retail–0.01% | ||||||||
Netflix, Inc., Sr. Unsec. Notes, 5.50%, 02/15/22(b) | 60,000 | 61,950 | ||||||
| Internet Software & Services–0.92% | ||||||||
Alibaba Group Holding Ltd. (China), | 2,207,000 | 2,224,790 | ||||||
3.60%, 11/28/24(b) | 1,665,000 | 1,682,486 | ||||||
4.50%, 11/28/34(b) | 1,124,000 | 1,156,680 | ||||||
CyrusOne L.P./CyrusOne Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 11/15/22 | 164,000 | 174,660 | ||||||
EarthLink Holdings Corp., | 55,000 | 56,306 | ||||||
Sr. Unsec. Gtd. Global Notes, 8.88%, 05/15/19 | 62,000 | 64,170 | ||||||
Equinix Inc., Sr. Unsec. Notes, 5.38%, 01/01/22 | 111,000 | 116,550 | ||||||
Tencent Holdings Ltd. (China), Sr. Unsec. Notes, 3.38%, 05/02/19(b) | 2,255,000 | 2,319,513 | ||||||
| 7,795,155 | ||||||||
| Investment Banking & Brokerage–0.29% | ||||||||
Charles Schwab Corp. (The), Series A, Jr. Unsec. Sub. Notes, 7.00%(e) | 1,315,000 | 1,551,700 | ||||||
Goldman Sachs Group, Inc. (The), Series L, Jr. Unsec. Sub. Notes, 5.70%(e) | 875,000 | 907,812 | ||||||
| 2,459,512 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Life & Health Insurance–0.89% | ||||||||
Forethought Financial Group, Inc., | $ | 50,000 | $ | 58,364 | ||||
MetLife Inc., Sr. Unsec. Global Notes, 4.13%, 08/13/42 | 2,200,000 | 2,300,144 | ||||||
Nationwide Financial Services, Inc., Sr. Unsec. Notes, 5.38%, 03/25/21(b) | 735,000 | 837,310 | ||||||
Prudential Financial, Inc., Jr. Unsec. Sub. Global Notes, 8.88%, 06/15/38 | 1,640,000 | 1,947,500 | ||||||
TIAA Asset Management Finance Co. LLC, Sr. Unsec. Notes, 4.13%, 11/01/24(b) | 2,235,000 | 2,370,876 | ||||||
| 7,514,194 | ||||||||
| Managed Health Care–0.11% | ||||||||
Cigna Corp., Sr. Unsec. Global Notes, 5.38%, 02/15/42 | 725,000 | 892,630 | ||||||
| Marine–0.02% | ||||||||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc., Sr. Sec. Gtd. Mortgage Notes, 8.13%, 11/15/21(b) | 193,000 | 193,965 | ||||||
| Metal & Glass Containers–0.02% | ||||||||
Berry Plastics Corp., Sec. Gtd. Notes, 5.50%, 05/15/22 | 167,000 | 175,350 | ||||||
Owens-Brockway Glass Container Inc., Sr. Unsec. Notes, 5.00%, 01/15/22(b) | 25,000 | 26,094 | ||||||
| 201,444 | ||||||||
| Motorcycle Manufacturers–0.16% | ||||||||
Harley-Davidson Financial Services, Inc., Sr. Unsec. Gtd. Notes, 2.15%, 02/26/20(b) | 1,315,000 | 1,315,840 | ||||||
| Movies & Entertainment–0.34% | ||||||||
AMC Entertainment Inc., Sr. Unsec. Gtd. Sub. Global Notes, 5.88%, 02/15/22 | 36,000 | 37,800 | ||||||
DreamWorks Animation SKG, Inc., Sr. Unsec. Gtd. Notes, 6.88%, 08/15/20(b) | 80,000 | 77,600 | ||||||
Time Warner, Inc., | 2,100,000 | 2,472,131 | ||||||
Sr. Unsec. Gtd. Notes, | 285,000 | 307,949 | ||||||
| 2,895,480 | ||||||||
| Multi-Line Insurance–0.54% | ||||||||
American International Group, Inc., Sr. Unsec. Global Notes, 4.50%, 07/16/44 | 2,100,000 | 2,257,647 | ||||||
Nationwide Mutual Insurance Co., Unsec. Sub. Notes, | 2,185,000 | 2,347,397 | ||||||
| 4,605,044 | ||||||||
| Principal Amount | Value | |||||||
| Multi-Sector Holdings–0.02% | ||||||||
SUAM Finance B.V. (Colombia), Sr. Unsec. Gtd. Notes, 4.88%, 04/17/24(b) | $ | 200,000 | $ | 208,727 | ||||
| Multi-Utilities–0.34% | ||||||||
E.CL S.A. (Chile), Sr. Unsec. Notes, 4.50%, 01/29/25(b) | 380,000 | 395,036 | ||||||
Enable Midstream Partners L.P., Sr. Unsec. Notes, 3.90%, 05/15/24(b) | 2,525,000 | 2,490,040 | ||||||
| 2,885,076 | ||||||||
| Office REIT’s–0.16% | ||||||||
Piedmont Operating Partnership L.P., Sr. Unsec. Gtd. Global Notes, 4.45%, 03/15/24 | 1,290,000 | 1,346,406 | ||||||
| Office Services & Supplies–0.13% | ||||||||
Pitney Bowes Inc., Sr. Unsec. Global Notes, 4.63%, 03/15/24 | 1,070,000 | 1,112,728 | ||||||
| Oil & Gas Drilling–0.27% | ||||||||
Pioneer Energy Services Corp., Sr. Unsec. Gtd. Global Notes, 6.13%, 03/15/22 | 70,000 | 53,900 | ||||||
Rowan Cos., Inc., Sr. Unsec. Gtd. Notes, 5.85%, 01/15/44 | 2,495,000 | 2,256,625 | ||||||
| 2,310,525 | ||||||||
| Oil & Gas Equipment & Services–0.07% | ||||||||
Bristow Group, Inc., Sr. Unsec. Gtd. Notes, 6.25%, 10/15/22 | 42,000 | 41,265 | ||||||
Exterran Partners, L.P./EXLP Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 04/01/21 | 79,000 | 73,470 | ||||||
Odebrecht Oil & Gas Finance Ltd. (Brazil), | 200,000 | 113,000 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.00%(b)(e) | 700,000 | 388,500 | ||||||
| 616,235 | ||||||||
| Oil & Gas Exploration & Production–1.66% | ||||||||
Antero Resources Corp., Sr. Unsec. Gtd. Notes, 5.13%, 12/01/22(b) | 92,000 | 91,080 | ||||||
Antero Resources Finance Corp., Sr. Unsec. Gtd. Global Notes, | 112,000 | 113,120 | ||||||
6.00%, 12/01/20 | 20,000 | 20,550 | ||||||
Approach Resources Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 06/15/21 | 42,000 | 38,535 | ||||||
Carrizo Oil & Gas, Inc., | 59,000 | 61,803 | ||||||
Sr. Unsec. Gtd. Notes, | 95,000 | 97,850 | ||||||
Chaparral Energy, Inc., Sr. Unsec. Gtd. Global Notes, 9.88%, 10/01/20 | 39,000 | 31,785 | ||||||
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 Exploration & Production–(continued) | ||||||||
Chesapeake Energy Corp., | $ | 25,000 | $ | 27,750 | ||||
Sr. Unsec. Gtd. Notes, | 47,000 | 51,465 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, | 2,575,000 | 2,549,250 | ||||||
5.88%, 05/01/22 | 41,000 | 43,665 | ||||||
Concho Resources Inc., | 17,000 | 17,765 | ||||||
5.50%, 04/01/23 | 77,000 | 80,465 | ||||||
Sr. Unsec. Gtd. Notes, | 17,000 | 18,275 | ||||||
ConocoPhillips Co., Sr. Unsec. Gtd. Global Notes, | 788,000 | 814,966 | ||||||
4.30%, 11/15/44 | 1,525,000 | 1,641,866 | ||||||
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes, 5.00%, 09/15/22 | 974,000 | 966,695 | ||||||
Denbury Resources Inc., Sr. Unsec. Gtd. Sub. Notes, 5.50%, 05/01/22 | 140,000 | 131,600 | ||||||
Devon Energy Corp., Sr. Unsec. Global Notes, | 910,000 | 922,055 | ||||||
3.25%, 05/15/22 | 2,287,000 | 2,348,869 | ||||||
Diamondback Energy, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 10/01/21 | 86,000 | 90,730 | ||||||
Laredo Petroleum, Inc., Sr. Unsec. Gtd. Global Notes, | 33,000 | 34,238 | ||||||
9.50%, 02/15/19 | 75,000 | 78,562 | ||||||
Newfield Exploration Co., Sr. Unsec. Sub. Notes, 6.88%, 02/01/20 | 44,000 | 45,650 | ||||||
Noble Energy Inc., Sr. Unsec. Notes, 3.90%, 11/15/24 | 1,098,000 | 1,141,924 | ||||||
Parsley Energy LLC/Parsley Finance Corp., Sr. Unsec. Notes, 7.50%, 02/15/22(b) | 88,000 | 90,640 | ||||||
Pertamina Persero PT (Indonesia), | 200,000 | 209,040 | ||||||
REGS, Sr. Unsec. Medium-Term Euro Notes, 4.30%, 05/20/23(b) | 800,000 | 810,192 | ||||||
QEP Resources Inc., Sr. Unsec. Notes, 5.38%, 10/01/22 | 140,000 | 138,600 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 5.00%, 08/15/22 | 371,000 | 380,275 | ||||||
Rosetta Resources, Inc., | 46,000 | 44,160 | ||||||
Sr. Unsec. Gtd. Notes, | 56,000 | 54,040 | ||||||
| Principal Amount | Value | |||||||
| Oil & Gas Exploration & Production–(continued) | ||||||||
SandRidge Energy, Inc., Sr. Unsec. Gtd. Global Notes, | $ | 65,000 | $ | 48,425 | ||||
7.50%, 02/15/23 | 17,000 | 12,325 | ||||||
8.75%, 01/15/20 | 31,000 | 24,180 | ||||||
SM Energy Co., | 395,000 | 408,825 | ||||||
6.50%, 01/01/23 | 21,000 | 21,735 | ||||||
Sr. Unsec. Notes, | 78,000 | 80,340 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Notes, | 38,000 | 37,810 | ||||||
5.75%, 03/15/21 | 175,000 | 174,125 | ||||||
| 13,995,225 | ||||||||
| Oil & Gas Refining & Marketing–0.04% | ||||||||
Calumet Specialty Products Partners L.P./Calumet Finance Corp., | 60,000 | 59,850 | ||||||
Reliance Industries Ltd. (India), Sr. Unsec. Notes, 4.13%, 01/28/25(b) | 320,000 | 319,200 | ||||||
| 379,050 | ||||||||
| Oil & Gas Storage & Transportation–2.32% | ||||||||
Crestwood Midstream Partners L.P./Crestwood Midstream Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 12/15/20 | 127,000 | 128,270 | ||||||
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20 | 50,000 | 57,750 | ||||||
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Notes, | 1,594,000 | 1,659,678 | ||||||
3.90%, 02/15/24 | 2,483,000 | 2,624,907 | ||||||
EQT Midstream Partners L.P., Sr. Unsec. Gtd. Notes, 4.00%, 08/01/24 | 2,255,000 | 2,244,186 | ||||||
Kinder Morgan Inc., Sr. Unsec. Gtd. Notes, 5.30%, 12/01/34 | 1,167,000 | 1,240,236 | ||||||
MarkWest Energy Partners, L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, | 29,000 | 29,943 | ||||||
5.50%, 02/15/23 | 194,000 | 203,700 | ||||||
6.50%, 08/15/21 | 44,000 | 46,860 | ||||||
NGL Energy Partners L.P./NGL Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 10/15/21 | 57,000 | 57,428 | ||||||
Sabine Pass Liquefaction LLC, Sr. Sec. Global Notes, 5.63%, 04/15/23 | 133,000 | 136,325 | ||||||
Teekay Corp. (Bermuda), Sr. Unsec. Global Notes, 8.50%, 01/15/20 | 35,000 | 39,288 | ||||||
Teekay Offshore Partners L.P./Teekay Offshore Finance Corp. (Bermuda), Sr. Unsec. Global Notes, 6.00%, 07/30/19 | 31,000 | 27,283 | ||||||
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) | ||||||||
Tesoro Logistics L.P./Tesoro Logistics Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.88%, 10/01/20 | $ | 133,000 | $ | 139,982 | ||||
Texas Eastern Transmission L.P., Sr. Unsec. Notes, 7.00%, 07/15/32 | 255,000 | 343,759 | ||||||
Williams Partners L.P., Sr. Unsec. Global Notes, | 5,289,000 | 5,284,904 | ||||||
5.10%, 09/15/45 | 4,502,000 | 4,513,227 | ||||||
Williams Partners L.P./ACMP Finance Corp., Sr. Unsec. Global Notes, 4.88%, 05/15/23 | 810,000 | 836,831 | ||||||
| 19,614,557 | ||||||||
| Other Diversified Financial Services–0.18% | ||||||||
Corp Financiera de Desarrollo S.A. (Peru), Unsec. Sub. Notes, 5.25%, 07/15/29(b) | 500,000 | 521,250 | ||||||
Rio Oil Finance Trust (Brazil), Series 2014-1, Sr. Sec. Notes, 6.25%, 07/06/24(b) | 200,000 | 183,000 | ||||||
Unifin Financiera S.A.P.I. de C.V. SOFOM, E.N.R. (Mexico), Sr. Unsec. Gtd. Bonds, 6.25%, 07/22/19(b) | 300,000 | 276,000 | ||||||
Voya Financial, Inc., Jr. Unsec. Gtd. Sub. Global Notes, 5.65%, 05/15/53 | 535,000 | 556,400 | ||||||
| 1,536,650 | ||||||||
| Packaged Foods & Meats–1.28% | ||||||||
Chiquita Brands International Inc., Sr. Unsec. Conv. Notes, 4.25%, 08/15/16 | 5,805,000 | 5,805,000 | ||||||
Diamond Foods Inc., Sr. Unsec. Gtd. Notes, 7.00%, 03/15/19(b) | 192,000 | 196,800 | ||||||
JBS Investments GmbH (Brazil), Sr. Unsec. Gtd. Notes, 7.25%, 04/03/24(b) | 300,000 | 307,500 | ||||||
Marfrig Overseas Ltd. (Brazil), REGS, Sr. Unsec. Gtd. Euro Notes, 9.50%, 05/04/20(b) | 400,000 | 396,400 | ||||||
Mead Johnson Nutrition Co., Sr. Unsec. Global Notes, 4.60%, 06/01/44 | 796,000 | 843,213 | ||||||
MHP S.A. (Ukraine), REGS, Sr. Unsec. Gtd. Euro Notes, 8.25%, 04/02/20(b) | 200,000 | 126,000 | ||||||
Post Holdings Inc., | 61,000 | 63,821 | ||||||
Sr. Unsec. Gtd. Notes, 6.75%, 12/01/21(b) | 26,000 | 26,683 | ||||||
Smithfield Foods Inc., Sr. Unsec. Notes, | 24,000 | 25,200 | ||||||
6.63%, 08/15/22 | 2,687,000 | 2,928,830 | ||||||
WhiteWave Foods Co. (The), Sr. Unsec. Gtd. Notes, 5.38%, 10/01/22 | 61,000 | 65,575 | ||||||
| 10,785,022 | ||||||||
| Principal Amount | Value | |||||||
| Paper Packaging–0.28% | ||||||||
Graphic Packaging International Inc., Sr. Unsec. Gtd. Notes, | $ | 468,000 | $ | 489,645 | ||||
4.88%, 11/15/22 | 138,000 | 144,383 | ||||||
Klabin Finance S.A. (Brazil), Sr. Unsec. Gtd. Notes, 5.25%, 07/16/24(b) | 1,770,000 | 1,729,201 | ||||||
| 2,363,229 | ||||||||
| Paper Products–0.03% | ||||||||
Mercer International Inc., Sr. Unsec. Gtd. Notes, 7.00%, 12/01/19(b) | 42,000 | 44,310 | ||||||
PH Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 5.38%, 10/15/20 | 181,000 | 185,525 | ||||||
Verso Paper Holdings LLC/Verso Paper Inc., Sr. Sec. Gtd. Bonds, 11.75%, 01/15/19 | 14,000 | 13,807 | ||||||
| 243,642 | ||||||||
| Personal Products–0.16% | ||||||||
Estee Lauder Cos. Inc. (The), Sr. Unsec. Global Notes, 3.70%, 08/15/42 | 1,340,000 | 1,303,069 | ||||||
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18 | 84,000 | 88,620 | ||||||
| 1,391,689 | ||||||||
| Pharmaceuticals–1.86% | ||||||||
Actavis Funding SCS, Sr. Unsec. Gtd. Global Notes, 3.85%, 06/15/24 | 1,145,000 | 1,162,710 | ||||||
Bayer US Finance LLC (Germany), Sr. Unsec. Gtd. Notes, | 1,000,000 | 1,013,014 | ||||||
3.38%, 10/08/24(b) | 710,000 | 739,784 | ||||||
Bristol-Myers Squibb Co., Sr. Unsec. Deb., 6.88%, 08/01/97 | 2,492,000 | 3,692,484 | ||||||
Eli Lilly and Co., Sr. Unsec. Global Notes, | 810,000 | 809,554 | ||||||
3.70%, 03/01/45 | 1,934,000 | 1,937,940 | ||||||
Endo Finance LLC/ Endo Ltd./Endo Finco Inc., Sr. Unsec. Gtd. Notes, 6.00%, 02/01/25(b) | 200,000 | 213,000 | ||||||
Merck & Co., Inc., Sr. Unsec. Global Notes, 1.85%, 02/10/20 | 2,560,000 | 2,552,027 | ||||||
Perrigo Finance PLC, Sr. Unsec. Gtd. Notes, | 1,654,000 | 1,723,431 | ||||||
4.90%, 12/15/44 | 1,371,000 | 1,486,491 | ||||||
Salix Pharmaceuticals Ltd., Sr. Unsec. Gtd. Notes, 6.25%, 01/15/21(b) | 8,000 | 9,020 | ||||||
Valeant Pharmaceuticals International, Inc., Sr. Unsec. Gtd. Notes, | 55,000 | 55,756 | ||||||
5.63%, 12/01/21(b) | 130,000 | 132,437 | ||||||
6.38%, 10/15/20(b) | 150,000 | 158,250 | ||||||
7.50%, 07/15/21(b) | 50,000 | 54,562 | ||||||
| 15,740,460 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Property & Casualty Insurance–0.46% | ||||||||
Allstate Corp. (The), Unsec. Sub. Global Notes, 5.75%, 08/15/53 | $ | 2,085,000 | $ | 2,257,012 | ||||
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(b) | 1,320,000 | 1,590,600 | ||||||
| 3,847,612 | ||||||||
| Railroads–0.34% | ||||||||
Canadian Pacific Railway Co. (Canada), Sr. Unsec. Bonds, 2.90%, 02/01/25 | 2,134,000 | 2,125,323 | ||||||
Transnet SOC Ltd. (South Africa), | 400,000 | 391,000 | ||||||
REGS, Sr. Unsec. Euro Notes, 4.00%, 07/26/22(b) | 400,000 | 393,000 | ||||||
| 2,909,323 | ||||||||
| Real Estate Development–0.05% | ||||||||
AV Homes, Inc., Sr. Unsec. Notes, 8.50%, 07/01/19(b) | 40,000 | 38,300 | ||||||
Country Garden Holdings Co. Ltd. (China), | 200,000 | 192,800 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.50%, 01/10/23(b) | 236,000 | 227,445 | ||||||
| 458,545 | ||||||||
| Real Estate Services–0.00% | ||||||||
Kennedy-Wilson Inc., Sr. Unsec. Gtd. Notes, 5.88%, 04/01/24 | 40,000 | 40,600 | ||||||
| Regional Banks–1.95% | ||||||||
Banco Internacional del Peru SAA (Peru), Unsec. Sub. Notes, 6.63%, 03/19/29(b) | 500,000 | 540,333 | ||||||
Fifth Third Bancorp, | 1,550,000 | 1,621,178 | ||||||
Series J, Jr. Unsec. Sub. Bonds, | 1,520,000 | 1,482,000 | ||||||
First Niagara Financial Group Inc., Unsec. Sub. Notes, 7.25%, 12/15/21 | 650,000 | 729,144 | ||||||
Manufacturers & Traders Trust Co., Sr. Unsec. Notes, 2.90%, 02/06/25 | 2,566,000 | 2,530,743 | ||||||
SunTrust Banks, Inc., Jr. Unsec. Sub. Notes, 5.63%(e) | 4,040,000 | 4,156,150 | ||||||
SVB Financial Group, Sr. Unsec. Global Notes, 3.50%, 01/29/25 | 5,385,000 | 5,330,848 | ||||||
Synovus Financial Corp., Sr. Unsec. Global Notes, 7.88%, 02/15/19 | 75,000 | 84,000 | ||||||
| 16,474,396 | ||||||||
| Reinsurance–0.21% | ||||||||
Reinsurance Group of America, Inc., Sr. Unsec. Medium-Term Notes, 4.70%, 09/15/23 | 1,650,000 | 1,804,291 | ||||||
| Principal Amount | Value | |||||||
| Renewable Electricity–0.16% | ||||||||
Oglethorpe Power Corp., Sr. Sec. First Mortgage Bonds, 4.55%, 06/01/44 | $ | 1,194,000 | $ | 1,299,228 | ||||
TerraForm Power Operating, LLC, Sr. Unsec. Gtd. Notes, 5.88%, 02/01/23(b) | 62,000 | 64,790 | ||||||
| 1,364,018 | ||||||||
| Residential REIT’s–0.26% | ||||||||
Essex Portfolio L.P., Sr. Unsec. Gtd. Global Notes, 3.63%, 08/15/22 | 2,135,000 | 2,181,665 | ||||||
| Security & Alarm Services–0.01% | ||||||||
ADT Corp. (The), Sr. Unsec. Global Notes, 6.25%, 10/15/21 | 50,000 | 54,250 | ||||||
| Semiconductor Equipment–0.03% | ||||||||
Amkor Technology Inc., Sr. Unsec. Global Notes, 6.38%, 10/01/22 | 115,000 | 120,175 | ||||||
Entegris Inc., Sr. Unsec. Gtd. Notes, 6.00%, 04/01/22(b) | 102,000 | 106,335 | ||||||
| 226,510 | ||||||||
| Semiconductors–0.07% | ||||||||
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 6.00%, 01/15/22(b) | 94,000 | 101,755 | ||||||
Micron Technology, Inc., | ||||||||
Sr. Unsec. Global Bonds, 5.88%, 02/15/22 | 140,000 | 149,100 | ||||||
Sr. Unsec. Notes, | ||||||||
5.25%, 08/01/23(b) | 55,000 | 56,650 | ||||||
5.50%, 02/01/25(b) | 54,000 | 55,620 | ||||||
NXP B.V./NXP Funding LLC (Netherlands), Sr. Unsec. Gtd. Notes, 5.75%, 02/15/21(b) | 200,000 | 214,460 | ||||||
| 577,585 | ||||||||
| Sovereign Debt–1.84% | ||||||||
Argentina Boden Bonds (Argentina), Sr. Unsec. Bonds, 7.00%, 10/03/15 | 685,000 | 705,208 | ||||||
Argentina Bonar Bonds (Argentina), Series X, Sr. Unsec. Bonds, 7.00%, 04/17/17 | 320,000 | 323,040 | ||||||
Banco Nacional de Desenvolvimento Economico e Social (Brazil), | ||||||||
Sr. Unsec. Notes, | ||||||||
4.00%, 04/14/19(b) | 1,606,000 | 1,626,075 | ||||||
5.75%, 09/26/23(b) | 200,000 | 209,000 | ||||||
Banque Centrale de Tunisie SA (Tunisia), Sr. Unsec. Bonds, 5.75%, 01/30/25(b) | 200,000 | 203,500 | ||||||
Chile Government International Bond (Chile), Sr. Unsec. Global Notes, 3.13%, 03/27/25 | 330,000 | 346,216 | ||||||
Commonwealth of the Bahamas (Bahamas), Sr. Unsec. Notes, 5.75%, 01/16/24(b) | 400,000 | 427,566 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Sovereign Debt–(continued) | ||||||||
Dominican Republic International Bond (Dominican Repubic), Sr. Unsec. Notes, 5.50%, 01/27/25(b) | $ | 330,000 | $ | 346,500 | ||||
El Salvador Government International Bond (El Salvador), Unsec. Notes, 6.38%, 01/18/27(b) | 228,000 | 232,845 | ||||||
Guatemala Government Bond (Guatemala), | 220,000 | 295,350 | ||||||
REGS, Sr. Unsec. Euro Bonds, 8.13%, 10/06/19(b)(f) | 90,000 | 120,825 | ||||||
Honduras Government International Bond (Honduras), REGS, Sr. Unsec. Euro Notes, 7.50%, 03/15/24(b) | 200,000 | 211,250 | ||||||
Hungary Government International Bond (Hungary), Sr. Unsec. Global Notes, | 400,000 | 453,000 | ||||||
5.38%, 03/25/24 | 400,000 | 453,800 | ||||||
7.63%, 03/29/41 | 450,000 | 662,625 | ||||||
Indonesia Government International Bond (Indonesia), Sr. Unsec. Notes, 3.38%, 04/15/23(b) | 300,000 | 298,875 | ||||||
3.75%, 04/25/22(b) | 300,000 | 312,000 | ||||||
4.13%, 01/15/25(b) | 200,000 | 208,660 | ||||||
Ivory Coast Government International Bond (Ivory Coast), Unsec. Bonds, 6.38%, 03/03/28(b) | 324,000 | 321,152 | ||||||
Lebanon Government International Bond (Lebanon), REGS, Sr. Unsec. Euro Bonds, 6.00%, 01/27/23(b) | 500,000 | 505,100 | ||||||
Magyar Export-Import Bank Zrt. (Hungary), Sr. Unsec. Gtd. Bonds, | 300,000 | 307,740 | ||||||
Mexico Government International Bond (Mexico), |
| 200,000 |
|
| 209,500 |
| ||
Sr. Unsec. Medium-Term Global Notes, 4.75%, 03/08/44 | 310,000 | 331,657 | ||||||
Nigeria Government International Bond (Nigeria), Sr. Unsec. Notes, 5.13%, 07/12/18(b) | 200,000 | 195,500 | ||||||
Pakistan Government International Bond (Pakistan), | ||||||||
Sr. Unsec. Bonds, 7.25%, 04/15/19(b) | 200,000 | 204,500 | ||||||
Unsec. Bonds, 6.75%, 12/03/19(b) | 225,000 | 226,688 | ||||||
Panama Government International Bond (Panama), Sr. Unsec. Global Bonds, | 320,000 | 338,400 | ||||||
5.20%, 01/30/20 | 400,000 | 448,000 | ||||||
Perusahaan Penerbit SBSN (Indonesia), Sr. Unsec. Notes, 4.00%, 11/21/18(b) | 200,000 | 211,000 | ||||||
Philippine Government International Bond (Philippines), Sr. Unsec. Global Bonds, | 200,000 | 223,000 | ||||||
5.00%, 01/13/37 | 300,000 | 362,250 | ||||||
| Principal Amount | Value | |||||||
| Sovereign Debt–(continued) | ||||||||
Poland Government International Bond (Poland), Sr. Unsec. Global Notes, 4.00%, 01/22/24 | $ | 400,000 | $ | 434,287 | ||||
Republic of Angola Via Northern Lights III B.V. (Angola), REGS, Sr. Unsec. Euro Notes, 7.00%, 08/16/19(b) | 400,000 | 400,000 | ||||||
Republic of Azerbaijan International Bond (Azerbaijan), Sr. Unsec. Notes, 4.75%, 03/18/24(b) | 400,000 | 406,096 | ||||||
Republic of Serbia (Serbia), | 200,000 | 209,000 | ||||||
REGS, Sr. Unsec. Euro Bonds, 6.75%, 11/01/24(b)(d) | 205,976 | 210,835 | ||||||
Romanian Government International Bond (Romania), Sr. Unsec. Notes, 4.88%, 01/22/24(b) | 200,000 | 225,000 | ||||||
Russian Foreign Bond (Russia), REGS, Sr. Unsec. Euro Bonds, 7.50%, 03/31/30(b)(d) | 150,650 | 161,730 | ||||||
Uruguay Government International Bond (Uruguay), Sr. Unsec. Bonds, 5.10%, 06/18/50 | 2,001,000 | 2,082,040 | ||||||
Venezuela Government International Bond (Venezuela), REGS, Sr. Unsec. Euro Bonds, 6.00%, 12/09/20(b) | 205,000 | 74,825 | ||||||
| 15,524,635 | ||||||||
| Specialized Consumer Services–0.01% | ||||||||
ServiceMaster Co., LLC (The), | ||||||||
Sr. Unsec. Gtd. Global Notes, 7.00%, 08/15/20 | 45,000 | 48,094 | ||||||
Sr. Unsec. Notes, 7.45%, 08/15/27 | 40,000 | 41,700 | ||||||
| 89,794 | ||||||||
| Specialized Finance–1.25% | ||||||||
Aircastle Ltd., | ||||||||
Sr. Unsec. Global Notes, 7.63%, 04/15/20 | 206,000 | 239,475 | ||||||
Sr. Unsec. Notes, 5.13%, 03/15/21 | 55,000 | 58,575 | ||||||
CIT Group Inc., Sr. Unsec. Global Notes, | 137,000 | 146,248 | ||||||
5.00%, 08/01/23 | 100,000 | 106,250 | ||||||
CME Group Inc., Sr. Unsec. Global Notes, 5.30%, 09/15/43 | 1,325,000 | 1,643,014 | ||||||
International Lease Finance Corp., | ||||||||
Sr. Unsec. Global Notes, 5.88%, 08/15/22 | 120,000 | 137,700 | ||||||
Sr. Unsec. Notes, 8.25%, 12/15/20 | 195,000 | 243,262 | ||||||
Moody’s Corp., Sr. Unsec. Global Notes, | 1,470,000 | 1,493,229 | ||||||
4.88%, 02/15/24 | 4,595,000 | 5,087,295 | ||||||
5.25%, 07/15/44 | 1,140,000 | 1,312,536 | ||||||
MSCI Inc., Sr. Unsec. Gtd. Notes., 5.25%, 11/15/24(b) | 100,000 | 104,875 | ||||||
| 10,572,459 | ||||||||
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 REIT’s–0.59% | ||||||||
Crown Castle International Corp., | ||||||||
Sr. Unsec. Global Notes, 5.25%, 01/15/23 | $ | 170,000 | $ | 180,625 | ||||
Sr. Unsec. Notes, 4.88%, 04/15/22 | 81,000 | 85,050 | ||||||
EPR Properties, Sr. Unsec. Gtd. Global Notes, 7.75%, 07/15/20 | 3,880,000 | 4,686,934 | ||||||
| 4,952,609 | ||||||||
| Specialty Chemicals–0.02% | ||||||||
PolyOne Corp., Sr. Unsec. Global Notes, 5.25%, 03/15/23 | 198,000 | 207,405 | ||||||
| Specialty Stores–0.43% | ||||||||
Michaels Stores Inc., Sr. Unsec. Gtd. Sub. Notes, 5.88%, 12/15/20(b) | 218,000 | 225,357 | ||||||
Tiffany & Co., Sr. Unsec. Notes, 3.80%, 10/01/24(b) | 1,005,000 | 1,018,573 | ||||||
4.90%, 10/01/44(b) | 2,303,000 | 2,393,542 | ||||||
| 3,637,472 | ||||||||
| Steel–0.29% | ||||||||
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 10/01/21 | 67,000 | 58,625 | ||||||
ArcelorMittal (Luxembourg), | ||||||||
Sr. Unsec. Global Notes, 4.50%, 08/05/15 | 19,000 | 19,214 | ||||||
6.25%, 03/01/21 | 172,000 | 187,704 | ||||||
7.00%, 02/25/22 | 10,000 | 11,250 | ||||||
Cliffs Natural Resources Inc., Sr. Unsec. Global Notes, 5.90%, 03/15/20 | 69,000 | 50,370 | ||||||
Evraz Inc. N.A. (Canada), Sr. Sec. Gtd. Notes, 7.50%, 11/15/19(b) | 500,000 | 472,700 | ||||||
Magnetation LLC/ Mag Finance Corp., Sr. Sec. Gtd. Notes, 11.00%, 05/15/18(b) | 85,000 | 59,500 | ||||||
Steel Dynamics, Inc., | ||||||||
Sr. Unsec. Gtd. Notes, 5.13%, 10/01/21(b) | 8,000 | 8,200 | ||||||
5.50%, 10/01/24(b) | 150,000 | 156,562 | ||||||
SunCoke Energy Partners L.P./SunCoke Energy Partners Finance Corp., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/20(b) | 154,000 | 160,352 | ||||||
7.38%, 02/01/20(b) | 32,000 | 33,320 | ||||||
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, 4.38%, 01/11/22 | 350,000 | 337,981 | ||||||
6.88%, 11/10/39 | 400,000 | 396,883 | ||||||
Vale S.A. (Brazil), Sr. Unsec. Global Notes, 5.63%, 09/11/42 | 600,000 | 530,340 | ||||||
| 2,483,001 | ||||||||
| Systems Software–0.20% | ||||||||
Microsoft Corp., Sr. Unsec. Global Notes, 3.50%, 02/12/35 | 1,659,000 | 1,648,659 | ||||||
| Principal Amount | Value | |||||||
| Technology Distributors–0.34% | ||||||||
Arrow Electronics, Inc., Sr. Unsec. Global Notes, 4.00%, 04/01/25 | $ | 2,815,000 | $ | 2,807,619 | ||||
CDW LLC/CDW Finance Corp., Sr. Unsec. Notes, 5.00%, 09/01/23 | 52,000 | 52,520 | ||||||
| 2,860,139 | ||||||||
| Technology Hardware, Storage & Peripherals–0.50% | ||||||||
Apple Inc., Sr. Unsec. Global Notes, 3.45%, 02/09/45 | 2,659,000 | 2,507,626 | ||||||
Seagate HDD Cayman, Sr. Unsec. Gtd. Notes, 5.75%, 12/01/34(b) | 1,540,000 | 1,694,000 | ||||||
| 4,201,626 | ||||||||
| Tobacco–0.45% | ||||||||
Philip Morris International Inc., Sr. Unsec. Global Notes, 4.25%, 11/10/44 | 3,624,000 | 3,836,698 | ||||||
| Trading Companies & Distributors–0.65% | ||||||||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust (Netherlands), Sr. Unsec. Gtd. Notes, | 2,085,000 | 2,210,100 | ||||||
5.00%, 10/01/21(b) | 630,000 | 679,612 | ||||||
Air Lease Corp., Sr. Unsec. Global Notes, 3.88%, 04/01/21 | 2,425,000 | 2,506,086 | ||||||
United Rentals North America Inc., Sr. Unsec. Gtd. Notes, 6.13%, 06/15/23 | 80,000 | 86,000 | ||||||
| 5,481,798 | ||||||||
| Wireless Telecommunication Services–1.31% | ||||||||
America Movil S.A.B. de C.V. (Mexico), Sr. Unsec. Gtd. Global Notes, 6.13%, 03/30/40 | 1,115,000 | 1,415,288 | ||||||
Bharti Airtel International Netherlands B.V. (India), Sr. Unsec. Gtd. Notes, 5.35%, 05/20/24(b) | 500,000 | 556,875 | ||||||
Comcel Trust via Comunicaciones Celulares S.A. (Guatemala), REGS, Sr. Unsec. Gtd. Euro Bonds, 6.88%, 02/06/24(b) | 266,000 | 284,540 | ||||||
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, | 25,000 | 25,233 | ||||||
4.88%, 08/15/20(b) | 1,835,000 | 2,030,505 | ||||||
Digicel Ltd. (Jamaica), | ||||||||
Sr. Unsec. Gtd. Notes, 6.75%, 03/01/23(b) | 200,000 | 202,700 | ||||||
Sr. Unsec. Notes, 6.00%, 04/15/21(b) | 200,000 | 198,000 | ||||||
Mobile Telesystems OJSC via MTS International Funding Ltd. (Russia), REGS, Sr. Unsec. Euro Notes, 8.63%, 06/22/20(b) | 260,000 | 265,190 | ||||||
MTN Mauritius Investments Ltd. (South Africa), Sr. Unsec. Gtd. Notes, 4.76%, 11/11/24(b) | 400,000 | 400,500 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Wireless Telecommunication Services–(continued) | ||||||||
Rogers Communications Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 5.00%, 03/15/44 | $ | 2,955,000 | $ | 3,333,376 | ||||
SBA Communications Corp., Sr. Unsec. Notes, 4.88%, 07/15/22(b) | 165,000 | 165,825 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/28 | 120,000 | 113,400 | ||||||
Sprint Communications Inc., | ||||||||
Sr. Unsec. Global Notes, 6.00%, 11/15/22 | 69,000 | 66,844 | ||||||
11.50%, 11/15/21 | 15,000 | 18,675 | ||||||
Sr. Unsec. Gtd. Notes, 7.00%, 03/01/20(b) | 780,000 | 866,775 | ||||||
Sprint Corp., Sr. Unsec. Gtd. Global Notes, | 50,000 | 51,375 | ||||||
7.63%, 02/15/25 | 100,000 | 101,500 | ||||||
7.88%, 09/15/23 | 136,000 | 141,440 | ||||||
T-Mobile USA, Inc., | ||||||||
Sr. Unsec. Gtd. Notes, 6.38%, 03/01/25 | 152,000 | 159,980 | ||||||
6.84%, 04/28/23 | 105,000 | 112,875 | ||||||
Sr. Unsec. Gtd. Global Notes, 6.63%, 04/01/23 | 129,000 | 137,546 | ||||||
VimpelCom Holdings B.V. (Russia), REGS, Sr. Unsec. Gtd. Euro Notes, 5.95%, 02/13/23(b) | 200,000 | 162,832 | ||||||
Wind Acquisition Finance S.A. (Italy), Sr. Sec. Gtd. Notes, 4.75%, 07/15/20(b) | 300,000 | 304,500 | ||||||
| 11,115,774 | ||||||||
Total U.S. Dollar Denominated Bonds and Notes |
| 397,008,535 | ||||||
U.S. Government Sponsored Agency Mortgage-Backed Securities–30.43% |
| |||||||
| Collateralized Mortgage Obligations–0.13% | ||||||||
Fannie Mae REMICs, | ||||||||
7.00%, 05/25/33, IO | 20,235 | 3,816 | ||||||
6.00%, 07/25/33, IO | 18,135 | 3,033 | ||||||
Ginnie Mae REMICs, 1.64%, 11/20/64 | 9,263,513 | 1,097,147 | ||||||
| 1,103,996 | ||||||||
| Federal Deposit Insurance Co. (FDIC)–0.04% | ||||||||
Federal Deposit Insurance Co. Series 2010-S1, Class 1A, Floating Rate Notes, 0.72%, 02/25/48(b)(g) | 317,038 | 317,187 | ||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–12.30% | ||||||||
Pass Through Ctfs., | ||||||||
5.50%, 05/01/16 to 07/01/40 | 6,259,947 | 7,119,544 | ||||||
6.50%, 05/01/16 to 09/01/36 | 1,089,667 | 1,246,446 | ||||||
7.00%, 08/01/16 to 10/01/34 | 2,316,418 | 2,699,707 | ||||||
6.00%, 04/01/17 to 02/01/34 | 526,236 | 588,641 | ||||||
7.50%, 04/01/17 to 05/01/35 | 1,090,049 | 1,327,964 | ||||||
3.50%, 08/01/26 | 1,650,376 | 1,765,880 | ||||||
| Principal Amount | Value | |||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–(continued) | ||||||||
8.50%, 08/01/31 | $ | 84,256 | $ | 103,094 | ||||
8.00%, 08/01/32 | 72,498 | 91,893 | ||||||
5.00%, 07/01/34 to 06/01/40 | 6,379,529 | 7,121,002 | ||||||
4.50%, 06/01/41 | 4,516,531 | 4,914,848 | ||||||
Pass Through Ctfs., ARM, | ||||||||
2.48%, 12/01/36(g) | 173,337 | 184,751 | ||||||
2.65%, 02/01/37(g) | 60,817 | 65,527 | ||||||
2.38%, 05/01/37 to 06/01/43(g) | 4,442,245 | 4,535,071 | ||||||
Pass Through Ctfs., TBA, | ||||||||
3.50%, 04/01/45(h) | 38,500,000 | 40,179,863 | ||||||
4.00%, 04/01/45(h) | 30,100,000 | 32,107,107 | ||||||
| 104,051,338 | ||||||||
| Federal National Mortgage Association (FNMA)–17.38% | ||||||||
Pass Through Ctfs., | ||||||||
7.50%, 11/01/15 to 08/01/37 | 1,330,217 | 1,595,075 | ||||||
7.00%, 12/01/15 to 02/01/34 | 919,161 | 1,068,208 | ||||||
6.50%, 05/01/16 to 01/01/37 | 383,440 | 441,255 | ||||||
6.00%, 05/01/17 to 10/01/39 | 179,883 | 203,223 | ||||||
5.00%, 03/01/18 to 12/01/39 | 1,895,806 | 2,104,789 | ||||||
5.50%, 11/01/18 to 06/01/40 | 2,667,829 | 3,011,204 | ||||||
8.00%, 08/01/21 to 04/01/33 | 143,027 | 174,024 | ||||||
9.50%, 04/01/30 | 33,424 | 39,915 | ||||||
8.50%, 10/01/32 | 125,479 | 157,571 | ||||||
3.00%, 08/01/43 | 6,071,909 | 6,198,850 | ||||||
Pass Through Ctfs., ARM, | ||||||||
2.33%, 05/01/35(g) | 593,518 | 633,429 | ||||||
2.23%, 01/01/37(g) | 352,664 | 374,717 | ||||||
2.31%, 03/01/38(g) | 174,267 | 186,078 | ||||||
Pass Through Ctfs., TBA, | ||||||||
2.50%, 04/01/30(h) | 13,300,000 | 13,594,575 | ||||||
3.00%, 04/01/30 to 04/01/45(h) | 28,000,000 | 28,756,066 | ||||||
3.50%, 04/01/45(h) | 35,700,000 | 37,316,957 | ||||||
4.00%, 04/01/45(h) | 17,500,000 | 18,673,251 | ||||||
4.50%, 04/01/45(h) | 29,900,000 | 32,459,721 | ||||||
| 146,988,908 | ||||||||
| Government National Mortgage Association (GNMA)–0.58% | ||||||||
Pass Through Ctfs., | ||||||||
7.50%, 06/15/23 to 05/15/32 | 36,849 | 40,312 | ||||||
9.00%, 09/15/24 to 10/15/24 | 19,985 | 20,104 | ||||||
8.50%, 02/15/25 | 6,910 | 7,001 | ||||||
8.00%, 08/15/25 to 09/15/26 | 70,913 | 77,658 | ||||||
6.56%, 01/15/27 | 156,467 | 179,207 | ||||||
7.00%, 04/15/28 to 09/15/32 | 432,666 | 507,498 | ||||||
6.00%, 11/15/28 to 02/15/33 | 119,894 | 139,709 | ||||||
6.50%, 01/15/29 to 09/15/34 | 313,347 | 360,101 | ||||||
5.50%, 06/15/35 | 170,771 | 193,998 | ||||||
5.00%, 07/15/35 to 08/15/35 | 70,701 | 78,999 | ||||||
Pass Through Ctfs., ARM, | ||||||||
2.00%, 01/20/25 to 05/20/25(g) | 76,055 | 78,959 | ||||||
3.00%, 06/20/25(g) | 9,858 | 10,276 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Government National Mortgage Association (GNMA)–(continued) | ||||||||
Pass Through Ctfs., TBA, 4.00%, 04/01/45(h) | $ | 3,000,000 | $ | 3,186,328 | ||||
| 4,880,150 | ||||||||
Total U.S. Government Sponsored Agency Mortgage-Backed Securities |
| 257,341,579 | ||||||
Asset-Backed Securities–21.40% |
| |||||||
Adjustable Rate Mortgage Trust, Series 2005-1, Class 4A1, Floating Rate Pass Through Ctfs., 2.68%, 05/25/35(g) | 2,592,673 | 2,557,259 | ||||||
AmeriCredit Automobile Receivables Trust, Series 2011-2, Class D, Pass Through Ctfs., 4.00%, 05/08/17 | 3,135,000 | 3,169,150 | ||||||
Banc of America Commercial Mortgage Trust, | ||||||||
Series 2006-1, Class AJ, Variable Rate Pass Through Ctfs., 5.46%, 09/10/45(g) | 3,100,000 | 3,184,889 | ||||||
Series 2006-1, Class B, Variable Rate Pass Through Ctfs., 5.49%, 09/10/45(g) | 3,077,000 | 3,162,513 | ||||||
Banc of America Mortgage Trust, Series 2005-12, Class A2, Floating Rate Pass Through Ctfs., 1.07%, 01/25/36(g) | 3,245,614 | 2,954,957 | ||||||
Bear Stearns Adjustable Rate Mortgage Trust, | ||||||||
Series 2003-6, Class 1A3, Floating Rate Pass Through Ctfs., 2.32%, 08/25/33(g) | 443,645 | 442,900 | ||||||
Series 2006-1, Class A1, Floating Rate Pass Through Ctfs., 2.36%, 02/25/36(g) | 1,944,619 | 1,943,444 | ||||||
Bear Stearns ALT-A Trust, Series 2004-11, Class 2A3, Floating Rate Pass Through Ctfs., 2.43%, 11/25/34(g) | 4,216,728 | 4,144,531 | ||||||
Boca Hotel Portfolio Trust, Series 2013-BOCA, Class B, Floating Rate Pass Through Ctfs., 1.92%, 08/15/26(b)(g) | 2,500,000 | 2,501,456 | ||||||
Carlyle High Yield Partners VIII, Ltd., Series 2006-8A, Class B, Floating Rate Pass Through Ctfs., 0.64%, 05/21/21(b)(g) | 700,000 | 676,669 | ||||||
CDGJ Commercial Mortgage Trust, Series 2014-BXCH, Class A, Floating Rate Pass Through Ctfs., 1.57%, 12/15/27(b)(g) | 1,150,000 | 1,156,991 | ||||||
Centurion CDO 9 Ltd. (Cayman Islands), Series 2005-9X, Class A2, Floating Rate Pass Through Ctfs., 0.69%, 07/17/19(g) | 2,750,000 | 2,657,875 | ||||||
CFCRE Commercial Mortgage Trust, Series 2011-C2, Class C, Variable Rate Pass Through Ctfs., 5.57%, 12/15/47(b)(g) | 5,000,000 | 5,699,747 | ||||||
| Principal Amount | Value | |||||||
Citigroup Commercial Mortgage Trust, Series 2014-388G, Class C, Floating Rate Pass Through Ctfs., 1.57%, 06/15/33(b)(g) | $ | 5,000,000 | $ | 5,009,665 | ||||
Citigroup Mortgage Loan Trust, Inc., | ||||||||
Series 2004-HYB3, Class 2A, Floating Rate Pass Through Ctfs., 2.59%, 09/25/34(g) | 3,917,455 | 3,884,061 | ||||||
Series 2004-UST1, Class A4, Floating Rate Pass Through Ctfs., 2.18%, 08/25/34(g) | 1,654,001 | 1,642,903 | ||||||
Commercial Mortgage Trust, Series 2013-THL, Class A2, Floating Rate Pass Through Ctfs., 1.22%, 06/08/30(b)(g) | 2,875,000 | 2,873,841 | ||||||
Countrywide Asset-Backed Ctfs., Series 2003-1, Class 3A, Floating Rate Pass Through Ctfs., 0.85%, 06/25/33(g) | 163,093 | 138,665 | ||||||
Countrywide Home Loans Mortgage Pass Through Trust, Series 2007-13, Class A10, Pass Through Ctfs., 6.00%, 08/25/37 | 906,678 | 874,572 | ||||||
Credit Suisse Mortgage Trust, Series 2009-2R, Class 1A11, Floating Rate Pass Through Ctfs., 3.66%, 09/26/34(b)(g) | 329,409 | 330,721 | ||||||
First Horizon Alternative Mortgage Securities Trust, | ||||||||
Series 2005-FA8, Class 2A1, Pass Through Ctfs., 5.00%, 11/25/20 | 323,884 | 331,089 | ||||||
Series 2006-FA5, Class A3, Pass Through Ctfs., 6.25%, 08/25/36 | 427,165 | 349,101 | ||||||
Foothill CLO Ltd. (Cayman Islands), Series 2007-1A, Class C, Floating Rate Pass Through Ctfs., | 1,531,000 | 1,507,270 | ||||||
Gallatin CLO III Ltd., Series 2007-1A, Class A2L, Floating Rate Pass Through Ctfs., 0.60%, 05/15/21(b)(g) | 1,133,000 | 1,107,054 | ||||||
GMACM Mortgage Loan Trust, Series 2006-AR1, Class 1A1, Floating Rate Pass Through Ctfs., 2.96%, 04/19/36(g) | 1,890,313 | 1,684,712 | ||||||
GP Portfolio Trust, Series 20014-GPP, Class B, Floating Rate Pass Through Ctfs., 1.47%, 02/15/27(b)(g) | 5,000,000 | 5,000,310 | ||||||
Hamlet II Ltd. (Cayman Islands), Series 2006-2A, Class A2B, Floating Rate Pass Through Ctfs., 0.59%, 05/11/21(b)(g) | 5,000,000 | 4,793,500 | ||||||
Harborview Mortgage Loan Trust, Series 2005-9, Class 2A1C, Floating Rate Pass Through Ctfs., 0.62%, 06/20/35(g) | 42,325 | 39,076 | ||||||
Hilton USA Trust, Series 2013-HLT, Class BFX, Pass Through Ctfs., 3.37%, 11/05/30(b) | 1,500,000 | 1,515,737 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
Hyatt Hotel Portfolio Trust, Series 2015-HYT, Class B, Floating Rate Pass Through Ctfs., 1.87%, 11/15/29(b)(g) | $ | 3,998,000 | $ | 4,011,073 | ||||
ING Investment Management CLO II, Ltd. (Cayman Islands), | ||||||||
Series 2006-2A, Class A2, Floating Rate Pass Through Ctfs., 0.59%, 08/01/20(b)(g) | 5,000,000 | 4,949,500 | ||||||
Series 2006-2A, Class B, Floating Rate Pass Through Ctfs., 0.65%, 08/01/20(b)(g) | 2,718,000 | 2,648,963 | ||||||
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2012-LC9, Class B, Variable Rate Pass Through Ctfs., 3.81%, 12/15/47(b)(g) | 5,000,000 | 5,233,735 | ||||||
JP Morgan Chase Commercial Mortgage Securities Trust, | ||||||||
Series 2006-LDP6, Class AJ, Variable Rate Pass Through Ctfs., 5.57%, 04/15/43(g) | 3,000,000 | 3,092,272 | ||||||
Series 2006-LDP8, Class AJ, Variable Rate Pass Through Ctfs., 5.48%, 05/15/45(g) | 1,200,000 | 1,260,504 | ||||||
Series 2006-LDP9, Class A3, Pass Through Ctfs., 5.34%, 05/15/47 | 883,583 | 934,063 | ||||||
JP Morgan Mortgage Trust, | ||||||||
Series 2005-A3, Class 1A1, Floating Rate Pass Through Ctfs., 4.94%, 06/25/35(g) | 2,035,176 | 2,001,615 | ||||||
Series 2005-A3, Class 6A5, Floating Rate Pass Through Ctfs., 2.58%, 06/25/35(g) | 1,818,606 | 1,819,048 | ||||||
Series 2005-A5, Class 1A2, Floating Rate Pass Through Ctfs., 2.65%, 08/25/35(g) | 2,775,477 | 2,767,203 | ||||||
Series 2005-A6, Class 7A1, Floating Rate Pass Through Ctfs., 2.53%, 08/25/35(g) | 1,778,923 | 1,743,852 | ||||||
Series 2007-A4, Class 3A1, Floating Rate Pass Through Ctfs., 5.24%, 06/25/37(g) | 2,196,848 | 2,026,478 | ||||||
LB-UBS Commercial Mortgage Trust, | ||||||||
Series 2006-C7, Class AM, Pass Through Ctfs., 5.38%, 11/15/38 | 2,110,000 | 2,229,728 | ||||||
Series 2005-C7, Class AJ, Variable Rate Pass Through Ctfs., 5.32%, 11/15/40(g) | 5,200,000 | 5,321,007 | ||||||
Series 2006-C7, Class A3, Pass Through Ctfs., 5.35%, 11/15/38 | 300,000 | 317,733 | ||||||
Lehman Mortgage Trust, Series 2006-1, Class 3A5, Pass Through Ctfs., 5.50%, 02/25/36 | 588,142 | 578,135 | ||||||
Luminent Mortgage Trust, Series 2005-1, Class A1, Floating Rate Pass Through Ctfs., 0.43%, 11/25/35(g) | 1,831,629 | 1,655,703 | ||||||
Merrill Lynch Mortgage Investors Trust, Series 2005-A5, Class A9, Floating Rate Pass Through Ctfs., 2.47%, 06/25/35(g) | 4,011,023 | 3,930,696 | ||||||
| Principal Amount | Value | |||||||
Provident Home Equity Loan Trust, Series 2000-2, Class A1, Floating Rate Pass Through Ctfs., 0.71%, 08/25/31(g) | $ | 303,922 | $ | 224,292 | ||||
Residential Funding Mortgage Sec I Trust, Series 2005-S9, Class A10, Pass Through Ctfs., 6.25%, 12/25/35 | 2,264,803 | 2,213,179 | ||||||
Santander Drive Auto Receivables Trust, Series 2011-1, Class D, Pass Through Ctfs., 4.01%, 02/15/17 | 1,535,786 | 1,552,255 | ||||||
Sequoia Mortgage Trust, | ||||||||
Series 2013-3, Class A1, Variable Rate Pass Through Ctfs., 2.00%, 03/25/43(g) | 2,737,945 | 2,582,717 | ||||||
Series 2013-4, Class A3, Variable Rate Pass Through Ctfs., 1.55%, 04/25/43(g) | 2,549,290 | 2,476,557 | ||||||
Series 2013-7, Class A2, Variable Rate Pass Through Ctfs., 3.00%, 06/25/43(g) | 2,285,572 | 2,260,774 | ||||||
Shellpoint Asset Funding Trust, Series 2013-1, Class A3, Variable Rate Pass Through Ctfs., 3.75%, 07/25/43(b)(g) | 3,955,297 | 4,107,697 | ||||||
Sierra Timeshare Receivables Funding LLC, Series 2013-2A, Class A, Pass Through Ctfs., 2.28%, 11/20/25(b) | 1,016,144 | 1,024,195 | ||||||
Specialty Underwriting & Residential Finance Trust, Series 2004-BC2, Class A2, Floating Rate Pass Through Ctfs., 0.71%, 05/25/35(g) | 41,645 | 37,369 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, | ||||||||
Series 2004-8, Class 3A, Floating Rate Pass Through Ctfs., 2.46%, 07/25/34(g) | 3,699,509 | 3,704,936 | ||||||
Series 2007-3, Class 4A2, Floating Rate Pass Through Ctfs., 4.82%, 04/25/47(g) | 995,994 | 719,786 | ||||||
Structured Asset Investment Loan Trust, Series 2003-BC12, Class 3A, Floating Rate Pass Through Ctfs., 0.91%, 11/25/33(g) | 18,487 | 17,905 | ||||||
Suntrust Alternative Loan Trust, Series 2005-1F, Class 2A8, Pass Through Ctfs., 6.00%, 12/25/35 | 703,868 | 642,145 | ||||||
Symphony CLO II, Ltd. (Cayman Islands), Series 2006-2A, Class A2B, Floating Rate Pass Through Ctfs., 0.59%, 10/25/20(b)(g) | 4,545,000 | 4,434,556 | ||||||
Thornburg Mortgage Securities Trust, Series 2003-6, Class A2, Floating Rate Pass Through Ctfs., 1.17%, 12/25/33(g) | 1,635,158 | 1,519,944 | ||||||
UBS-Citigroup Commercial Mortgage Trust, Series 2011-C1, Class C, Variable Rate Pass Through Ctfs., 5.89%, 01/10/45(b)(g) | 4,500,000 | 5,204,396 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
Wachovia Bank Commercial Mortgage Trust, | ||||||||
Series 2005-C21, Class AJ, Variable Rate Pass Through Ctfs., 5.24%, 10/15/44(g) | $ | 1,515,000 | $ | 1,545,732 | ||||
Series 2005-C21, Class AM, Variable Rate Pass Through Ctfs., 5.24%, 10/15/44(g) | 1,680,000 | 1,709,872 | ||||||
WaMu Mortgage Pass Through Ctfs., | ||||||||
Series 2003-AR8, Class A, Floating Rate Pass Through Ctfs., 2.38%, 08/25/33(g) | 1,362,233 | 1,405,727 | ||||||
Series 2005-AR10, Class 1A3, Floating Rate Pass Through Ctfs., 2.39%, 09/25/35(g) | 525,000 | 506,869 | ||||||
Series 2005-AR12, Class 1A8, Floating Rate Pass Through Ctfs., 2.33%, 10/25/35(g) | 2,321,699 | 2,259,607 | ||||||
Series 2007-HY2, Class 2A2, Floating Rate Pass Through Ctfs., 2.34%, 11/25/36(g) | 1,547,893 | 1,362,399 | ||||||
Wells Fargo Commercial Mortgage Trust, Series 2014-TISH, Class B, Floating Rate Pass Through Ctfs., 1.52%, 02/15/27(b)(g) | 2,500,000 | 2,486,142 | ||||||
Wells Fargo Mortgage Backed Securities Trust, | ||||||||
Series 2004-K, Class 1A2, Floating Rate Pass Through Ctfs., 2.62%, 07/25/34(g) | 1,100,861 | 1,107,710 | ||||||
Series 2004-Z, Class 2A1, Floating Rate Pass Through Ctfs., 2.61%, 12/25/34(g) | 1,345,612 | 1,355,797 | ||||||
Series 2005-AR14, Class A1, Floating Rate Pass Through Ctfs., 5.36%, 08/25/35(g) | 1,284,718 | 1,291,591 | ||||||
Series 2005-AR2, Class 2A2, Floating Rate Pass Through Ctfs., 2.61%, 03/25/35(g) | 2,692,553 | 2,746,777 | ||||||
Series 2006-AR8, Class 1A3, Floating Rate Pass Through Ctfs., 2.61%, 04/25/36(g) | 3,061,672 | 3,052,882 | ||||||
Series 2007-7, Class A1, Pass Through Ctfs., 6.00%, 06/25/37 | 1,947,709 | 1,977,860 | ||||||
WFRBS Commercial Mortgage Trust, | ||||||||
Series 2011-C5, Class B, Variable Rate Pass Through Ctfs., 5.63%, 11/15/44(b)(g) | 5,000,000 | 5,836,550 | ||||||
Series 2013-C15, Class B, Variable Rate Pass Through Ctfs., 4.48%, 08/15/46(g) | 3,800,000 | 4,169,254 | ||||||
Series 2013-C16, Class B, Variable Rate Pass Through Ctfs., 4.98%, 09/15/46(g) | 3,127,000 | 3,554,269 | ||||||
Total Asset-Backed Securities | 180,947,707 | |||||||
| Principal Amount | Value | |||||||
U.S. Treasury Securities–18.22% |
| |||||||
| U.S. Treasury Bills–0.54% | ||||||||
0.00%, 08/20/15(i)(j) | $ 665,000 | $ | 664,810 | |||||
0.07%, 08/20/15(i)(j) | 1,150,000 | 1,149,671 | ||||||
0.08%, 08/20/15(i)(j) | 1,260,000 | 1,259,639 | ||||||
0.09%, 08/20/15(i)(j) | 395,000 | 394,887 | ||||||
0.12%, 08/20/15(i)(j) | 880,000 | 879,748 | ||||||
0.10%, 08/20/15(i)(j) | 200,000 | 199,943 | ||||||
| 4,548,698 | ||||||||
| U.S. Treasury Notes–15.76% | ||||||||
1.25%, 01/31/20 | 85,949,500 | 84,938,932 | ||||||
2.00%, 02/15/25 | 48,278,900 | 48,304,844 | ||||||
| 133,243,776 | ||||||||
| U.S. Treasury Bonds–1.92% | ||||||||
3.00%, 11/15/44 | 14,994,400 | 16,270,658 | ||||||
Total U.S. Treasury Securities |
| 154,063,132 | ||||||
| Shares | ||||||||
Preferred Stocks–1.37% |
| |||||||
| Diversified Banks–0.13% | ||||||||
Citigroup Inc., Series K, 6.88% Pfd. | 39,000 | 1,046,370 | ||||||
| Investment Banking & Brokerage–1.05% | ||||||||
Goldman Sachs Group, Inc. (The), Series J, 5.50% Pfd. | 78,000 | 1,945,320 | ||||||
Morgan Stanley, 6.88% Pfd. | 85,000 | 2,305,200 | ||||||
Morgan Stanley, Series E, 7.13% Pfd. | 164,000 | 4,619,880 | ||||||
| 8,870,400 | ||||||||
| Regional Banks–0.09% | ||||||||
PNC Financial Services Group, Inc. (The), Series P, 6.13% Pfd. | 27,000 | 768,150 | ||||||
| Reinsurance–0.10% | ||||||||
Reinsurance Group of America, Inc., 6.20% Sr. Unsec. Sub. Pfd. | 30,000 | 872,700 | ||||||
Total Preferred Stocks | 11,557,620 | |||||||
| Principal Amount | ||||||||
Non-U.S. Dollar Denominated Bonds & Notes–0.83%(k) |
| |||||||
| Diversified Banks–0.70% | ||||||||
Standard Chartered Bank (Singapore) Ltd. (United Kingdom), Sr. Unsec. Medium-Term Euro Notes, 7.28%, 06/05/19(b) | IN | R 373,800,000 | 5,949,532 | |||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco Core Plus Bond Fund
| Principal Amount | Value | |||||||
| Food Distributors–0.02% | ||||||||
Bakkavor Finance 2 PLC (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 8.25%, 02/15/18(b) | GBP 100,000 | $ | 161,748 | |||||
| Hotels, Resorts & Cruise Lines–0.02% | ||||||||
Thomas Cook Group PLC (United Kingdom), Sr. Unsec. Gtd. Medium-Term Euro Notes, 7.75%, 06/22/17 | GBP 100,000 | 164,334 | ||||||
| Other Diversified Financial Services–0.04% | ||||||||
Cabot Financial Luxembourg S.A. (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 10.38%, 10/01/19(b) | GBP 100,000 | 171,373 | ||||||
Lowell Group Financing PLC (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 10.75%, 04/01/19(b) | GBP 100,000 | 168,285 | ||||||
| 339,658 | ||||||||
| Sovereign Debt–0.05% | ||||||||
Mexican Bonos (Mexico), Series M, Sr. Unsec. Bonds, 7.75%, 05/29/31 | MXN 4,500,000 | 352,351 | ||||||
Peruvian Government International Bond (Peru), Sr. Unsec. Notes, 8.60%, 08/12/17(b) | PEN 210,000 | 75,758 | ||||||
| 428,109 | ||||||||
Total Non-U.S. Dollar Denominated Bonds & Notes |
| 7,043,381 | ||||||
| Principal Amount | Value | |||||||
Municipal Obligations–0.34% |
| |||||||
Florida Hurricane Catastrophe Fund Finance Corp.; Series 2013 A, RB, 3.00%, 07/01/20 | $ | 1,450,000 | $ | 1,480,203 | ||||
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); | ||||||||
Series 2010, Class A, Build America Taxable RB, 6.66%, 04/01/57 | 550,000 | 725,280 | ||||||
Series 2010 A, Taxable Build America RB, 6.64%, 04/01/57 | 500,000 | 674,845 | ||||||
Total Municipal Obligations | 2,880,328 | |||||||
| Shares | ||||||||
Common Stocks–0.00% | ||||||||
| Paper Products–0.00% | ||||||||
Verso Corp. (Cost $972) | 302 | 725 | ||||||
Money Market Funds–3.15% |
| |||||||
Liquid Assets Portfolio–Institutional Class(l) | 13,299,488 | 13,299,488 | ||||||
Premier Portfolio–Institutional | 13,299,487 | 13,299,487 | ||||||
Total Money Market Funds (Cost $26,598,975) | 26,598,975 | |||||||
Options Purchased–0.17% |
| |||||||
(Cost $1,713,536)(m) | 1,431,608 | |||||||
TOTAL INVESTMENTS–122.85% (Cost $1,015,607,581) | 1,038,873,590 | |||||||
OTHER ASSETS LESS LIABILITIES–(22.85)% |
| (193,250,308 | ) | |||||
NET ASSETS–100.00% | $ | 845,623,282 | ||||||
Investment Abbreviations:
| ARM | – Adjustable Rate Mortgage | |
| Conv. | – Convertible | |
| Ctfs. | – Certificates | |
| Deb. | – Debentures | |
| GBP | – British Pound | |
| Gtd. | – Guaranteed |
| INR | – Indian Rupee | |
| IO | – Interest Only | |
| Jr. | – Junior | |
| MXN | – Mexican Peso | |
| 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 |
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, 2015 was $199,064,504, which represented 23.54% of the Fund’s Net Assets. |
| (c) | All or a portion of this security is Payment-in-Kind. |
| Issuer | Cash Rate | PIK Rate | ||||||
Alphabet Holding Co., Inc., Sr. Unsec. PIK Global Notes | — | 8.50 | % | |||||
| (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) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
| (g) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2015. |
| (h) | Security purchased on a forward commitment basis. This security is subject to dollar roll transactions. See Note 1J. |
| (i) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
| (j) | 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. |
| (k) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
| (l) | The money market fund and the Fund are affiliated by having the same investment adviser. |
| (m) | The table below details options purchased: |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco Core Plus Bond Fund
| Open Over-The-Counter Interest Rate Swaptions Purchased | ||||||||||||||||||||||||||||
| Description | Type of Contract | Counterparty | Exercise Rate | Pay/ Receive | Floating Rate Index | Expiration Date | Notional Value(a) | Value | ||||||||||||||||||||
30 Year Interest Rate Swap | Put | Goldman Sachs International | 3.45 | % | Pay | 3 Month USD LIBOR | 05/06/15 | $ | 39,000,000 | $ | 3,300 | |||||||||||||||||
30 Year Interest Rate Swap | Put | Morgan Stanley Capital Services LLC | 2.85 | Pay | 3 Month USD LIBOR | 05/16/15 | 20,000,000 | 170,211 | ||||||||||||||||||||
Subtotal Swaptions Purchased — Interest Rate Risk |
| $ | 173,511 | |||||||||||||||||||||||||
| Open Over-The-Counter Credit Default Swaptions Purchased | ||||||||||||||||||||||||||||||||
| Description | Type of Contract | Counterparty | Exercise Rate | Pay/ Receive | Reference Entity | Expiration Date | Implied Credit Spread(b) | Notional Value(a) | Value | |||||||||||||||||||||||
5 Year Credit Default Swap | Call | Goldman Sachs International | 1.00 | % | Receive | Markit CDX North America Investment Grade Index, Series 23 | 03/18/15 | 0.41 | % | $ | 50,000,000 | $ | 28,772 | |||||||||||||||||||
Subtotal Swaptions Purchased — Credit Risk | $ | 28,772 | ||||||||||||||||||||||||||||||
Total Swaptions Purchased | $ | 202,283 | ||||||||||||||||||||||||||||||
| Open Over-The-Counter Foreign Currency Options Purchased | ||||||||||||||||||||||||||
| Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Notional Value | Value | ||||||||||||||||||||
CAD versus MXN | Put | Goldman Sachs International | 06/17/15 | MXN 11.50 | CAD | 30,000,000 | $ | 160,886 | ||||||||||||||||||
CHF versus JPY | Put | Barclays Bank PLC | 07/23/15 | JPY 126.30 | CHF | 13,900,000 | 393,478 | |||||||||||||||||||
USD versus CHF | Call | Morgan Stanley Capital Services LLC | 04/01/15 | CHF 1.03 | USD | 24,000,000 | 5,582 | |||||||||||||||||||
USD versus SGD | Call | Bank of America Merrill Lynch | 05/08/15 | SGD 1.38 | USD | 22,800,000 | 137,599 | |||||||||||||||||||
USD versus CNH | Call | J.P. Morgan Securities LLC | 01/27/16 | CNH 6.75 | USD | 16,000,000 | 195,485 | |||||||||||||||||||
USD versus CHF | Call | Goldman Sachs International | 03/11/15 | CHF 0.95 | USD | 16,000,000 | 186,874 | |||||||||||||||||||
USD versus CHF | Call | Deutsche Bank Securities Inc. | 03/23/15 | CHF 0.96 | USD | 24,000,000 | 149,421 | |||||||||||||||||||
Total Foreign Currency Options Purchased — Currency Risk |
| $ | 1,229,325 | |||||||||||||||||||||||
Total Options Purchased (cost $1,713,536) |
| $ | 1,431,608 | |||||||||||||||||||||||
| (a) | Notional Value is calculated by multiplying the Number of Contracts by the multiplier. |
| (b) | Implied credit spreads represent the current level as of February 28, 2015 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. |
Abbreviations:
| CAD | – Canadian Dollar | |
| CHF | – Swiss Franc | |
| CNH | – Chinese Yuan |
| JPY | – Japanese Yen | |
| LIBOR | – London Interbank Offered Rate | |
| MXN | – Mexican Peso |
| SGD | – Singapore Dollar | |
| USD | – U.S. Dollar |
Portfolio Composition
By security type, based on Total Investments
as of February 28, 2015
U.S. Dollar Denominated Bonds and Notes | 38.2 | % | ||
U.S. Government Sponsored Agency Mortgage-Backed Securities | 24.8 | |||
Asset-Backed Securities | 17.4 | |||
U.S. Treasury Securities | 14.8 | |||
Preferred Stocks | 1.1 | |||
Non-U.S. Dollar Denominated Bonds & Notes | 0.7 | |||
Municipal Obligations | 0.3 | |||
Common Stock | 0.0 | |||
Money Market Funds | 2.6 | |||
Put Options Purchased | 0.1 |
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, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $989,008,606) | $ | 1,012,274,615 | ||
Investments in affiliated money market funds, at value and cost | 26,598,975 | |||
Total investments, at value (Cost $1,015,607,581) | 1,038,873,590 | |||
Foreign currencies, at value (Cost $9,188,773) | 9,035,842 | |||
Receivable for: | ||||
Investments sold | 326,732,674 | |||
Variation margin — centrally cleared swap agreements | 13,090 | |||
Fund shares sold | 4,439,526 | |||
Dividends and interest | 5,394,253 | |||
Fund expenses absorbed | 33,832 | |||
Swaps receivables | 74,713 | |||
Premiums received on swap agreements | 203,605 | |||
Investment for trustee deferred compensation and retirement plans | 115,631 | |||
Unrealized appreciation on forward foreign currency contracts outstanding | 1,723,734 | |||
Total assets | 1,386,640,490 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 538,689,894 | |||
Fund shares reacquired | 930,920 | |||
Options written, at value (premiums received $342,032) | 64,721 | |||
Dividends | 271,268 | |||
Swaps payable | 111,522 | |||
Variation margin — futures | 17,038 | |||
Accrued fees to affiliates | 324,619 | |||
Accrued trustees’ and officers’ fees and benefits | 4,121 | |||
Accrued other operating expenses | 177,650 | |||
Trustee deferred compensation and retirement plans | 129,903 | |||
Unrealized depreciation on swap agreements — OTC | 295,552 | |||
Total liabilities | 541,017,208 | |||
Net assets applicable to shares outstanding | $ | 845,623,282 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 896,593,979 | ||
Undistributed net investment income | (3,379,995 | ) | ||
Undistributed net realized gain (loss) | (73,020,307 | ) | ||
Net unrealized appreciation | 25,429,605 | |||
| $ | 845,623,282 | |||
Net Assets: |
| |||
Class A | $ | 427,408,302 | ||
Class B | $ | 10,645,277 | ||
Class C | $ | 53,134,976 | ||
Class R | $ | 5,527,642 | ||
Class Y | $ | 76,755,393 | ||
Class R5 | $ | 606,238 | ||
Class R6 | $ | 271,545,454 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 38,809,650 | |||
Class B | 966,899 | |||
Class C | 4,826,729 | |||
Class R | 502,157 | |||
Class Y | 6,965,497 | |||
Class R5 | 55,088 | |||
Class R6 | 24,674,860 | |||
Class A: | ||||
Net asset value per share | $ | 11.01 | ||
Maximum offering price per share | ||||
(Net asset value of $11.01 ¸ 95.75%) | $ | 11.50 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.01 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 11.01 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 11.01 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 11.02 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 11.00 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 11.00 | ||
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, 2015
(Unaudited)
Investment income: |
| |||
Interest | $ | 13,383,442 | ||
Dividends | 365,525 | |||
Dividends from affiliated money market funds | 7,061 | |||
Total investment income | 13,756,028 | |||
Expenses: | ||||
Advisory fees | 1,617,164 | |||
Administrative services fees | 99,039 | |||
Custodian fees | 51,877 | |||
Distribution fees: | ||||
Class A | 461,661 | |||
Class B | 55,528 | |||
Class C | 219,166 | |||
Class R | 12,629 | |||
Transfer agent fees — A, B, C, R and Y | 476,667 | |||
Transfer agent fees — R5 | 375 | |||
Transfer agent fees — R6 | 393 | |||
Trustees’ and officers’ fees and benefits | 18,080 | |||
Other | 188,511 | |||
Total expenses | 3,201,090 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (363,251 | ) | ||
Net expenses | 2,837,839 | |||
Net investment income | 10,918,189 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 16,441,356 | |||
Foreign currencies | (97,286 | ) | ||
Forward foreign currency contracts | 1,627,903 | |||
Futures contracts | (5,724,226 | ) | ||
Option contracts written | (6,010 | ) | ||
Swap agreements | (113,533 | ) | ||
| 12,128,204 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (3,997,902 | ) | ||
Foreign currencies | (139,766 | ) | ||
Forward foreign currency contracts | 1,035,494 | |||
Futures contracts | 887,108 | |||
Option contracts written | 277,311 | |||
Swap agreements | 301,196 | |||
| (1,636,559 | ) | |||
Net realized and unrealized gain | 10,491,645 | |||
Net increase in net assets resulting from operations | $ | 21,409,834 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 10,918,189 | $ | 21,983,027 | ||||
Net realized gain | 12,128,204 | 3,118,290 | ||||||
Change in net unrealized appreciation (depreciation) | (1,636,559 | ) | 28,530,746 | |||||
Net increase in net assets resulting from operations | 21,409,834 | 53,632,063 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (6,912,858 | ) | (13,587,195 | ) | ||||
Class B | (166,251 | ) | (483,748 | ) | ||||
Class C | (652,719 | ) | (1,171,456 | ) | ||||
Class R | (89,274 | ) | (120,792 | ) | ||||
Class Y | (681,764 | ) | (124,974 | ) | ||||
Class R5 | (22,885 | ) | (75,598 | ) | ||||
Class R6 | (5,411,795 | ) | (10,148,675 | ) | ||||
Total distributions from net investment income | (13,937,546 | ) | (25,712,438 | ) | ||||
Share transactions–net: | ||||||||
Class A | 89,958,067 | (6,017,746 | ) | |||||
Class B | (1,344,307 | ) | (4,652,287 | ) | ||||
Class C | 14,520,385 | 778,537 | ||||||
Class R | 1,918,832 | 592,575 | ||||||
Class Y | 66,456,681 | 8,120,874 | ||||||
Class R5 | (887,928 | ) | (547,261 | ) | ||||
Class R6 | 1,846,231 | 71,556,506 | ||||||
Net increase in net assets resulting from share transactions | 172,467,961 | 69,831,198 | ||||||
Net increase in net assets | 179,940,249 | 97,750,823 | ||||||
Net assets: | ||||||||
Beginning of period | 665,683,033 | 567,932,210 | ||||||
End of period (includes undistributed net investment income of $(3,379,995) and $(360,638), respectively) | $ | 845,623,282 | $ | 665,683,033 | ||||
February 28, 2015
(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 thirteen 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.
26 Invesco Core Plus Bond Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked 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, if available, provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end-of-day net present values, spreads, ratings, industry, company performance and returns of referenced assets.
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/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (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
27 Invesco Core Plus Bond 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 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 net investment income, if any, 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. | 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 (“Counterparties”) 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. | 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.
28 Invesco Core Plus Bond Fund
Dollar roll transactions involve the risk that a Counterparty 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.
| K. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
| L. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between Counterparties to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
| M. | Call Options Written and Purchased — The Fund may write call options and/or buy call options. A covered call option gives the purchaser of such option the right to buy, and the writer the obligation to sell, the underlying security or foreign currency at the stated exercise price during the option period. An uncovered call option exists without the ownership of the underlying security. Options written by the Fund normally will have expiration dates between three and nine months from the date written. The exercise price of a call option may be below, equal to, or above the current market value of the underlying security at the time the option is written. |
Additionally, the Fund may enter into an option on a swap agreement, also called a “swaption”. A swaption is an option that gives the buyer the right, but not the obligation, to enter into a swap on a future date in exchange for paying a market-based premium. A receiver swaption gives the owner the right to receive the total return of a specified asset, reference rate or index. Swaptions also include options that allow an existing swap to be terminated or extended by one of the Counterparties.
When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded as an asset and an equivalent liability in the Statement of Assets and Liabilities. The amount of the liability is subsequently “marked-to-market” to reflect the current market value of the option written. If a written covered call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written covered call option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations. A risk in writing a covered call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing an uncovered call option is that the Fund may incur significant losses if the value of the written security exceeds the exercise price of the option.
When the Fund buys a call option, an amount equal to the premium paid by the Fund is recorded as an investment on the Statement of Assets and Liabilities. The amount of the investment is subsequently “marked-to-market” to reflect the current value of the option purchased. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased.
| N. | Put Options Purchased and Written — The Fund may purchase and write put options including options on securities indexes, or foreign currency and/or futures contracts. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option’s underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option’s underlying instrument may be a security, securities index, or a futures contract. |
Additionally, the Fund may enter into an option on a swap agreement, also called a “swaption”. A swaption is an option that gives the buyer the right, but not the obligation, to enter into a swap on a future date in exchange for paying a market-based premium. A receiver swaption gives the
29 Invesco Core Plus Bond Fund
owner the right to receive the total return of a specified asset, reference rate or index. Swaptions also include options that allow an existing swap to be terminated or extended by one of the Counterparties.
Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund’s resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the underlying portfolio securities. The Fund may write put options to earn additional income in the form of option premiums if it expects the price of the underlying instrument to remain stable or rise during the option period so that the option will not be exercised. The risk in this strategy is that the price of the underlying securities may decline by an amount greater than the premium received. Put options written are reported as a liability in the Statement of Assets and Liabilities. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations as Net realized gain from Investment securities. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased.
| O. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency 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 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 for variation margin in the Statement of Assets and Liabilities until the centrally cleared swap is terminated at which time a realized gain or loss is recorded.
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.
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 centrally cleared and OTC 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,
30 Invesco Core Plus Bond Fund
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.
Notional amounts of each individual credit default swap agreement outstanding as of February 28, 2015 for which the Fund is the seller of protection are disclosed in the open swap agreements table. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund for the same referenced entity or entities.
| P. | 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. |
| Q. | 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. |
| R. | 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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.44%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
Effective January 1, 2015, the Adviser has contractually agreed, through at least December 31, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 0.86%, 1.61%, 1.61%, 1.11%, 0.61%, 0.61% and 0.61%, respectively, of average daily net assets. Prior to January 1, 2015, 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 0.84%, 1.59%, 1.59%, 1.09%, 0.59%, 0.59% and 0.59%, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $21,513 and reimbursed class level expenses of $271,565, $8,166, $32,230, $3,714, $25,320, $51 and $0 of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended February 28, 2015, 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,
31 Invesco Core Plus Bond Fund
subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended February 28, 2015, 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $107,112 in front-end sales commissions from the sale of Class A shares and $1,109, $2,359 and $579 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, 2015. 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 | $ | 38,157,320 | $ | — | $ | — | $ | 38,157,320 | ||||||||
U.S. Treasury Securities | — | 154,063,132 | — | 154,063,132 | ||||||||||||
Corporate Debt Securities | — | 381,483,900 | — | 381,483,900 | ||||||||||||
U.S. Government Sponsored Agency Securities | — | 257,341,579 | — | 257,341,579 | ||||||||||||
Asset-Backed Securities | — | 180,947,707 | — | 180,947,707 | ||||||||||||
Municipal Obligations | — | 2,880,328 | — | 2,880,328 | ||||||||||||
Foreign Debt Securities | — | 6,615,272 | — | 6,615,272 | ||||||||||||
Foreign Sovereign Debt Securities | — | 15,952,744 | — | 15,952,744 | ||||||||||||
Options Purchased | — | 1,431,608 | — | 1,431,608 | ||||||||||||
| 38,157,320 | 1,000,716,270 | — | 1,038,873,590 | |||||||||||||
Forward Foreign Currency Contracts* | — | 1,723,734 | — | 1,723,734 | ||||||||||||
Futures Contracts* | 609,861 | — | — | 609,861 | ||||||||||||
Options Written* | — | 277,311 | — | 277,311 | ||||||||||||
Swap Agreements* | — | (295,552 | ) | — | (295,552 | ) | ||||||||||
Total Investments | $ | 38,767,181 | $ | 1,002,421,763 | $ | — | $ | 1,041,188,944 | ||||||||
| * | Unrealized appreciation (depreciation) |
32 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, 2015:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Credit risk: | ||||||||
Swap agreements(a) | $ | — | $ | (279,221 | ) | |||
Options purchased(b) | 28,772 | — | ||||||
Options written(c) | 3,749 | — | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(d) | 3,230,495 | (1,506,761 | ) | |||||
Options purchased(b) | 1,229,325 | — | ||||||
Options written(c) | 60,972 | — | ||||||
Interest rate risk: | ||||||||
Futures contracts(e) | 622,441 | (12,580 | ) | |||||
Options purchased(b) | 173,511 | — | ||||||
Swap agreements(a) | — | (16,331 | ) | |||||
Total | $ | 5,349,265 | $ | (1,814,893 | ) | |||
| (a) | Values are disclosed on the Statement of Assets and Liabilities under the captions Unrealized depreciation on swap agreements — OTC. |
| (b) | Options purchased at value as reported in the Schedule of Investments. |
| (c) | Values are disclosed on the Statement of Assets and Liabilities under the caption Options written, at value. |
| (d) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized appreciation on forward foreign currency contracts outstanding. |
| (e) | Includes cumulative appreciation of futures contracts. Only current day’s variation margin (payable) is reported within the Statement of Assets and Liabilities. |
Effect of Derivative Investments for the six months ended February 28, 2015
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 | Futures Contracts | Options(f) | Swap Agreements | |||||||||||||
Realized Gain (Loss): | ||||||||||||||||
Credit risk | $ | — | $ | — | $ | 254,075 | $ | (89,416 | ) | |||||||
Currency risk | 1,627,903 | — | 2,476,649 | — | ||||||||||||
Interest rate risk | — | (5,724,226 | ) | (320,250 | ) | (24,117 | ) | |||||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||
Credit risk | — | — | 29,023 | 317,527 | ||||||||||||
Currency risk | 1,035,494 | — | 180,247 | — | ||||||||||||
Interest rate risk | — | 887,106 | (86,116 | ) | (16,331 | ) | ||||||||||
Total | $ | 2,663,397 | $ | (4,837,120 | ) | $ | 2,533,628 | $ | 187,663 | |||||||
| (f) | Options purchased net realized gain of $2,416,484 and net unrealized gain (loss) of $(281,928) are included in the net realized gain and net unrealized gain of investment securities. |
The table below summarizes the average notional value of forward foreign currency contracts, futures contracts, options written, options purchased and swap agreements outstanding during the period.
| Forward Foreign Currency Contracts | Futures Contracts | Options Written | Options Purchased | Swap Agreements | ||||||||||||||||
Average notional value | $ | 128,375,080 | $ | 259,632,980 | $ | 86,993,686 | $ | 214,024,167 | $ | 47,844,167 | ||||||||||
33 Invesco Core Plus Bond Fund
| Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
| Settlement Date | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
| Deliver | Receive | |||||||||||||||||||||||||
03/02/15 | Deutsche Bank Securities Inc. | CHF | 7,500,000 | JPY | 965,017,500 | $ | 8,215,012 | $ | 198,749 | |||||||||||||||||
03/02/15 | Deutsche Bank Securities Inc. | JPY | 965,017,500 | USD | 8,121,197 | 8,066,409 | 54,788 | |||||||||||||||||||
03/02/15 | Deutsche Bank Securities Inc. | USD | 7,912,311 | CHF | 7,500,000 | 7,867,660 | (44,651 | ) | ||||||||||||||||||
03/10/15 | Citigroup Global Markets Inc. | EUR | 8,000,000 | USD | 9,105,040 | 8,953,938 | 151,102 | |||||||||||||||||||
03/13/15 | Citigroup Global Markets Inc. | EUR | 29,825,827 | USD | 35,184,281 | 33,383,484 | 1,800,797 | |||||||||||||||||||
03/13/15 | Citigroup Global Markets Inc. | USD | 25,258,329 | EUR | 22,000,000 | 24,624,184 | (634,145 | ) | ||||||||||||||||||
03/13/15 | Deutsche Bank Securities Inc. | AUD | 7,500,000 | USD | 6,171,863 | 5,855,236 | 316,627 | |||||||||||||||||||
03/13/15 | Deutsche Bank Securities Inc. | USD | 6,056,025 | AUD | 7,500,000 | 5,855,236 | (200,789 | ) | ||||||||||||||||||
03/13/15 | Goldman Sachs International | GBP | 431,024 | USD | 674,882 | 665,374 | 9,508 | |||||||||||||||||||
04/07/15 | Deutsche Bank Securities Inc. | CHF | 7,500,000 | USD | 7,922,842 | 7,879,992 | 42,850 | |||||||||||||||||||
04/07/15 | Deutsche Bank Securities Inc. | USD | 8,125,163 | JPY | 965,017,500 | 8,070,975 | (54,188 | ) | ||||||||||||||||||
04/07/15 | Goldman Sachs International | INR | 484,795,000 | USD | 7,739,384 | 7,812,249 | (72,865 | ) | ||||||||||||||||||
04/07/15 | Goldman Sachs International | THB | 494,100,000 | USD | 15,000,000 | 15,234,014 | (234,014 | ) | ||||||||||||||||||
04/07/15 | Goldman Sachs International | TWD | 480,600,000 | USD | 15,000,000 | 15,266,109 | (266,109 | ) | ||||||||||||||||||
04/07/15 | Goldman Sachs International | USD | 15,000,000 | INR | 966,300,000 | 15,571,482 | 571,482 | |||||||||||||||||||
04/07/15 | Goldman Sachs International | USD | 15,237,793 | TWD | 480,600,000 | 15,266,108 | 28,315 | |||||||||||||||||||
04/07/15 | Goldman Sachs International | USD | 7,734,313 | THB | 252,680,000 | 7,790,590 | 56,277 | |||||||||||||||||||
Total Open Forward Foreign Currency Contracts — Currency Risk | $ | 1,723,734 | ||||||||||||||||||||||||
Currency Abbreviations:
| AUD | – Australian Dollar | JPY | – Japanese Yen | |||
| CHF | – Swiss Franc | THB | – Thailand Baht | |||
| EUR | – Euro | TWD | – New Taiwan Dollar | |||
| GBP | – British Pound Sterling | USD | – U.S. Dollar | |||
| INR | – Indian Rupee |
| Open Futures Contracts | ||||||||||||||||||||
| Type of Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
Long Gilt | Short | 124 | June-2015 | $ | (22,699,468 | ) | $ | (12,580 | ) | |||||||||||
U.S. 2 Year Treasury Notes | Long | 331 | June-2015 | 72,349,360 | 71,698 | |||||||||||||||
U.S. 5 Year Treasury Notes | Long | 222 | June-2015 | 26,480,438 | 87,978 | |||||||||||||||
U.S. 10 Year Treasury Notes | Short | 755 | June-2015 | (96,486,641 | ) | 257,885 | ||||||||||||||
U.S. Long Bond | Short | 181 | June-2015 | (29,293,719 | ) | 40,918 | ||||||||||||||
U.S. Ultra Bond | Short | 205 | June-2015 | (34,497,656 | ) | 163,962 | ||||||||||||||
Total Futures Contracts — Interest Rate Risk | $ | 609,861 | ||||||||||||||||||
| Open Over-The-Counter Credit Default Swaptions Written – Credit Risk | ||||||||||||||||||||||||||||||||||
| Description | Type of Contract | Counterparty | Exercise Rate | Pay/ Receive | Reference Entity | Expiration Date | Premiums Received | Notional Value | Value | Unrealized Appreciation | ||||||||||||||||||||||||
5 Year Credit Default Swap | Put | Goldman Sachs International | 1.00 | % | Pay | Markit CDX North America Investment Grade Index, Series 23 | 03/18/15 | $ | 24,000 | $ | 50,000,000 | $ | 3,749 | $ | 20,251 | |||||||||||||||||||
| Open Foreign Currency Options Written | ||||||||||||||||||||||||||||||||||||
| Description | Type of Contract | Counterparty | Expiration Date | Number of Contracts | Strike Price | Premiums Received | Notional Value | Value | Unrealized Appreciation | |||||||||||||||||||||||||||
USD versus CHF | Call | Deutsche Bank Securities Inc. | 04/01/15 | 24,000 | CHF 1.03 | $ | 48,960 | USD 24,000,000 | $ | 5,582 | $ | 43,378 | ||||||||||||||||||||||||
CAD versus MXN | Call | Goldman Sachs International | 06/17/15 | 30,000 | MXN 13.58 | 269,072 | CAD 30,000,000 | 55,390 | 213,682 | |||||||||||||||||||||||||||
Subtotal — Currency Risk |
| $ | 318,032 | $ | 60,972 | $ | 257,060 | |||||||||||||||||||||||||||||
Total Options Written |
| $ | 342,032 | $ | 64,721 | $ | 277,311 | |||||||||||||||||||||||||||||
Currency Abbreviations:
| CAD | – Canadian Dollar | MXN | – Mexican Peso | |||
| CHF | – Swiss Franc | USD | – U.S. Dollar |
34 Invesco Core Plus Bond Fund
| Call Options Written Transactions | ||||||||||||||||||||||||||||||||
| Call Options | ||||||||||||||||||||||||||||||||
| Number of Contracts(g) | Notional Value | Notional Value | Notional Value | Premiums Received | ||||||||||||||||||||||||||||
Beginning of period | — | — | — | — | $ | — | ||||||||||||||||||||||||||
Written | 142,200 | CAD | 30,000,000 | CHF | 13,900,000 | USD | 144,300,000 | 948,064 | ||||||||||||||||||||||||
Closed | (63,200 | ) | — | CHF | (13,900,000 | ) | USD | (49,300,000 | ) | (399,532 | ) | |||||||||||||||||||||
Expired | (25,000 | ) | — | — | USD | (71,000,000 | ) | (230,500 | ) | |||||||||||||||||||||||
End of period | 54,000 | CAD | 30,000,000 | CHF | — | USD | 24,000,000 | $ | 318,032 | |||||||||||||||||||||||
| Put Options Written Transactions | ||||||||||||||||||||||||
| Number of Contracts(g) | Notional Value | Notional Value | Premiums Received | |||||||||||||||||||||
Beginning of period | — | — | — | $ | — | |||||||||||||||||||
Written | 27,000 | EUR | 27,000,000 | USD | 91,000,000 | 180,765 | ||||||||||||||||||
Closed | (27,000 | ) | EUR | (27,000,000 | ) | (25,000,000 | ) | (117,565 | ) | |||||||||||||||
Expired | USD | (16,000,000 | ) | (39,200 | ) | |||||||||||||||||||
End of period | — | EUR | — | USD | 50,000,000 | $ | 24,000 | |||||||||||||||||
| (g) | Does not include swaptions written. |
| Open Over-The-Counter Credit Default Swap Agreements — Credit Risk | ||||||||||||||||||||||||||||||
| Counterparty | Reference Entity | Buy/Sell Protection | (Pay)/Receive Fixed Rate | Expiration Date | Implied Credit Spread(h) | Notional Value | Premiums | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Bank of America Securities LLC | Citigroup Inc. | Buy | (1.00 | )% | 06/20/17 | 0.41 | % | $ | (5,500,000 | ) | $ | 203,605 | $ | (279,221 | ) | |||||||||||||||
| (h) | Implied credit spreads represent the current level as of February 28, 2015 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. |
| Open Over-The-Counter Interest Rate Swap Agreements — Interest Rate Risk | ||||||||||||||||||||||||||||||||
| Counterparty | Pay/ Receive | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Premiums Received/(Paid) | Unrealized (Depreciation) | |||||||||||||||||||||||||
Deutsche Bank AG | Pay | 3-Month NZD BBR | 3.76 | % | January-2025 | NZD | $ | 30,000,000 | — | $ | (16,331 | ) | ||||||||||||||||||||
Abbreviations:
| BBR | – Bank Bill Rate | |
| NZD | – New Zealand Dollar |
| EUR | – Euro | |
| CAD | – Canadian Dollar |
| CHF | – Swiss Franc | |
| USD | – U.S. Dollar |
Offsetting Assets and Liabilities
Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting arrangements on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the 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, 2015.
| Assets: | ||||||||||||||||||||||||
| Gross amounts of Recognized Assets | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in Statement of Assets & Liabilities | Collateral Received | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of America Securities LLC(i) | $ | 203,605 | $ | (203,605 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Citigroup Global Markets Inc.(j) | 1,951,899 | (634,145 | ) | 1,317,754 | — | — | 1,317,754 | |||||||||||||||||
Deutsche Bank AG(i) | 74,713 | (74,713 | ) | — | — | — | — | |||||||||||||||||
Deutsche Bank Securities Inc.(j) | 613,014 | (299,628 | ) | 313,386 | — | — | 313,386 | |||||||||||||||||
Goldman Sachs International(j) | 665,582 | (572,988 | ) | 92,594 | — | — | 92,594 | |||||||||||||||||
Total | $ | 3,508,813 | $ | (1,785,079 | ) | $ | 1,723,734 | $ | — | $ | — | $ | 1,723,734 | |||||||||||
35 Invesco Core Plus Bond Fund
| Liabilities: | ||||||||||||||||||||||||
| Gross amounts of Recognized Liabilities | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of liabilities presented in Statement of Assets & Liabilities | Collateral Pledged | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of America Securities LLC(i) | $ | 317,721 | $ | (203,605 | ) | $ | 114,116 | $ | — | $ | — | $ | 114,116 | |||||||||||
Citigroup Global Markets Inc.(j) | 634,145 | (634,145 | ) | — | — | — | — | |||||||||||||||||
Deutsche Bank AG(i) | 89,353 | (74,713 | ) | 14,640 | — | — | 14,640 | |||||||||||||||||
Deutsche Bank Securities Inc.(j) | 299,628 | (299,628 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International(j) | 572,988 | (572,988 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 1,913,835 | $ | (1,785,079 | ) | $ | 128,756 | $ | — | $ | — | $ | 128,756 | |||||||||||
| (i) | Swap agreements — OTC Counterparty. |
| (j) | Forward foreign currency contracts Counterparty. |
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, 2015, the Fund engaged in securities purchases of $5,912,336.
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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $692.
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 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. The Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund’s total assets.
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
36 Invesco Core Plus Bond Fund
The Fund had a capital loss carryforward as of August 31, 2014, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 80,979,897 | $ | — | $ | 80,979,897 | ||||||
Not subject to expiration | 2,171,784 | — | 2,171,784 | |||||||||
| $ | 83,151,681 | $ | — | $ | 83,151,681 | |||||||
| * | 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, 2015 was $1,846,367,884 and $1,715,991,332, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $705,832,610 and $600,140,110, 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 | $ | 28,567,268 | ||
Aggregate unrealized (depreciation) of investment securities | (5,695,577 | ) | ||
Net unrealized appreciation of investment securities | $ | 22,871,691 | ||
Cost of investments for tax purposes is $1,016,001,899.
37 Invesco Core Plus Bond Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 11,236,101 | $ | 122,540,470 | 5,936,190 | $ | 63,761,071 | ||||||||||
Class B | 57,939 | 632,106 | 119,540 | 1,281,173 | ||||||||||||
Class C | 1,897,654 | 20,694,398 | 1,227,666 | 13,233,897 | ||||||||||||
Class R | 279,420 | 3,039,683 | 78,626 | 845,313 | ||||||||||||
Class Y | 6,647,449 | 72,689,601 | 984,592 | 10,675,204 | ||||||||||||
Class R5 | 2,501 | 27,208 | 28,631 | 306,446 | ||||||||||||
Class R6 | 1,206,321 | 13,118,783 | 6,811,615 | 73,005,951 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 626,779 | 6,849,502 | 1,199,252 | 12,892,430 | ||||||||||||
Class B | 14,646 | 159,884 | 41,100 | 441,232 | ||||||||||||
Class C | 57,864 | 632,143 | 101,712 | 1,092,648 | ||||||||||||
Class R | 8,019 | 87,628 | 11,219 | 120,554 | ||||||||||||
Class Y | 46,609 | 510,936 | 9,882 | 106,881 | ||||||||||||
Class R5 | 1,930 | 21,017 | 6,921 | 74,217 | ||||||||||||
Class R6 | 496,033 | 5,413,825 | 944,113 | 10,147,976 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 94,166 | 1,026,613 | 224,452 | 2,413,768 | ||||||||||||
Class B | (94,166 | ) | (1,026,613 | ) | (224,505 | ) | (2,413,768 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (3,712,839 | ) | (40,458,518 | ) | (7,964,908 | ) | (85,085,015 | ) | ||||||||
Class B | (101,925 | ) | (1,109,684 | ) | (370,860 | ) | (3,960,924 | ) | ||||||||
Class C | (624,606 | ) | (6,806,156 | ) | (1,270,424 | ) | (13,548,008 | ) | ||||||||
Class R | (110,956 | ) | (1,208,479 | ) | (35,142 | ) | (373,292 | ) | ||||||||
Class Y | (616,515 | ) | (6,743,856 | ) | (246,283 | ) | (2,661,211 | ) | ||||||||
Class R5 | (86,371 | ) | (936,153 | ) | (86,919 | ) | (927,924 | ) | ||||||||
Class R6 | (1,526,181 | ) | (16,686,377 | ) | (1,086,134 | ) | (11,597,421 | ) | ||||||||
Net increase in share activity | 15,799,872 | $ | 172,467,961 | 6,440,336 | $ | 69,831,198 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 34% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| In addition, 32% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. |
38 Invesco Core Plus Bond Fund
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 02/28/15 | $ | 10.92 | $ | 0.16 | $ | 0.13 | $ | 0.29 | $ | (0.20 | ) | $ | — | $ | (0.20 | ) | $ | 11.01 | 2.71 | % | $ | 427,408 | 0.84 | %(d) | 0.99 | %(d) | 2.92 | %(d) | 263 | % | ||||||||||||||||||||||||||
Year ended 08/31/14 | 10.41 | 0.39 | 0.58 | 0.97 | (0.46 | ) | — | (0.46 | ) | 10.92 | 9.44 | 333,641 | 0.81 | 1.03 | 3.62 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.91 | 0.12 | 0.14 | 0.26 | (0.16 | ) | — | (0.16 | ) | 11.01 | 2.42 | 10,645 | 1.59 | (d) | 1.74 | (d) | 2.17 | (d) | 263 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.41 | 0.31 | 0.57 | 0.88 | (0.38 | ) | — | (0.38 | ) | 10.91 | 8.53 | 11,899 | 1.56 | 1.78 | 2.87 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.91 | 0.12 | 0.14 | 0.26 | (0.16 | ) | — | (0.16 | ) | 11.01 | 2.42 | 53,135 | 1.59 | (d) | 1.74 | (d) | 2.17 | (d) | 263 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.41 | 0.31 | 0.57 | 0.88 | (0.38 | ) | — | (0.38 | ) | 10.91 | 8.53 | 38,142 | 1.56 | 1.78 | 2.87 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.91 | 0.14 | 0.15 | 0.29 | (0.19 | ) | — | (0.19 | ) | 11.01 | 2.67 | 5,528 | 1.09 | (d) | 1.24 | (d) | 2.67 | (d) | 263 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.41 | 0.36 | 0.57 | 0.93 | (0.43 | ) | — | (0.43 | ) | 10.91 | 9.07 | 3,554 | 1.06 | 1.28 | 3.37 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Class Y |
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Six months ended 02/28/15 | 10.92 | 0.17 | 0.15 | 0.32 | (0.22 | ) | — | (0.22 | ) | 11.02 | 2.93 | 76,755 | 0.59 | (d) | 0.74 | (d) | 3.17 | (d) | 263 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.42 | 0.42 | 0.56 | 0.98 | (0.48 | ) | — | (0.48 | ) | 10.92 | 9.61 | 9,699 | 0.56 | 0.78 | 3.87 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.91 | 0.17 | 0.14 | 0.31 | (0.22 | ) | — | (0.22 | ) | 11.00 | 2.84 | 606 | 0.59 | (d) | 0.60 | (d) | 3.17 | (d) | 263 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.40 | 0.41 | 0.58 | 0.99 | (0.48 | ) | — | (0.48 | ) | 10.91 | 9.72 | 1,495 | 0.56 | 0.60 | 3.87 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
Class R6 |
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Six months ended 02/28/15 | 10.91 | 0.17 | 0.14 | 0.31 | (0.22 | ) | — | (0.22 | ) | 11.00 | 2.86 | 271,545 | 0.53 | (d) | 0.54 | (d) | 3.23 | (d) | 263 | |||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.41 | 0.42 | 0.56 | 0.98 | (0.48 | ) | — | (0.48 | ) | 10.91 | 9.64 | 267,254 | 0.54 | 0.56 | 3.89 | 398 | ||||||||||||||||||||||||||||||||||||||||
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 reorganization 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 $372,390, $11,198, $44,197, $5,093, $34,720, $1,157 and $269,158 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Commencement date of September 24, 2012 for Class R6 shares. |
| (f) | Annualized. |
39 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,027.10 | $ | 4.22 | $ | 1,020.63 | $ | 4.21 | 0.84 | % | ||||||||||||
| B | 1,000.00 | 1,024.20 | 7.98 | 1,016.91 | 7.95 | 1.59 | ||||||||||||||||||
| C | 1,000.00 | 1,024.20 | 7.98 | 1,016.91 | 7.95 | 1.59 | ||||||||||||||||||
| R | 1,000.00 | 1,026.70 | 5.48 | 1,019.39 | 5.46 | 1.09 | ||||||||||||||||||
| Y | 1,000.00 | 1,029.30 | 2.97 | 1,021.87 | 2.96 | 0.59 | ||||||||||||||||||
| R5 | 1,000.00 | 1,028.40 | 2.97 | 1,021.87 | 2.96 | 0.59 | ||||||||||||||||||
| R6 | 1,000.00 | 1,028.60 | 2.67 | 1,022.17 | 2.66 | 0.53 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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. |
40 Invesco Core Plus Bond Fund
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This service is provided by Invesco Investment Services, Inc.
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov. |
| |||
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
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SEC file numbers: 811-09913 and 333-36074 CPB-SAR-1 Invesco Distributors, Inc.
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 |
Semiannual Report to Shareholders
|
February 28, 2015 | ||
| ||||
| 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 | |||
| 14 | Financial Statements | |||
| 16 | Notes to Financial Statements | |||
| 23 | Financial Highlights | |||
| 24 | Fund Expenses | |||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
Performance summary
Fund vs. Indexes
Cumulative total returns, 8/31/14 to 2/28/15, 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 | 5.98 | % | |||
| Class B Shares | 5.57 | ||||
| Class C Shares | 5.56 | ||||
| Class R Shares | 5.82 | ||||
| Class Y Shares | 6.11 | ||||
| Class R6 Shares | 6.16 | ||||
| S&P 500 Index▼ (Broad Market Index) | 6.12 | ||||
| S&P 500 Equal Weight Index▼ (Style-Specific Index) | 6.26 | ||||
| Lipper Multi-Cap Core Funds Indexn (Peer Group Index) | 4.82 |
Source(s): ▼FactSet Research Systems Inc.; ¡Lipper 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 2/28/15, including maximum applicable sales charges
| Class A Shares | |||||
| Inception (7/28/97) | 8.59 | % | |||
| 10 Years | 8.65 | ||||
| 5 Years | 15.83 | ||||
| 1 Year | 8.03 | ||||
| Class B Shares | |||||
| Inception (12/1/87) | 11.46 | % | |||
| 10 Years | 8.61 | ||||
| 5 Years | 16.05 | ||||
| 1 Year | 8.46 | ||||
| Class C Shares | |||||
| Inception (7/28/97) | 8.14 | % | |||
| 10 Years | 8.46 | ||||
| 5 Years | 16.28 | ||||
| 1 Year | 12.47 | ||||
| Class R Shares | |||||
| Inception (3/31/08) | 11.11 | % | |||
| 5 Years | 16.86 | ||||
| 1 Year | 14.03 | ||||
| Class Y Shares | |||||
| Inception (7/28/97) | 9.21 | % | |||
| 10 Years | 9.54 | ||||
| 5 Years | 17.45 | ||||
| 1 Year | 14.62 | ||||
| Class R6 Shares | |||||
| 10 Years | 9.35 | % | |||
| 5 Years | 17.33 | ||||
| 1 Year | 14.73 | ||||
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 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.
Average Annual Total Returns
As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges
| Class A Shares | |||||
| Inception (7/28/97) | 8.51 | % | |||
| 10 Years | 8.26 | ||||
| 5 Years | 15.43 | ||||
| 1 Year | 7.51 | ||||
| Class B Shares | |||||
| Inception (12/1/87) | 11.42 | % | |||
| 10 Years | 8.22 | ||||
| 5 Years | 15.65 | ||||
| 1 Year | 7.90 | ||||
| Class C Shares | |||||
| Inception (7/28/97) | 8.06 | % | |||
| 10 Years | 8.07 | ||||
| 5 Years | 15.88 | ||||
| 1 Year | 11.91 | ||||
| Class R Shares | |||||
| Inception (3/31/08) | 10.97 | % | |||
| 5 Years | 16.46 | ||||
| 1 Year | 13.49 | ||||
| Class Y Shares | |||||
| Inception (7/28/97) | 9.13 | % | |||
| 10 Years | 9.15 | ||||
| 5 Years | 17.04 | ||||
| 1 Year | 14.04 | ||||
| Class R6 Shares | |||||
| 10 Years | 8.96 | % | |||
| 5 Years | 16.92 | ||||
| 1 Year | 14.19 | ||||
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 0.56%, 1.31%, 1.31%, 0.81%, 0.31% and 0.22%, 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: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market |
strategists, economists and retirement experts wherever you may be.
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–98.34% |
| |||||||
| Advertising–0.40% | ||||||||
Interpublic Group of Cos., Inc. (The) | 430,444 | $ | 9,598,901 | |||||
Omnicom Group Inc. | 110,825 | 8,815,021 | ||||||
| 18,413,922 | ||||||||
| Aerospace & Defense–2.21% | ||||||||
Boeing Co. (The) | 69,750 | 10,521,788 | ||||||
General Dynamics Corp. | 61,303 | 8,507,630 | ||||||
Honeywell International Inc. | 87,857 | 9,029,943 | ||||||
L-3 Communications Holdings, Inc. | 70,116 | 9,075,114 | ||||||
Lockheed Martin Corp. | 45,489 | 9,100,075 | ||||||
Northrop Grumman Corp. | 59,506 | 9,860,739 | ||||||
Precision Castparts Corp. | 36,593 | 7,915,066 | ||||||
Raytheon Co. | 80,795 | 8,788,072 | ||||||
Rockwell Collins, Inc. | 102,403 | 9,122,059 | ||||||
Textron Inc. | 214,182 | 9,490,404 | ||||||
United Technologies Corp. | 75,111 | 9,156,782 | ||||||
| 100,567,672 | ||||||||
| Agricultural & Farm Machinery–0.19% | ||||||||
Deere & Co. | 97,485 | 8,832,141 | ||||||
| Agricultural Products–0.18% | ||||||||
Archer-Daniels-Midland Co. | 168,982 | 8,090,858 | ||||||
| Air Freight & Logistics–0.75% | ||||||||
C.H. Robinson Worldwide, Inc. | 116,536 | 8,658,625 | ||||||
Expeditors International of Washington, Inc. | 188,578 | 9,108,317 | ||||||
FedEx Corp. | 47,919 | 8,480,705 | ||||||
United Parcel Service, Inc.–Class B | 76,579 | 7,790,382 | ||||||
| 34,038,029 | ||||||||
| Airlines–0.37% | ||||||||
Delta Air Lines, Inc. | 176,673 | 7,865,482 | ||||||
Southwest Airlines Co. | 203,423 | 8,796,010 | ||||||
| 16,661,492 | ||||||||
| Alternative Carriers–0.21% | ||||||||
Level 3 Communications, Inc.(b) | 177,193 | 9,543,615 | ||||||
| Aluminum–0.18% | ||||||||
Alcoa Inc. | 566,497 | 8,378,491 | ||||||
| Apparel Retail–1.03% | ||||||||
Gap, Inc. (The) | 211,122 | 8,782,675 | ||||||
L Brands, Inc. | 101,016 | 9,279,330 | ||||||
Ross Stores, Inc. | 92,997 | 9,840,012 | ||||||
TJX Cos., Inc. (The) | 128,392 | 8,812,827 | ||||||
Urban Outfitters, Inc.(b) | 262,751 | 10,236,779 | ||||||
| 46,951,623 | ||||||||
| Shares | Value | |||||||
| Apparel, Accessories & Luxury Goods–1.24% | ||||||||
Coach, Inc. | 239,312 | $ | 10,422,038 | |||||
Fossil Group, Inc.(b) | 78,785 | 6,776,298 | ||||||
Michael Kors Holdings Ltd.(b) | 109,442 | 7,377,485 | ||||||
PVH Corp. | 66,313 | 7,064,324 | ||||||
Ralph Lauren Corp. | 46,376 | 6,372,526 | ||||||
Under Armour, Inc.–Class A(b) | 122,385 | 9,424,869 | ||||||
VF Corp. | 115,902 | 8,885,047 | ||||||
| 56,322,587 | ||||||||
| Application Software–1.02% | ||||||||
Adobe Systems Inc.(b) | 110,810 | 8,765,071 | ||||||
Autodesk, Inc.(b) | 143,067 | 9,190,624 | ||||||
Citrix Systems, Inc.(b) | 140,396 | 8,939,715 | ||||||
Intuit Inc. | 91,393 | 8,922,699 | ||||||
salesforce.com, inc.(b) | 152,965 | 10,612,712 | ||||||
| 46,430,821 | ||||||||
| Asset Management & Custody Banks–1.94% | ||||||||
Affiliated Managers Group, Inc.(b) | 43,243 | 9,358,650 | ||||||
Ameriprise Financial, Inc. | 65,954 | 8,813,433 | ||||||
Bank of New York Mellon Corp. (The) | 211,016 | 8,259,166 | ||||||
BlackRock, Inc. | 24,711 | 9,178,160 | ||||||
Franklin Resources, Inc. | 156,111 | 8,403,455 | ||||||
Invesco Ltd.(c) | 218,460 | 8,797,384 | ||||||
Legg Mason, Inc. | 167,537 | 9,594,844 | ||||||
Northern Trust Corp. | 127,827 | 8,926,159 | ||||||
State Street Corp. | 111,959 | 8,335,348 | ||||||
T. Rowe Price Group Inc. | 102,728 | 8,485,333 | ||||||
| 88,151,932 | ||||||||
| Auto Parts & Equipment–0.63% | ||||||||
BorgWarner, Inc. | 159,662 | 9,812,826 | ||||||
Delphi Automotive PLC (United Kingdom) | 120,736 | 9,518,826 | ||||||
Johnson Controls, Inc. | 182,649 | 9,280,396 | ||||||
| 28,612,048 | ||||||||
| Automobile Manufacturers–0.42% | ||||||||
Ford Motor Co. | 561,962 | 9,182,459 | ||||||
General Motors Co. | 266,829 | 9,955,390 | ||||||
| 19,137,849 | ||||||||
| Automotive Retail–0.81% | ||||||||
AutoNation, Inc.(b) | 146,884 | 9,033,366 | ||||||
AutoZone, Inc.(b) | 13,929 | 8,951,889 | ||||||
CarMax, Inc.(b) | 144,490 | 9,696,724 | ||||||
O’Reilly Automotive, Inc.(b) | 43,875 | 9,131,704 | ||||||
| 36,813,683 | ||||||||
| Biotechnology–1.33% | ||||||||
Alexion Pharmaceuticals, Inc.(b) | 45,070 | 8,129,276 | ||||||
Amgen Inc. | 51,198 | 8,074,948 | ||||||
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 | |||||||
| Biotechnology–(continued) | ||||||||
Biogen Idec Inc.(b) | 24,452 | $ | 10,015,295 | |||||
Celgene Corp.(b) | 73,576 | 8,941,691 | ||||||
Gilead Sciences, Inc.(b) | 80,896 | 8,375,163 | ||||||
Regeneron Pharmaceuticals, Inc.(b) | 20,227 | 8,370,742 | ||||||
Vertex Pharmaceuticals Inc.(b) | 71,056 | 8,486,218 | ||||||
| 60,393,333 | ||||||||
| Brewers–0.19% | ||||||||
Molson Coors Brewing Co.–Class B | 116,399 | 8,833,520 | ||||||
| Broadcasting–0.55% | ||||||||
CBS Corp.–Class B | 157,513 | 9,309,018 | ||||||
Discovery Communications, Inc.–Class A(b) | 90,114 | 2,910,682 | ||||||
Discovery Communications, Inc.–Class C(b) | 166,433 | 5,077,871 | ||||||
Scripps Networks Interactive Inc.–Class A | 109,985 | 7,951,916 | ||||||
| 25,249,487 | ||||||||
| Building Products–0.40% | ||||||||
Allegion PLC | 156,547 | 9,037,458 | ||||||
Masco Corp. | 350,262 | 9,173,362 | ||||||
| 18,210,820 | ||||||||
| Cable & Satellite–0.77% | ||||||||
Cablevision Systems Corp.–Class A | 426,737 | 8,014,121 | ||||||
Comcast Corp.–Class A | 152,191 | 9,037,102 | ||||||
DIRECTV(b) | 100,919 | 8,941,423 | ||||||
Time Warner Cable Inc. | 58,046 | 8,941,986 | ||||||
| 34,934,632 | ||||||||
| Casinos & Gaming–0.18% | ||||||||
Wynn Resorts Ltd. | 57,117 | 8,139,173 | ||||||
| Coal & Consumable Fuels–0.17% | ||||||||
CONSOL Energy Inc. | 245,377 | 7,901,139 | ||||||
| Commodity Chemicals–0.23% | ||||||||
LyondellBasell Industries N.V.–Class A | 119,300 | 10,249,063 | ||||||
| Communications Equipment–1.18% | ||||||||
Cisco Systems, Inc. | 313,677 | 9,256,608 | ||||||
F5 Networks, Inc.(b) | 64,527 | 7,621,607 | ||||||
Harris Corp. | 121,872 | 9,467,017 | ||||||
Juniper Networks, Inc. | 399,232 | 9,545,637 | ||||||
Motorola Solutions, Inc. | 135,191 | 9,184,877 | ||||||
QUALCOMM, Inc. | 119,342 | 8,653,488 | ||||||
| 53,729,234 | ||||||||
| Computer & Electronics Retail–0.40% | ||||||||
Best Buy Co., Inc. | 228,597 | 8,709,546 | ||||||
GameStop Corp.–Class A | 260,798 | 9,641,702 | ||||||
| 18,351,248 | ||||||||
| Construction & Engineering–0.59% | ||||||||
Fluor Corp. | 148,097 | 8,589,626 | ||||||
Jacobs Engineering Group, Inc.(b) | 205,408 | 9,107,791 | ||||||
| Shares | Value | |||||||
| Construction & Engineering–(continued) | ||||||||
Quanta Services, Inc.(b) | 316,446 | $ | 9,107,316 | |||||
| 26,804,733 | ||||||||
| Construction Machinery & Heavy Trucks–0.71% | ||||||||
Caterpillar Inc. | 93,080 | 7,716,332 | ||||||
Cummins Inc. | 59,785 | 8,503,221 | ||||||
Joy Global Inc. | 182,017 | 8,066,993 | ||||||
PACCAR Inc. | 124,428 | 7,969,613 | ||||||
| 32,256,159 | ||||||||
| Construction Materials–0.49% | ||||||||
Martin Marietta Materials, Inc. | 78,426 | 11,162,373 | ||||||
Vulcan Materials Co. | 135,018 | 11,206,494 | ||||||
| 22,368,867 | ||||||||
| Consumer Electronics–0.42% | ||||||||
Garmin Ltd. | 160,820 | 7,981,497 | ||||||
Harman International Industries, Inc. | 81,075 | 11,187,539 | ||||||
| 19,169,036 | ||||||||
| Consumer Finance–0.72% | ||||||||
American Express Co. | 92,568 | 7,552,623 | ||||||
Capital One Financial Corp. | 105,073 | 8,270,296 | ||||||
Discover Financial Services | 136,285 | 8,310,659 | ||||||
Navient Corp. | 404,407 | 8,654,310 | ||||||
| 32,787,888 | ||||||||
| Data Processing & Outsourced Services–2.23% | ||||||||
Alliance Data Systems Corp.(b) | 30,707 | 8,552,207 | ||||||
Automatic Data Processing, Inc. | 102,105 | 9,071,008 | ||||||
Computer Sciences Corp. | 137,374 | 9,742,564 | ||||||
Fidelity National Information Services, Inc. | 139,628 | 9,437,457 | ||||||
Fiserv, Inc.(b) | 123,245 | 9,621,737 | ||||||
MasterCard, Inc.–Class A | 100,127 | 9,024,446 | ||||||
Paychex, Inc. | 182,728 | 9,106,250 | ||||||
Total System Services, Inc. | 260,476 | 9,950,183 | ||||||
Visa Inc.–Class A | 32,805 | 8,900,325 | ||||||
Western Union Co. (The) | 494,935 | 9,661,131 | ||||||
Xerox Corp. | 627,238 | 8,561,799 | ||||||
| 101,629,107 | ||||||||
| Department Stores–0.63% | ||||||||
Kohl’s Corp. | 147,089 | 10,855,168 | ||||||
Macy’s, Inc. | 135,083 | 8,607,489 | ||||||
Nordstrom, Inc. | 112,844 | 9,076,043 | ||||||
| 28,538,700 | ||||||||
| Distillers & Vintners–0.43% | ||||||||
Brown-Forman Corp.–Class B | 97,316 | 8,922,904 | ||||||
Constellation Brands, Inc.–Class A(b) | 92,792 | 10,645,098 | ||||||
| 19,568,002 | ||||||||
| Distributors–0.17% | ||||||||
Genuine Parts Co. | 82,214 | 7,899,121 | ||||||
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 | |||||||
| Diversified Banks–1.11% | ||||||||
Bank of America Corp. | 491,757 | $ | 7,774,678 | |||||
Citigroup Inc. | 157,748 | 8,269,150 | ||||||
Comerica Inc. | 189,853 | 8,691,470 | ||||||
JPMorgan Chase & Co. | 140,303 | 8,597,768 | ||||||
U.S. Bancorp | 191,929 | 8,561,953 | ||||||
Wells Fargo & Co. | 156,867 | 8,594,743 | ||||||
| 50,489,762 | ||||||||
| Diversified Chemicals–0.82% | ||||||||
Dow Chemical Co. (The) | 194,320 | 9,568,317 | ||||||
E. I. du Pont de Nemours and Co. | 121,468 | 9,456,284 | ||||||
Eastman Chemical Co. | 116,094 | 8,644,359 | ||||||
FMC Corp. | 153,159 | 9,711,812 | ||||||
| 37,380,772 | ||||||||
| Diversified Metals & Mining–0.18% | ||||||||
Freeport-McMoRan Inc. | 386,768 | 8,365,792 | ||||||
| Diversified Support Services–0.22% | ||||||||
Cintas Corp. | 118,595 | 9,900,311 | ||||||
| Drug Retail–0.42% | ||||||||
CVS Health Corp. | 93,659 | 9,728,360 | ||||||
Walgreens Boots Alliance, Inc. | 113,071 | 9,393,939 | ||||||
| 19,122,299 | ||||||||
| Electric Utilities–2.35% | ||||||||
American Electric Power Co., Inc. | 143,530 | 8,264,457 | ||||||
Duke Energy Corp. | 101,871 | 8,001,967 | ||||||
Edison International | 131,621 | 8,456,649 | ||||||
Entergy Corp. | 97,485 | 7,751,032 | ||||||
Eversource Energy | 164,720 | 8,524,260 | ||||||
Exelon Corp. | 234,515 | 7,954,749 | ||||||
FirstEnergy Corp. | 224,935 | 7,868,226 | ||||||
NextEra Energy, Inc. | 83,560 | 8,645,118 | ||||||
Pepco Holdings, Inc. | 315,971 | 8,575,453 | ||||||
Pinnacle West Capital Corp. | 128,607 | 8,241,137 | ||||||
PPL Corp. | 240,542 | 8,202,482 | ||||||
Southern Co. (The) | 175,788 | 8,049,333 | ||||||
Xcel Energy, Inc. | 243,251 | 8,581,895 | ||||||
| 107,116,758 | ||||||||
| Electrical Components & Equipment–0.80% | ||||||||
AMETEK, Inc. | 173,364 | 9,212,563 | ||||||
Eaton Corp. PLC(b) | 130,157 | 9,242,449 | ||||||
Emerson Electric Co. | 144,169 | 8,350,268 | ||||||
Rockwell Automation, Inc. | 80,379 | 9,407,558 | ||||||
| 36,212,838 | ||||||||
| Electronic Components–0.42% | ||||||||
Amphenol Corp.–Class A | 160,974 | 9,088,592 | ||||||
Corning Inc. | 408,327 | 9,963,179 | ||||||
| 19,051,771 | ||||||||
| Shares | Value | |||||||
| Electronic Equipment & Instruments–0.19% | ||||||||
FLIR Systems, Inc. | 263,738 | $ | 8,513,463 | |||||
| Electronic Manufacturing Services–0.22% | ||||||||
TE Connectivity Ltd. (Switzerland) | 136,351 | 9,834,998 | ||||||
| Environmental & Facilities Services–0.60% | ||||||||
Republic Services, Inc. | 217,557 | 8,902,432 | ||||||
Stericycle, Inc.(b) | 65,810 | 8,882,376 | ||||||
Waste Management, Inc. | 173,686 | 9,462,413 | ||||||
| 27,247,221 | ||||||||
| Fertilizers & Agricultural Chemicals–0.64% | ||||||||
CF Industries Holdings, Inc. | 33,857 | 10,368,029 | ||||||
Monsanto Co. | 71,423 | 8,601,472 | ||||||
Mosaic Co. (The) | 188,874 | 10,059,429 | ||||||
| 29,028,930 | ||||||||
| Food Distributors–0.18% | ||||||||
Sysco Corp. | 214,182 | 8,350,956 | ||||||
| Food Retail–0.43% | ||||||||
Kroger Co. (The) | 136,861 | 9,737,660 | ||||||
Whole Foods Market, Inc. | 174,333 | 9,848,071 | ||||||
| 19,585,731 | ||||||||
| Footwear–0.19% | ||||||||
NIKE, Inc.–Class B | 87,592 | 8,506,935 | ||||||
| Gas Utilities–0.18% | ||||||||
AGL Resources Inc. | 164,591 | 8,083,064 | ||||||
| General Merchandise Stores–0.79% | ||||||||
Dollar General Corp.(b) | 120,684 | 8,764,072 | ||||||
Dollar Tree, Inc.(b) | 123,625 | 9,850,440 | ||||||
Family Dollar Stores, Inc. | 106,293 | 8,369,511 | ||||||
Target Corp. | 116,351 | 8,939,247 | ||||||
| 35,923,270 | ||||||||
| Gold–0.26% | ||||||||
Newmont Mining Corp. | 442,195 | 11,642,994 | ||||||
| Health Care Distributors–0.82% | ||||||||
AmerisourceBergen Corp. | 92,588 | 9,514,343 | ||||||
Cardinal Health, Inc. | 106,226 | 9,346,826 | ||||||
McKesson Corp. | 41,025 | 9,382,417 | ||||||
Patterson Cos. Inc. | 177,567 | 8,891,668 | ||||||
| 37,135,254 | ||||||||
| Health Care Equipment–2.55% | ||||||||
Abbott Laboratories | 192,808 | 9,133,315 | ||||||
Baxter International Inc. | 117,372 | 8,116,274 | ||||||
Becton, Dickinson and Co. | 61,491 | 9,021,960 | ||||||
Boston Scientific Corp.(b) | 647,985 | 10,950,946 | ||||||
C.R. Bard, Inc. | 50,294 | 8,506,727 | ||||||
CareFusion Corp.(b) | 143,115 | 8,598,349 | ||||||
Edwards Lifesciences Corp.(b) | 65,366 | 8,694,985 | ||||||
Intuitive Surgical, Inc.(b) | 16,754 | 8,377,000 | ||||||
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 Equipment–(continued) | ||||||||
Medtronic PLC | 116,158 | $ | 9,012,699 | |||||
St. Jude Medical, Inc. | 126,998 | 8,468,227 | ||||||
Stryker Corp. | 91,562 | 8,675,500 | ||||||
Varian Medical Systems, Inc.(b) | 98,928 | 9,197,336 | ||||||
Zimmer Holdings, Inc. | 75,657 | 9,108,346 | ||||||
| 115,861,664 | ||||||||
| Health Care Facilities–0.55% | ||||||||
HCA Holdings, Inc.(b) | 117,062 | 8,374,616 | ||||||
Tenet Healthcare Corp.(b) | 167,637 | 7,761,593 | ||||||
Universal Health Services, Inc.–Class B | 78,992 | 8,953,743 | ||||||
| 25,089,952 | ||||||||
| Health Care REIT’s–0.55% | ||||||||
HCP, Inc. | 185,750 | 7,868,370 | ||||||
Health Care REIT, Inc. | 110,461 | 8,517,648 | ||||||
Ventas, Inc. | 113,162 | 8,427,174 | ||||||
| 24,813,192 | ||||||||
| Health Care Services–0.81% | ||||||||
DaVita HealthCare Partners Inc.(b) | 114,765 | 8,561,469 | ||||||
Express Scripts Holding Co.(b) | 101,637 | 8,617,801 | ||||||
Laboratory Corp. of America Holdings(b) | 82,650 | 10,168,429 | ||||||
Quest Diagnostics Inc. | 132,825 | 9,316,346 | ||||||
| 36,664,045 | ||||||||
| Health Care Supplies–0.18% | ||||||||
DENTSPLY International Inc. | 155,391 | 8,237,277 | ||||||
| Health Care Technology–0.22% | ||||||||
Cerner Corp.(b) | 137,106 | 9,879,858 | ||||||
| Home Entertainment Software–0.24% | ||||||||
Electronic Arts Inc.(b) | 187,633 | 10,728,855 | ||||||
| Home Furnishings–0.42% | ||||||||
Leggett & Platt, Inc. | 203,080 | 9,148,754 | ||||||
Mohawk Industries, Inc.(b) | 54,774 | 10,097,587 | ||||||
| 19,246,341 | ||||||||
| Home Improvement Retail–0.42% | ||||||||
Home Depot, Inc. (The) | 84,423 | 9,687,539 | ||||||
Lowe’s Cos., Inc. | 129,856 | 9,621,031 | ||||||
| 19,308,570 | ||||||||
| Homebuilding–0.64% | ||||||||
D.R. Horton, Inc. | 351,138 | 9,589,579 | ||||||
Lennar Corp.–Class A | 199,096 | 9,996,610 | ||||||
PulteGroup Inc. | 417,226 | 9,412,619 | ||||||
| 28,998,808 | ||||||||
| Homefurnishing Retail–0.19% | ||||||||
Bed Bath & Beyond Inc.(b) | 116,592 | 8,704,759 | ||||||
| Hotel and Resort REIT’s–0.17% | ||||||||
Host Hotels & Resorts Inc. | 360,299 | 7,566,279 | ||||||
| Shares | Value | |||||||
| Hotels, Resorts & Cruise Lines–0.96% | ||||||||
Carnival Corp. | 196,130 | $ | 8,627,759 | |||||
Marriott International Inc.–Class A | 109,742 | 9,119,560 | ||||||
Royal Caribbean Cruises Ltd. | 108,038 | 8,256,264 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 106,697 | 8,570,970 | ||||||
Wyndham Worldwide Corp. | 101,859 | 9,318,061 | ||||||
| 43,892,614 | ||||||||
| Household Appliances–0.22% | ||||||||
Whirlpool Corp. | 46,632 | 9,883,652 | ||||||
| Household Products–0.75% | ||||||||
Clorox Co. (The) | 84,686 | 9,200,287 | ||||||
Colgate-Palmolive Co. | 122,849 | 8,700,166 | ||||||
Kimberly-Clark Corp. | 74,758 | 8,197,962 | ||||||
Procter & Gamble Co. (The) | 94,067 | 8,007,924 | ||||||
| 34,106,339 | ||||||||
| Housewares & Specialties–0.21% | ||||||||
Newell Rubbermaid Inc. | 243,603 | 9,571,162 | ||||||
| Human Resource & Employment Services–0.20% | ||||||||
Robert Half International, Inc. | 148,384 | 9,193,873 | ||||||
| Hypermarkets & Super Centers–0.38% | ||||||||
Costco Wholesale Corp. | 61,094 | 8,978,374 | ||||||
Wal-Mart Stores, Inc. | 100,509 | 8,435,721 | ||||||
| 17,414,095 | ||||||||
| Independent Power Producers & Energy Traders–0.35% | ||||||||
AES Corp. (The) | 633,845 | 8,220,970 | ||||||
NRG Energy, Inc. | 315,971 | 7,576,984 | ||||||
| 15,797,954 | ||||||||
| Industrial Conglomerates–0.79% | ||||||||
3M Co. | 53,613 | 9,041,833 | ||||||
Danaher Corp. | 100,569 | 8,777,662 | ||||||
General Electric Co. | 338,441 | 8,796,082 | ||||||
Roper Industries, Inc. | 56,199 | 9,417,266 | ||||||
| 36,032,843 | ||||||||
| Industrial Gases–0.60% | ||||||||
Air Products and Chemicals, Inc. | 61,015 | 9,526,882 | ||||||
Airgas, Inc. | 76,468 | 8,963,579 | ||||||
Praxair, Inc. | 68,087 | 8,708,327 | ||||||
| 27,198,788 | ||||||||
| Industrial Machinery–1.98% | ||||||||
Dover Corp. | 124,208 | 8,949,187 | ||||||
Flowserve Corp. | 153,522 | 9,538,322 | ||||||
Illinois Tool Works Inc. | 90,276 | 8,924,685 | ||||||
Ingersoll-Rand PLC | 135,714 | 9,118,624 | ||||||
Pall Corp. | 90,315 | 9,104,655 | ||||||
Parker Hannifin Corp. | 68,441 | 8,397,026 | ||||||
Pentair PLC (United Kingdom) | 140,349 | 9,328,998 | ||||||
Snap-on Inc. | 63,503 | 9,349,547 | ||||||
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) | ||||||||
Stanley Black & Decker Inc. | 89,901 | $ | 8,840,864 | |||||
Xylem, Inc. | 232,702 | 8,307,461 | ||||||
| 89,859,369 | ||||||||
| Industrial REIT’s–0.19% | ||||||||
Prologis, Inc. | 199,426 | 8,517,484 | ||||||
| Insurance Brokers–0.38% | ||||||||
Aon PLC | 88,661 | 8,898,018 | ||||||
Marsh & McLennan Cos., Inc. | 149,093 | 8,481,901 | ||||||
| 17,379,919 | ||||||||
| Integrated Oil & Gas–0.79% | ||||||||
Chevron Corp. | 82,279 | 8,777,524 | ||||||
Exxon Mobil Corp. | 97,271 | 8,612,374 | ||||||
Hess Corp. | 126,616 | 9,506,329 | ||||||
Occidental Petroleum Corp. | 113,497 | 8,839,147 | ||||||
| 35,735,374 | ||||||||
| Integrated Telecommunication Services–0.99% | ||||||||
AT&T Inc. | 261,934 | 9,052,439 | ||||||
CenturyLink Inc. | 224,156 | 8,486,546 | ||||||
Frontier Communications Corp. | 1,345,657 | 10,738,343 | ||||||
Verizon Communications Inc. | 184,813 | 9,139,003 | ||||||
Windstream Holdings Inc. | 994,547 | 7,846,976 | ||||||
| 45,263,307 | ||||||||
| Internet Retail–1.12% | ||||||||
Amazon.com, Inc.(b) | 27,410 | 10,420,186 | ||||||
Expedia, Inc. | 96,238 | 8,829,837 | ||||||
Netflix Inc.(b) | 25,184 | 11,960,133 | ||||||
Priceline Group Inc. (The)(b) | 7,630 | 9,441,972 | ||||||
TripAdvisor Inc.(b) | 116,383 | 10,387,183 | ||||||
| 51,039,311 | ||||||||
| Internet Software & Services–1.16% | ||||||||
Akamai Technologies, Inc.(b) | 138,549 | 9,630,541 | ||||||
eBay Inc.(b) | 151,045 | 8,747,016 | ||||||
Facebook Inc.–Class A(b) | 108,232 | 8,547,081 | ||||||
Google Inc.–Class A(b) | 8,098 | 4,556,178 | ||||||
Google Inc.–Class C(b) | 8,098 | 4,521,923 | ||||||
VeriSign, Inc.(b) | 147,837 | 9,464,525 | ||||||
Yahoo! Inc.(b) | 167,671 | 7,424,472 | ||||||
| 52,891,736 | ||||||||
| Investment Banking & Brokerage–0.77% | ||||||||
Charles Schwab Corp. (The) | 293,001 | 8,596,649 | ||||||
E*TRADE Financial Corp.(b) | 373,065 | 9,712,747 | ||||||
Goldman Sachs Group, Inc. (The) | 44,612 | 8,466,912 | ||||||
Morgan Stanley | 232,381 | 8,316,916 | ||||||
| 35,093,224 | ||||||||
| IT Consulting & Other Services–0.82% | ||||||||
Accenture PLC–Class A | 102,853 | 9,259,856 | ||||||
| Shares | Value | |||||||
| IT Consulting & Other Services–(continued) | ||||||||
Cognizant Technology Solutions Corp.–Class A(b) | 166,873 | $ | 10,427,059 | |||||
International Business Machines Corp. | 54,213 | 8,779,253 | ||||||
Teradata Corp.(b) | 202,836 | 9,030,259 | ||||||
| 37,496,427 | ||||||||
| Leisure Products–0.36% | ||||||||
Hasbro, Inc. | 150,263 | 9,363,639 | ||||||
Mattel, Inc. | 273,989 | 7,211,390 | ||||||
| 16,575,029 | ||||||||
| Life & Health Insurance–1.31% | ||||||||
Aflac, Inc. | 144,540 | 8,997,615 | ||||||
Lincoln National Corp. | 153,132 | 8,826,529 | ||||||
MetLife, Inc. | 159,481 | 8,106,419 | ||||||
Principal Financial Group, Inc. | 166,511 | 8,520,368 | ||||||
Prudential Financial, Inc. | 97,204 | 7,858,943 | ||||||
Torchmark Corp. | 161,561 | 8,603,123 | ||||||
Unum Group | 262,915 | 8,823,428 | ||||||
| 59,736,425 | ||||||||
| Life Sciences Tools & Services–0.80% | ||||||||
Agilent Technologies, Inc. | 212,079 | 8,951,855 | ||||||
PerkinElmer, Inc. | 201,863 | 9,487,561 | ||||||
Thermo Fisher Scientific, Inc. | 67,395 | 8,761,350 | ||||||
Waters Corp.(b) | 75,508 | 9,089,653 | ||||||
| 36,290,419 | ||||||||
| Managed Health Care–1.08% | ||||||||
Aetna Inc. | 96,491 | 9,605,679 | ||||||
Anthem, Inc. | 68,681 | 10,058,332 | ||||||
Cigna Corp. | 82,804 | 10,071,451 | ||||||
Humana Inc. | 58,661 | 9,642,695 | ||||||
UnitedHealth Group Inc. | 85,295 | 9,692,071 | ||||||
| 49,070,228 | ||||||||
| Metal & Glass Containers–0.40% | ||||||||
Ball Corp. | 126,750 | 9,089,242 | ||||||
Owens-Illinois, Inc.(b) | 348,812 | 9,124,922 | ||||||
| 18,214,164 | ||||||||
| Motorcycle Manufacturers–0.18% | ||||||||
Harley-Davidson, Inc. | 126,826 | 8,062,329 | ||||||
| Movies & Entertainment–0.75% | ||||||||
Time Warner Inc. | 102,578 | 8,397,035 | ||||||
Twenty-First Century Fox, Inc.–Class A | 228,287 | 7,990,045 | ||||||
Viacom Inc.–Class B | 115,457 | 8,075,062 | ||||||
Walt Disney Co. (The) | 92,072 | 9,582,854 | ||||||
| 34,044,996 | ||||||||
| Multi-Line Insurance–0.92% | ||||||||
American International Group, Inc. | 155,851 | 8,623,236 | ||||||
Assurant, Inc. | 127,267 | 7,797,649 | ||||||
Genworth Financial Inc.–Class A(b) | 1,063,612 | 8,242,993 | ||||||
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) | ||||||||
Hartford Financial Services Group, Inc. (The) | 208,561 | $ | 8,542,658 | |||||
Loews Corp. | 213,584 | 8,759,080 | ||||||
| 41,965,616 | ||||||||
| Multi-Sector Holdings–0.39% | ||||||||
Berkshire Hathaway Inc.–Class B(b) | 57,515 | 8,478,286 | ||||||
Leucadia National Corp. | 386,413 | 9,169,581 | ||||||
| 17,647,867 | ||||||||
| Multi-Utilities–2.62% | ||||||||
Ameren Corp. | 196,267 | 8,323,683 | ||||||
CenterPoint Energy, Inc. | 382,900 | 7,960,491 | ||||||
CMS Energy Corp. | 251,082 | 8,820,511 | ||||||
Consolidated Edison, Inc. | 131,396 | 8,296,343 | ||||||
Dominion Resources, Inc. | 115,839 | 8,350,834 | ||||||
DTE Energy Co. | 102,866 | 8,438,098 | ||||||
Integrys Energy Group, Inc. | 113,436 | 8,477,072 | ||||||
NiSource Inc. | 210,752 | 9,043,368 | ||||||
PG&E Corp. | 161,778 | 8,692,332 | ||||||
Public Service Enterprise Group Inc. | 206,769 | 8,696,704 | ||||||
SCANA Corp. | 148,489 | 8,456,449 | ||||||
Sempra Energy | 77,932 | 8,432,242 | ||||||
TECO Energy, Inc. | 437,828 | 8,594,564 | ||||||
Wisconsin Energy Corp. | 167,205 | 8,524,111 | ||||||
| 119,106,802 | ||||||||
| Office REIT’s–0.39% | ||||||||
Boston Properties, Inc. | 64,475 | 8,859,510 | ||||||
Vornado Realty Trust | 82,132 | 9,037,805 | ||||||
| 17,897,315 | ||||||||
| Office Services & Supplies–0.18% | ||||||||
Pitney Bowes Inc. | 349,826 | 8,105,468 | ||||||
| Oil & Gas Drilling–1.17% | ||||||||
Diamond Offshore Drilling, Inc. | 252,209 | 7,674,720 | ||||||
Ensco PLC–Class A | 311,530 | 7,623,139 | ||||||
Helmerich & Payne, Inc. | 139,605 | 9,361,911 | ||||||
Nabors Industries Ltd. | 842,381 | 10,790,901 | ||||||
Noble Corp. PLC | 580,152 | 9,653,729 | ||||||
Transocean Ltd. | 511,463 | 8,249,898 | ||||||
| 53,354,298 | ||||||||
| Oil & Gas Equipment & Services–1.14% | ||||||||
Baker Hughes Inc. | 153,187 | 9,575,720 | ||||||
Cameron International Corp.(b) | 184,651 | 8,693,369 | ||||||
FMC Technologies, Inc.(b) | 195,947 | 7,824,164 | ||||||
Halliburton Co. | 222,088 | 9,536,459 | ||||||
National Oilwell Varco Inc. | 136,861 | 7,438,395 | ||||||
Schlumberger Ltd. | 105,296 | 8,861,711 | ||||||
| 51,929,818 | ||||||||
| Oil & Gas Exploration & Production–3.64% | ||||||||
Anadarko Petroleum Corp. | 114,859 | 9,674,573 | ||||||
| Shares | Value | |||||||
| Oil & Gas Exploration & Production–(continued) | ||||||||
Apache Corp. | 149,252 | $ | 9,826,752 | |||||
Cabot Oil & Gas Corp. | 279,953 | 8,118,637 | ||||||
Chesapeake Energy Corp. | 488,620 | 8,150,182 | ||||||
Cimarex Energy Co. | 85,520 | 9,379,834 | ||||||
ConocoPhillips | 134,888 | 8,794,698 | ||||||
Denbury Resources Inc. | 1,316,221 | 11,056,256 | ||||||
Devon Energy Corp. | 158,909 | 9,787,205 | ||||||
EOG Resources, Inc. | 97,530 | 8,750,392 | ||||||
EQT Corp. | 106,575 | 8,505,751 | ||||||
Marathon Oil Corp. | 330,994 | 9,221,493 | ||||||
Murphy Oil Corp. | 187,528 | 9,543,300 | ||||||
Newfield Exploration Co.(b) | 349,101 | 11,530,806 | ||||||
Noble Energy, Inc. | 192,060 | 9,070,994 | ||||||
Pioneer Natural Resources Co. | 64,180 | 9,788,733 | ||||||
QEP Resources Inc. | 434,890 | 9,341,437 | ||||||
Range Resources Corp. | 155,477 | 7,702,330 | ||||||
Southwestern Energy Co.(b) | 293,409 | 7,358,698 | ||||||
| 165,602,071 | ||||||||
| Oil & Gas Refining & Marketing–0.93% | ||||||||
Marathon Petroleum Corp. | 101,246 | 10,630,830 | ||||||
Phillips 66 | 128,255 | 10,062,887 | ||||||
Tesoro Corp. | 113,208 | 10,397,023 | ||||||
Valero Energy Corp. | 182,057 | 11,231,096 | ||||||
| 42,321,836 | ||||||||
| Oil & Gas Storage & Transportation–0.78% | ||||||||
Kinder Morgan Inc. | 215,056 | 8,819,447 | ||||||
ONEOK, Inc. | 187,779 | 8,311,098 | ||||||
Spectra Energy Corp. | 250,261 | 8,881,763 | ||||||
Williams Cos., Inc. (The) | 197,001 | 9,660,929 | ||||||
| 35,673,237 | ||||||||
| Packaged Foods & Meats–2.51% | ||||||||
Campbell Soup Co. | 192,543 | 8,970,578 | ||||||
ConAgra Foods, Inc. | 229,344 | 8,022,453 | ||||||
General Mills, Inc. | 161,685 | 8,697,036 | ||||||
Hershey Co. (The) | 85,502 | 8,873,398 | ||||||
Hormel Foods Corp. | 165,302 | 9,671,820 | ||||||
JM Smucker Co. (The) | 84,951 | 9,799,098 | ||||||
Kellogg Co. | 128,353 | 8,276,201 | ||||||
Keurig Green Mountain Inc. | 61,812 | 7,885,975 | ||||||
Kraft Foods Group, Inc. | 142,245 | 9,112,215 | ||||||
McCormick & Co., Inc. | 116,222 | 8,760,814 | ||||||
Mead Johnson Nutrition Co. | 86,123 | 9,022,246 | ||||||
Mondelez International Inc.–Class A | 226,264 | 8,357,061 | ||||||
Tyson Foods, Inc.–Class A | 206,465 | 8,529,069 | ||||||
| 113,977,964 | ||||||||
| Paper Packaging–0.64% | ||||||||
Avery Dennison Corp. | 168,038 | 8,998,435 | ||||||
MeadWestvaco Corp. | 193,250 | 10,253,845 | ||||||
Sealed Air Corp. | 205,859 | 9,702,135 | ||||||
| 28,954,415 | ||||||||
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 Products–0.20% | ||||||||
International Paper Co. | 158,490 | $ | 8,940,421 | |||||
| Personal Products–0.37% | ||||||||
Avon Products, Inc. | 878,396 | 7,475,150 | ||||||
Estee Lauder Cos. Inc. (The)–Class A | 115,347 | 9,535,736 | ||||||
| 17,010,886 | ||||||||
| Pharmaceuticals–2.84% | ||||||||
AbbVie Inc. | 129,060 | 7,808,130 | ||||||
Actavis PLC(b) | 32,524 | 9,476,193 | ||||||
Allergan, Inc. | 40,407 | 9,404,325 | ||||||
Bristol-Myers Squibb Co. | 143,383 | 8,734,892 | ||||||
Eli Lilly and Co. | 121,118 | 8,498,850 | ||||||
Endo International PLC(b) | 113,016 | 9,674,169 | ||||||
Hospira, Inc.(b) | 139,628 | 12,223,035 | ||||||
Johnson & Johnson | 80,664 | 8,268,867 | ||||||
Mallinckrodt PLC(b) | 88,933 | 10,380,260 | ||||||
Merck & Co., Inc. | 145,942 | 8,543,445 | ||||||
Mylan Inc.(b) | 157,985 | 9,056,490 | ||||||
Perrigo Co. PLC | 54,909 | 8,481,793 | ||||||
Pfizer Inc. | 272,174 | 9,341,012 | ||||||
Zoetis Inc. | 201,670 | 9,294,970 | ||||||
| 129,186,431 | ||||||||
| Property & Casualty Insurance–1.33% | ||||||||
ACE Ltd. | 74,335 | 8,474,933 | ||||||
Allstate Corp. (The) | 124,945 | 8,821,117 | ||||||
Chubb Corp. (The) | 82,715 | 8,308,722 | ||||||
Cincinnati Financial Corp. | 165,529 | 8,733,310 | ||||||
Progressive Corp. (The) | 319,204 | 8,506,787 | ||||||
Travelers Cos., Inc. (The) | 81,657 | 8,773,228 | ||||||
XL Group PLC | 242,551 | 8,780,346 | ||||||
| 60,398,443 | ||||||||
| Publishing–0.43% | ||||||||
Gannett Co., Inc. | 275,648 | 9,757,939 | ||||||
News Corp.–Class A(b) | 559,722 | 9,669,198 | ||||||
| 19,427,137 | ||||||||
| Railroads–0.77% | ||||||||
CSX Corp. | 241,785 | 8,295,643 | ||||||
Kansas City Southern | 76,844 | 8,901,609 | ||||||
Norfolk Southern Corp. | 82,951 | 9,054,931 | ||||||
Union Pacific Corp. | 74,844 | 9,000,740 | ||||||
| 35,252,923 | ||||||||
| Real Estate Services–0.19% | ||||||||
CBRE Group, Inc.–Class A(b) | 256,901 | 8,801,428 | ||||||
| Regional Banks–1.69% | ||||||||
BB&T Corp. | 224,935 | 8,558,777 | ||||||
Fifth Third Bancorp | 426,737 | 8,261,628 | ||||||
Huntington Bancshares Inc. | 837,357 | 9,160,685 | ||||||
KeyCorp | 633,369 | 8,822,830 | ||||||
M&T Bank Corp. | 69,132 | 8,364,972 | ||||||
| Shares | Value | |||||||
| Regional Banks–(continued) | ||||||||
PNC Financial Services Group, Inc. (The) | 96,008 | $ | 8,828,896 | |||||
Regions Financial Corp. | 841,539 | 8,087,190 | ||||||
SunTrust Banks, Inc. | 209,390 | 8,584,990 | ||||||
Zions Bancorp. | 312,223 | 8,347,282 | ||||||
| 77,017,250 | ||||||||
| Research & Consulting Services–0.63% | ||||||||
Dun & Bradstreet Corp. (The) | 74,035 | 9,808,157 | ||||||
Equifax Inc. | 105,786 | 9,877,239 | ||||||
Nielsen N.V. | 194,320 | 8,785,207 | ||||||
| 28,470,603 | ||||||||
| Residential REIT’s–0.79% | ||||||||
Apartment Investment & Management Co.–Class A | 230,726 | 8,693,756 | ||||||
AvalonBay Communities, Inc. | 51,692 | 8,701,831 | ||||||
Equity Residential | 118,511 | 9,128,902 | ||||||
Essex Property Trust, Inc. | 41,329 | 9,192,810 | ||||||
| 35,717,299 | ||||||||
| Restaurants–1.01% | ||||||||
Chipotle Mexican Grill, Inc.(b) | 12,808 | 8,516,936 | ||||||
Darden Restaurants, Inc. | 146,807 | 9,395,648 | ||||||
McDonald’s Corp. | 92,956 | 9,193,348 | ||||||
Starbucks Corp. | 101,186 | 9,459,373 | ||||||
Yum! Brands, Inc. | 115,632 | 9,378,912 | ||||||
| 45,944,217 | ||||||||
| Retail REIT’s–0.78% | ||||||||
General Growth Properties, Inc. | 310,268 | 9,000,875 | ||||||
Kimco Realty Corp. | 332,957 | 8,750,110 | ||||||
Macerich Co. (The) | 104,916 | 8,776,223 | ||||||
Simon Property Group, Inc. | 46,684 | 8,886,766 | ||||||
| 35,413,974 | ||||||||
| Security & Alarm Services–0.43% | ||||||||
ADT Corp. (The) | 276,099 | 10,828,603 | ||||||
Tyco International PLC | 202,738 | 8,559,598 | ||||||
| 19,388,201 | ||||||||
| Semiconductor Equipment–0.57% | ||||||||
Applied Materials, Inc. | 356,036 | 8,918,702 | ||||||
KLA-Tencor Corp. | 122,742 | 7,972,707 | ||||||
Lam Research Corp. | 107,479 | 8,862,718 | ||||||
| 25,754,127 | ||||||||
| Semiconductors–2.42% | ||||||||
Altera Corp. | 227,455 | 8,418,110 | ||||||
Analog Devices, Inc. | 150,653 | 8,819,227 | ||||||
Avago Technologies Ltd. (Singapore) | 84,916 | 10,836,980 | ||||||
Broadcom Corp.–Class A | 202,300 | 9,150,029 | ||||||
First Solar, Inc.(b) | 199,994 | 11,948,641 | ||||||
Intel Corp.(d) | 232,541 | 7,731,988 | ||||||
Linear Technology Corp. | 185,505 | 8,938,558 | ||||||
Microchip Technology Inc. | 192,763 | 9,882,959 | ||||||
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) | ||||||||
Micron Technology, Inc.(b) | 247,759 | $ | 7,598,768 | |||||
NVIDIA Corp. | 429,128 | 9,466,564 | ||||||
Texas Instruments Inc. | 158,610 | 9,326,268 | ||||||
Xilinx, Inc. | 186,532 | 7,903,361 | ||||||
| 110,021,453 | ||||||||
| Soft Drinks–1.04% | ||||||||
Coca-Cola Co. (The) | 205,910 | 8,915,903 | ||||||
Coca-Cola Enterprises, Inc. | 195,130 | 9,015,006 | ||||||
Dr Pepper Snapple Group, Inc. | 119,980 | 9,453,224 | ||||||
Monster Beverage Corp.(b) | 80,142 | 11,309,639 | ||||||
PepsiCo, Inc. | 88,914 | 8,800,708 | ||||||
| 47,494,480 | ||||||||
| Specialized Consumer Services–0.20% | ||||||||
H&R Block, Inc. | 263,573 | 9,001,018 | ||||||
| Specialized Finance–1.01% | ||||||||
CME Group Inc.–Class A | 96,735 | 9,279,789 | ||||||
Intercontinental Exchange, Inc. | 38,448 | 9,049,121 | ||||||
McGraw Hill Financial, Inc. | 95,162 | 9,811,202 | ||||||
Moody’s Corp. | 90,122 | 8,736,427 | ||||||
NASDAQ OMX Group, Inc. (The) | 182,688 | 9,163,630 | ||||||
| 46,040,169 | ||||||||
| Specialized REIT’s–1.16% | ||||||||
American Tower Corp. | 85,450 | 8,471,513 | ||||||
Crown Castle International Corp. | 111,058 | 9,585,416 | ||||||
Iron Mountain Inc. | 231,169 | 8,495,461 | ||||||
Plum Creek Timber Co., Inc. | 204,212 | 8,870,969 | ||||||
Public Storage | 46,248 | 9,121,031 | ||||||
Weyerhaeuser Co. | 235,105 | 8,254,536 | ||||||
| 52,798,926 | ||||||||
| Specialty Chemicals–1.03% | ||||||||
Ecolab Inc. | 82,319 | 9,511,137 | ||||||
International Flavors & Fragrances Inc. | 84,178 | 10,263,824 | ||||||
PPG Industries, Inc. | 38,321 | 9,019,997 | ||||||
Sherwin-Williams Co. (The) | 34,071 | 9,717,049 | ||||||
Sigma-Aldrich Corp. | 61,939 | 8,551,298 | ||||||
| 47,063,305 | ||||||||
| Specialty Stores–0.75% | ||||||||
PetSmart, Inc. | 108,455 | 8,992,004 | ||||||
Staples, Inc. | 511,463 | 8,574,677 | ||||||
Tiffany & Co. | 80,943 | 7,140,792 | ||||||
Tractor Supply Co. | 108,385 | 9,550,886 | ||||||
| 34,258,359 | ||||||||
| Steel–0.37% | ||||||||
Allegheny Technologies, Inc. | 275,918 | 9,287,400 | ||||||
Nucor Corp. | 162,370 | 7,636,261 | ||||||
| 16,923,661 | ||||||||
| Shares | Value | |||||||
| Systems Software–0.98% | ||||||||
CA, Inc. | 282,109 | $ | 9,174,185 | |||||
Microsoft Corp. | 179,420 | �� | 7,867,567 | |||||
Oracle Corp. | 210,858 | 9,239,797 | ||||||
Red Hat, Inc.(b) | 145,564 | 10,061,384 | ||||||
Symantec Corp. | 333,484 | 8,390,457 | ||||||
| 44,733,390 | ||||||||
| Technology Hardware, Storage & Peripherals–1.27% | ||||||||
Apple Inc. | 76,767 | 9,861,489 | ||||||
EMC Corp. | 297,240 | 8,602,125 | ||||||
Hewlett-Packard Co.(d) | 221,621 | 7,721,276 | ||||||
NetApp, Inc. | 206,997 | 8,000,434 | ||||||
SanDisk Corp. | 85,269 | 6,815,551 | ||||||
Seagate Technology PLC | 131,539 | 8,039,664 | ||||||
Western Digital Corp. | 79,747 | 8,531,334 | ||||||
| 57,571,873 | ||||||||
| Thrifts & Mortgage Finance–0.38% | ||||||||
Hudson City Bancorp, Inc. | 880,231 | 8,591,055 | ||||||
People’s United Financial Inc. | 578,161 | 8,747,576 | ||||||
| 17,338,631 | ||||||||
| Tires & Rubber–0.19% | ||||||||
Goodyear Tire & Rubber Co. (The) | 318,059 | 8,501,717 | ||||||
| Tobacco–0.81% | ||||||||
Altria Group, Inc. | 169,663 | 9,550,330 | ||||||
Lorillard, Inc. | 134,673 | 9,214,326 | ||||||
Philip Morris International Inc. | 99,783 | 8,277,998 | ||||||
Reynolds American Inc. | 131,069 | 9,911,438 | ||||||
| 36,954,092 | ||||||||
| Trading Companies & Distributors–0.52% | ||||||||
Fastenal Co. | 184,894 | 7,682,346 | ||||||
United Rentals, Inc.(b) | 84,507 | 7,864,221 | ||||||
W.W. Grainger, Inc. | 34,247 | 8,113,457 | ||||||
| 23,660,024 | ||||||||
| Trucking–0.20% | ||||||||
Ryder System, Inc. | 96,040 | 9,026,800 | ||||||
Total Common Stocks & Other Equity Interests |
| 4,473,561,750 | ||||||
Money Market Funds–2.94% |
| |||||||
Liquid Assets Portfolio– | 66,940,069 | 66,940,069 | ||||||
Premier Portfolio–Institutional Class(e) | 66,940,070 | 66,940,070 | ||||||
Total Money Market Funds |
| 133,880,139 | ||||||
TOTAL INVESTMENTS–101.28% |
| 4,607,441,889 | ||||||
OTHER ASSETS LESS LIABILITIES–(1.28)% |
| (58,084,885 | ) | |||||
NET ASSETS–100.00% |
| $ | 4,549,357,004 | |||||
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 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, 2015
Consumer Discretionary | 17.1 | % | ||
Financials | 16.0 | |||
Industrials | 12.8 | |||
Information Technology | 12.4 | |||
Health Care | 11.2 | |||
Energy | 8.4 | |||
Consumer Staples | 7.7 | |||
Materials | 5.8 | |||
Utilities | 5.7 | |||
Telecommunication Services | 1.2 | |||
Money Market Funds Plus Other Assets Less Liabilities | 1.7 |
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, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $3,115,578,126) | $ | 4,464,764,366 | ||
Investments in affiliates, at value (Cost $140,145,548) | 142,677,523 | |||
Total investments, at value (Cost $3,255,723,674) | 4,607,441,889 | |||
Cash | 110,659 | |||
Receivable for: | ||||
Fund shares sold | 37,414,094 | |||
Dividends | 7,655,171 | |||
Investment for trustee deferred compensation and retirement plans | 126,712 | |||
Other assets | 127,635 | |||
Total assets | 4,652,876,160 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 95,115,696 | |||
Fund shares reacquired | 5,358,658 | |||
Variation margin — futures | 150,351 | |||
Accrued fees to affiliates | 2,250,744 | |||
Accrued trustees’ and officers’ fees and benefits | 8,453 | |||
Accrued other operating expenses | 424,459 | |||
Trustee deferred compensation and retirement plans | 210,795 | |||
Total liabilities | 103,519,156 | |||
Net assets applicable to shares outstanding | $ | 4,549,357,004 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 3,201,712,283 | ||
Undistributed net investment income | 7,499,304 | |||
Undistributed net realized gain (loss) | (11,448,826 | ) | ||
Net unrealized appreciation | 1,351,594,243 | |||
| $ | 4,549,357,004 | |||
Net Assets: |
| |||
Class A | $ | 1,876,875,071 | ||
Class B | $ | 13,175,286 | ||
Class C | $ | 627,417,717 | ||
Class R | $ | 87,896,746 | ||
Class Y | $ | 1,773,293,748 | ||
Class R6 | $ | 170,698,436 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 37,381,826 | |||
Class B | 263,176 | |||
Class C | 12,959,670 | |||
Class R | 1,756,847 | |||
Class Y | 35,040,666 | |||
Class R6 | 3,370,764 | |||
Class A: | ||||
Net asset value per share | $ | 50.21 | ||
Maximum offering price per share | ||||
(Net asset value of $50.21 ¸ 94.50%) | $ | 53.13 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 50.06 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 48.41 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 50.03 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 50.61 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 50.64 | ||
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, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $10,035) | $ | 34,520,605 | ||
Dividends from affiliates | 108,605 | |||
Total investment income | 34,629,210 | |||
Expenses: | ||||
Advisory fees | 1,984,182 | |||
Administrative services fees | 289,123 | |||
Custodian fees | 85,916 | |||
Distribution fees: | ||||
Class A | 2,040,527 | |||
Class B | 71,767 | |||
Class C | 2,254,483 | |||
Class R | 181,315 | |||
Transfer agent fees — A, B, C, R & Y | 2,171,783 | |||
Transfer agent fees — R6 | 1,525 | |||
Trustees’ and officers’ fees and benefits | 39,112 | |||
Other | 623,977 | |||
Total expenses | 9,743,710 | |||
Less: Fees waived and expense offset arrangement(s) | (44,339 | ) | ||
Net expenses | 9,699,371 | |||
Net investment income | 24,929,839 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain from: | ||||
Investment securities | 25,901,456 | |||
Futures contracts | 2,318,504 | |||
| 28,219,960 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 184,953,204 | |||
Futures contracts | (155,339 | ) | ||
| 184,797,865 | ||||
Net realized and unrealized gain | 213,017,825 | |||
Net increase in net assets resulting from operations | $ | 237,947,664 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 24,929,839 | $ | 30,074,136 | ||||
Net realized gain | 28,219,960 | 57,887,030 | ||||||
Change in net unrealized appreciation | 184,797,865 | 412,469,081 | ||||||
Net increase in net assets resulting from operations | 237,947,664 | 500,430,247 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (16,858,603 | ) | (12,875,050 | ) | ||||
Class B | (75,582 | ) | (126,859 | ) | ||||
Class C | (2,502,255 | ) | (1,210,824 | ) | ||||
Class R | (624,853 | ) | (354,344 | ) | ||||
Class Y | (16,046,854 | ) | (7,443,262 | ) | ||||
Class R6 | (1,937,107 | ) | (165 | ) | ||||
Total distributions from net investment income | (38,045,254 | ) | (22,010,504 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (22,937,573 | ) | (29,164,508 | ) | ||||
Class B | (195,607 | ) | (532,180 | ) | ||||
Class C | (6,475,857 | ) | (5,079,486 | ) | ||||
Class R | (1,012,662 | ) | (946,483 | ) | ||||
Class Y | (18,300,963 | ) | (14,325,712 | ) | ||||
Class R6 | (2,090,876 | ) | (311 | ) | ||||
Total distributions from net realized gains | (51,013,538 | ) | (50,048,680 | ) | ||||
Share transactions-net: | ||||||||
Class A | 307,557,004 | 266,279,740 | ||||||
Class B | (3,146,775 | ) | (10,881,910 | ) | ||||
Class C | 256,678,536 | 164,908,129 | ||||||
Class R | 19,276,693 | 27,842,070 | ||||||
Class Y | 691,362,625 | 406,934,786 | ||||||
Class R6 | 168,206,941 | 1,159,547 | ||||||
Net increase in net assets resulting from share transactions | 1,439,935,024 | 856,242,362 | ||||||
Net increase in net assets | 1,588,823,896 | 1,284,613,425 | ||||||
Net assets: | ||||||||
Beginning of period | 2,960,533,108 | 1,675,919,683 | ||||||
End of period (includes undistributed net investment income of $7,499,304 and $20,614,719, respectively) | $ | 4,549,357,004 | $ | 2,960,533,108 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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 securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R6 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | 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 (“Counterparties”) 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. |
18 Invesco Equally-Weighted S&P 500 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 $2 billion | 0.12% | |||
Over $2 billion | 0.10% | |||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.11%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $43,424.
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, 2015, 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, 2015, 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $317,024 in front-end sales commissions from the sale of Class A shares and $9,103, $4,257 and $31,842 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, 2015. 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 | $ | 4,607,441,889 | $ | — | $ | — | $ | 4,607,441,889 | ||||||||
Futures Contracts* | (123,972 | ) | — | — | (123,972 | ) | ||||||||||
Total Investments | $ | 4,607,317,917 | $ | — | $ | — | $ | 4,607,317,917 | ||||||||
| * | 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, 2015:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Market risk: | ||||||||
Futures contracts(a) | $ | — | $ | (123,972 | ) | |||
| (a) | 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, 2015
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 Contracts | ||||
Realized Gain: | ||||
Market risk | $ | 2,318,504 | ||
Change in Unrealized Appreciation (Depreciation): | ||||
Market risk | (155,339 | ) | ||
Total | $ | 2,163,165 | ||
The table below summarizes the average notional value of futures contracts outstanding during the period.
| Futures Contracts | ||||
Average notional value | $ | 50,691,121 | ||
| Open Futures Contracts — Market Risk | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
E-Mini S&P 500 Index | Long | 439 | March-2015 | $ | 46,156,460 | $ | (123,972 | ) | ||||||||||||
20 Invesco Equally-Weighted S&P 500 Fund
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, 2015.
Value 08/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain | Value 02/28/15 | Dividend Income | ||||||||||||||||||||||
Invesco Ltd. | $ | 6,217,400 | $ | 3,039,180 | $ | (454,637 | ) | $ | (19,759 | ) | $ | 15,200 | $ | 8,797,384 | $ | 94,067 | ||||||||||||
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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $915.
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2014.
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, 2015 was $1,694,125,190 and $357,966,572, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 1,364,748,239 | ||
Aggregate unrealized (depreciation) of investment securities | (45,372,401 | ) | ||
Net unrealized appreciation of investment securities | $ | 1,319,375,838 | ||
Cost of investments for tax purposes is $3,288,066,051.
21 Invesco Equally-Weighted S&P 500 Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 9,129,927 | $ | 442,751,913 | 11,111,178 | $ | 497,003,093 | ||||||||||
Class B | 20,953 | 1,008,155 | 36,745 | 1,631,827 | ||||||||||||
Class C | 5,781,022 | 270,736,523 | 4,539,053 | 196,758,364 | ||||||||||||
Class R | 620,701 | 30,098,683 | 908,413 | 40,579,106 | ||||||||||||
Class Y | 17,641,217 | 860,257,502 | 11,606,461 | 529,732,277 | ||||||||||||
Class R6 | 4,039,998 | 202,519,176 | 25,789 | 1,182,670 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 738,018 | 34,922,986 | 886,321 | 37,385,013 | ||||||||||||
Class B | 5,237 | 247,498 | 14,292 | 603,698 | ||||||||||||
Class C | 181,393 | 8,289,654 | 141,126 | 5,767,810 | ||||||||||||
Class R | 34,670 | 1,635,742 | 30,735 | 1,293,625 | ||||||||||||
Class Y | 615,826 | 29,356,434 | 453,253 | 19,245,106 | ||||||||||||
Class R6 | 84,454 | 4,027,614 | — | — | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 61,247 | 2,991,794 | 230,621 | 10,198,764 | ||||||||||||
Class B | (61,460 | ) | (2,991,794 | ) | (230,900 | ) | (10,198,764 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (3,585,332 | ) | (173,109,689 | ) | (6,140,632 | ) | (278,307,130 | ) | ||||||||
Class B | (29,391 | ) | (1,410,634 | ) | (65,314 | ) | (2,918,671 | ) | ||||||||
Class C | (477,839 | ) | (22,347,641 | ) | (868,921 | ) | (37,618,045 | ) | ||||||||
Class R | (258,809 | ) | (12,457,732 | ) | (312,777 | ) | (14,030,661 | ) | ||||||||
Class Y | (4,077,808 | ) | (198,251,311 | ) | (3,134,890 | ) | (142,042,597 | ) | ||||||||
Class R6 | (779,270 | ) | (38,339,849 | ) | (493 | ) | (23,123 | ) | ||||||||
Net increase in share activity | 29,684,754 | $ | 1,439,935,024 | 19,230,060 | $ | 856,242,362 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 46% 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. |
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 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 02/28/15 | $ | 48.54 | $ | 0.34 | $ | 2.49 | $ | 2.83 | $ | (0.49 | ) | $ | (0.67 | ) | $ | (1.16 | ) | $ | 50.21 | 5.98 | % | $ | 1,876,875 | 0.54 | %(d) | 0.54 | %(d) | 1.40 | %(d) | 10 | % | |||||||||||||||||||||||||
Year ended 08/31/14 | 40.07 | 0.59 | 9.45 | 10.04 | (0.48 | ) | (1.09 | ) | (1.57 | ) | 48.54 | 25.64 | 1,506,665 | 0.56 | 0.56 | 1.31 | 17 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 48.35 | 0.16 | 2.48 | 2.64 | (0.26 | ) | (0.67 | ) | (0.93 | ) | 50.06 | 5.57 | 13,175 | 1.29 | (d) | 1.29 | (d) | 0.65 | (d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 40.01 | 0.25 | 9.44 | 9.69 | (0.26 | ) | (1.09 | ) | (1.35 | ) | 48.35 | 24.70 | 15,851 | 1.31 | 1.31 | 0.56 | 17 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 46.79 | 0.15 | 2.40 | 2.55 | (0.26 | ) | (0.67 | ) | (0.93 | ) | 48.41 | 5.56 | 627,418 | 1.29 | (d) | 1.29 | (d) | 0.65 | (d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 38.75 | 0.25 | 9.14 | 9.39 | (0.26 | ) | (1.09 | ) | (1.35 | ) | 46.79 | 24.73 | 349,739 | 1.31 | 1.31 | 0.56 | 17 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 48.36 | 0.27 | 2.48 | 2.75 | (0.41 | ) | (0.67 | ) | (1.08 | ) | 50.03 | 5.82 | 87,897 | 0.79 | (d) | 0.79 | (d) | 1.15 | (d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 39.95 | 0.48 | 9.43 | 9.91 | (0.41 | ) | (1.09 | ) | (1.50 | ) | 48.36 | 25.35 | 65,777 | 0.81 | 0.81 | 1.06 | 17 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 48.95 | 0.40 | 2.52 | 2.92 | (0.59 | ) | (0.67 | ) | (1.26 | ) | 50.61 | 6.11 | 1,773,294 | 0.29 | (d) | 0.29 | (d) | 1.65 | (d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 40.38 | 0.71 | 9.52 | 10.23 | (0.57 | ) | (1.09 | ) | (1.66 | ) | 48.95 | 25.95 | 1,021,247 | 0.31 | 0.31 | 1.56 | 17 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 48.99 | 0.43 | 2.51 | 2.94 | (0.62 | ) | (0.67 | ) | (1.29 | ) | 50.64 | 6.16 | 170,698 | 0.17 | (d) | 0.17 | (d) | 1.77 | (d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 40.39 | 0.78 | 9.49 | 10.27 | (0.58 | ) | (1.09 | ) | (1.67 | ) | 48.99 | 26.05 | 1,253 | 0.22 | 0.22 | 1.65 | 17 | |||||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(f) | 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 is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $1,645,950, $14,472, $454,633, $73,127, $1,329,261 and $83,808 for Class A, Class B, Class C, Class R, Class Y and Class R6 shares, respectively. |
| (e) | Annualized. |
| (f) | 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,059.80 | $ | 2.76 | $ | 1,022.12 | $ | 2.71 | 0.54 | % | ||||||||||||
| B | 1,000.00 | 1,055.70 | 6.58 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||
| C | 1,000.00 | 1,055.60 | 6.57 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||
| R | 1,000.00 | 1,058.20 | 4.03 | 1,020.88 | 3.96 | 0.79 | ||||||||||||||||||
| Y | 1,000.00 | 1,061.10 | 1.48 | 1,023.36 | 1.45 | 0.29 | ||||||||||||||||||
| R5 | 1,000.00 | 1,061.60 | 0.87 | 1,023.95 | 0.85 | 0.17 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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, 2015 | ||
| ||||
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 | ||||
17 Financial Statements | ||||
19 Notes to Financial Statements | ||||
28 Financial Highlights | ||||
30 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, 8/31/14 to 2/28/15, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
|
| |||
Class A Shares | 1.96 | % | ||
Class B Shares | 1.56 | |||
Class C Shares | 1.57 | |||
Class R Shares | 1.83 | |||
Class Y Shares | 2.00 | |||
Class R5 Shares | 2.13 | |||
Class R6 Shares | 2.18 | |||
Russell 1000 Value Indexq (Broad Market Index) | 3.48 | |||
Barclays U.S. Government/Credit Indexq (Style-Specific Index) | 2.24 | |||
Source(s): qFactSet Research Systems 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 2/28/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (8/3/60) | 10.30 | % | ||
10 Years | 6.52 | |||
5 Years | 10.05 | |||
1 Year | 2.52 | |||
Class B Shares | ||||
Inception (5/1/92) | 9.80 | % | ||
10 Years | 6.86 | |||
5 Years | 10.55 | |||
1 Year | 2.77 | |||
Class C Shares | ||||
Inception (7/6/93) | 9.06 | % | ||
10 Years | 6.35 | |||
5 Years | 10.47 | |||
1 Year | 6.70 | |||
Class R Shares | ||||
Inception (10/1/02) | 8.53 | % | ||
10 Years | 6.87 | |||
5 Years | 11.02 | |||
1 Year | 8.19 | |||
Class Y Shares | ||||
Inception (12/22/04) | 7.39 | % | ||
10 Years | 7.40 | |||
5 Years | 11.57 | |||
1 Year | 8.66 | |||
Class R5 Shares | ||||
10 Years | 7.31 | % | ||
5 Years | 11.69 | |||
1 Year | 8.85 | |||
Class R6 Shares | ||||
10 Years | 7.24 | % | ||
5 Years | 11.54 | |||
1 Year | 8.95 | |||
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 12/31/14, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (8/3/60) | 10.31 | % | ||
10 Years | 6.51 | |||
5 Years | 10.06 | |||
1 Year | 3.07 | |||
Class B Shares | ||||
Inception (5/1/92) | 9.82 | % | ||
10 Years | 6.84 | |||
5 Years | 10.57 | |||
1 Year | 3.43 | |||
Class C Shares | ||||
Inception (7/6/93) | 9.09 | % | ||
10 Years | 6.33 | |||
5 Years | 10.48 | |||
1 Year | 7.28 | |||
Class R Shares | ||||
Inception (10/1/02) | 8.56 | % | ||
10 Years | 6.84 | |||
5 Years | 11.00 | |||
1 Year | 8.77 | |||
Class Y Shares | ||||
Inception (12/22/04) | 7.41 | % | ||
10 Years | 7.39 | |||
5 Years | 11.58 | |||
1 Year | 9.34 | |||
Class R5 Shares | ||||
10 Years | 7.28 | % | ||
5 Years | 11.66 | |||
1 Year | 9.42 | |||
Class R6 Shares | ||||
10 Years | 7.21 | % | ||
5 Years | 11.51 | |||
1 Year | 9.52 | |||
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 0.80%, 1.55%, 1.55%, 1.05%, 0.55%, 0.49% and 0.40%, 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 0.81%, 1.56%, 1.56%, 1.06%, 0.56%, 0.50% and 0.41%, 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 June 30, 2016. See current prospectus for more information. |
3 Invesco Equity and Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the | |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee. 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
| ||
| Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. | |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it. 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. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. | ||
Sincerely,
Philip Taylor Senior Managing Director, Invesco Ltd. | ||
| iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–63.81% |
| |||||||
| Aerospace & Defense–0.93% | ||||||||
General Dynamics Corp. | 941,397 | $ | 130,647,076 | |||||
| Agricultural Products–0.73% | ||||||||
Archer-Daniels-Midland Co. | 2,125,807 | 101,783,639 | ||||||
| Application Software–1.21% | ||||||||
Adobe Systems Inc.(b) | 1,103,440 | 87,282,104 | ||||||
Citrix Systems, Inc.(b) | 1,285,273 | 81,839,758 | ||||||
| 169,121,862 | ||||||||
| Asset Management & Custody Banks–1.64% | ||||||||
Northern Trust Corp. | 1,336,894 | 93,355,308 | ||||||
State Street Corp. | 1,829,144 | 136,179,771 | ||||||
| 229,535,079 | ||||||||
| Automobile Manufacturers–0.81% | ||||||||
General Motors Co. | 3,049,901 | 113,791,806 | ||||||
| Biotechnology–0.82% | ||||||||
Amgen Inc. | 724,428 | 114,256,784 | ||||||
| Broadcasting–0.17% | ||||||||
CBS Corp.–Class B | 415,176 | 24,536,902 | ||||||
| Cable & Satellite–1.82% | ||||||||
Comcast Corp.–Class A | 2,640,928 | 156,818,305 | ||||||
Time Warner Cable Inc. | 633,163 | 97,538,760 | ||||||
| 254,357,065 | ||||||||
| Communications Equipment–0.97% | ||||||||
Cisco Systems, Inc. | 4,580,682 | 135,175,926 | ||||||
| Construction Machinery & Heavy Trucks–0.49% | ||||||||
Caterpillar Inc. | 820,559 | 68,024,341 | ||||||
| Consumer Finance–0.25% | ||||||||
Synchrony Financial(b) | 1,115,467 | 35,639,171 | ||||||
| Diversified Banks–7.82% | ||||||||
Bank of America Corp. | 12,661,860 | 200,184,007 | ||||||
Citigroup Inc. | 7,810,419 | 409,422,164 | ||||||
Comerica Inc. | 1,949,559 | 89,250,811 | ||||||
JPMorgan Chase & Co. | 6,446,504 | 395,041,765 | ||||||
| 1,093,898,747 | ||||||||
| Diversified Chemicals–0.35% | ||||||||
Dow Chemical Co. (The) | 984,947 | 48,498,790 | ||||||
| Diversified Metals & Mining–0.17% | ||||||||
Freeport-McMoRan Inc. | 1,091,792 | 23,615,461 | ||||||
| Electric Utilities–0.36% | ||||||||
FirstEnergy Corp. | 1,459,446 | 51,051,421 | ||||||
| Shares | Value | |||||||
| Electronic Components–0.90% | ||||||||
Corning Inc. | 5,186,910 | $ | 126,560,604 | |||||
| General Merchandise Stores–1.19% | ||||||||
Target Corp. | 2,162,083 | 166,112,837 | ||||||
| Health Care Equipment–0.63% | ||||||||
Medtronic PLC | 1,139,747 | 88,432,970 | ||||||
| Health Care Services–0.52% | ||||||||
Express Scripts Holding Co.(b) | 851,156 | 72,169,517 | ||||||
| Hotels, Resorts & Cruise Lines–1.00% | ||||||||
Carnival Corp. | 3,184,545 | 140,088,134 | ||||||
| Household Products–0.78% | ||||||||
Procter & Gamble Co. (The) | 1,289,832 | 109,803,398 | ||||||
| Hypermarkets & Super Centers–1.02% | ||||||||
Wal-Mart Stores, Inc. | 1,698,763 | 142,577,178 | ||||||
| Industrial Conglomerates–1.96% | ||||||||
General Electric Co. | 10,564,329 | 274,566,911 | ||||||
| Industrial Machinery–0.82% | ||||||||
Ingersoll-Rand PLC | 1,714,786 | 115,216,471 | ||||||
| Insurance Brokers–2.04% | ||||||||
Aon PLC | 994,194 | 99,777,310 | ||||||
Marsh & McLennan Cos., Inc. | 1,772,468 | 100,835,704 | ||||||
Willis Group Holdings PLC | 1,789,969 | 85,417,321 | ||||||
| 286,030,335 | ||||||||
| Integrated Oil & Gas–3.58% | ||||||||
Exxon Mobil Corp. | 976,452 | 86,455,060 | ||||||
Occidental Petroleum Corp. | 1,001,606 | 78,005,075 | ||||||
Royal Dutch Shell PLC–Class A (United Kingdom) | 6,772,412 | 220,901,119 | ||||||
Total S.A. (France) | 2,149,440 | 115,425,532 | ||||||
| 500,786,786 | ||||||||
| Integrated Telecommunication Services–1.14% | ||||||||
Koninklijke KPN N.V. (Netherlands) | 6,488,776 | 22,129,215 | ||||||
Orange S.A. (France) | 1,450,512 | 26,416,086 | ||||||
Telecom Italia S.p.A. (Italy)(b) | 13,551,252 | 16,219,523 | ||||||
Telefonica S.A. (Spain) | 975,489 | 15,168,751 | ||||||
Verizon Communications Inc. | 1,596,573 | 78,950,535 | ||||||
| 158,884,110 | ||||||||
| Internet Software & Services–1.08% | ||||||||
eBay Inc.(b) | 2,602,493 | 150,710,370 | ||||||
| Investment Banking & Brokerage–3.01% | ||||||||
Charles Schwab Corp. (The) | 3,894,512 | 114,264,982 | ||||||
Goldman Sachs Group, Inc. (The) | 522,391 | 99,144,588 | ||||||
Morgan Stanley | 5,805,235 | 207,769,361 | ||||||
| 421,178,931 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Equity and Income Fund
| Shares | Value | |||||||
| IT Consulting & Other Services–0.84% | ||||||||
Amdocs Ltd. | 2,230,188 | $ | 117,084,870 | |||||
| Managed Health Care–1.56% | ||||||||
Anthem, Inc. | 774,906 | 113,484,984 | ||||||
UnitedHealth Group Inc. | 922,574 | 104,832,083 | ||||||
| 218,317,067 | ||||||||
| Movies & Entertainment–0.87% | ||||||||
Time Warner Inc. | 702,994 | 57,547,089 | ||||||
Viacom Inc.–Class B | 909,619 | 63,618,753 | ||||||
| 121,165,842 | ||||||||
| Multi-Utilities–0.44% | ||||||||
PG&E Corp. | 1,149,138 | 61,743,185 | ||||||
| Oil & Gas Drilling–0.33% | ||||||||
Ensco PLC–Class A | 1,885,162 | 46,129,914 | ||||||
| Oil & Gas Equipment & Services–0.79% | ||||||||
Baker Hughes Inc. | 1,774,143 | 110,901,679 | ||||||
| Oil & Gas Exploration & Production–1.84% | ||||||||
Anadarko Petroleum Corp. | 880,252 | 74,143,626 | ||||||
Apache Corp. | 1,564,774 | 103,024,720 | ||||||
Canadian Natural Resources Ltd. (Canada) | 2,751,904 | 80,047,384 | ||||||
| 257,215,730 | ||||||||
| Other Diversified Financial Services–0.89% | ||||||||
Voya Financial, Inc. | 2,829,074 | 125,016,780 | ||||||
| Packaged Foods & Meats–1.35% | ||||||||
Mondelez International Inc.–Class A | 2,955,428 | 109,158,733 | ||||||
Unilever N.V.–New York Shares (United Kingdom) | 1,834,959 | 79,765,668 | ||||||
| 188,924,401 | ||||||||
| Pharmaceuticals–5.01% | ||||||||
Eli Lilly and Co. | 1,789,148 | 125,544,515 | ||||||
Merck & Co., Inc. | 2,383,974 | 139,557,838 | ||||||
Novartis AG (Switzerland) | 1,288,960 | 132,024,388 | ||||||
Novartis AG–ADR (Switzerland) | 102,464 | 10,492,314 | ||||||
Pfizer Inc. | 2,195,299 | 75,342,662 | ||||||
Sanofi (France) | 1,007,661 | 98,896,959 | ||||||
Teva Pharmaceutical Industries Ltd.–ADR (Israel) | 2,081,965 | 118,713,644 | ||||||
| 700,572,320 | ||||||||
| Publishing–0.54% | ||||||||
Thomson Reuters Corp. | 1,919,734 | 75,345,720 | ||||||
| Railroads–0.74% | ||||||||
CSX Corp. | 3,011,960 | 103,340,348 | ||||||
| Regional Banks–3.14% | ||||||||
BB&T Corp. | 2,009,050 | 76,444,352 | ||||||
Citizens Financial Group Inc. | 2,990,877 | 74,293,385 | ||||||
Fifth Third Bancorp | 4,302,435 | 83,295,142 | ||||||
| Shares | Value | |||||||
| Regional Banks–(continued) | ||||||||
First Horizon National Corp. | 2,914,618 | $ | 41,649,891 | |||||
PNC Financial Services Group, Inc. (The) | 1,776,312 | 163,349,651 | ||||||
| 439,032,421 | ||||||||
| Security & Alarm Services–0.71% | ||||||||
Tyco International PLC | 2,356,904 | 99,508,487 | ||||||
| Semiconductor Equipment–1.12% | ||||||||
Applied Materials, Inc. | 6,279,053 | 157,290,278 | ||||||
| Semiconductors–1.50% | ||||||||
Broadcom Corp.–Class A | 2,113,298 | 95,584,468 | ||||||
Intel Corp. | 3,424,563 | 113,866,720 | ||||||
| 209,451,188 | ||||||||
| Specialized Finance–0.48% | ||||||||
CME Group Inc.–Class A | 705,630 | 67,691,086 | ||||||
| Systems Software–1.59% | ||||||||
Microsoft Corp. | 2,326,388 | 102,012,114 | ||||||
Symantec Corp. | 4,785,298 | 120,398,097 | ||||||
| 222,410,211 | ||||||||
| Technology Hardware, Storage & Peripherals–0.54% | ||||||||
NetApp, Inc. | 1,957,898 | 75,672,758 | ||||||
| Tobacco–0.68% | ||||||||
Philip Morris International Inc. | 1,148,605 | 95,288,271 | ||||||
| Wireless Telecommunication Services–0.64% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 2,600,398 | 89,869,755 | ||||||
Total Common Stocks & Other Equity Interests |
| 8,929,024,933 | ||||||
| Principal Amount | ||||||||
Bonds and Notes–20.06% | ||||||||
| Advertising–0.03% | ||||||||
Interpublic Group of Cos., Inc. (The), Sr. Unsec. Global Notes, 2.25%, 11/15/17 | $ | 4,145,000 | 4,174,908 | |||||
| Aerospace & Defense–0.07% | ||||||||
L-3 Communications Corp., Sr. Unsec. Gtd. Global Notes, 3.95%, 05/28/24 | 4,355,000 | 4,452,507 | ||||||
Northrop Grumman Corp., Sr. Unsec. Global Notes, 3.85%, 04/15/45 | 1,938,000 | 1,902,576 | ||||||
Precision Castparts Corp., Sr. Unsec. Global Notes, 2.50%, 01/15/23 | 4,150,000 | 4,093,956 | ||||||
| 10,449,039 | ||||||||
| Agricultural & Farm Machinery–0.11% | ||||||||
Deere & Co., Sr. Unsec. Notes, 2.60%, 06/08/22 | 14,645,000 | 14,701,219 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Agricultural Products–0.21% | ||||||||
Bunge Ltd Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.10%, 07/15/15 | $ | 23,703,000 | $ | 24,068,770 | ||||
Ingredion Inc., Sr. Unsec. Notes, 6.63%, 04/15/37 | 3,940,000 | 4,992,521 | ||||||
| 29,061,291 | ||||||||
| Air Freight & Logistics–0.31% | ||||||||
FedEx Corp., | ||||||||
Sr. Unsec. Gtd. Bonds, 4.90%, 01/15/34 | 4,310,000 | 4,904,184 | ||||||
Sr. Unsec. Gtd. Notes, 5.10%, 01/15/44 | 8,875,000 | 10,312,353 | ||||||
UTi Worldwide Inc., Sr. Unsec. Conv. Notes, 4.50%, 03/01/19(c) | 24,390,000 | 27,774,113 | ||||||
| 42,990,650 | ||||||||
| Airlines–0.20% | ||||||||
American Airlines Pass Through Trust, Series 2014-1, Class A, Sr. Sec. Pass Through Ctfs., 3.70%, 10/01/26 | 4,520,000 | 4,720,575 | ||||||
Continental Airlines Pass Through Trust, | ||||||||
Series 2010-1, Class A, Sr. Sec. Pass Through Ctfs., 4.75%, 01/12/21 | 3,872,536 | 4,192,021 | ||||||
Series 2012-1, Class A, Sr. Sec. Pass Through Ctfs., 4.15%, 04/11/24 | 5,325,489 | 5,671,645 | ||||||
Delta Air Lines Pass Through Trust, Series 2010-1, Class A, Sr. Sec. Pass Through Ctfs., 6.20%, 07/02/18 | 2,041,040 | 2,256,625 | ||||||
United Airlines Pass Through Trust, Series 2014-2, Class A, Sr. Sec. Pass Through Ctfs., 3.75%, 09/03/26 | 5,455,000 | 5,703,884 | ||||||
Virgin Australia Pass Through Trust (Australia), Series 2013-1, Class A, Sec. Gtd. Pass Through Ctfs., 5.00%, 10/23/23(c) | 5,884,505 | 6,127,241 | ||||||
| 28,671,991 | ||||||||
| Airport Services–0.04% | ||||||||
Heathrow Funding Ltd. (United Kingdom), Sr. Sec. Notes, 2.50%, 06/25/15(c) | 6,220,000 | 6,144,500 | ||||||
| Apparel Retail–0.03% | ||||||||
Ross Stores, Inc., Sr. Unsec. Notes, 3.38%, 09/15/24 | 3,638,000 | 3,719,544 | ||||||
| Application Software–0.35% | ||||||||
Citrix Systems Inc., Sr. Unsec. Conv. Notes, 0.50%, 04/15/19(c) | 46,415,000 | 48,416,647 | ||||||
| Asset Management & Custody Banks–0.08% | ||||||||
Apollo Management Holdings L.P., Sr. Unsec. Gtd. Notes, | 4,260,000 | 4,402,825 | ||||||
| Principal Amount | Value | |||||||
| Asset Management & Custody Banks–(continued) | ||||||||
Blackstone Holdings Finance Co. LLC, Sr. Unsec. Gtd. Notes, 5.00%, 06/15/44(c) | $ | 3,975,000 | $ | 4,351,439 | ||||
KKR Group Finance Co III LLC, Sr. Unsec. Gtd. Bonds, 5.13%, 06/01/44(c) | 2,220,000 | 2,380,112 | ||||||
| 11,134,376 | ||||||||
| Automobile Manufacturers–0.28% | ||||||||
Daimler Finance North America LLC (Germany), Sr. Unsec. Gtd. Notes, 1.88%, 01/11/18(c) | 5,220,000 | 5,280,289 | ||||||
Ford Motor Co., Sr. Unsec. Global Notes, 4.75%, 01/15/43 | 11,500,000 | 12,665,740 | ||||||
Ford Motor Credit Co. LLC, | ||||||||
Sr. Unsec. Global Notes, 2.50%, 01/15/16 | 4,970,000 | 5,037,236 | ||||||
Sr. Unsec. Notes, 2.75%, 05/15/15 | 15,750,000 | 15,816,823 | ||||||
| 38,800,088 | ||||||||
| Automotive Retail–0.11% | ||||||||
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, | ||||||||
4.50%, 12/01/23 | 6,415,000 | 6,908,520 | ||||||
5.75%, 05/01/20 | 7,393,000 | 8,332,607 | ||||||
| 15,241,127 | ||||||||
| Biotechnology–0.41% | ||||||||
BioMarin Pharmaceutical Inc., Sr. Unsec. Sub. Conv. Notes, 1.50%, 10/15/20 | 21,842,000 | 30,060,052 | ||||||
Celgene Corp., Sr. Unsec. Global Notes, | ||||||||
4.00%, 08/15/23 | 4,735,000 | 5,111,097 | ||||||
4.63%, 05/15/44 | 13,875,000 | 15,249,138 | ||||||
Gilead Sciences, Inc., Sr. Unsec. Global Bonds, 2.05%, 04/01/19 | 6,515,000 | 6,582,182 | ||||||
| 57,002,469 | ||||||||
| Brewers–0.16% | ||||||||
Anheuser-Busch InBev Worldwide, Inc. (Belgium), Sr. Unsec. Gtd. Global Notes, | ||||||||
0.80%, 07/15/15 | 3,745,000 | 3,751,243 | ||||||
3.63%, 04/15/15 | 6,145,000 | 6,167,429 | ||||||
FBG Finance Pty Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(c) | 11,890,000 | 12,041,003 | ||||||
| 21,959,675 | ||||||||
| Broadcasting–0.56% | ||||||||
Discovery Communications LLC, Sr. Unsec. Gtd. Global Notes, 3.70%, 06/01/15 | 14,175,000 | 14,245,875 | ||||||
Grupo Televisa S.A.B. (Mexico), Sr. Unsec. Global Notes, 5.00%, 05/13/45 | 3,000,000 | 3,194,666 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Broadcasting–(continued) | ||||||||
Liberty Media Corp., Sr. Unsec. Conv. Bonds, 1.38%, 10/15/23 | $ | 61,171,000 | $ | 61,400,391 | ||||
| 78,840,932 | ||||||||
| Cable & Satellite–0.36% | ||||||||
Comcast Corp., | ||||||||
Sr. Unsec. Gtd. Global Notes, 4.25%, 01/15/33 | 8,165,000 | 8,844,142 | ||||||
5.70%, 05/15/18 | 4,735,000 | 5,344,734 | ||||||
Sr. Unsec. Gtd. Notes, | 2,465,000 | 3,373,321 | ||||||
Cox Communications, Inc., | ||||||||
4.70%, 12/15/42(c) | 4,980,000 | 5,085,965 | ||||||
6.25%, 06/01/18(c) | 3,700,000 | 4,179,245 | ||||||
7.25%, 11/15/15 | 5,000,000 | 5,224,771 | ||||||
8.38%, 03/01/39(c) | 655,000 | 942,456 | ||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 5.15%, 03/15/42 | 1,370,000 | 1,416,038 | ||||||
NBCUniversal Media LLC, Sr. Unsec. Gtd. Global Notes, | ||||||||
5.15%, 04/30/20 | 3,320,000 | 3,826,919 | ||||||
5.95%, 04/01/41 | 3,365,000 | 4,451,804 | ||||||
Time Warner Cable, Inc., Sr. Unsec. Gtd. Deb., 5.88%, 11/15/40 | 7,235,000 | 8,336,239 | ||||||
| 51,025,634 | ||||||||
| Catalog Retail–0.22% | ||||||||
Liberty Interactive LLC, Sr. Unsec. Conv. Global Bonds, 0.75%, 03/30/23(d) | 15,395,000 | 21,957,119 | ||||||
QVC, Inc., Sr. Sec. Gtd. Global Notes, 5.45%, 08/15/34 | 8,810,000 | 8,764,045 | ||||||
| 30,721,164 | ||||||||
| Coal & Consumable Fuels–0.07% | ||||||||
Peabody Energy Corp., Jr. Unsec. Sub. Conv. Deb., 4.75%, 12/15/41 | 21,736,000 | 10,215,920 | ||||||
| Commodity Chemicals–0.07% | ||||||||
Montell Finance Co. B.V. (Netherlands), Sr. Unsec. Gtd. Deb., 8.10%, 03/15/27(c) | 7,384,000 | 10,275,275 | ||||||
| Communications Equipment–0.37% | ||||||||
Ciena Corp., Sr. Unsec. Conv. Notes, 4.00%, 12/15/20(c) | 14,876,000 | 19,422,477 | ||||||
JDS Uniphase Corp., Sr. Unsec. Conv. Bonds, 0.63%, 08/15/18(d) | 31,263,000 | 32,962,926 | ||||||
| 52,385,403 | ||||||||
| Consumer Finance–0.22% | ||||||||
American Express Co., Unsec. Sub. Global Notes, 3.63%, 12/05/24 | 3,423,000 | 3,514,582 | ||||||
| Principal Amount | Value | |||||||
| Consumer Finance–(continued) | ||||||||
American Express Credit Corp., Sr. Unsec. Medium-Term Notes, 2.75%, 09/15/15 | $ | 26,345,000 | $ | 26,654,575 | ||||
| 30,169,157 | ||||||||
| Data Processing & Outsourced Services–0.09% | ||||||||
Computer Sciences Corp., Sr. Unsec. Global Notes, 4.45%, 09/15/22 | 4,954,000 | 5,126,516 | ||||||
Xerox Corp., Sr. Unsec. Global Notes, 4.80%, 03/01/35 | 7,279,000 | 7,247,801 | ||||||
| 12,374,317 | ||||||||
| Distillers & Vintners–0.02% | ||||||||
Brown-Forman Corp., Sr. Unsec. Notes, 2.25%, 01/15/23 | 3,480,000 | 3,345,340 | ||||||
| Diversified Banks–1.59% | ||||||||
Banco Inbursa S.A. Institucion de Banca Multiple (Mexico), Sr. Unsec. Notes, 4.13%, 06/06/24(c) | 5,000,000 | 4,978,253 | ||||||
Bank of America Corp., | ||||||||
Sr. Unsec. Global Notes, 5.75%, 12/01/17 | 2,825,000 | 3,121,838 | ||||||
Sr. Unsec. Medium-Term Notes, 1.25%, 01/11/16 | 6,465,000 | 6,482,871 | ||||||
Series L, Sr. Unsec. Medium-Term Global Notes, 5.65%, 05/01/18 | 8,680,000 | 9,651,806 | ||||||
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 6.75%, 05/22/19 | 8,500,000 | 10,096,562 | ||||||
BBVA Bancomer S.A. (Mexico), Sr. Unsec. Notes, 4.38%, 04/10/24(c) | 6,875,000 | 7,170,345 | ||||||
Bear Stearns Cos., LLC (The), Sr. Unsec. Global Notes, 7.25%, 02/01/18 | 8,140,000 | 9,403,924 | ||||||
BNP Paribas S.A. (France), Unsec. Sub. Notes, 4.25%, 10/15/24 | 5,010,000 | 5,222,201 | ||||||
Citigroup Inc., | ||||||||
2.65%, 03/02/15 | 5,950,000 | 5,950,370 | ||||||
Unsec. Sub. Global Notes, | ||||||||
3.50%, 05/15/23 | 5,000,000 | 5,002,841 | ||||||
5.30%, 05/06/44 | 2,765,000 | 3,100,963 | ||||||
6.68%, 09/13/43 | 8,000,000 | 10,687,421 | ||||||
Credit Suisse AG (Switzerland), Unsec. Sub. Notes, 6.50%, 08/08/23(c) | 6,536,000 | 7,433,651 | ||||||
Danske Bank A/S (Denmark), Sr. Unsec. Notes, 3.88%, 04/14/16(c) | 9,435,000 | 9,728,445 | ||||||
HBOS PLC (United Kingdom), Unsec. Sub. Medium-Term Global Notes, 6.75%, 05/21/18(c) | 8,535,000 | 9,576,419 | ||||||
ING Bank N.V. (Netherlands), | ||||||||
3.75%, 03/07/17(c) | 8,380,000 | 8,761,616 | ||||||
Unsec. Sub. Notes, 5.13%, 05/01/15(c) | 3,650,000 | 3,674,386 | ||||||
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 Banks–(continued) | ||||||||
JPMorgan Chase & Co., | ||||||||
Series S, Jr. Unsec. Sub. Notes, 6.75%(e) | $ | 2,170,000 | $ | 2,359,875 | ||||
Series V, Jr. Unsec. Sub. Global Notes, 5.00%(e) | 6,410,000 | 6,353,913 | ||||||
Series X, Jr. Unsec. Sub. Global Notes, 6.10%(e) | 10,895,000 | 11,289,944 | ||||||
Korea Development Bank (The) (South Korea), Sr. Unsec. Global Notes, 4.38%, 08/10/15 | 3,460,000 | 3,508,989 | ||||||
Lloyds Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 2.30%, 11/27/18 | 5,240,000 | 5,329,310 | ||||||
Mizuho Financial Group Cayman 3 Ltd. (Japan), Unsec. Gtd. Sub. Notes, 4.60%, 03/27/24(c) | 5,010,000 | 5,393,838 | ||||||
National Australia Bank Ltd. (Australia), Sr. Unsec. Bonds, 3.75%, 03/02/15(c) | 3,390,000 | 3,390,330 | ||||||
Santander Holdings USA Inc., Sr. Unsec. Global Notes, 3.00%, 09/24/15 | 16,313,000 | 16,466,947 | ||||||
Societe Generale S.A. (France), Unsec. Sub. Notes, 5.00%, 01/17/24(c) | 7,365,000 | 7,785,194 | ||||||
Standard Chartered PLC (United Kingdom), | ||||||||
Sr. Unsec. Notes, 3.85%, 04/27/15(c) | 4,190,000 | 4,210,424 | ||||||
Unsec. Sub. Notes, 5.70%, 03/26/44(c) | 4,170,000 | 4,635,384 | ||||||
U.S. Bank N.A., Unsec. Sub. Notes, 3.78%, 04/29/20 | 8,200,000 | 8,239,406 | ||||||
Wells Fargo & Co., | ||||||||
Sr. Unsec. Global Notes, 1.50%, 01/16/18 | 2,070,000 | 2,074,049 | ||||||
3.63%, 04/15/15 | 750,000 | 752,716 | ||||||
Unsec. Sub. Medium-Term Notes, 4.10%, 06/03/26 | 4,515,000 | 4,721,459 | ||||||
4.65%, 11/04/44 | 14,430,000 | 15,605,997 | ||||||
| 222,161,687 | ||||||||
| Diversified Capital Markets–0.05% | ||||||||
Credit Suisse (Switzerland), Sr. Unsec. Medium-Term Notes, 3.63%, 09/09/24 | 3,495,000 | 3,633,041 | ||||||
UBS AG (Switzerland), Sr. Unsec. Medium-Term Global Bank Notes, 5.75%, 04/25/18 | 2,414,000 | 2,704,717 | ||||||
| 6,337,758 | ||||||||
| Diversified Chemicals–0.06% | ||||||||
Eastman Chemical Co., Sr. Unsec. Global Notes, 2.70%, 01/15/20 | 8,092,000 | 8,192,595 | ||||||
| Diversified Metals & Mining–0.18% | ||||||||
Glencore Finance Canada Ltd. (Switzerland), Sr. Unsec. Gtd. Notes, | ||||||||
2.05%, 10/23/15(c) | 4,700,000 | 4,722,613 | ||||||
2.70%, 10/25/17(c) | 4,700,000 | 4,777,911 | ||||||
| Principal Amount | Value | |||||||
| Diversified Metals & Mining–(continued) | ||||||||
Rio Tinto Finance USA Ltd. (United Kingdom), Sr. Unsec. Gtd. Global Notes, | ||||||||
7.13%, 07/15/28 | $ | 2,175,000 | $ | 2,937,772 | ||||
9.00%, 05/01/19 | 5,240,000 | 6,618,733 | ||||||
Southern Copper Corp., Sr. Unsec. Global Notes, | ||||||||
5.25%, 11/08/42 | 4,250,000 | 3,856,317 | ||||||
6.75%, 04/16/40 | 1,695,000 | 1,801,572 | ||||||
| 24,714,918 | ||||||||
| Diversified Real Estate Activities–0.05% | ||||||||
Brookfield Asset Management Inc. (Canada), Sr. Unsec. Notes, 4.00%, 01/15/25 | 7,670,000 | 7,699,878 | ||||||
| Diversified Support Services–0.03% | ||||||||
Cintas Corp. No. 2, Sr. Unsec. Gtd. Notes, 2.85%, 06/01/16 | 4,605,000 | 4,717,125 | ||||||
| Drug Retail–0.18% | ||||||||
CVS Health Corp., Sr. Unsec. Global Notes, 3.38%, 08/12/24 | 3,740,000 | 3,900,991 | ||||||
CVS Pass Through Trust, Sr. Sec. Global Pass Through Ctfs., 6.04%, 12/10/28 | 9,166,289 | 10,738,248 | ||||||
Walgreens Boots Alliance Inc., Sr. Unsec. Global Notes, | ||||||||
3.30%, 11/18/21 | 6,129,000 | 6,308,814 | ||||||
4.50%, 11/18/34 | 4,519,000 | 4,797,003 | ||||||
| 25,745,056 | ||||||||
| Electric Utilities–0.21% | ||||||||
Electricite de France S.A. (France), | ||||||||
Sr. Unsec. Notes, 4.60%, 01/27/20(c) | 2,150,000 | 2,386,818 | ||||||
4.88%, 01/22/44(c) | 9,110,000 | 10,273,467 | ||||||
Jr. Unsec. Sub. Notes, 5.63%(c)(e) | 8,670,000 | 9,415,620 | ||||||
Louisville Gas & Electric Co., Sr. Sec. First Mortgage Global Bonds, 1.63%, 11/15/15 | 5,525,000 | 5,563,351 | ||||||
Ohio Power Co., Series M, Sr. Unsec. Notes, 5.38%, 10/01/21 | 1,050,000 | 1,234,304 | ||||||
PPL Electric Utilities Corp., Sr. Sec. First Mortgage Bonds, 6.25%, 05/15/39 | 355,000 | 498,613 | ||||||
| 29,372,173 | ||||||||
| Electrical Components & Equipment–0.06% | ||||||||
Eaton Corp., Sr. Unsec. Gtd. Global Notes, 0.95%, 11/02/15 | 8,285,000 | 8,297,147 | ||||||
| Environmental & Facilities Services–0.03% | ||||||||
Waste Management, Inc., Sr. Unsec. Gtd. Global Notes, 3.90%, 03/01/35 | 4,786,000 | 4,870,264 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Fertilizers & Agricultural Chemicals–0.07% | ||||||||
Monsanto Co., Sr. Unsec. Global Notes, | ||||||||
2.13%, 07/15/19 | $ | 3,055,000 | $ | 3,089,221 | ||||
3.38%, 07/15/24 | 2,085,000 | 2,175,850 | ||||||
3.60%, 07/15/42 | 4,150,000 | 3,899,170 | ||||||
| 9,164,241 | ||||||||
| General Merchandise Stores–0.10% | ||||||||
Dollar General Corp., Sr. Unsec. Global Notes, 3.25%, 04/15/23 | 3,650,000 | 3,530,338 | ||||||
Target Corp., Sr. Unsec. Global Notes, 2.90%, 01/15/22 | 9,830,000 | 10,125,662 | ||||||
| 13,656,000 | ||||||||
| Gold–0.04% | ||||||||
Newmont Mining Corp., Sr. Unsec. Gtd. Global Notes, 3.50%, 03/15/22 | 6,300,000 | 6,191,364 | ||||||
| Health Care Distributors–0.15% | ||||||||
AmerisourceBergen Corp., Sr. Unsec. Bonds, 3.40%, 05/15/24 | 9,400,000 | 9,622,772 | ||||||
McKesson Corp., Sr. Unsec. Global Notes, 2.28%, 03/15/19 | 11,085,000 | 11,182,095 | ||||||
| 20,804,867 | ||||||||
| Health Care Equipment–0.51% | ||||||||
Becton, Dickinson and Co., Sr. Unsec. Notes, 2.68%, 12/15/19 | 3,198,000 | 3,274,369 | ||||||
CareFusion Corp., Sr. Unsec. Global Notes, | ||||||||
3.88%, 05/15/24 | 6,825,000 | 7,133,068 | ||||||
4.88%, 05/15/44 | 7,465,000 | 8,235,884 | ||||||
Edwards Lifesciences Corp., Sr. Unsec. Global Notes, 2.88%, 10/15/18 | 7,055,000 | 7,247,968 | ||||||
Medtronic Inc., | ||||||||
Sr. Unsec. Gtd. Global Notes, 4.00%, 04/01/43 | 5,720,000 | 5,963,092 | ||||||
4.63%, 03/15/44 | 5,490,000 | 6,205,162 | ||||||
Sr. Unsec. Gtd. Notes, 3.15%, 03/15/22(c) | 10,944,000 | 11,341,713 | ||||||
4.38%, 03/15/35(c) | 3,883,000 | 4,232,054 | ||||||
NuVasive Inc., Sr. Unsec. Conv. Notes, 2.75%, 07/01/17 | 13,684,000 | 17,267,498 | ||||||
| 70,900,808 | ||||||||
| Health Care Facilities–0.54% | ||||||||
Brookdale Senior Living Inc., Sr. Unsec. Conv. Notes, 2.75%, 06/15/18 | 24,795,000 | 34,387,566 | ||||||
HealthSouth Corp., Sr. Unsec. Sub. Conv. Notes, 2.00%, 12/01/20(d) | 33,605,000 | 40,851,078 | ||||||
| 75,238,644 | ||||||||
| Principal Amount | Value | |||||||
| Health Care REIT’s–0.19% | ||||||||
HCP, Inc., Sr. Unsec. Global Notes, | ||||||||
3.88%, 08/15/24 | $ | 5,085,000 | $ | 5,220,097 | ||||
4.20%, 03/01/24 | 4,690,000 | 4,929,747 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 6,620,000 | 6,756,537 | ||||||
Ventas Realty L.P., Sr. Unsec. Gtd. Notes, 5.70%, 09/30/43 | 2,080,000 | 2,546,988 | ||||||
Ventas Realty L.P./Ventas Capital Corp., Sr. Unsec. Gtd. Notes, | ||||||||
2.70%, 04/01/20 | 4,710,000 | 4,746,438 | ||||||
4.25%, 03/01/22 | 1,905,000 | 2,031,700 | ||||||
| 26,231,507 | ||||||||
| Health Care Services–0.48% | ||||||||
Express Scripts Holding Co., | ||||||||
Sr. Unsec. Gtd. Global Notes, 2.25%, 06/15/19 | 9,380,000 | 9,392,679 | ||||||
Sr. Unsec. Gtd. Notes, 3.13%, 05/15/16 | 3,800,000 | 3,898,425 | ||||||
Laboratory Corp. of America Holdings, Sr. Unsec. Notes, | ||||||||
3.20%, 02/01/22 | 6,132,000 | 6,172,998 | ||||||
4.70%, 02/01/45 | 2,694,000 | 2,784,840 | ||||||
Medco Health Solutions Inc., Sr. Unsec. Gtd. Notes, 2.75%, 09/15/15 | 3,535,000 | 3,570,965 | ||||||
Omnicare, Inc., | ||||||||
Sr. Unsec. Gtd. Sub. Conv. Notes, 3.50%, 02/15/44 | 18,351,000 | 22,479,975 | ||||||
Series OCR, Sr. Unsec. Gtd. Conv. Notes, 3.25%, 01/15/21(d) | 16,126,000 | 18,978,286 | ||||||
| 67,278,168 | ||||||||
| Homebuilding–0.06% | ||||||||
MDC Holdings, Inc., Sr. Unsec. Gtd. Notes, 6.00%, 01/15/43 | 10,130,000 | 8,389,996 | ||||||
| Hotels, Resorts & Cruise Lines–0.01% | ||||||||
Wyndham Worldwide Corp., Sr. Unsec. Notes, 2.95%, 03/01/17 | 1,225,000 | 1,254,292 | ||||||
| Housewares & Specialties–0.09% | ||||||||
Tupperware Brands Corp., Sr. Unsec. Gtd. Global Notes, 4.75%, 06/01/21 | 12,185,000 | 13,083,832 | ||||||
| Hypermarkets & Super Centers–0.03% | ||||||||
Wal-Mart Stores, Inc., | ||||||||
Sr. Unsec. Global Bonds, 3.30%, 04/22/24 | 3,610,000 | 3,830,353 | ||||||
Sr. Unsec. Global Notes, 6.50%, 08/15/37 | 730,000 | 1,027,417 | ||||||
| 4,857,770 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Industrial Conglomerates–0.14% | ||||||||
General Electric Capital Corp., | ||||||||
Sr. Unsec. Medium-Term Global Notes, 6.00%, 08/07/19 | $ | 8,500,000 | $ | 9,977,608 | ||||
Series C, Jr. Unsec. Sub. Global Bonds, 5.25%(e) | 9,400,000 | 9,672,600 | ||||||
| 19,650,208 | ||||||||
| Industrial Machinery–0.19% | ||||||||
Pentair Finance S.A., Sr. Unsec. Gtd. Global Notes, 5.00%, 05/15/21 | 7,940,000 | 8,902,469 | ||||||
Valmont Industries, Inc., Sr. Unsec. Gtd. Global Notes, | ||||||||
5.00%, 10/01/44 | 4,195,000 | 4,205,352 | ||||||
5.25%, 10/01/54 | 13,347,000 | 13,098,317 | ||||||
| 26,206,138 | ||||||||
| Insurance Brokers–0.03% | ||||||||
Marsh & McLennan Cos., Inc., Sr. Unsec. Global Notes, 4.05%, 10/15/23 | 3,960,000 | 4,241,931 | ||||||
| Integrated Oil & Gas–0.25% | ||||||||
BP Capital Markets PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 2.24%, 05/10/19 | 5,302,000 | 5,346,511 | ||||||
Chevron Corp., Sr. Unsec. Global Notes, | ||||||||
1.37%, 03/02/18 | 14,553,000 | 14,580,726 | ||||||
1.72%, 06/24/18 | 5,275,000 | 5,327,262 | ||||||
Husky Energy Inc. (Canada), Sr. Unsec. Global Notes, 3.95%, 04/15/22 | 3,630,000 | 3,713,248 | ||||||
Shell International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15 | 1,965,000 | 1,982,336 | ||||||
Suncor Energy Inc. (Canada), Sr. Unsec. Notes, 3.60%, 12/01/24 | 3,379,000 | 3,505,154 | ||||||
| 34,455,237 | ||||||||
| Integrated Telecommunication Services–0.43% | ||||||||
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31 | 63,000 | 93,133 | ||||||
AT&T Inc., Sr. Unsec. Global Notes, | ||||||||
5.35%, 09/01/40 | 2,077,000 | 2,217,341 | ||||||
6.15%, 09/15/34 | 3,675,000 | 4,385,960 | ||||||
British Telecommunications PLC (United Kingdom), Sr. Unsec. Global Notes, 1.25%, 02/14/17 | 5,420,000 | 5,417,399 | ||||||
Telefonica Emisiones SAU (Spain), Sr. Unsec. Gtd. Global Notes, 7.05%, 06/20/36 | 3,600,000 | 4,922,159 | ||||||
Verizon Communications, Inc., | ||||||||
Sr. Unsec. Global Notes, 4.40%, 11/01/34 | 3,285,000 | 3,348,424 | ||||||
5.15%, 09/15/23 | 4,525,000 | 5,200,451 | ||||||
6.40%, 09/15/33 | 18,470,000 | 23,516,877 | ||||||
6.40%, 02/15/38 | 3,500,000 | 4,508,574 | ||||||
Sr. Unsec. Notes, | 6,727,000 | 7,072,442 | ||||||
| 60,682,760 | ||||||||
| Principal Amount | Value | |||||||
| Internet Retail–0.01% | ||||||||
Amazon.com, Inc., Sr. Unsec. Global Notes, 4.80%, 12/05/34 | $ | 1,819,000 | $ | 1,959,639 | ||||
| Investment Banking & Brokerage–1.95% | ||||||||
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20 | 7,880,000 | 8,711,484 | ||||||
Goldman Sachs Group, Inc. (The), | ||||||||
Sr. Unsec. Global Notes, 2.63%, 01/31/19 | 5,200,000 | 5,292,399 | ||||||
5.25%, 07/27/21 | 5,510,000 | 6,275,993 | ||||||
6.15%, 04/01/18 | 10,325,000 | 11,622,914 | ||||||
Sr. Unsec. Medium-Term Global Notes, 3.70%, 08/01/15 | 1,350,000 | 1,366,815 | ||||||
Unsec. Sub. Global Notes, | 4,585,000 | 5,961,302 | ||||||
Series 0000, Sr. Unsec. Exchangeable Basket-Linked Conv. Medium-Term Notes, | ||||||||
1.00%, 03/15/17(c)(f) | 61,461,000 | 85,859,173 | ||||||
1.00%, 09/28/20(c)(g) | 59,890,000 | 67,656,535 | ||||||
Jefferies Group LLC, Sr. Unsec. Conv. Deb., 3.88%, 11/01/17(d) | 24,314,000 | 24,982,635 | ||||||
Lazard Group LLC, Sr. Unsec. Global Notes, 3.75%, 02/13/25 | 11,653,000 | 11,565,313 | ||||||
Macquarie Bank Ltd. (Australia), | 6,100,000 | 6,514,490 | ||||||
Macquarie Group Ltd. (Australia), | 3,169,000 | 3,612,256 | ||||||
Morgan Stanley, | ||||||||
Sr. Unsec. Global Notes, 6.38%, 07/24/42 | 8,140,000 | 10,974,411 | ||||||
Sr. Unsec. Medium-Term Global Notes, 4.00%, 07/24/15 | 12,875,000 | 13,045,841 | ||||||
Sr. Unsec. Notes, 3.45%, 11/02/15 | 9,855,000 | 10,028,628 | ||||||
| 273,470,189 | ||||||||
| IT Consulting & Other Services–0.00% | ||||||||
International Business Machines Corp., Sr. Unsec. Global Notes, 7.63%, 10/15/18 | 100,000 | 120,876 | ||||||
| Life & Health Insurance–0.15% | ||||||||
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15 | 3,100,000 | 3,182,287 | ||||||
Pacific LifeCorp., Sr. Unsec. Notes, 6.00%, 02/10/20(c) | 3,425,000 | 3,890,109 | ||||||
Prudential Financial, Inc., | ||||||||
Sr. Unsec. Medium-Term Notes, 5.10%, 08/15/43 | 4,010,000 | 4,555,153 | ||||||
Series D, Sr. Unsec. Medium-Term Notes, | ||||||||
4.75%, 09/17/15 | 5,030,000 | 5,139,429 | ||||||
6.63%, 12/01/37 | 3,475,000 | 4,627,438 | ||||||
| 21,394,416 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Managed Health Care–0.82% | ||||||||
Aetna, Inc., Sr. Unsec. Global Notes, 3.95%, 09/01/20 | $ | 9,990,000 | $ | 10,730,924 | ||||
Anthem, Inc., | ||||||||
Sr. Unsec. Conv. Bonds, 2.75%, 10/15/42 | 45,576,000 | 89,813,205 | ||||||
Sr. Unsec. Global Notes, 1.25%, 09/10/15 | 14,663,000 | 14,707,115 | ||||||
| 115,251,244 | ||||||||
| Movies & Entertainment–0.13% | ||||||||
Live Nation Entertainment, Inc., Sr. Unsec. Conv. Notes, 2.50%, 05/15/19(c) | 11,374,000 | 12,212,832 | ||||||
Time Warner, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16 | 2,655,000 | 2,868,786 | ||||||
Viacom Inc., Sr. Unsec. Global Notes, 4.85%, 12/15/34 | 3,527,000 | 3,643,382 | ||||||
| 18,725,000 | ||||||||
| Multi-Line Insurance–0.28% | ||||||||
American International Group, Inc., Sr. Unsec. Global Notes, | ||||||||
2.30%, 07/16/19 | 3,855,000 | 3,905,292 | ||||||
4.38%, 01/15/55 | 7,405,000 | 7,510,381 | ||||||
Farmers Exchange Capital III, Unsec. Sub. Notes, 5.45%, 10/15/54(c) | 9,460,000 | 10,278,181 | ||||||
Hartford Financial Services Group Inc. (The), Sr. Unsec. Notes, 4.00%, 03/30/15 | 7,290,000 | 7,308,693 | ||||||
Nationwide Financial Services Inc., | 9,220,000 | 9,899,392 | ||||||
| 38,901,939 | ||||||||
| Multi-Utilities–0.03% | ||||||||
Enable Midstream Partners L.P., Sr. Unsec. Gtd. Notes, 2.40%, 05/15/19(c) | 4,395,000 | 4,299,055 | ||||||
| Office REIT’s–0.10% | ||||||||
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 4.50%, 07/15/15 | 5,210,000 | 5,253,169 | ||||||
Highwoods Realty L.P., Sr. Unsec. Notes, 3.20%, 06/15/21 | 1,650,000 | 1,671,896 | ||||||
Piedmont Operating Partnership L.P., Sr. Unsec. Gtd. Global Notes, 4.45%, 03/15/24 | 6,115,000 | 6,382,382 | ||||||
| 13,307,447 | ||||||||
| Office Services & Supplies–0.04% | ||||||||
Pitney Bowes Inc., Sr. Unsec. Global Notes, 4.63%, 03/15/24 | 5,065,000 | 5,267,260 | ||||||
| Oil & Gas Drilling–0.08% | ||||||||
Noble Holding International Ltd. (Switzerland), Sr. Unsec. Gtd. Global Notes, 2.50%, 03/15/17 | 1,150,000 | 1,133,612 | ||||||
| Principal Amount | Value | |||||||
| Oil & Gas Drilling–(continued) | ||||||||
Rowan Cos., Inc., Sr. Unsec. Gtd. Notes, | ||||||||
5.40%, 12/01/42 | $ | 3,671,000 | $ | 3,120,015 | ||||
5.85%, 01/15/44 | 7,719,000 | 6,981,519 | ||||||
| 11,235,146 | ||||||||
| Oil & Gas Equipment & Services–0.09% | ||||||||
Helix Energy Solutions Group, Inc., Sr. Unsec. Conv. Notes, 3.25%, 03/15/18(d) | 11,911,000 | 12,111,998 | ||||||
| Oil & Gas Exploration & Production–0.77% | ||||||||
Cobalt International Energy Inc., Sr. Unsec. Conv. Notes, 2.63%, 12/01/19 | 18,562,000 | 13,492,254 | ||||||
ConocoPhillips Co., Sr. Unsec. Gtd. Global Notes, | ||||||||
2.88%, 11/15/21 | 8,738,000 | 8,905,601 | ||||||
4.15%, 11/15/34 | 9,367,000 | 9,893,531 | ||||||
Devon Energy Corp., Sr. Unsec. Global Notes, | ||||||||
2.25%, 12/15/18 | 4,368,000 | 4,425,864 | ||||||
3.25%, 05/15/22 | 2,882,000 | 2,959,966 | ||||||
Marathon Oil Corp., Sr. Unsec. Notes, 0.90%, 11/01/15 | 21,730,000 | 21,718,993 | ||||||
Noble Energy, Inc., Sr. Unsec. Global Notes, 5.25%, 11/15/43 | 7,940,000 | 8,738,739 | ||||||
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/24/22 | 7,430,000 | 7,902,422 | ||||||
Southwestern Energy Co., Sr. Unsec. Global Notes, 4.10%, 03/15/22 | 6,279,000 | 6,195,382 | ||||||
Stone Energy Corp., Sr. Unsec. Gtd. Conv. Notes, 1.75%, 03/01/17 | 24,746,000 | 22,905,516 | ||||||
| 107,138,268 | ||||||||
| Oil & Gas Refining & Marketing–0.03% | ||||||||
Phillips 66, Sr. Unsec. Gtd. Global Notes, 1.95%, 03/05/15 | 4,760,000 | 4,760,236 | ||||||
| Oil & Gas Storage & Transportation–0.54% | ||||||||
Enterprise Products Operating LLC, | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.25%, 01/31/20 | 2,889,000 | 3,265,275 | ||||||
Sr. Unsec. Gtd. Notes, 2.55%, 10/15/19 | 3,770,000 | 3,816,549 | ||||||
6.45%, 09/01/40 | 555,000 | 722,832 | ||||||
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19 | 4,420,000 | 5,090,166 | ||||||
Kinder Morgan Inc., Sr. Unsec. Gtd. Notes, 5.30%, 12/01/34 | 5,398,000 | 5,736,754 | ||||||
Plains All American Pipeline L.P./ PAA Finance Corp., Sr. Unsec. Global Notes, 3.65%, 06/01/22 | 4,275,000 | 4,468,287 | ||||||
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 7.50%, 09/15/38 | 2,245,000 | 2,727,044 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Oil & Gas Storage & Transportation–(continued) | ||||||||
Sunoco Logistics Partners Operations L.P., Sr. Unsec. Gtd. Notes, | ||||||||
5.30%, 04/01/44 | $ | 8,165,000 | $ | 8,809,539 | ||||
5.50%, 02/15/20 | 5,405,000 | 6,017,568 | ||||||
Texas Eastern Transmission L.P., Sr. Unsec. Notes, 7.00%, 07/15/32 | 3,835,000 | 5,169,868 | ||||||
Western Gas Partners L.P., Sr. Unsec. Notes, 5.45%, 04/01/44 | 9,710,000 | 10,801,947 | ||||||
Williams Partners L.P., Sr. Unsec. Global Notes, | ||||||||
5.10%, 09/15/45 | 9,003,000 | 9,025,452 | ||||||
5.40%, 03/04/44 | 9,000,000 | 9,387,399 | ||||||
| 75,038,680 | ||||||||
| Other Diversified Financial Services–0.07% | ||||||||
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.35%, 10/15/19(c) | 9,335,000 | 9,328,253 | ||||||
| Packaged Foods & Meats–0.19% | ||||||||
General Mills, Inc., Sr. Unsec. Global Notes, 2.20%, 10/21/19 | 8,595,000 | 8,634,024 | ||||||
Grupo Bimbo S.A.B. de C.V. (Mexico), Sr. Unsec. Gtd. Notes, 3.88%, 06/27/24(c) | 7,565,000 | 7,744,405 | ||||||
Mondelez International Inc., Sr. Unsec. Global Notes, 6.50%, 02/09/40 | 1,476,000 | 2,062,476 | ||||||
Tyson Foods, Inc., Sr. Unsec. Gtd. Global Bonds, | ||||||||
3.95%, 08/15/24 | 2,372,000 | 2,517,720 | ||||||
4.88%, 08/15/34 | 2,136,000 | 2,401,237 | ||||||
5.15%, 08/15/44 | 2,202,000 | 2,589,441 | ||||||
| 25,949,303 | ||||||||
| Paper Packaging–0.08% | ||||||||
Packaging Corp. of America, Sr. Unsec. Global Notes, 4.50%, 11/01/23 | 11,003,000 | 11,817,069 | ||||||
| Paper Products–0.02% | ||||||||
International Paper Co., Sr. Unsec. Global Notes, 6.00%, 11/15/41 | 2,855,000 | 3,389,737 | ||||||
| Pharmaceuticals–0.45% | ||||||||
AbbVie Inc., Sr. Unsec. Global Notes, 1.20%, 11/06/15 | 18,095,000 | 18,148,401 | ||||||
Actavis Funding SCS, Sr. Unsec. Gtd. Global Notes, 4.85%, 06/15/44 | 9,265,000 | 9,529,290 | ||||||
Bayer US Finance LLC (Germany), Sr. Unsec. Gtd. Notes, 3.00%, 10/08/21(c) | 6,079,000 | 6,269,702 | ||||||
Jazz Investments I Ltd., Sr. Unsec. Gtd. Conv. Notes, | 14,556,000 | 16,957,740 | ||||||
Merck & Co., Inc., Sr. Unsec. Global Notes, 3.70%, 02/10/45 | 3,535,000 | 3,491,544 | ||||||
| Principal Amount | Value | |||||||
| Pharmaceuticals–(continued) | ||||||||
Perrigo Co. PLC, Sr. Unsec. Global Notes, 2.30%, 11/08/18 | $ | 3,945,000 | $ | 3,988,980 | ||||
Zoetis Inc., Sr. Unsec. Global Notes, 4.70%, 02/01/43 | 4,101,000 | 4,221,416 | ||||||
| 62,607,073 | ||||||||
| Property & Casualty Insurance–0.29% | ||||||||
CNA Financial Corp., | ||||||||
Sr. Unsec. Global Bonds, 5.88%, 08/15/20 | 4,915,000 | 5,659,812 | ||||||
Sr. Unsec. Notes, 7.35%, 11/15/19 | 425,000 | 510,027 | ||||||
Liberty Mutual Group Inc., Sr. Unsec. Gtd. Bonds, 4.85%, 08/01/44(c) | 6,360,000 | 6,846,260 | ||||||
Markel Corp., Sr. Unsec. Notes, 5.00%, 03/30/43 | 4,185,000 | 4,591,204 | ||||||
Old Republic International Corp., Sr. Unsec. Conv. Notes, 3.75%, 03/15/18 | 8,381,000 | 9,947,199 | ||||||
Travelers Cos., Inc. (The), Sr. Unsec. Global Notes, 4.60%, 08/01/43 | 6,455,000 | 7,396,569 | ||||||
WR Berkley Corp., Sr. Unsec. Global Notes, 4.63%, 03/15/22 | 5,040,000 | 5,453,818 | ||||||
| 40,404,889 | ||||||||
| Railroads–0.27% | ||||||||
Burlington Northern Santa Fe, LLC, | 19,380,000 | 22,950,698 | ||||||
CSX Corp., Sr. Unsec. Notes, | 1,660,000 | 2,047,597 | ||||||
Union Pacific Corp., Sr. Unsec. Notes, | ||||||||
3.25%, 01/15/25 | 1,550,000 | 1,623,160 | ||||||
4.15%, 01/15/45 | 4,410,000 | 4,763,660 | ||||||
4.85%, 06/15/44 | 5,560,000 | 6,648,151 | ||||||
| 38,033,266 | ||||||||
| Regional Banks–0.10% | ||||||||
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 02/08/20 | 5,305,000 | 6,044,096 | ||||||
Regions Financial Corp., Sr. Unsec. Notes, 5.75%, 06/15/15 | 8,450,000 | 8,560,295 | ||||||
| 14,604,391 | ||||||||
| Reinsurance–0.06% | ||||||||
Reinsurance Group of America, Inc., Sr. Unsec. Medium-Term Notes, 4.70%, 09/15/23 | 7,510,000 | 8,212,259 | ||||||
| Renewable Electricity–0.05% | ||||||||
Oglethorpe Power Corp., Sr. Sec. First Mortgage Bonds, 4.55%, 06/01/44 | 5,806,000 | 6,317,687 | ||||||
| Semiconductor Equipment–0.34% | ||||||||
Lam Research Corp., Series B, Sr. Unsec. Conv. Notes, 1.25%, 05/15/18 | 33,039,000 | 48,071,745 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| Semiconductors–0.75% | ||||||||
Microchip Technology Inc., | $ | 14,946,000 | $ | 15,954,855 | ||||
Micron Technology, Inc., Series G, Sr. Unsec. Conv. Global Bonds, 3.00%, 11/15/28(d) | 31,699,000 | 38,316,166 | ||||||
NVIDIA Corp., Sr. Unsec. Conv. Bonds, 1.00%, 12/01/18 | 42,110,000 | 50,953,100 | ||||||
| 105,224,121 | ||||||||
| Soft Drinks–0.09% | ||||||||
PepsiCo, Inc., Sr. Unsec. Global Notes, 3.60%, 03/01/24 | 11,445,000 | 12,242,186 | ||||||
| Sovereign Debt–0.13% | ||||||||
Brazilian Government International Bond (Brazil), Sr. Unsec. Global Bonds, 6.00%, 01/17/17 | 16,505,000 | 17,825,400 | ||||||
| Specialized Finance–0.09% | ||||||||
Moody’s Corp., Sr. Unsec. Global Notes, 4.50%, 09/01/22 | 9,185,000 | 9,929,360 | ||||||
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Collateral Trust Bonds, 3.05%, 02/15/22 | 2,550,000 | 2,610,811 | ||||||
| 12,540,171 | ||||||||
| Steel–0.21% | ||||||||
ArcelorMittal (Luxembourg), | ||||||||
Sr. Unsec. Global Bonds, | 7,005,000 | 8,642,769 | ||||||
Sr. Unsec. Global Notes, 4.50%, 08/05/15 | 8,775,000 | 8,873,719 | ||||||
6.13%, 06/01/18 | 390,000 | 424,125 | ||||||
7.50%, 03/01/41 | 2,225,000 | 2,352,937 | ||||||
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, 5.63%, 09/15/19 | 4,655,000 | 5,016,749 | ||||||
Vale S.A. (Brazil), Sr. Unsec. Global Notes, 5.63%, 09/11/42 | 4,075,000 | 3,601,893 | ||||||
| 28,912,192 | ||||||||
| Systems Software–0.27% | ||||||||
Microsoft Corp., Sr. Unsec. Global Notes, 3.50%, 02/12/35 | 6,968,000 | 6,924,568 | ||||||
NetSuite Inc., Sr. Unsec. Conv. Notes, 0.25%, 06/01/18 | 23,004,000 | 24,427,373 | ||||||
Oracle Corp., Sr. Unsec. Global Notes, 4.30%, 07/08/34 | 6,045,000 | 6,592,077 | ||||||
| 37,944,018 | ||||||||
| Technology Hardware, Storage & Peripherals–0.55% | ||||||||
Apple Inc., Sr. Unsec. Global Notes, 2.15%, 02/09/22 | 7,303,000 | 7,223,204 | ||||||
SanDisk Corp., Sr. Unsec. Conv. Bonds, 0.50%, 10/15/20 | 55,749,000 | 60,313,449 | ||||||
Seagate HDD Cayman, | ||||||||
Sr. Unsec. Gtd. Bonds, 4.75%, 01/01/25(c) | 890,000 | 947,850 | ||||||
Sr. Unsec. Gtd. Notes, 5.75%, 12/01/34(c) | 7,094,000 | 7,803,400 | ||||||
| 76,287,903 | ||||||||
| Principal Amount | Value | |||||||
| Thrifts & Mortgage Finance–0.42% | ||||||||
MGIC Investment Corp., Sr. Unsec. Conv. Notes, | ||||||||
2.00%, 04/01/20 | $ | 6,962,000 | $ | 9,903,445 | ||||
5.00%, 05/01/17 | 24,396,000 | 27,277,777 | ||||||
Radian Group Inc., Sr. Unsec. Conv. Notes, | ||||||||
2.25%, 03/01/19 | 4,063,000 | 6,234,166 | ||||||
3.00%, 11/15/17 | 10,019,000 | 14,734,192 | ||||||
| 58,149,580 | ||||||||
| Tobacco–0.16% | ||||||||
Altria Group, Inc., Sr. Unsec. Gtd. Global Notes, 4.13%, 09/11/15 | 5,138,000 | 5,232,672 | ||||||
Philip Morris International Inc., Sr. Unsec. Global Notes, | ||||||||
3.60%, 11/15/23 | 3,940,000 | 4,212,663 | ||||||
4.88%, 11/15/43 | 11,740,000 | 13,607,852 | ||||||
| 23,053,187 | ||||||||
| Trading Companies & Distributors–0.03% | ||||||||
Air Lease Corp., Sr. Unsec. Global Notes, 4.25%, 09/15/24 | 4,355,000 | 4,501,981 | ||||||
| Trucking–0.08% | ||||||||
Penske Truck Leasing Co., L.P./PTL Finance Corp., Sr. Unsec. Notes, 2.50%, 03/15/16(c) | 7,435,000 | 7,551,856 | ||||||
Ryder System, Inc., Sr. Unsec. Medium-Term Notes, 3.15%, 03/02/15 | 4,030,000 | 4,030,300 | ||||||
| 11,582,156 | ||||||||
| 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 | 6,764,627 | ||||||
Sr. Unsec. Gtd. Global Notes, 2.38%, 09/08/16 | 4,450,000 | 4,543,473 | ||||||
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, | ||||||||
3.21%, 08/15/15(c) | 5,295,000 | 5,344,318 | ||||||
6.11%, 01/15/20(c) | 6,300,000 | 7,213,500 | ||||||
Rogers Communications Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 4.50%, 03/15/43 | 6,080,000 | 6,307,373 | ||||||
| 30,173,291 | ||||||||
Total Bonds and Notes | 2,806,370,281 | |||||||
U.S. Treasury Securities–4.64% |
| |||||||
| U.S. Treasury Bills–0.01% | ||||||||
0.00%, 08/20/15(h)(i) | 5,000 | 4,999 | ||||||
0.08%, 08/20/15(h)(i) | 1,950,000 | 1,949,442 | ||||||
| 1,954,441 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Equity and Income Fund
| Principal Amount | Value | |||||||
| U.S. Treasury Notes–4.45% | ||||||||
2.50%, 03/31/15 | $ | 495,000 | $ | 495,930 | ||||
2.13%, 05/31/15 | 4,445,000 | 4,467,975 | ||||||
2.00%, 04/30/16 | 17,445,000 | 17,781,297 | ||||||
1.75%, 05/31/16 | 950,000 | 966,239 | ||||||
0.50%, 01/31/17 | 21,000,000 | 20,962,621 | ||||||
0.88%, 04/30/17 | 2,000,000 | 2,007,036 | ||||||
0.63%, 05/31/17 | 4,410,000 | 4,397,964 | ||||||
1.00%, 02/15/18 | 73,025,000 | 73,032,965 | ||||||
1.25%, 01/31/19 | 23,000,000 | 22,942,184 | ||||||
3.63%, 08/15/19 | 58,350,000 | 63,936,344 | ||||||
3.38%, 11/15/19 | 10,000,000 | 10,873,064 | ||||||
1.25%, 01/31/20 | 214,212,600 | 211,693,954 | ||||||
2.00%, 02/15/25 | 188,841,000 | 188,942,477 | ||||||
| 622,500,050 | ||||||||
| U.S. Treasury Bonds–0.18% | ||||||||
3.00%, 11/15/44 | 22,733,700 | 24,668,694 | ||||||
Total U.S. Treasury Securities |
| 649,123,185 | ||||||
| Shares | ||||||||
Preferred Stocks–1.04% |
| |||||||
| Asset Management & Custody Banks–0.24% | ||||||||
AMG Capital Trust II, $2.58 Jr. Gtd. Sub. Conv. Pfd. | 438,000 | 27,183,375 | ||||||
State Street Corp., Series D, 5.90% Pfd. | 244,395 | 6,542,454 | ||||||
| 33,725,829 | ||||||||
| Diversified Banks–0.03% | ||||||||
Wells Fargo & Co., 5.85% Pfd. | 142,800 | 3,689,952 | ||||||
| Oil & Gas Storage & Transportation–0.37% | ||||||||
El Paso Energy Capital Trust I, $2.38 Jr. Unsec. Gtd. Sub. Conv. Pfd. | 875,900 | 52,063,496 | ||||||
| Regional Banks–0.40% | ||||||||
KeyCorp, Series A, $7.75 Conv. Pfd. | 427,098 | 55,714,934 | ||||||
Total Preferred Stocks | 145,194,211 | |||||||
| Principal Amount | ||||||||
U.S. Government Sponsored Agency Securities–0.70% |
| |||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–0.35% | ||||||||
Unsec. Global Notes, | ||||||||
4.88%, 06/13/18 | $ | 33,680,000 | 37,698,484 | |||||
6.75%, 03/15/31 | 7,000,000 | 10,622,770 | ||||||
| 48,321,254 | ||||||||
| Federal National Mortgage Association (FNMA)–0.35% | ||||||||
Unsec. Global Notes, | ||||||||
4.38%, 10/15/15 | 38,850,000 | 39,862,171 | ||||||
6.63%, 11/15/30 | 6,315,000 | 9,470,193 | ||||||
| 49,332,364 | ||||||||
Total U.S. Government Sponsored Agency Securities (Cost $97,504,798) |
| 97,653,618 | ||||||
| Principal Amount | Value | |||||||
Municipal Obligations–0.07% |
| |||||||
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); | $ | 2,600,000 | $ | 3,509,194 | ||||
Series 2010, Class A, Build America Taxable RB, 6.66%, 04/01/57 | 4,980,000 | 6,567,076 | ||||||
Total Municipal Obligations |
| 10,076,270 | ||||||
U.S. Government Sponsored Agency Mortgage-Backed Securities–0.00% |
| |||||||
| Federal Home Loan Mortgage Corp. (FHLMC)–0.00% | ||||||||
Pass Through Ctfs., | ||||||||
6.50%, 05/01/29 | 2 | 2 | ||||||
5.50%, 02/01/37 | 105 | 117 | ||||||
| 119 | ||||||||
| Federal National Mortgage Association (FNMA)–0.00% | ||||||||
Pass Through Ctfs., | ||||||||
7.00%, 07/01/18 to 07/01/32 | 45,436 | 48,852 | ||||||
5.50%, 03/01/21 | 126 | 137 | ||||||
8.00%, 08/01/21 | 3,287 | 3,508 | ||||||
| 52,497 | ||||||||
| Government National Mortgage Association (GNMA)–0.00% | ||||||||
Pass Through Ctfs., | ||||||||
8.00%, 04/15/26 to 01/20/31 | 34,626 | 37,782 | ||||||
7.50%, 12/20/30 | 2,205 | 2,733 | ||||||
| 40,515 | ||||||||
Total U.S. Government Sponsored Agency Mortgage-Backed Securities |
| 93,131 | ||||||
| Shares | ||||||||
Money Market Funds–10.15% |
| |||||||
Liquid Assets Portfolio– Institutional Class(j) | 710,321,316 | 710,321,316 | ||||||
Premier Portfolio– Institutional Class(j) | 710,321,317 | 710,321,317 | ||||||
Total Money Market Funds | 1,420,642,633 | |||||||
TOTAL INVESTMENTS–100.47% |
| 14,058,178,262 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.47)% |
| (66,070,125 | ) | |||||
NET ASSETS–100.00% | $ | 13,992,108,137 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Equity and Income Fund
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, 2015 was $583,968,672, which represented 4.17% of the Fund’s Net Assets. |
| (d) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
| (e) | Perpetual bond with no specified maturity date. |
| (f) | Exchangeable for a basket of four common stocks and one ordinary Share. |
| (g) | Exchangeable for a basket of five common shares. |
| (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, 2015
Common Stocks & Other Equity Interests | 63.8 | % | ||
Bonds and Notes | 20.1 | |||
U.S. Treasury Securities | 4.6 | |||
Preferred Stocks | 1.0 | |||
Security types each less than 1% of portfolio | 0.8 | |||
Money Market Funds Plus Other Assets Less Liabilities | 9.7 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Equity and Income Fund
Statement of Assets and Liabilities
February 28, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $10,279,943,654) | $ | 12,637,535,629 | ||
Investments in affiliated money market funds, at value and cost | 1,420,642,633 | |||
Total investments, at value (Cost $11,700,586,287) | 14,058,178,262 | |||
Foreign currencies, at value (Cost $226,333) | 211,607 | |||
Receivable for: | ||||
Investments sold | 12,792,520 | |||
Fund shares sold | 30,332,509 | |||
Dividends and interest | 48,576,057 | |||
Investment for trustee deferred compensation and retirement plans | 1,259,865 | |||
Forward foreign currency contracts outstanding | 3,454,940 | |||
Other assets | 421,052 | |||
Total assets | 14,155,226,812 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 127,048,173 | |||
Fund shares reacquired | 25,092,345 | |||
Variation margin — futures | 229,469 | |||
Accrued fees to affiliates | 8,807,619 | |||
Accrued trustees’ and officers’ fees and benefits | 25,463 | |||
Accrued other operating expenses | 439,860 | |||
Trustee deferred compensation and retirement plans | 1,475,746 | |||
Total liabilities | 163,118,675 | |||
Net assets applicable to shares outstanding | $ | 13,992,108,137 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 11,455,933,376 | ||
Undistributed net investment income | (15,486,974 | ) | ||
Undistributed net realized gain | 190,253,004 | |||
Net unrealized appreciation | 2,361,408,731 | |||
| $ | 13,992,108,137 | |||
Net Assets: |
| |||
Class A | $ | 10,300,517,287 | ||
Class B | $ | 365,342,727 | ||
Class C | $ | 1,700,869,304 | ||
Class R | $ | 236,904,421 | ||
Class Y | $ | 778,711,493 | ||
Class R5 | $ | 469,503,385 | ||
Class R6 | $ | 140,259,520 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 984,660,112 | |||
Class B | 35,731,528 | |||
Class C | 165,467,666 | |||
Class R | 22,543,295 | |||
Class Y | 74,412,454 | |||
Class R5 | 44,847,626 | |||
Class R6 | 13,400,921 | |||
Class A: | ||||
Net asset value per share | $ | 10.46 | ||
Maximum offering price per share | ||||
(Net asset value of $10.46 ¸ 94.50%) | $ | 11.07 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.22 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.28 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.51 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.46 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.47 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.47 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Equity and Income Fund
Statement of Operations
For the six months ended February 28, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $2,130,368) | $ | 95,649,285 | ||
Dividends from affiliated money market funds | 267,785 | |||
Interest | 50,540,399 | |||
Total investment income | 146,457,469 | |||
Expenses: | ||||
Advisory fees | 23,918,380 | |||
Administrative services fees | 441,448 | |||
Custodian fees | 213,596 | |||
Distribution fees: | ||||
Class A | 12,488,656 | |||
Class B | 1,997,106 | |||
Class C | 8,131,220 | |||
Class R | 573,091 | |||
Transfer agent fees — A, B, C, R and Y | 10,611,069 | |||
Transfer agent fees — R5 | 202,826 | |||
Transfer agent fees — R6 | 2,494 | |||
Trustees’ and officers’ fees and benefits | 141,737 | |||
Other | 871,633 | |||
Total expenses | 59,593,256 | |||
Less: Fees waived and expense offset arrangement(s) | (903,634 | ) | ||
Net expenses | 58,689,622 | |||
Net investment income | 87,767,847 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 352,846,852 | |||
Foreign currencies | (233,567 | ) | ||
Forward foreign currency contracts | 80,759,149 | |||
Futures contracts | (5,048,702 | ) | ||
| 428,323,732 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (259,167,668 | ) | ||
Foreign currencies | (10,100 | ) | ||
Forward foreign currency contracts | 3,147,441 | |||
Futures contracts | 402,677 | |||
| (255,627,650 | ) | |||
Net realized and unrealized gain | 172,696,082 | |||
Net increase in net assets resulting from operations | $ | 260,463,929 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Equity and Income Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 87,767,847 | $ | 242,381,622 | ||||
Net realized gain | 428,323,732 | 1,231,080,527 | ||||||
Change in net unrealized appreciation (depreciation) | (255,627,650 | ) | 602,657,350 | |||||
Net increase in net assets resulting from operations | 260,463,929 | 2,076,119,499 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (178,115,591 | ) | (176,864,717 | ) | ||||
Class B | (5,600,141 | ) | (6,019,914 | ) | ||||
Class C | (22,836,857 | ) | (16,287,779 | ) | ||||
Class R | (3,789,027 | ) | (3,426,602 | ) | ||||
Class Y | (14,273,341 | ) | (12,338,759 | ) | ||||
Class R5 | (7,865,762 | ) | (7,043,126 | ) | ||||
Class R6 | (3,021,430 | ) | (1,862,221 | ) | ||||
Total distributions from net investment income | (235,502,149 | ) | (223,843,118 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (842,972,012 | ) | (493,452,271 | ) | ||||
Class B | (33,958,762 | ) | (29,777,478 | ) | ||||
Class C | (140,184,003 | ) | (75,974,395 | ) | ||||
Class R | (19,237,356 | ) | (10,930,123 | ) | ||||
Class Y | (63,938,513 | ) | (30,498,502 | ) | ||||
Class R5 | (34,430,458 | ) | (15,792,758 | ) | ||||
Class R6 | (12,907,558 | ) | (3,739,507 | ) | ||||
Total distributions from net realized gains | (1,147,628,662 | ) | (660,165,034 | ) | ||||
Share transactions–net: | ||||||||
Class A | 944,081,264 | 535,605,880 | ||||||
Class B | (42,839,874 | ) | (174,743,171 | ) | ||||
Class C | 212,308,348 | 204,432,386 | ||||||
Class R | 23,040,646 | 18,698,631 | ||||||
Class Y | 121,292,903 | 187,672,956 | ||||||
Class R5 | 100,001,069 | 129,099,607 | ||||||
Class R6 | 3,714,734 | 102,986,907 | ||||||
Net increase in net assets resulting from share transactions | 1,361,599,090 | 1,003,753,196 | ||||||
Net increase in net assets | 238,932,208 | 2,195,864,543 | ||||||
Net assets: | ||||||||
Beginning of period | 13,753,175,929 | 11,557,311,386 | ||||||
End of period (includes undistributed net investment income of $(15,486,974) and $132,247,328, respectively) | $ | 13,992,108,137 | $ | 13,753,175,929 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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.
19 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 securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked 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/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (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.
20 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 net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
| J. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
21 Invesco Equity and Income Fund
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (“Counterparties”) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
| 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 Counterparties 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. | Put Options Purchased — The Fund may purchase put options including options on securities indexes, or foreign currency and/or futures contracts. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option’s underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option’s underlying instrument may be a security, securities index, or a futures contract. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund’s resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the securities hedged. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations as Net realized gain from Investment Securities. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased. |
| M. | 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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 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 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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
22 Invesco Equity and Income Fund
(5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $894,276.
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, 2015, 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, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares, Class C shares and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended February 28, 2015, 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, 2015, IDI advised the Fund that IDI retained $1,624,485 in front-end sales commissions from the sale of Class A shares and $6,514, $44,772 and $24,260 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2015, the Fund incurred $42,379 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. |
23 Invesco Equity and Income Fund
The following is a summary of the tiered valuation input levels, as of February 28, 2015. 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 | $ | 9,934,562,539 | $ | 560,299,238 | $ | — | $ | 10,494,861,777 | ||||||||
U.S. Treasury Securities | — | 649,123,185 | — | 649,123,185 | ||||||||||||
Corporate Debt Securities | — | 2,788,544,881 | — | 2,788,544,881 | ||||||||||||
U.S. Government Sponsored Agency Securities | — | 97,746,749 | — | 97,746,749 | ||||||||||||
Municipal Obligations | — | 10,076,270 | — | 10,076,270 | ||||||||||||
Foreign Sovereign Debt Securities | — | 17,825,400 | — | 17,825,400 | ||||||||||||
| 9,934,562,539 | 4,123,615,723 | — | 14,058,178,262 | |||||||||||||
Forward Foreign Currency Contracts* | — | 3,454,940 | — | 3,454,940 | ||||||||||||
Futures Contracts* | 373,190 | — | — | 373,190 | ||||||||||||
Total Investments | $ | 9,934,935,729 | $ | 4,127,070,663 | $ | — | $ | 14,062,006,392 | ||||||||
| * | 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, 2015:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | 7,842,733 | $ | (4,387,793 | ) | |||
Interest rate risk: | ||||||||
Futures contracts(b) | 373,190 | — | ||||||
Total | $ | 8,215,923 | $ | (4,387,793 | ) | |||
| (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, 2015
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 | Futures Contracts | Options Purchased(a) | ||||||||||
Realized Gain (Loss): | ||||||||||||
Currency risk | $ | 80,759,149 | $ | — | $ | — | ||||||
Interest rate risk | — | (5,048,702 | ) | — | ||||||||
Equity risk | — | — | (608,140 | ) | ||||||||
Change in Unrealized Appreciation: | ||||||||||||
Currency risk | 3,147,441 | — | — | |||||||||
Interest rate risk | — | 402,677 | — | |||||||||
Total | $ | 83,906,590 | $ | (4,646,025 | ) | $ | (608,140 | ) | ||||
| (a) | Options purchased are included in the net realized gain from investment securities. |
The table below summarizes the six month average notional value of forward foreign currency contracts and futures contracts and the three month average notional value of options purchased outstanding during the period.
| Forward Foreign Currency Contracts | Futures Contracts | Options Purchased | ||||||||||
Average notional value | $ | 770,851,940 | $ | 207,009,896 | $ | 19,632,600 | ||||||
24 Invesco Equity and Income Fund
| Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement Date | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||||
| Counterparty | Deliver | Receive | ||||||||||||||||||||||||
03/20/15 | Bank of New York Mellon (The) | CAD | 75,565,564 | USD | 59,743,180 | $ | 60,431,943 | $ | (688,763 | ) | ||||||||||||||||
03/20/15 | State Street Bank and Trust Co. | CAD | 75,664,271 | USD | 59,826,895 | 60,510,882 | (683,987 | ) | ||||||||||||||||||
03/20/15 | State Street Bank and Trust Co. | CHF | 49,008,399 | USD | 52,933,755 | 51,453,117 | 1,480,638 | |||||||||||||||||||
03/20/15 | Bank of New York Mellon (The) | CHF | 48,885,160 | USD | 52,809,999 | 51,323,730 | 1,486,269 | |||||||||||||||||||
03/20/15 | Bank of New York Mellon (The) | EUR | 120,869,049 | USD | 136,660,590 | 135,297,381 | 1,363,209 | |||||||||||||||||||
03/20/15 | State Street Bank and Trust Co. | EUR | 120,820,350 | USD | 136,597,675 | 135,242,868 | 1,354,807 | |||||||||||||||||||
03/20/15 | Bank of New York Mellon (The) | GBP | 76,541,148 | USD | 116,626,513 | 118,149,697 | (1,523,184 | ) | ||||||||||||||||||
03/20/15 | State Street Bank and Trust Co. | GBP | 76,559,791 | USD | 116,686,615 | 118,178,474 | (1,491,859 | ) | ||||||||||||||||||
03/20/15 | Bank of New York Mellon (The) | ILS | 171,278,587 | USD | 44,081,479 | 43,003,594 | 1,077,885 | |||||||||||||||||||
03/20/15 | State Street Bank and Trust Co. | ILS | 171,296,361 | USD | 44,087,982 | 43,008,057 | 1,079,925 | |||||||||||||||||||
Total Forward Foreign Currency Contracts — Currency Risk | $ | 3,454,940 | ||||||||||||||||||||||||
Currency Abbreviations:
| CAD | – Canadian Dollar | |
| CHF | – Swiss Franc | |
| EUR | – Euro | |
| GBP | – British Pound Sterling | |
| ILS | – Israeli Shekel |
| Open Futures Contracts | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
U.S. Treasury 5 Year Notes | Short | 627 | June-2015 | $ | (74,789,344 | ) | $ | 125,993 | ||||||||||||
U.S. Treasury 10 Year Notes | Short | 967 | June-2015 | (123,579,578 | ) | 247,197 | ||||||||||||||
Total Futures Contracts — Interest Rate Risk | $ | 373,190 | ||||||||||||||||||
Offsetting Assets and Liabilities
Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting arrangements on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the 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, 2015.
| Assets: | ||||||||||||||||||||||||
| Gross amounts of Recognized Assets | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in Statement of Assets & Liabilities | Collateral Received | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of New York Mellon (The) | $ | 3,927,363 | $ | (2,211,947 | ) | $ | 1,715,416 | $ | — | $ | — | $ | 1,715,416 | |||||||||||
State Street Bank and Trust Co. | 3,915,370 | (2,175,846 | ) | 1,739,524 | — | — | 1,739,524 | |||||||||||||||||
Total | $ | 7,842,733 | $ | (4,387,793 | ) | $ | 3,454,940 | $ | — | $ | — | $ | 3,454,940 | |||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Gross amounts of Recognized Liabilities | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of liabilities presented in Statement of Assets & Liabilities | Collateral Pledged | |||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of New York Mellon (The) | $ | 2,211,947 | $ | (2,211,947 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
State Street Bank and Trust Co. | 2,175,846 | (2,175,846 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 4,387,793 | $ | (4,387,793 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
25 Invesco Equity and Income 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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $9,358.
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 251,980 | $ | — | $ | 251,980 | ||||||
August 31, 2017 | 5,299,188 | — | 5,299,188 | |||||||||
| $ | 5,551,168 | $ | — | $ | 5,551,168 | |||||||
| * | 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, 2015 was $2,256,014,310 and $2,208,125,613, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $2,234,070,289 and $2,301,979,985, 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 | $ | 2,481,921,820 | ||
Aggregate unrealized (depreciation) of investment securities | (175,202,514 | ) | ||
Net unrealized appreciation of investment securities | $ | 2,306,719,306 | ||
Cost of investments for tax purposes is $11,751,458,956.
26 Invesco Equity and Income Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 67,190,956 | $ | 721,998,339 | 123,294,433 | $ | 1,338,786,753 | ||||||||||
Class B | 244,621 | 2,573,958 | 681,308 | 7,216,215 | ||||||||||||
Class C | 16,133,914 | 170,826,715 | 27,559,284 | 294,554,564 | ||||||||||||
Class R | 2,966,490 | 31,990,134 | 6,158,932 | 67,354,694 | ||||||||||||
Class Y | 16,096,615 | 173,404,923 | 25,562,881 | 279,392,264 | ||||||||||||
Class R5 | 9,707,226 | 103,148,742 | 21,087,163 | 228,477,944 | ||||||||||||
Class R6 | 4,196,715 | 44,577,121 | 11,239,560 | 122,857,003 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 94,111,385 | 957,537,689 | 59,884,857 | 626,269,537 | ||||||||||||
Class B | 3,842,551 | 38,218,025 | 3,366,931 | 34,386,317 | ||||||||||||
Class C | 14,845,019 | 148,347,558 | 8,120,425 | 83,387,271 | ||||||||||||
Class R | 2,252,237 | 23,016,280 | 1,367,065 | 14,353,524 | ||||||||||||
Class Y | 6,991,519 | 71,163,896 | 3,766,637 | 39,437,002 | ||||||||||||
Class R5 | 4,152,459 | 42,283,542 | 2,125,920 | 22,271,818 | ||||||||||||
Class R6 | 1,563,994 | 15,928,988 | 533,196 | 5,601,728 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 5,073,771 | 54,752,517 | 12,844,760 | 139,827,651 | ||||||||||||
Class B | (5,184,510 | ) | (54,752,517 | ) | (13,105,664 | ) | (139,827,651 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (73,110,898 | ) | (790,207,281 | ) | (144,137,291 | ) | (1,569,278,061 | ) | ||||||||
Class B | (2,721,499 | ) | (28,879,340 | ) | (7,178,837 | ) | (76,518,052 | ) | ||||||||
Class C | (10,101,145 | ) | (106,865,925 | ) | (16,168,255 | ) | (173,509,449 | ) | ||||||||
Class R | (2,942,565 | ) | (31,965,768 | ) | (5,756,408 | ) | (63,009,587 | ) | ||||||||
Class Y | (11,681,057 | ) | (123,275,916 | ) | (12,079,237 | ) | (131,156,310 | ) | ||||||||
Class R5 | (4,210,476 | ) | (45,431,215 | ) | (11,162,020 | ) | (121,650,155 | ) | ||||||||
Class R6 | (5,427,817 | ) | (56,791,375 | ) | (2,336,610 | ) | (25,471,824 | ) | ||||||||
Net increase in share activity | 133,989,505 | $ | 1,361,599,090 | 95,669,030 | $ | 1,003,753,196 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 33% 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. |
27 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 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 02/28/15 | $ | 11.42 | $ | 0.07 | $ | 0.12 | $ | 0.19 | $ | (0.20 | ) | $ | (0.95 | ) | $ | (1.15 | ) | $ | 10.46 | 1.96 | %(c) | $ | 10,300,517 | 0.78 | %(d) | 0.79 | %(d) | 1.38 | %(d) | 36 | % | |||||||||||||||||||||||||
Year ended 08/31/14 | 10.43 | 0.22 | (e) | 1.56 | 1.78 | (0.20 | ) | (0.59 | ) | (0.79 | ) | 11.42 | 17.86 | (c) | 10,181,796 | 0.79 | 0.80 | 1.99 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
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 | (f) | 0.78 | (f) | 1.89 | (f) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 6.45 | 0.15 | 1.34 | 1.49 | (0.15 | ) | — | (0.15 | ) | 7.79 | 23.51 | (g) | 8,395,716 | 0.82 | 0.82 | 2.15 | 78 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.18 | 0.03 | 0.11 | 0.14 | (0.15 | ) | (0.95 | ) | (1.10 | ) | 10.22 | 1.56 | (c) | 365,343 | 1.53 | (d) | 1.54 | (d) | 0.63 | (d) | 36 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.22 | 0.13 | (e) | 1.54 | 1.67 | (0.12 | ) | (0.59 | ) | (0.71 | ) | 11.18 | 17.01 | (c) | 442,318 | 1.54 | 1.55 | 1.24 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
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)(h) | 1,014,527 | 0.84 | (h) | 0.98 | (h) | 1.71 | (h) | 22 | ||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.64 | 0.09 | (0.27 | ) | (0.18 | ) | (0.07 | ) | — | (0.07 | ) | 7.39 | (2.40 | )(c)(h) | 1,278,734 | 0.91 | (f)(h) | 0.91 | (f)(h) | 1.76 | (f)(h) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 6.33 | 0.14 | 1.32 | 1.46 | (0.15 | ) | — | (0.15 | ) | 7.64 | 23.48 | (i)(j) | 1,594,135 | 0.82 | (j) | 0.82 | (j) | 2.16 | (j) | 78 | ||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.24 | 0.03 | 0.11 | 0.14 | (0.15 | ) | (0.95 | ) | (1.10 | ) | 10.28 | 1.57 | (c) | 1,700,869 | 1.53 | (d) | 1.54 | (d) | 0.63 | (d) | 36 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.27 | 0.13 | (e) | 1.55 | 1.68 | (0.12 | ) | (0.59 | ) | (0.71 | ) | 11.24 | 17.03 | (c) | 1,624,965 | 1.54 | 1.55 | 1.24 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
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)(k) | 1,157,325 | 1.54 | (k) | 1.54 | (k) | 1.31 | (k) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 7.42 | 0.09 | 0.65 | 0.74 | (0.09 | ) | — | (0.09 | ) | 8.07 | 9.95 | (c)(k) | 1,216,936 | 1.54 | (k) | 1.54 | (k) | 1.01 | (k) | 22 | ||||||||||||||||||||||||||||||||||||
Eight months ended 08/31/10 | 7.68 | 0.06 | (0.27 | ) | (0.21 | ) | (0.05 | ) | — | (0.05 | ) | 7.42 | (2.81 | )(c)(k) | 1,211,089 | 1.52 | (f)(k) | 1.52 | (f)(k) | 1.15 | (f)(k) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 6.36 | 0.09 | 1.33 | 1.42 | (0.10 | ) | — | (0.10 | ) | 7.68 | 22.63 | (j)(l) | 1,375,516 | 1.56 | (j) | 1.56 | (j) | 1.40 | (j) | 78 | ||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.47 | 0.06 | 0.11 | 0.17 | (0.18 | ) | (0.95 | ) | (1.13 | ) | 10.51 | 1.83 | (c) | 236,904 | 1.03 | (d) | 1.04 | (d) | 1.13 | (d) | 36 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.47 | 0.19 | (e) | 1.58 | 1.77 | (0.18 | ) | (0.59 | ) | (0.77 | ) | 11.47 | 17.60 | (c) | 232,455 | 1.04 | 1.05 | 1.74 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
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 | (f) | 1.03 | (f) | 1.64 | (f) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 6.48 | 0.13 | 1.35 | 1.48 | (0.13 | ) | — | (0.13 | ) | 7.83 | 23.25 | (m) | 169,713 | 1.07 | 1.07 | 1.88 | 78 | |||||||||||||||||||||||||||||||||||||||
Class Y(n) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.43 | 0.09 | 0.10 | 0.19 | (0.21 | ) | (0.95 | ) | (1.16 | ) | 10.46 | 2.00 | (c) | 778,711 | 0.53 | (d) | 0.54 | (d) | 1.63 | (d) | 36 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.43 | 0.24 | (e) | 1.58 | 1.82 | (0.23 | ) | (0.59 | ) | (0.82 | ) | 11.43 | 18.25 | (c) | 719,931 | 0.54 | 0.55 | 2.24 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
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 | (f) | 0.53 | (f) | 2.15 | (f) | 24 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/09 | 6.45 | 0.16 | 1.35 | 1.51 | (0.17 | ) | — | (0.17 | ) | 7.79 | 23.82 | (o) | 530,010 | 0.57 | 0.57 | 2.34 | 78 | |||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.43 | 0.09 | 0.12 | 0.21 | (0.22 | ) | (0.95 | ) | (1.17 | ) | 10.47 | 2.13 | (c) | 469,503 | 0.47 | (d) | 0.48 | (d) | 1.69 | (d) | 36 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.43 | 0.25 | (e) | 1.58 | 1.83 | (0.24 | ) | (0.59 | ) | (0.83 | ) | 11.43 | 18.23 | (c) | 402,366 | 0.48 | 0.49 | 2.30 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
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(p) | 7.59 | 0.03 | (0.04 | ) | (0.01 | ) | (0.04 | ) | — | (0.04 | ) | 7.54 | (0.13 | )(c) | 63,598 | 0.45 | (f) | 0.45 | (f) | 1.79 | (f) | 24 | ||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.43 | 0.10 | 0.11 | 0.21 | (0.22 | ) | (0.95 | ) | (1.17 | ) | 10.47 | 2.18 | (c) | 140,260 | 0.37 | (d) | 0.38 | (d) | 1.79 | (d) | 36 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.43 | 0.26 | (e) | 1.58 | 1.84 | (0.25 | ) | (0.59 | ) | (0.84 | ) | 11.43 | 18.44 | (c) | 149,346 | 0.39 | 0.40 | 2.39 | (e) | 60 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(p) | 9.27 | 0.21 | 1.14 | 1.35 | (0.19 | ) | — | (0.19 | ) | 10.43 | 14.81 | (c) | 37,884 | 0.37 | (f) | 0.38 | (f) | 2.15 | (f) | 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 effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Balanced Fund and Invesco Basic Balanced 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 $10,081,788, $402,731, $1,639,721, $231,136, $750,967, $412,808 and $154,620 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Net investment income per share and the ratio of net investment income to average net assets includes 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 $0.16 and 1.47%, $0.07 and 0.72%, $0.07 and 0.72%, $0.13 and 1.22%, $0.18 and 1.72%, $0.19 and 1.78% and $0.20 and 1.87% 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 0.28,% and 0.38% for the year ended August 31, 2011 and the eight months ended August 31, 2010, respectively. |
28 Invesco Equity 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 0.99%, 0.97% and 0.99% for the years ended August 31, 2012, August 31, 2011 and the eight months ended August 31, 2010, respectively. |
| (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) | On June 1, 2010, Class I shares of Van Kampen Equity and Income Fund were reorganized into Class Y shares. |
| (o) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
| (p) | Commencement date of June 1, 2010 and September 24, 2012 for Class R5 shares and Class R6 shares, respectively. |
29 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,019.60 | $ | 3.91 | $ | 1,020.93 | $ | 3.91 | 0.78 | % | ||||||||||||
| B | 1,000.00 | 1,015.60 | 7.65 | 1,017.21 | 7.65 | 1.53 | ||||||||||||||||||
| C | 1,000.00 | 1,015.70 | 7.65 | 1,017.21 | 7.65 | 1.53 | ||||||||||||||||||
| R | 1,000.00 | 1,018.30 | 5.15 | 1,019.69 | 5.16 | 1.03 | ||||||||||||||||||
| Y | 1,000.00 | 1,020.00 | 2.65 | 1,022.17 | 2.66 | 0.53 | ||||||||||||||||||
| R5 | 1,000.00 | 1,021.30 | 2.36 | 1,022.46 | 2.36 | 0.47 | ||||||||||||||||||
| R6 | 1,000.00 | 1,021.80 | 1.85 | 1,022.96 | 1.86 | 0.37 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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. |
30 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, 2015 | ||
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Invesco Floating Rate Fund
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| Nasdaq: | ||||
| A: AFRAX n C: AFRCX n R: AFRRX n Y: AFRYX n R5: AFRIX n R6: AFRFX | ||||
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2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
23 Financial Statements | ||||
26 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
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| |||
Fund vs. Indexes Cumulative total returns, 8/31/14 to 2/28/15, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
|
| |||
Class A Shares | 0.13 | % | ||
Class C Shares | -0.12 | |||
Class R Shares | 0.01 | |||
Class Y Shares | 0.25 | |||
Class R5 Shares | 0.27 | |||
Class R6 Shares | 0.31 | |||
Barclays U.S. Aggregate Indexq (Broad Market Index) | 2.25 | |||
Credit Suisse Leveraged Loan Index¢ (Style-Specific Index) | 0.77 | |||
Lipper Loan Participation Funds Classification Averaget (Peer Group) | 0.15 | |||
Source(s): qFactset Research Systems Inc.; nBloomberg L.P.; tLipper Inc.
The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market. The Credit Suisse 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 2/28/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (5/1/97) | 4.10 | % | ||
10 Years | 3.64 | |||
5 Years | 4.95 | |||
1 Year | -0.64 | |||
Class C Shares | ||||
Inception (3/31/00) | 3.47 | % | ||
10 Years | 3.39 | |||
5 Years | 4.98 | |||
1 Year | 0.36 | |||
Class R Shares | ||||
10 Years | 3.70 | % | ||
5 Years | 5.24 | |||
1 Year | 1.60 | |||
Class Y Shares | ||||
10 Years | 4.05 | % | ||
5 Years | 5.74 | |||
1 Year | 2.10 | |||
Class R5 Shares | ||||
10 Years | 4.20 | % | ||
5 Years | 5.82 | |||
1 Year | 2.12 | |||
Class R6 Shares | ||||
10 Years | 3.99 | % | ||
5 Years | 5.65 | |||
1 Year | 2.08 | |||
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 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (5/1/97) | 4.05 | % | ||
10 Years | 3.61 | |||
5 Years | 5.20 | |||
1 Year | -1.61 | |||
Class C Shares | ||||
Inception (3/31/00) | 3.41 | % | ||
10 Years | 3.38 | |||
5 Years | 5.22 | |||
1 Year | -0.63 | |||
Class R Shares | ||||
10 Years | 3.67 | % | ||
5 Years | 5.48 | |||
1 Year | 0.61 | |||
Class Y Shares | ||||
10 Years | 4.01 | % | ||
5 Years | 6.01 | |||
1 Year | 1.10 | |||
Class R5 Shares | ||||
10 Years | 4.17 | % | ||
5 Years | 6.06 | |||
1 Year | 1.13 | |||
Class R6 Shares | ||||
10 Years | 3.95 | % | ||
5 Years | 5.91 | |||
1 Year | 1.21 | |||
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 The performance data quoted represent past performance and cannot guarantee comparable future 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 1.04%, 1.54%, 1.29%, 0.79%, 0.77% and 0.70%, 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 1.05%, 1.55%, 1.30%, 0.80%, 0.78% and 0.71%, 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 June 30, 2016. See current prospectus for more information. |
3 Invesco Floating Rate Fund
Letters to Shareholders
| Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. | |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee. | ||
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 |
 | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. | |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it. 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. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. | ||
Sincerely,
|
Philip Taylor |
Senior Managing Director, Invesco Ltd. |
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
Variable Rate Senior Loan Interests–90.75%(a)(b) |
| |||||||||||||||
| Aerospace & Defense–2.19% | ||||||||||||||||
Aveos Fleet Performance Inc. (Canada), Second Lien Term Loan | 0.00 | % | 03/12/15 | $ | 413 | $ | 41,256 | |||||||||
BE Aerospace Inc., Term Loan | 4.00 | % | 12/16/21 | 2,090 | 2,098,205 | |||||||||||
Camp International Holding Co., | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 05/31/19 | 3,696 | 3,728,033 | |||||||||||
Second Lien Term Loan | 8.25 | % | 11/30/19 | 258 | 258,143 | |||||||||||
Consolidated Aerospace Manufacturing, LLC, | ||||||||||||||||
Term Loan | 5.00 | % | 03/27/20 | 1,003 | 1,005,083 | |||||||||||
Term Loan | 5.00 | % | 03/27/20 | 327 | 327,656 | |||||||||||
DAE Aviation Holdings, Inc., | ||||||||||||||||
Term Loan B-1 | 5.00 | % | 11/02/18 | 2,847 | 2,871,473 | |||||||||||
Term Loan B-2 | 5.00 | % | 11/02/18 | 936 | 944,302 | |||||||||||
Element Materials Technology Group US Holdings Inc., Term Loan B | 5.25 | % | 08/06/21 | 604 | 607,342 | |||||||||||
IAP Worldwide Services, | ||||||||||||||||
Revolver(d) | — | 07/18/18 | 877 | 881,069 | ||||||||||||
Second Lien Term Loan | 8.00 | % | 07/18/19 | 1,031 | 933,051 | |||||||||||
Landmark U.S. Holdings LLC, | ||||||||||||||||
Canadian Term Loan | 4.75 | % | 10/25/19 | 246 | 246,406 | |||||||||||
First Lien Term Loan | 4.75 | % | 10/25/19 | 6,207 | 6,208,280 | |||||||||||
PRV Aerospace, LLC, Term Loan | 6.50 | % | 05/09/18 | 1,849 | 1,827,109 | |||||||||||
Sequa Corp., Term Loan | 5.25 | % | 06/19/17 | 9,049 | 8,859,129 | |||||||||||
Transdigm Inc., | ||||||||||||||||
Term Loan C | 3.75 | % | 02/28/20 | 13,063 | 13,033,925 | |||||||||||
Term Loan D | 3.75 | % | 06/04/21 | 7,045 | 7,034,811 | |||||||||||
| 50,905,273 | ||||||||||||||||
| Air Transport–0.60% | ||||||||||||||||
American Airlines, Inc., Term Loan B | 3.75 | % | 06/27/19 | 3,786 | 3,786,845 | |||||||||||
Delta Air Lines, Inc., | ||||||||||||||||
Revolver Loan(e) | 0.00 | % | 04/20/16 | 8,237 | 8,099,362 | |||||||||||
Revolver Loan(e) | 0.00 | % | 10/18/17 | 1,145 | 1,101,925 | |||||||||||
United Continental Holdings, Inc., Term Loan B-1 | 3.75 | % | 09/15/21 | 964 | 967,756 | |||||||||||
| 13,955,888 | ||||||||||||||||
| Automotive–4.61% | ||||||||||||||||
Affinia Group Inc., Term Loan B-2 | 4.75 | % | 04/27/20 | 2,159 | 2,163,107 | |||||||||||
American Tire Distributors, Inc., Term Loan | 5.75 | % | 06/01/18 | 6,449 | 6,493,509 | |||||||||||
Autoparts Holdings Ltd., First Lien Term Loan | 6.50 | % | 07/29/17 | 5,016 | 5,030,062 | |||||||||||
BBB Industries, LLC, | ||||||||||||||||
First Lien Term Loan | 6.00 | % | 11/03/21 | 2,363 | 2,377,395 | |||||||||||
Second Lien Term Loan | 9.75 | % | 11/03/22 | 1,033 | 984,297 | |||||||||||
Dealer Tire, LLC, Term Loan | 5.50 | % | 12/22/21 | 2,584 | 2,613,204 | |||||||||||
Dexter Axle Co., Term Loan | 4.50 | % | 02/28/20 | 3,327 | 3,310,338 | |||||||||||
Federal-Mogul Corp., Term Loan C | 4.75 | % | 04/15/21 | 33,217 | 33,213,536 | |||||||||||
Gates Global, LLC, Term Loan | 4.25 | % | 07/05/21 | 8,982 | 8,935,065 | |||||||||||
Goodyear Tire & Rubber Co., Second Lien Term Loan | 4.75 | % | 04/30/19 | 2,724 | 2,741,693 | |||||||||||
Henniges Automotive Holdings, Inc., Term Loan | 5.50 | % | 06/12/21 | 2,428 | 2,440,077 | |||||||||||
Key Safety Systems, Inc., Term Loan | 4.75 | % | 08/29/21 | 2,367 | 2,373,249 | |||||||||||
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) | ||||||||||||||||
Midas Intermediate Holdco II, LLC, | ||||||||||||||||
Delayed Draw Term Loan | 4.75 | % | 08/18/21 | $ | 237 | $ | 238,059 | |||||||||
Term Loan | 4.75 | % | 08/18/21 | 2,099 | 2,112,771 | |||||||||||
MPG Holdco I Inc., Term Loan | 4.25 | % | 10/20/21 | 3,864 | 3,885,458 | |||||||||||
TI Group Automotive Systems, L.L.C., Term Loan | 4.25 | % | 07/02/21 | 12,763 | 12,768,253 | |||||||||||
Tower Automotive Holdings USA, LLC, Term Loan | 4.00 | % | 04/23/20 | 5,952 | 5,942,829 | |||||||||||
Transtar Holding Co., | ||||||||||||||||
First Lien Term Loan | 5.75 | % | 10/09/18 | 4,645 | 4,567,301 | |||||||||||
Second Lien Term Loan | 10.00 | % | 10/09/19 | 1,654 | 1,612,276 | |||||||||||
Wand Intermediate I L.P., | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 09/17/21 | 1,818 | 1,828,451 | |||||||||||
Second Lien Term Loan | 8.25 | % | 09/19/22 | 1,406 | 1,413,081 | |||||||||||
| 107,044,011 | ||||||||||||||||
| Beverage and Tobacco–0.14% | ||||||||||||||||
Winebow Holdings, Inc., | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 07/01/21 | 1,872 | 1,841,299 | |||||||||||
Second Lien Term Loan | 8.50 | % | 12/31/21 | 1,508 | 1,447,852 | |||||||||||
| 3,289,151 | ||||||||||||||||
| Building & Development–2.48% | ||||||||||||||||
ABC Supply Co., Inc., Term Loan B | 3.50 | % | 04/16/20 | 4,642 | 4,627,082 | |||||||||||
Capital Automotive L.P., Second Lien Term Loan | 6.00 | % | 04/30/20 | 4,080 | 4,130,524 | |||||||||||
Distribution International, Inc., First Lien Term Loan | 6.00 | % | 12/15/21 | 2,032 | 2,031,745 | |||||||||||
Lake at Las Vegas Joint Venture, LLC, | ||||||||||||||||
Exit Revolver Loan(e) | 0.00 | % | 02/28/17 | 11 | 5,775 | |||||||||||
PIK Exit Revolver Loan(f) | 5.00 | % | 02/28/17 | 149 | 79,807 | |||||||||||
Mannington Mills, Inc., Term Loan | 4.75 | % | 10/01/21 | 1,168 | 1,167,749 | |||||||||||
Mueller Water Products, Inc., Term Loan | 4.00 | % | 11/25/21 | 106 | 105,977 | |||||||||||
Quikrete Holdings, Inc., First Lien Term Loan | 4.00 | % | 09/28/20 | 10,178 | 10,162,381 | |||||||||||
Re/Max International, Inc., Term Loan | 4.00 | % | 07/31/20 | 2,861 | 2,853,601 | |||||||||||
Realogy Corp., | ||||||||||||||||
Extended Revolver(e) | 0.00 | % | 03/05/18 | 5,984 | 5,774,207 | |||||||||||
Synthetic LOC (Acquired 11/18/11-08/08/12; Cost $1,308) | 4.42 | % | 10/10/16 | — | 287 | |||||||||||
Term Loan B | 3.75 | % | 03/05/20 | 25,463 | 25,481,497 | |||||||||||
United Subcontractors, Inc., Term Loan (Acquired 02/15/06-09/30/13; Cost $1,385,421) | 4.26 | % | 06/30/15 | 129 | 126,726 | |||||||||||
WireCo WorldGroup Inc., Term Loan | 6.00 | % | 02/15/17 | 1,129 | 1,132,228 | |||||||||||
| 57,679,586 | ||||||||||||||||
| Business Equipment & Services–9.01% | ||||||||||||||||
Accelya International S.A., (Luxembourg) | ||||||||||||||||
Term Loan A1 (Acquired 03/06/14; Cost $2,568,049) | 4.99 | % | 03/06/20 | 2,579 | 2,562,667 | |||||||||||
Term Loan A2 (Acquired 03/06/14; Cost $889,207) | 4.99 | % | 03/06/20 | 893 | 887,360 | |||||||||||
Acosta, Inc., Term Loan | 5.00 | % | 09/26/21 | 5,883 | 5,923,108 | |||||||||||
Asurion LLC, | ||||||||||||||||
Incremental Term Loan B-1 | 5.00 | % | 05/24/19 | 13,585 | 13,638,601 | |||||||||||
Incremental Term Loan B-2 | 4.25 | % | 07/08/20 | 21,027 | 21,011,275 | |||||||||||
Second Lien Term Loan | 8.50 | % | 03/03/21 | 29,705 | 30,020,985 | |||||||||||
AVSC Holding Corp., First Lien Term Loan | 4.50 | % | 01/24/21 | 1,686 | 1,689,930 | |||||||||||
Brickman Group Ltd. LLC, | ||||||||||||||||
First Lien Term Loan | 4.00 | % | 12/18/20 | 1,769 | 1,761,006 | |||||||||||
Second Lien Term Loan | 7.50 | % | 12/17/21 | 1,110 | 1,106,039 | |||||||||||
Brock Holdings III, Inc., First Lien Term Loan | 6.00 | % | 03/16/17 | 226 | 222,607 | |||||||||||
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) | ||||||||||||||||
Caraustar Industries, Inc., | ||||||||||||||||
Incremental Term Loan | 8.00 | % | 05/01/19 | $ | 188 | $ | 183,831 | |||||||||
Incremental Term Loan | 8.00 | % | 05/01/19 | 5,896 | 5,793,096 | |||||||||||
Checkout Holding Corp., | ||||||||||||||||
Second Lien Term Loan | 7.75 | % | 04/11/22 | 4,379 | 3,947,953 | |||||||||||
Term Loan B | 4.50 | % | 04/09/21 | 7,530 | 7,153,593 | |||||||||||
Connolly, LLC, | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 05/14/21 | 7,195 | 7,244,765 | |||||||||||
Second Lien Term Loan | 8.00 | % | 05/14/22 | 3,931 | 3,899,692 | |||||||||||
Crossmark Holdings, Inc., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 12/20/19 | 4,613 | 4,558,668 | |||||||||||
Second Lien Term Loan | 8.75 | % | 12/21/20 | 576 | 560,579 | |||||||||||
Diamond US Holding LLC, Term Loan | 4.75 | % | 12/17/21 | 2,608 | 2,604,040 | |||||||||||
Expert Global Solutions, Inc., First Lien Term Loan B | 8.52 | % | 04/03/18 | 3,682 | 3,692,325 | |||||||||||
First Data Corp., | ||||||||||||||||
Term Loan | 3.67 | % | 03/24/18 | 38,107 | 38,111,308 | |||||||||||
Term Loan | 3.67 | % | 09/24/18 | 4,954 | 4,957,843 | |||||||||||
Term Loan(d) | — | 03/24/21 | 3,000 | 3,013,125 | ||||||||||||
Genesys Telecom Holdings, U.S., Inc., | ||||||||||||||||
Term Loan | 4.00 | % | 02/08/20 | 789 | 785,342 | |||||||||||
Term Loan | 4.50 | % | 11/13/20 | 3,442 | 3,445,884 | |||||||||||
Information Resources, Inc., Term Loan | 4.75 | % | 09/30/20 | 465 | 468,414 | |||||||||||
Inmar, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.00 | % | 01/27/22 | 306 | 300,448 | |||||||||||
Term Loan | 4.25 | % | 01/27/21 | 1,720 | 1,694,660 | |||||||||||
Intertrust Group Holding B.V. (Netherlands), | ||||||||||||||||
Second Lien Term Loan 2 | 8.00 | % | 04/16/22 | 3,172 | 3,166,741 | |||||||||||
Term Loan B5 | 4.51 | % | 04/16/21 | 1,746 | 1,740,586 | |||||||||||
Karman Buyer Corp., | ||||||||||||||||
Second Lien Term Loan | 7.50 | % | 07/25/22 | 2,541 | 2,541,504 | |||||||||||
Term Loan | 4.25 | % | 07/23/21 | 8,868 | 8,840,947 | |||||||||||
Kronos Inc., Second Lien Term Loan | 9.75 | % | 04/30/20 | 1,710 | 1,753,725 | |||||||||||
Learning Care Group (US) No. 2 Inc., Term Loan | 5.50 | % | 05/05/21 | 2,282 | 2,298,002 | |||||||||||
Nuance Communications, Inc., Term Loan C | 2.93 | % | 08/07/19 | 6,090 | 6,036,900 | |||||||||||
Sensus USA, Inc., First Lien Term Loan | 4.50 | % | 05/09/17 | 3,352 | 3,360,547 | |||||||||||
ServiceMaster Co., (The), Term Loan | 4.25 | % | 07/01/21 | 711 | 712,601 | |||||||||||
SunGard Data Systems Inc., Term Loan C | 3.92 | % | 02/28/17 | 791 | 791,881 | |||||||||||
TNS Inc., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 02/14/20 | 2,493 | 2,488,734 | |||||||||||
Second Lien Term Loan | 9.00 | % | 08/14/20 | 241 | 237,885 | |||||||||||
Trans Union LLC, | ||||||||||||||||
Revolver Loan | 3.75 | % | 04/09/19 | 497 | 491,905 | |||||||||||
Revolver Loan(e) | 0.00 | % | 04/09/19 | 1,392 | 1,377,334 | |||||||||||
Term Loan | 4.00 | % | 04/09/21 | 1,167 | 1,164,734 | |||||||||||
Wash MultiFamily Laundry Systems, LLC, Term Loan (Acquired 02/14/13; Cost $1,077,472) | 4.50 | % | 02/21/19 | 1,078 | 1,059,362 | |||||||||||
| 209,302,532 | ||||||||||||||||
| Cable & Satellite Television–3.01% | ||||||||||||||||
Charter Communications Operating, LLC, Term Loan G | 4.25 | % | 09/12/21 | 11,128 | 11,229,005 | |||||||||||
ION Media Networks, Inc., Term Loan B-1 | 4.75 | % | 12/18/20 | 2,756 | 2,759,736 | |||||||||||
MCC Iowa, | ||||||||||||||||
Term Loan H | 3.25 | % | 01/29/21 | 3,260 | 3,250,752 | |||||||||||
Term Loan J | 3.75 | % | 06/30/21 | 1,863 | 1,860,581 | |||||||||||
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) | ||||||||||||||||
Mediacom Illinois LLC, | ||||||||||||||||
Term Loan E | 3.15 | % | 10/23/17 | $ | 1,923 | $ | 1,917,129 | |||||||||
Term Loan G | 3.75 | % | 06/30/21 | 2,255 | 2,240,560 | |||||||||||
Quebecor Media Inc. (Canada), Term Loan B-1 | 3.25 | % | 08/17/20 | 2,479 | 2,434,478 | |||||||||||
Virgin Media Investment Holdings Ltd. (United Kingdom), Term Loan B | 3.50 | % | 06/07/20 | 11,291 | 11,278,629 | |||||||||||
WideOpenWest Finance, LLC, Term Loan B | 4.75 | % | 04/01/19 | 7,996 | 8,010,596 | |||||||||||
Ziggo B.V. (Netherlands), | ||||||||||||||||
Term Loan B-1 | 3.50 | % | 01/15/22 | 9,274 | 9,207,556 | |||||||||||
Term Loan B-2 | 3.50 | % | 01/15/22 | 5,976 | 5,933,523 | |||||||||||
Term Loan B-3 | 3.50 | % | 01/15/22 | 9,829 | 9,758,526 | |||||||||||
| 69,881,071 | ||||||||||||||||
| Chemicals & Plastics–3.90% | ||||||||||||||||
Allnex & Cy S.C.A., | ||||||||||||||||
Term Loan B-1 | 4.50 | % | 10/03/19 | 569 | 569,910 | |||||||||||
Term Loan B-2 | 4.50 | % | 10/03/19 | 295 | 295,709 | |||||||||||
Ascend Performance Materials Operations LLC, Term Loan B | 6.75 | % | 04/10/18 | 1,981 | 1,698,379 | |||||||||||
Chemstralia Pty Ltd., Term Loan(d) | — | 02/28/22 | 4,785 | 4,689,413 | ||||||||||||
Chromaflo Technologies Corp., | ||||||||||||||||
First Lien Term Loan B | 4.50 | % | 12/02/19 | 348 | 344,467 | |||||||||||
Second Lien Term Loan | 8.25 | % | 05/30/20 | 815 | 806,942 | |||||||||||
Citadel Plastics Holdings, Inc., First Lien Term Loan | 5.25 | % | 11/05/20 | 1,198 | 1,203,744 | |||||||||||
Colouroz Investment LLC (Germany), | ||||||||||||||||
First Lien Term Loan B-2 | 4.75 | % | 09/07/21 | 6,291 | 6,251,418 | |||||||||||
Second Lien Term Loan B-2 | 8.25 | % | 09/06/22 | 3,449 | 3,285,130 | |||||||||||
Term Loan C | 4.75 | % | 09/07/21 | 1,040 | 1,033,432 | |||||||||||
Eco Services Operations LLC, Term Loan | 4.75 | % | 12/04/21 | 2,101 | 2,109,323 | |||||||||||
Ferro Corp., Term Loan (Acquired 08/04/14; Cost $1,359,265) | 4.00 | % | 07/31/21 | 1,366 | 1,346,816 | |||||||||||
Gemini HDPE LLC, Term Loan | 4.75 | % | 08/07/21 | 1,615 | 1,617,571 | |||||||||||
HII Holding Corp., First Lien Term Loan | 4.00 | % | 12/20/19 | 2,035 | 2,039,155 | |||||||||||
Huntsman International, LLC, Incremental Term Loan | 3.75 | % | 08/12/21 | 6,760 | 6,785,248 | |||||||||||
Ineos Holdings Ltd., Term Loan | 3.75 | % | 05/04/18 | 13,775 | 13,757,439 | |||||||||||
MacDermid, Inc., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 06/07/20 | 5,919 | 5,950,930 | |||||||||||
Term Loan B-2 | 4.75 | % | 06/07/20 | 1,998 | 2,015,120 | |||||||||||
OMNOVA Solutions, Inc., Term Loan B-1 | 4.25 | % | 05/31/18 | 2,520 | 2,499,081 | |||||||||||
Otter Products, LLC, Term Loan B | 5.75 | % | 06/03/20 | 5,902 | 5,877,852 | |||||||||||
Oxea Finance LLC, | ||||||||||||||||
First Lien Term Loan B-2 | 4.25 | % | 01/15/20 | 5,205 | 5,061,925 | |||||||||||
Second Lien Term Loan | 8.25 | % | 07/15/20 | 1,557 | 1,477,380 | |||||||||||
Phillips-Medisize Corp., | ||||||||||||||||
Second Lien Term Loan | 8.25 | % | 06/16/22 | 788 | 765,969 | |||||||||||
Term Loan | 4.75 | % | 06/16/21 | 1,623 | 1,624,692 | |||||||||||
Styrolution US Holding LLC, First Lien Term Loan B-1 | 6.50 | % | 11/07/19 | 6,992 | 6,913,196 | |||||||||||
Tata Chemicals North America Inc., Term Loan | 3.75 | % | 08/07/20 | 1,614 | 1,607,890 | |||||||||||
Univar Inc., Term Loan B | 5.00 | % | 06/30/17 | 5,015 | 4,988,236 | |||||||||||
WNA Holdings, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.50 | % | 12/07/20 | 642 | 622,985 | |||||||||||
Term Loan | 4.50 | % | 06/05/20 | 1,978 | 1,977,705 | |||||||||||
Term Loan | 4.50 | % | 06/07/20 | 1,347 | 1,346,936 | |||||||||||
| 90,563,993 | ||||||||||||||||
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 | |||||||||||||
| Clothing & Textiles–0.32% | ||||||||||||||||
ABG Intermediate Holdings 2 LLC, | ||||||||||||||||
First Lien Term Loan | 5.50 | % | 05/27/21 | $ | 3,354 | $ | 3,371,225 | |||||||||
Second Lien Term Loan | 9.00 | % | 05/27/22 | 1,605 | 1,609,245 | |||||||||||
Varsity Brands, Inc., Term Loan | 6.00 | % | 12/11/21 | 2,386 | 2,411,331 | |||||||||||
| 7,391,801 | ||||||||||||||||
| Conglomerates–0.57% | ||||||||||||||||
CeramTec Acquisition Corp., | ||||||||||||||||
Term Loan B-1 | 4.25 | % | 08/30/20 | 3,333 | 3,330,559 | |||||||||||
Term Loan B-2 | 4.25 | % | 08/30/20 | 334 | 333,595 | |||||||||||
Term Loan B-3 | 4.25 | % | 08/30/20 | 988 | 987,388 | |||||||||||
Epiq Systems, Inc., Term Loan | 4.50 | % | 08/27/20 | 4,383 | 4,372,500 | |||||||||||
Polymer Group, Inc., Term Loan | 5.25 | % | 12/19/19 | 4,281 | 4,302,476 | |||||||||||
| 13,326,518 | ||||||||||||||||
| Containers & Glass Products–2.21% | ||||||||||||||||
Berlin Packaging, LLC, | ||||||||||||||||
Second Lien Term Loan | 7.75 | % | 10/01/22 | 760 | 762,068 | |||||||||||
Term Loan | 4.50 | % | 10/01/21 | 2,791 | 2,795,906 | |||||||||||
Berry Plastics Group, Inc., Term Loan D | 3.50 | % | 02/08/20 | 16,636 | 16,595,056 | |||||||||||
BWAY Holding Company, Term Loan | 5.50 | % | 08/14/20 | 9,658 | 9,716,966 | |||||||||||
Charter NEX US Holdings, Inc., First Lien Term Loan | 5.25 | % | 02/07/22 | 1,111 | 1,116,608 | |||||||||||
Consolidated Container Co. LLC, Term Loan | 5.00 | % | 07/03/19 | 1,357 | 1,333,702 | |||||||||||
Constantia Flexibles Group GmbH (Austria), Term Loan B(d) | — | 04/30/22 | 1,688 | 1,696,516 | ||||||||||||
Devix US, Inc., First Lien Term Loan B | 4.25 | % | 05/02/21 | 1,861 | 1,865,964 | |||||||||||
Exopack Holdings S.A., Term Loan | 5.25 | % | 05/08/19 | 2,262 | 2,277,053 | |||||||||||
Hoffmaster Group, Inc., |
| |||||||||||||||
First Lien Term Loan | 5.25 | % | 05/09/20 | 3,700 | 3,728,158 | |||||||||||
Second Lien Term Loan | 10.00 | % | 05/09/21 | 786 | 779,282 | |||||||||||
Onex Wizard US Acquisition Inc., Term Loan(d) | — | 03/13/22 | 6,035 | 6,087,926 | ||||||||||||
Ranpak Corp., |
| |||||||||||||||
First Lien Term Loan | 4.75 | % | 10/01/21 | 613 | 614,560 | |||||||||||
Second Lien Term Loan | 8.25 | % | 10/03/22 | 415 | 414,282 | |||||||||||
Reynolds Group Holdings Inc., Incremental Term Loan | 4.00 | % | 12/01/18 | 1,615 | 1,623,004 | |||||||||||
| 51,407,051 | ||||||||||||||||
| Cosmetics & Toiletries–0.46% | ||||||||||||||||
Nice-Pak Products, Inc., Term Loan (Acquired 06/11/14; Cost $418,490) | 7.50 | % | 06/18/15 | 422 | 408,988 | |||||||||||
Prestige Brands, Inc., Term Loan B-1 | 4.13 | % | 01/31/19 | 2,691 | 2,699,709 | |||||||||||
Revlon Consumer Products Corp., Term Loan | 4.00 | % | 10/08/19 | 2,485 | 2,485,732 | |||||||||||
Vogue International LLC, Term Loan B | 5.75 | % | 02/14/20 | 4,954 | 4,985,269 | |||||||||||
| 10,579,698 | ||||||||||||||||
| Drugs–1.91% | ||||||||||||||||
BPA Laboratories, |
| |||||||||||||||
First Lien Term Loan | 2.75 | % | 07/01/17 | 1,202 | 1,075,937 | |||||||||||
Second Lien Term Loan | 2.75 | % | 07/01/17 | 1,045 | 927,688 | |||||||||||
Grifols Worldwide Operations USA, Inc., Term Loan B | 3.17 | % | 02/27/21 | 13,288 | 13,283,370 | |||||||||||
Millennium Laboratories, LLC, Term Loan B | 5.25 | % | 04/16/21 | 20,585 | 20,713,764 | |||||||||||
Par Pharmaceutical Companies, Inc., Incremental Term Loan B-3 | 4.25 | % | 09/30/19 | 1,819 | 1,819,996 | |||||||||||
Valeant Pharmaceuticals International, Inc. (Canada) |
| |||||||||||||||
Term Loan B | 3.50 | % | 12/11/19 | 1,649 | 1,648,479 | |||||||||||
Term Loan B | 3.50 | % | 08/05/20 | 4,968 | 4,966,573 | |||||||||||
| 44,435,807 | ||||||||||||||||
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 | |||||||||||||
| Ecological Services & Equipment–0.14% | ||||||||||||||||
ADS Waste Holdings, Inc., Term Loan B-2 | 3.75 | % | 10/09/19 | $ | 714 | $ | 708,611 | |||||||||
PSSI Holdings LLC, Term Loan | 5.00 | % | 12/02/21 | 2,614 | 1,316,805 | |||||||||||
Waste Industries USA, Inc., Term Loan(d) | — | 02/27/20 | 1,148 | 1,153,001 | ||||||||||||
| 3,178,417 | ||||||||||||||||
| Electronics & Electrical–6.95% | ||||||||||||||||
4L Technologies Inc., Term Loan | 5.50 | % | 05/08/20 | 10,573 | 10,315,070 | |||||||||||
AF Borrower LLC, Term Loan | 6.25 | % | 01/28/22 | 2,278 | 2,280,853 | |||||||||||
AVG Technologies N.V. (Netherlands), Term Loan | 5.75 | % | 10/15/20 | 2,519 | 2,496,689 | |||||||||||
Blackboard Inc., Term Loan B-3 | 4.75 | % | 10/04/18 | 8,076 | 8,087,856 | |||||||||||
BMC Software Finance, Inc., Term Loan | 5.00 | % | 09/10/20 | 1,544 | 1,481,228 | |||||||||||
Carros US LLC, Term Loan | 4.50 | % | 09/30/21 | 1,236 | 1,224,784 | |||||||||||
Compuware Corp., |
| |||||||||||||||
Term Loan B-1 | 6.25 | % | 12/15/19 | 1,223 | 1,194,268 | |||||||||||
Term Loan B-2 | 6.25 | % | 12/15/21 | 3,435 | 3,309,179 | |||||||||||
DEI Sales, Inc., Term Loan | 5.75 | % | 07/13/17 | 1,956 | 1,760,648 | |||||||||||
Deltek, Inc., First Lien Term Loan | 4.50 | % | 10/10/18 | 8,640 | 8,642,816 | |||||||||||
Fidji Luxembourg BC4 S.a r.l. (Luxembourg), Term Loan | 6.25 | % | 12/24/20 | 3,356 | 3,355,947 | |||||||||||
Freescale Semiconductor, Inc., Term Loan B-4 | 4.25 | % | 02/28/20 | 29,532 | 29,521,351 | |||||||||||
Infor (US), Inc., Term Loan B-3 | 3.75 | % | 06/03/20 | 6,204 | 6,159,216 | |||||||||||
MA Finance Co., LLC, Term Loan C | 4.50 | % | 11/20/19 | 8,811 | 8,656,573 | |||||||||||
Microsemi Corp., Incremental Term Loan | 3.50 | % | 02/19/20 | 971 | 970,001 | |||||||||||
Mirion Technologies, Inc., Term Loan(d) | — | 01/01/22 | 3,220 | 3,223,803 | ||||||||||||
MSC Software Corp., |
| |||||||||||||||
First Lien Term Loan | 5.00 | % | 05/29/20 | 1,614 | 1,620,246 | |||||||||||
Second Lien Term Loan | 8.50 | % | 06/01/21 | 803 | 790,577 | |||||||||||
Oberthur Technologies of America Corp., Term Loan B-2 | 4.50 | % | 10/18/19 | 1,875 | 1,851,213 | |||||||||||
Omnitracs, Inc., Term Loan | 4.75 | % | 11/25/20 | 4,886 | 4,894,442 | |||||||||||
Peak 10, Inc., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 06/17/21 | 1,321 | 1,319,106 | |||||||||||
Second Lien Term Loan | 8.25 | % | 06/17/22 | 788 | 760,062 | |||||||||||
Riverbed Technology, Inc., Term Loan(d) | — | 01/01/22 | 4,023 | 4,059,748 | ||||||||||||
RP Crown Parent, LLC, | ||||||||||||||||
First Lien Term Loan | 6.00 | % | 12/21/18 | 16,627 | 16,276,963 | |||||||||||
Second Lien Term Loan | 11.25 | % | 12/20/19 | 602 | 534,680 | |||||||||||
Ship Luxco 3 S.a.r.l. (Luxembourg), | ||||||||||||||||
Term Loan | 4.50 | % | 11/30/19 | 3,721 | 3,731,314 | |||||||||||
Term Loan C-2 | 4.75 | % | 11/29/19 | 2,401 | 2,408,254 | |||||||||||
SkillSoft Corp., | ||||||||||||||||
Second Lien Term Loan | 9.25 | % | 04/28/22 | 2,784 | 2,616,835 | |||||||||||
Term Loan | 5.75 | % | 04/28/21 | 13,862 | 13,749,492 | |||||||||||
Sybil Software LLC, Term Loan | 4.75 | % | 03/20/20 | 1,056 | 1,061,581 | |||||||||||
Zebra Technologies Corp., Term Loan | 4.75 | % | 10/27/21 | 12,764 | 12,915,546 | |||||||||||
| 161,270,341 | ||||||||||||||||
| Equipment Leasing–0.16% | ||||||||||||||||
IBC Capital US LLC, | ||||||||||||||||
Second Lien Term Loan | 8.00 | % | 09/09/22 | 1,422 | 1,429,573 | |||||||||||
Term Loan | 4.75 | % | 09/09/21 | 2,312 | 2,324,146 | |||||||||||
| 3,753,719 | ||||||||||||||||
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 | |||||||||||||
| Financial Intermediaries–0.90% | ||||||||||||||||
Bankruptcy Management Solutions, Inc., Term Loan B | 7.00 | % | 06/27/18 | $ | 22 | $ | 18,934 | |||||||||
iPayment Inc., Term Loan | 6.75 | % | 05/08/17 | 3,978 | 3,918,224 | |||||||||||
MoneyGram International, Inc., Term Loan | 4.25 | % | 03/27/20 | 13,562 | 12,947,257 | |||||||||||
RJO Holdings Corp., Term Loan | 6.93 | % | 12/10/15 | 1,614 | 1,505,480 | |||||||||||
SAM Finance Lux S.a r.l. (Luxembourg), Term Loan | 4.25 | % | 12/17/20 | 2,548 | 2,551,367 | |||||||||||
| 20,941,262 | ||||||||||||||||
| Food & Drug Retailers–1.20% | ||||||||||||||||
Albertson’s LLC, Term Loan B-4 | 5.50 | % | 08/25/21 | 16,050 | 16,213,933 | |||||||||||
Demoulas Super Markets, Inc., Term Loan A | 3.92 | % | 12/09/19 | 4,753 | 4,545,079 | |||||||||||
Supervalu Inc., Term Loan | 4.50 | % | 03/21/19 | 7,079 | 7,104,337 | |||||||||||
| 27,863,349 | ||||||||||||||||
| Food Products–3.68% | ||||||||||||||||
AdvancePierre Foods, Inc., | ||||||||||||||||
First Lien Term Loan | 5.75 | % | 07/10/17 | 6,636 | 6,652,875 | |||||||||||
Second Lien Term Loan | 9.50 | % | 10/10/17 | 524 | 521,047 | |||||||||||
Big Heart Pet Brands, Term Loan | 3.50 | % | 03/08/20 | 9,107 | 9,105,302 | |||||||||||
Candy Intermediate Holdings, Inc., Term Loan | 7.50 | % | 06/18/18 | 2,803 | 2,799,444 | |||||||||||
Charger OpCp B.V., Term Loan B-1 | 3.50 | % | 07/23/23 | 8,769 | 8,790,438 | |||||||||||
CSM Bakery Solutions LLC, | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 07/03/20 | 6,765 | 6,725,827 | |||||||||||
Second Lien Term Loan | 8.75 | % | 07/03/21 | 2,515 | 2,408,585 | |||||||||||
Del Monte Foods, Inc., | ||||||||||||||||
First Lien Term Loan | 4.25 | % | 02/18/21 | 3,506 | 3,415,234 | |||||||||||
Second Lien Term Loan | 8.25 | % | 08/18/21 | 3,739 | 3,411,555 | |||||||||||
Diamond Foods, Inc., Term Loan | 4.25 | % | 08/20/18 | 488 | 487,735 | |||||||||||
Dole Food Co., Inc., Term Loan B | 4.50 | % | 11/01/18 | 10,029 | 10,026,234 | |||||||||||
H.J. Heinz Co., Revolver Loan(e) | 0.00 | % | 06/07/18 | 10,581 | 10,518,017 | |||||||||||
Hearthside Group Holdings, LLC, | ||||||||||||||||
Revolver Loan(e) | 0.00 | % | 06/02/19 | 2,701 | 2,691,691 | |||||||||||
Term Loan | 4.50 | % | 06/02/21 | 2,097 | 2,107,427 | |||||||||||
JBS USA, LLC, Term Loan | 3.75 | % | 05/25/18 | 6,906 | 6,906,466 | |||||||||||
New HB Acquisition, LLC, Term Loan B | 6.75 | % | 04/09/20 | 3,845 | 3,924,008 | |||||||||||
Post Holdings Inc., Revolver Loan(d) | — | 01/29/19 | 3,566 | 3,558,741 | ||||||||||||
QCE LLC, PIK Term Loan(f) | 15.00 | % | 07/01/19 | 5 | 1,741 | |||||||||||
Shearer’s Foods, LLC, | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 06/30/21 | 832 | 833,358 | |||||||||||
Second Lien Term Loan | 7.75 | % | 06/30/22 | 457 | 452,159 | |||||||||||
| 85,337,884 | ||||||||||||||||
| Food Service–2.64% | ||||||||||||||||
Aramark Corp., LOC | 3.67 | % | 07/26/16 | 82 | 81,648 | |||||||||||
New Red Finance, Inc., Term Loan B | 4.50 | % | 12/12/21 | 34,808 | 35,046,974 | |||||||||||
Portillo’s Holdings, LLC, | ||||||||||||||||
First Lien Term Loan | 4.75 | % | 08/02/21 | 2,044 | 2,043,106 | |||||||||||
Second Lien Term Loan | 8.00 | % | 08/01/22 | 569 | 567,786 | |||||||||||
Red Lobster Management, LLC, Term Loan | 6.25 | % | 07/28/21 | 3,415 | 3,418,379 | |||||||||||
Restaurant Holding Co., LLC, First Lien Term Loan (Acquired 02/28/14; Cost $2,705,629) | 8.75 | % | 02/28/19 | 2,795 | 2,459,841 | |||||||||||
Steak n Shake Operations, Inc., Term Loan | 4.75 | % | 03/19/21 | 2,477 | 2,446,000 | |||||||||||
TMK Hawk Parent, Corp., | ||||||||||||||||
First Lien Term Loan | 5.25 | % | 10/01/21 | 2,358 | 2,363,562 | |||||||||||
Second Lien Term Loan (Acquired 10/01/14; Cost $1,072,955) | 8.50 | % | 10/01/22 | 1,083 | 1,083,244 | |||||||||||
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 Service–(continued) | ||||||||||||||||
US Foods, Inc., Incremental Term Loan | 4.50 | % | 03/31/19 | $ | 6,416 | $ | 6,410,481 | |||||||||
Weight Watchers International, Inc., Term Loan B-2 | 4.00 | % | 04/02/20 | 9,875 | 5,266,804 | |||||||||||
| 61,187,825 | ||||||||||||||||
| Forest Products–0.37% | ||||||||||||||||
NewPage Corp., Term Loan B | 9.50 | % | 02/11/21 | 4,718 | 4,577,030 | |||||||||||
Xerium Technologies, Inc., Term Loan | 6.25 | % | 05/17/19 | 3,986 | 3,989,124 | |||||||||||
| 8,566,154 | ||||||||||||||||
| Health Care–5.23% | ||||||||||||||||
Acadia Healthcare Company, Inc., Term Loan B | 4.25 | % | 02/11/22 | 1,105 | 1,110,855 | |||||||||||
Accellent Inc., | ||||||||||||||||
Second Lien Term Loan | 7.50 | % | 03/11/22 | 2,122 | 2,026,325 | |||||||||||
Term Loan | 4.50 | % | 03/12/21 | 10,336 | 10,232,392 | |||||||||||
Alere Inc., Term Loan B | 4.25 | % | 06/30/17 | 2,629 | 2,635,618 | |||||||||||
ATI Holdings, Inc., Term Loan | 5.25 | % | 12/20/19 | 2,011 | 2,014,659 | |||||||||||
Auris Luxembourg II S.A. (Luxembourg), Term Loan B-2 | 5.50 | % | 01/17/22 | 2,216 | 2,242,792 | |||||||||||
Biomet, Inc., Term Loan B-2 | 3.67 | % | 07/25/17 | 4,596 | 4,598,374 | |||||||||||
CareCore National, LLC, Term Loan | 5.50 | % | 03/05/21 | 2,326 | 2,340,908 | |||||||||||
Carestream Health, Inc., First Lien Term Loan | 5.01 | % | 06/07/19 | 10,802 | 10,834,820 | |||||||||||
Creganna Finance (US) LLC, | ||||||||||||||||
First Lien Term Loan | 5.25 | % | 12/01/21 | 1,166 | 1,178,869 | |||||||||||
Second Lien Term Loan | 9.00 | % | 06/01/22 | 1,156 | 1,163,138 | |||||||||||
DJO Finance LLC, Term Loan B | 4.25 | % | 09/15/17 | 13,114 | 13,135,681 | |||||||||||
Drumm Investors LLC, Term Loan | 6.75 | % | 05/04/18 | 788 | 796,458 | |||||||||||
Kindred Healthcare, Inc., Term Loan | 4.25 | % | 04/09/21 | 11,101 | 11,136,139 | |||||||||||
Kinetic Concepts, Inc., Term Loan E-1 | 4.00 | % | 05/04/18 | 24,964 | 25,012,990 | |||||||||||
Knowledge Universe Education LLC, Term Loan | 5.25 | % | 03/18/21 | 2,332 | 2,346,351 | |||||||||||
MPH Acquisition Holdings LLC, Term Loan | 3.75 | % | 03/31/21 | 12,237 | 12,173,954 | |||||||||||
Ortho-Clinical Diagnostics, Inc., Term Loan | 4.75 | % | 06/30/21 | 4,597 | 4,552,518 | |||||||||||
Sage Products Holdings III, LLC, First Lien Term Loan | 5.00 | % | 12/13/19 | 762 | 770,221 | |||||||||||
Surgery Center Holdings, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.50 | % | 11/03/21 | 4,280 | 4,162,185 | |||||||||||
Term Loan | 5.25 | % | 11/03/20 | 3,105 | 3,085,535 | |||||||||||
Western Dental Services, Inc., Term Loan | 6.00 | % | 11/01/18 | 4,080 | 3,855,802 | |||||||||||
| 121,406,584 | ||||||||||||||||
| Home Furnishings–0.32% | ||||||||||||||||
Britax Group Ltd., Term Loan | 4.50 | % | 10/15/20 | 1,782 | 1,354,200 | |||||||||||
Mattress Holdings Corp., Term Loan | 5.25 | % | 10/20/21 | 4,633 | 4,665,352 | |||||||||||
PGT, Inc., Term Loan | 5.25 | % | 09/22/21 | 1,328 | 1,336,009 | |||||||||||
| 7,355,561 | ||||||||||||||||
| Industrial Equipment–2.71% | ||||||||||||||||
Accudyne Industries LLC, Term Loan | 4.00 | % | 12/13/19 | 1,311 | 1,263,890 | |||||||||||
Alliance Laundry Systems LLC, Second Lien Term Loan | 9.50 | % | 12/10/19 | 535 | 538,044 | |||||||||||
Apex Tool Group, LLC, Term Loan | 4.50 | % | 01/31/20 | 4,371 | 4,283,345 | |||||||||||
Capital Safety North America Holdings Inc., First Lien Term Loan | 3.75 | % | 03/29/21 | 2,076 | 2,035,493 | |||||||||||
Crosby US Acquisition Corp., | ||||||||||||||||
First Lien Term Loan | 3.75 | % | 11/23/20 | 6,969 | 6,472,609 | |||||||||||
Second Lien Term Loan (Acquired 11/07/13; Cost $1,617,877) | 7.00 | % | 11/22/21 | 1,620 | 1,441,442 | |||||||||||
Delachaux S.A. (France), Term Loan B-2 | 5.25 | % | 10/28/21 | 2,309 | 2,322,991 | |||||||||||
Doncasters US Finance LLC, Term Loan B | 4.50 | % | 04/09/20 | 5,699 | 5,688,631 | |||||||||||
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 | |||||||||||||
| Industrial Equipment–(continued) | ||||||||||||||||
Doosan Infracore International, Inc., Term Loan B | 4.50 | % | 05/28/21 | $ | 7,054 | $ | 7,115,644 | |||||||||
Dynacast International LLC, | ||||||||||||||||
First Lien Term Loan | 5.25 | % | 01/28/22 | 2,782 | 2,799,628 | |||||||||||
Second Lien Term Loan | 9.50 | % | 01/30/23 | 848 | 853,935 | |||||||||||
Filtration Group Corp., | ||||||||||||||||
First Lien Term Loan | 4.50 | % | 11/21/20 | 629 | 629,920 | |||||||||||
Second Lien Term Loan | 8.25 | % | 11/21/21 | 1,705 | 1,696,507 | |||||||||||
Gardner Denver, Inc., Term Loan | 4.25 | % | 07/30/20 | 688 | 662,909 | |||||||||||
Generac Power System, Inc., Term Loan B | 3.25 | % | 05/31/20 | 1,736 | 1,728,790 | |||||||||||
Husky Injection Molding Systems Ltd. (Canada), Term Loan | 4.25 | % | 06/30/21 | 7,135 | 7,122,574 | |||||||||||
North American Lifting Holdings, Inc., First Lien Term Loan | 5.50 | % | 11/27/20 | 4,394 | 4,108,223 | |||||||||||
Rexnord LLC/ RBS Global, Inc., Term Loan B | 4.00 | % | 08/21/20 | 7,790 | 7,784,014 | |||||||||||
Tank Holding Corp., Term Loan | 4.25 | % | 07/09/19 | 2,365 | 2,359,553 | |||||||||||
Virtuoso US LLC, Term Loan | 4.75 | % | 02/11/21 | 1,935 | 1,921,432 | |||||||||||
| 62,829,574 | ||||||||||||||||
| Insurance–0.27% | ||||||||||||||||
Cooper Gay Swett & Crawford Ltd., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 04/16/20 | 1,920 | 1,783,501 | |||||||||||
Second Lien Term Loan | 8.25 | % | 10/16/20 | 1,300 | 1,132,919 | |||||||||||
York Risk Services Holding Corp., Term Loan | 4.75 | % | 10/01/21 | 3,276 | 3,271,831 | |||||||||||
| 6,188,251 | ||||||||||||||||
| Leisure Goods, Activities & Movies–2.82% | ||||||||||||||||
Alpha Topco Ltd., (United Kingdom) | ||||||||||||||||
Second Lien Term Loan | 7.75 | % | 07/31/22 | 10,394 | 10,437,619 | |||||||||||
Term Loan B-3 | 4.75 | % | 07/30/21 | 28,778 | 28,696,736 | |||||||||||
Bright Horizons Family Solutions, Inc., Term Loan B-1 | 4.25 | % | 01/30/20 | 473 | 475,490 | |||||||||||
Creative Artists Agency, LLC, Term Loan | 5.50 | % | 12/17/21 | 2,311 | 2,330,781 | |||||||||||
CWGS Group, LLC, Term Loan | 5.75 | % | 02/20/20 | 6,996 | 7,036,937 | |||||||||||
Dave & Buster’s, Inc., Term Loan | 4.25 | % | 07/25/20 | 1,110 | 1,112,742 | |||||||||||
Dorna Sports S.L. (Spain), Term Loan B | 4.36 | % | 04/30/21 | 1,827 | 1,817,496 | |||||||||||
Equinox Holdings Inc., | ||||||||||||||||
First Lien Term Loan | 5.00 | % | 01/31/20 | 4,027 | 4,049,686 | |||||||||||
Revolver Loan(e) | 0.00 | % | 02/01/18 | 1,866 | 1,679,639 | |||||||||||
Fitness International, LLC, Term Loan B | 5.50 | % | 07/01/20 | 5,348 | 5,120,475 | |||||||||||
Metro-Goldwyn-Mayer Inc., Second Lien Term Loan | 5.13 | % | 06/26/20 | 1,556 | 1,548,308 | |||||||||||
Performance Sports Group Ltd. (Canada), Term Loan | 4.00 | % | 04/15/21 | 1,262 | 1,258,672 | |||||||||||
| 65,564,581 | ||||||||||||||||
| Lodging & Casinos–3.73% | ||||||||||||||||
Belmond Interfin Ltd. (Bermuda), Term Loan | 4.00 | % | 03/21/21 | 1,350 | 1,349,735 | |||||||||||
Caesars Growth Properties Holdings, LLC, Term Loan B | 6.25 | % | 05/08/21 | 7,020 | 6,398,679 | |||||||||||
Cannery Casino Resorts, LLC, First Lien Term Loan | 6.00 | % | 10/02/18 | 4,517 | 4,404,473 | |||||||||||
ESH Hospitality, Inc., Term Loan | 5.00 | % | 06/24/19 | 3,859 | 3,897,535 | |||||||||||
Four Seasons Holdings Inc. (Canada), First Lien Term Loan | 3.50 | % | 06/27/20 | 3,258 | 3,253,351 | |||||||||||
Harrah’s Operating Co., Inc., Term Loan B-6(g) | 1.50 | % | 03/01/17 | 11,423 | 10,570,355 | |||||||||||
Hilton Worldwide Finance, LLC, Term Loan | 3.50 | % | 10/26/20 | 5,406 | 5,412,395 | |||||||||||
La Quinta Intermediate Holdings LLC, Term Loan | 4.00 | % | 04/14/21 | 8,987 | 8,999,737 | |||||||||||
Scientific Games International, Inc., | ||||||||||||||||
Term Loan B-2 | 6.00 | % | 10/01/21 | 2,968 | 2,968,166 | |||||||||||
Term Loan | 6.00 | % | 10/18/20 | 29,704 | 29,696,910 | |||||||||||
Twin River Management Group, Inc., Term Loan | 5.25 | % | 07/10/20 | 6,135 | 6,165,101 | |||||||||||
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 | |||||||||||||
| Lodging & Casinos–(continued) | ||||||||||||||||
Yonkers Racing Corp., | ||||||||||||||||
First Lien Term Loan | 4.25 | % | 08/20/19 | $ | 3,367 | $ | 3,232,703 | |||||||||
Second Lien Term Loan | 8.75 | % | 08/20/20 | 392 | 307,037 | |||||||||||
| 86,656,177 | ||||||||||||||||
| Nonferrous Metals & Minerals–0.54% | ||||||||||||||||
Arch Coal, Inc., Term Loan | 6.25 | % | 05/16/18 | 10,650 | 8,568,223 | |||||||||||
EP Minerals, LLC, Term Loan | 5.50 | % | 08/20/20 | 883 | 884,940 | |||||||||||
Noranda Aluminum Acquisition Corp., Term Loan B | 5.75 | % | 02/28/19 | 3,301 | 3,122,077 | |||||||||||
| 12,575,240 | ||||||||||||||||
| Oil & Gas–6.02% | ||||||||||||||||
American Energy — Marcellus, LLC, | ||||||||||||||||
First Lien Term Loan | 5.25 | % | 08/04/20 | 5,037 | 4,321,944 | |||||||||||
Second Lien Term Loan | 8.50 | % | 08/04/21 | 999 | 776,179 | |||||||||||
Ameriforge Group Inc., First Lien Term Loan | 5.00 | % | 12/19/19 | 68 | 61,111 | |||||||||||
Bronco Midstream Funding, LLC, Term Loan | 5.00 | % | 08/15/20 | 6,361 | 6,154,244 | |||||||||||
CITGO Holding Inc., Term Loan | 9.50 | % | 05/12/18 | 11,951 | 11,910,986 | |||||||||||
Crestwood Holdings LLC, Term Loan B-1 | 7.00 | % | 06/19/19 | 4,055 | 3,827,770 | |||||||||||
Drillships Financing Holding Inc., Term Loan B-1 | 6.00 | % | 03/31/21 | 20,181 | 15,862,540 | |||||||||||
Drillships Ocean Ventures, Inc., Term Loan | 5.50 | % | 07/25/21 | 7,016 | 5,884,449 | |||||||||||
EMG Utica, LLC, Term Loan | 4.75 | % | 03/27/20 | 2,761 | 2,533,568 | |||||||||||
Expro US Finco LLC, Term Loan | 5.75 | % | 09/02/21 | 1,992 | 1,708,069 | |||||||||||
Fieldwood Energy LLC, | ||||||||||||||||
Second Lien Term Loan | 8.38 | % | 09/30/20 | 10,281 | 7,920,129 | |||||||||||
Term Loan | 3.88 | % | 09/28/18 | 899 | 864,105 | |||||||||||
Floatel International Ltd., Term Loan | 6.00 | % | 06/27/20 | 6,643 | 4,982,421 | |||||||||||
Glenn Pool Oil & Gas Trust I, Term Loan (Acquired 06/08/11; Cost $426,903) | 4.50 | % | 05/02/16 | 427 | 424,768 | |||||||||||
HGIM Corp., Term Loan B | 5.50 | % | 06/18/20 | 9,184 | 6,586,046 | |||||||||||
Jonah Energy LLC, Second Lien Term Loan | 7.50 | % | 05/12/21 | 4,220 | 3,755,408 | |||||||||||
McDermott International, Inc., Term Loan | 5.25 | % | 04/16/19 | 2,102 | 1,926,113 | |||||||||||
NGPL PipeCo LLC, Term Loan | 6.75 | % | 09/15/17 | 4,726 | 4,560,913 | |||||||||||
Obsidian Natural Gas Trust (United Kingdom), Term Loan (Acquired 05/05/11; Cost $361,583) | 7.00 | % | 11/02/15 | 355 | 353,645 | |||||||||||
Osum Productions Corp. (Canada), Term Loan (Acquired 08/04/14; Cost $2,124,253) | 6.50 | % | 07/28/20 | 2,154 | 1,776,718 | |||||||||||
Pacific Drilling S.A. (Luxembourg), Term Loan | 4.50 | % | 06/03/18 | 3,877 | 3,093,774 | |||||||||||
Paragon Offshore Finance Co. (Cayman Islands), Term Loan | 3.75 | % | 07/18/21 | 2,551 | 1,862,256 | |||||||||||
Petroleum GEO-Services ASA, Term Loan | 3.25 | % | 03/19/21 | 6,891 | 5,868,936 | |||||||||||
Samchully Midstream 3 LLC, Term Loan | 5.75 | % | 10/20/21 | 3,496 | 3,356,094 | |||||||||||
Samson Investment Co., Second Lien Term Loan | 5.00 | % | 09/25/18 | 5,609 | 3,572,327 | |||||||||||
Seadrill Operating LP, Term Loan | 4.00 | % | 02/21/21 | 26,484 | 21,523,708 | |||||||||||
Seventy Seven Operating LLC, Term Loan | 3.75 | % | 06/25/21 | 2,285 | 2,087,505 | |||||||||||
Southcross Energy Partners, L.P., Term Loan | 5.25 | % | 08/04/21 | 1,893 | 1,850,072 | |||||||||||
Tallgrass Operations, LLC, Term Loan | 5.44 | % | 11/13/18 | 1,466 | 1,459,968 | |||||||||||
Targa Resources Corp., Term Loan(d) | — | 02/25/22 | 2,552 | 2,542,447 | ||||||||||||
Utex Industries, Inc., First Lien Term Loan | 5.00 | % | 05/22/21 | 1,055 | 976,007 | |||||||||||
Veresen Midstream US LLC, Term Loan(d) | — | 04/01/22 | 5,271 | 5,270,835 | ||||||||||||
| 139,655,055 | ||||||||||||||||
| Publishing–2.57% | ||||||||||||||||
Chesapeake US Holdings Inc., | ||||||||||||||||
Term Loan A | 4.25 | % | 09/30/20 | 1,562 | 1,554,570 | |||||||||||
Term Loan B | 4.25 | % | 09/30/20 | 4,332 | 4,310,266 | |||||||||||
Term Loan C | 4.25 | % | 09/30/20 | 1,140 | 1,134,020 | |||||||||||
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 | |||||||||||||
| Publishing–(continued) | ||||||||||||||||
Getty Images, Inc., | ||||||||||||||||
Revolver Loan(e) | 0.00 | % | 10/18/17 | $ | 6,977 | $ | 6,000,230 | |||||||||
Term Loan | 4.75 | % | 10/18/19 | 7,589 | 6,583,231 | |||||||||||
Harland Clarke Holdings Corp., | ||||||||||||||||
Term Loan B-2 | 5.51 | % | 06/30/17 | 310 | 311,192 | |||||||||||
Term Loan B-4 | 6.00 | % | 08/04/19 | 1,412 | 1,420,660 | |||||||||||
Interactive Data Corp., Term Loan | 4.75 | % | 05/02/21 | 869 | 872,530 | |||||||||||
MediMedia USA, Inc., First Lien Term Loan | 8.00 | % | 11/20/18 | 5,549 | 5,520,837 | |||||||||||
Merrill Communications LLC, Term Loan | 5.75 | % | 03/08/18 | 4,879 | 4,897,583 | |||||||||||
Newsday, LLC, Term Loan | 3.67 | % | 10/12/16 | 2,615 | 2,609,643 | |||||||||||
ProQuest LLC, Term Loan | 5.25 | % | 10/24/21 | 4,680 | 4,688,710 | |||||||||||
Southern Graphics Inc., Term Loan | 4.25 | % | 10/17/19 | 2,780 | 2,771,228 | |||||||||||
Tribune Co., Term Loan | 4.00 | % | 12/27/20 | 17,010 | 17,036,810 | |||||||||||
| 59,711,510 | ||||||||||||||||
| Radio & Television–3.40% | ||||||||||||||||
Block Communications, Inc., Incremental Term Loan B | 4.25 | % | 11/07/21 | 1,167 | 1,170,968 | |||||||||||
iHeartCommunications, Inc., | ||||||||||||||||
Term Loan D | 6.92 | % | 01/30/19 | 15,752 | 15,117,959 | |||||||||||
Term Loan E | 7.67 | % | 07/30/19 | 31,611 | 30,685,490 | |||||||||||
Gray Television, Inc., Term Loan | 3.75 | % | 06/10/21 | 3,131 | 3,125,877 | |||||||||||
Media General, Inc., Term Loan B | 4.25 | % | 07/31/20 | 7,042 | 7,072,025 | |||||||||||
NEP/NCP HoldCo, Inc., | ||||||||||||||||
Incremental Term Loan | 4.25 | % | 01/22/20 | 2,018 | 1,945,184 | |||||||||||
Second Lien Term Loan | 9.50 | % | 07/22/20 | 132 | 128,172 | |||||||||||
TWCC Holding Corp., | ||||||||||||||||
Second Lien Term Loan | 7.00 | % | 06/26/20 | 7,922 | 7,407,477 | |||||||||||
Term Loan | 3.50 | % | 02/13/17 | 12,280 | 12,183,466 | |||||||||||
| 78,836,618 | ||||||||||||||||
| Retailers (except Food & Drug)–7.01% | ||||||||||||||||
David’s Bridal, Inc., | ||||||||||||||||
Asset-Backed Revolver Loan (Acquired 11/21/14-01/29/15; Cost $1,304,696)(e) | 0.00 | % | 10/11/17 | 1,320 | 1,201,012 | |||||||||||
Asset-Backed Revolver Loan (Acquired 02/02/15-02/20/15; Cost $267,985) | 3.50 | % | 10/11/17 | 253 | 230,127 | |||||||||||
Term Loan | 5.25 | % | 10/11/19 | 6,948 | 6,704,831 | |||||||||||
Dollar Tree, Inc., Term Loan B(d) | — | 03/09/22 | 13,811 | 13,930,914 | ||||||||||||
Hudson’s Bay Co. (Canada), First Lien Term Loan | 4.75 | % | 11/04/20 | 249 | 250,382 | |||||||||||
J. Crew Group, Inc., Term Loan | 4.00 | % | 03/05/21 | 10,695 | 10,117,506 | |||||||||||
J.C. Penney Corp., Inc., Term Loan | 5.00 | % | 06/20/19 | 2,787 | 2,753,128 | |||||||||||
Lands’ End, Inc., Term Loan B | 4.25 | % | 04/04/21 | 4,881 | 4,673,927 | |||||||||||
Leonardo Acquisition Corp., Term Loan | 4.25 | % | 01/31/21 | 408 | 407,654 | |||||||||||
Men’s Wearhouse, Inc. (The), Term Loan B | 4.50 | % | 06/18/21 | 9,555 | 9,650,192 | |||||||||||
National Vision, Inc., | ||||||||||||||||
First Lien Term Loan | 4.00 | % | 03/12/21 | 3,685 | 3,641,621 | |||||||||||
Second Lien Term Loan | 6.75 | % | 03/11/22 | 132 | 127,251 | |||||||||||
Nine West Holdings, Inc., Term Loan | 4.75 | % | 10/08/19 | 2,896 | 2,754,522 | |||||||||||
OSP Group, Inc., First Lien Term Loan | 4.50 | % | 03/18/21 | 4,034 | 4,044,015 | |||||||||||
Payless, Inc., | ||||||||||||||||
Second Lien Term Loan | 8.50 | % | 03/11/22 | 2,178 | 2,025,203 | |||||||||||
Term Loan | 5.00 | % | 03/11/21 | 7,700 | 7,314,975 | |||||||||||
Pep Boys — Manny, Moe & Jack, Term Loan | 4.25 | % | 10/11/18 | 1,105 | 1,105,231 | |||||||||||
PetSmart, Inc., Term Loan(d) | — | 03/11/22 | 21,440 | 21,612,821 | ||||||||||||
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 | |||||||||||||
| Retailers (except Food & Drug)–(continued) | ||||||||||||||||
Pier 1 Imports (U.S.), Inc., Term Loan | 4.50 | % | 04/30/21 | $ | 2,690 | $ | 2,592,231 | |||||||||
Savers Inc., Term Loan | 5.00 | % | 07/09/19 | 4,841 | 4,768,205 | |||||||||||
Sears Roebuck Acceptance Corp., Term Loan | 5.50 | % | 06/30/18 | 24,863 | 24,570,428 | |||||||||||
Spin Holdco Inc., First Lien Term Loan | 4.25 | % | 11/14/19 | 19,078 | 18,976,336 | |||||||||||
Toys ‘R’ US Property Co. I, LLC, Term Loan | 6.00 | % | 08/21/19 | 14,221 | 13,723,221 | |||||||||||
Toys ‘R’ US-Delaware, Inc., | ||||||||||||||||
Term Loan A-1 | 8.25 | % | 10/24/19 | 1,745 | 1,723,757 | |||||||||||
Term Loan A-1 | 8.25 | % | 10/24/19 | 2,164 | 2,137,459 | |||||||||||
Term Loan B-2 | 5.25 | % | 05/25/18 | 96 | 76,335 | |||||||||||
Term Loan B-3 | 5.25 | % | 05/25/18 | 28 | 22,109 | |||||||||||
Wilton Brands LLC, Term Loan B | 7.50 | % | 08/30/18 | 1,797 | 1,724,728 | |||||||||||
| 162,860,121 | ||||||||||||||||
| Steel–0.13% | ||||||||||||||||
TMS International Corp., Term Loan B | 4.50 | % | 10/16/20 | 3,226 | 3,097,418 | |||||||||||
| Surface Transport–0.62% | ||||||||||||||||
Hertz Corp. (The), LOC (Acquired 03/14/11; Cost $545,562) | 3.75 | % | 03/11/18 | 552 | 546,073 | |||||||||||
Navios Partners Finance (US) Inc., Term Loan | 5.25 | % | 06/27/18 | 334 | 334,411 | |||||||||||
PODS Holding, LLC, | ||||||||||||||||
First Lien Term Loan | 5.25 | % | 02/02/22 | 2,169 | 2,180,853 | |||||||||||
Second Lien Term Loan | 9.25 | % | 02/02/23 | 1,276 | 1,285,515 | |||||||||||
Stena International S.A. (Luxembourg), Term Loan | 4.00 | % | 03/03/21 | 4,663 | 4,181,044 | |||||||||||
U.S. Shipping Corp., Term Loan B-1 | 5.50 | % | 04/30/18 | 3,799 | 3,770,834 | |||||||||||
Vouvray US Finance LLC, | ||||||||||||||||
Second Lien Term Loan | 8.50 | % | 12/27/21 | 1,070 | 1,066,009 | |||||||||||
Term Loan | 5.00 | % | 06/27/21 | 934 | 941,904 | |||||||||||
| 14,306,643 | ||||||||||||||||
| Telecommunications–5.44% | ||||||||||||||||
Altice Financing S.A. (Luxembourg), Term Loan | 5.25 | % | 02/04/22 | 2,534 | 2,552,513 | |||||||||||
Avaya Inc., | ||||||||||||||||
Term Loan B-3 | 4.67 | % | 10/26/17 | 22,897 | 22,293,690 | |||||||||||
Term Loan B-6 | 6.50 | % | 03/30/18 | 7,363 | 7,308,249 | |||||||||||
Consolidated Communications, Inc., Term Loan | 4.25 | % | 12/23/20 | 6,682 | 6,716,033 | |||||||||||
Fairpoint Communications, Inc., Term Loan | 7.50 | % | 02/14/19 | 9,355 | 9,445,790 | |||||||||||
Hargray Communications Group, Inc., Term Loan | 5.25 | % | 06/26/19 | 2,750 | 2,762,456 | |||||||||||
Level 3 Communications, Inc., Term Loan B | 4.50 | % | 01/31/22 | 17,195 | 17,300,520 | |||||||||||
Level 3 Communications, Inc., | ||||||||||||||||
Term Loan B | 4.00 | % | 01/15/20 | 17,059 | 17,086,483 | |||||||||||
Term Loan B-III | 4.00 | % | 08/01/19 | 428 | 428,998 | |||||||||||
LTS Buyer LLC, Second Lien Term Loan | 8.00 | % | 04/12/21 | 82 | 81,796 | |||||||||||
Nextgen Finance, LLC, Term Loan B | 5.00 | % | 05/31/21 | 5,735 | 5,520,132 | |||||||||||
NTELOS Inc., Term Loan B | 5.75 | % | 11/09/19 | 6,568 | 5,582,530 | |||||||||||
Sabre Industries, Inc., Term Loan(d) | — | 02/27/22 | 1,133 | 1,137,483 | ||||||||||||
Syniverse Holdings, Inc., | ||||||||||||||||
Term Loan | 4.00 | % | 04/23/19 | 9,263 | 9,182,112 | |||||||||||
Term Loan | 4.00 | % | 04/23/19 | 2,500 | 2,475,000 | |||||||||||
Telesat LLC, Term Loan B-2 | 3.50 | % | 03/28/19 | 1,259 | 1,258,651 | |||||||||||
U.S. Telepacific Corp., Term Loan | 6.00 | % | 11/25/20 | 7,266 | 7,275,062 | |||||||||||
XO Communications, LLC, Term Loan | 4.25 | % | 03/17/21 | 1,095 | 1,096,548 | |||||||||||
Yankee Cable Acquisition, LLC, Term Loan | 4.50 | % | 03/01/20 | 735 | 737,484 | |||||||||||
Zayo Group, LLC, Term Loan | 4.00 | % | 07/02/19 | 6,163 | 6,169,382 | |||||||||||
| 126,410,912 | ||||||||||||||||
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 | |||||||||||||
| Utilities–2.49% | ||||||||||||||||
Calpine Construction Finance Co., L.P., Term Loan B-2 | 3.25 | % | 01/31/22 | $ | 5,682 | $ | 5,635,606 | |||||||||
Calpine Corp., | ||||||||||||||||
Term Loan | 4.00 | % | 04/01/18 | 42 | 42,298 | |||||||||||
Term Loan B | 4.00 | % | 10/30/20 | 8,259 | 8,272,991 | |||||||||||
Dynegy Inc., Term Loan B-2 | 4.00 | % | 04/23/20 | 2,933 | 2,931,229 | |||||||||||
Granite Acquisition, Inc., | ||||||||||||||||
First Lien Term Loan B | 5.00 | % | 12/19/21 | 12,213 | 12,380,827 | |||||||||||
First Lien Term Loan C | 5.00 | % | 12/19/21 | 535 | 542,550 | |||||||||||
Second Lien Term Loan B | 8.25 | % | 12/19/22 | 2,755 | 2,793,845 | |||||||||||
NSG Holdings LLC, Term Loan (Acquired 12/17/12-10/04/13; Cost $843,117) | 3.75 | % | 12/11/19 | 847 | 841,761 | |||||||||||
Southeast PowerGen LLC, Term Loan B | 4.50 | % | 12/02/21 | 1,877 | 1,896,820 | |||||||||||
Texas Competitive Electric Holdings, Term Loan(g) | 4.66 | % | 10/10/17 | 5,064 | 3,245,081 | |||||||||||
TPF II Power, LLC, Term Loan | 5.50 | % | 10/02/21 | 14,573 | 14,755,165 | |||||||||||
USIC Holding, Inc., First Lien Term Loan | 4.00 | % | 07/10/20 | 4,589 | 4,569,905 | |||||||||||
| 57,908,078 | ||||||||||||||||
Total Variable Rate Senior Loan Interests | 2,107,223,654 | |||||||||||||||
Structured Products–4.57% |
| |||||||||||||||
Apidos Cinco CDO(h)(i) | 4.48 | % | 05/14/20 | 345 | 340,964 | |||||||||||
Apidos CLO IX(h)(i) | 6.73 | % | 07/15/23 | 3,083 | 3,122,303 | |||||||||||
Apidos CLO X(h)(i) | 6.48 | % | 10/30/22 | 3,367 | 3,365,316 | |||||||||||
Apidos CLO X(h)(i) | 6.48 | % | 10/30/22 | 2,190 | 2,188,905 | |||||||||||
Apidos CLO XI(h)(i) | 5.48 | % | 01/17/23 | 2,070 | 1,935,036 | |||||||||||
Apidos CLO XV(h)(i) | 4.98 | % | 10/20/25 | 6,500 | 5,804,500 | |||||||||||
Apidos Quattro CDO(h)(i) | 3.86 | % | 01/20/19 | 272 | 268,546 | |||||||||||
Atrium X CDO(h)(i) | 4.73 | % | 07/16/25 | 3,742 | 3,331,877 | |||||||||||
Babson CLO Ltd. 2007-I(h)(i) | 3.48 | % | 01/18/21 | 1,034 | 1,009,391 | |||||||||||
Babson CLO Ltd. 2013-II(h)(i) | 4.73 | % | 01/18/25 | 6,540 | 5,717,268 | |||||||||||
Carlyle Global Market Strategies CLO 2012-3(h)(i) | 5.73 | % | 10/14/24 | 3,188 | 3,069,406 | |||||||||||
Carlyle Global Market Strategies CLO 2013-1(h)(i) | 5.73 | % | 02/14/25 | 3,200 | 3,067,520 | |||||||||||
Carlyle High Yield Partners 2007-10(h)(i) | 3.43 | % | 04/19/22 | 1,400 | 1,317,540 | |||||||||||
Columbus Nova CLO Ltd.(h)(i) | 3.83 | % | 05/16/19 | 429 | 419,305 | |||||||||||
Columbus Nova CLO Ltd.(h)(i) | 3.83 | % | 05/16/19 | 1,093 | 1,068,298 | |||||||||||
Dryden Senior Loan Fund 2013-30(h)(i) | 5.23 | % | 10/15/25 | 3,276 | 2,995,247 | |||||||||||
Dryden Senior Loan Fund 2014-34(h)(i) | 5.09 | % | 10/15/26 | 1,000 | 883,200 | |||||||||||
Duane Street CLO 2007-4(h)(i) | 4.48 | % | 11/14/21 | 1,764 | 1,750,417 | |||||||||||
Flagship CLO VI(h)(i) | 4.99 | % | 06/10/21 | 3,254 | 3,234,111 | |||||||||||
Flagship CLO VI(h)(i) | 4.99 | % | 06/10/21 | 987 | 980,728 | |||||||||||
Four Corners CLO II, Ltd.(h)(i) | 2.08 | % | 01/26/20 | 310 | 303,614 | |||||||||||
Four Corners CLO II, Ltd.(h)(i) | 2.08 | % | 01/26/20 | 103 | 100,878 | |||||||||||
Halcyon Loan Investors CLO II, Ltd.(h)(i) | 3.83 | % | 04/24/21 | 917 | 878,578 | |||||||||||
ING Investment Management CLO 2012-3, Ltd.(h)(i) | 6.08 | % | 10/15/22 | 1,243 | 1,219,383 | |||||||||||
ING Investment Management CLO 2012-4, Ltd.(h)(i) | 5.98 | % | 10/15/23 | 1,861 | 1,815,778 | |||||||||||
ING Investment Management CLO 2013-1, Ltd.(h)(i) | 5.23 | % | 04/15/24 | 4,808 | 4,394,146 | |||||||||||
ING Investment Management CLO 2013-3(h)(i) | 4.73 | % | 01/18/26 | 2,745 | 2,426,031 | |||||||||||
ING Investment Management CLO III, Ltd.(h)(i) | 3.73 | % | 12/13/20 | 1,188 | 1,158,894 | |||||||||||
ING Investment Management CLO IV, Ltd.(h)(i) | 4.48 | % | 06/14/22 | 293 | 288,517 | |||||||||||
Keuka Park CLO 2013-1(h)(i) | 4.73 | % | 10/21/24 | 617 | 546,600 | |||||||||||
Kingsland Ltd. 2006-2(h)(i) | 4.73 | % | 04/21/21 | 1,205 | 1,184,756 | |||||||||||
KKR Financial CLO 2012-1(h)(i) | 5.74 | % | 12/15/24 | 2,100 | 1,988,280 | |||||||||||
KKR Financial CLO 2013-1(h)(i) | 4.98 | % | 07/15/25 | 2,461 | 2,178,723 | |||||||||||
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 | |||||||||||||
Madison Park Funding IV Ltd.(h)(i) | 3.83 | % | 03/22/21 | $ | 1,344 | $ | 1,307,277 | |||||||||
Madison Park Funding X, Ltd.(h)(i) | 5.48 | % | 01/20/25 | 1,953 | 1,862,771 | |||||||||||
Madison Park Funding XIV, Ltd.(h)(i) | 4.98 | % | 07/20/26 | 1,350 | 1,199,880 | |||||||||||
Madison Park Funding XIV, Ltd.(h)(i) | 5.63 | % | 07/20/26 | 1,915 | 1,607,451 | |||||||||||
Marine Park CLO 2012-1(h)(i) | 5.98 | % | 05/18/23 | 2,191 | 2,137,540 | |||||||||||
Octagon Investment Partners XIV Ltd.(h)(i) | 5.48 | % | 01/15/24 | 2,052 | 1,931,137 | |||||||||||
Octagon Investment Partners XIX Ltd.(h)(i) | 5.10 | % | 04/15/26 | 2,920 | 2,591,792 | |||||||||||
Octagon Investment Partners XVII Ltd.(h)(i) | 4.73 | % | 10/25/25 | 1,975 | 1,753,010 | |||||||||||
Octagon Investment Partners XVIII Ltd.(h)(i) | 5.48 | % | 12/16/24 | 4,442 | 4,042,220 | |||||||||||
Octagon Investment Partners XXI Ltd(h)(i) | 6.83 | % | 10/25/26 | 3,500 | 3,460,100 | |||||||||||
Pacifica CDO VI, Ltd.(h)(i) | 3.98 | % | 08/15/21 | 565 | 535,564 | |||||||||||
Regatta IV Funding Ltd. 2014-1(h)(i) | 5.18 | % | 07/25/26 | 3,250 | 2,859,025 | |||||||||||
Seneca Park CLO 2014-1 Ltd.(h)(i) | 4.92 | % | 07/17/26 | 2,750 | 2,461,250 | |||||||||||
Sierra CLO II Ltd.(h)(i) | 3.73 | % | 01/22/21 | 733 | 721,565 | |||||||||||
Silverado CLO 2006-II Ltd.(h)(i) | 3.98 | % | 10/16/20 | 886 | 847,370 | |||||||||||
Slater Mill Loan Fund, LP(h)(i) | 5.73 | % | 08/17/22 | 1,108 | 1,055,924 | |||||||||||
Stone Tower CLO 2007-6, Ltd.(h)(i) | 3.83 | % | 04/17/21 | 1,750 | 1,699,250 | |||||||||||
Symphony CLO 2014-14 XIV Ltd.(h)(i) | 4.83 | % | 07/14/26 | 2,750 | 2,432,375 | |||||||||||
Symphony CLO IX, Ltd.(h)(i) | 5.23 | % | 04/16/22 | 388 | 373,295 | |||||||||||
Symphony CLO VIII, Ltd.(h)(i) | 6.23 | % | 01/09/23 | 1,156 | 1,149,064 | |||||||||||
Symphony CLO XI, Ltd.(h)(i) | 5.48 | % | 01/17/25 | 2,640 | 2,470,776 | |||||||||||
Symphony CLO XII(h)(i) | 5.13 | % | 10/15/25 | 1,850 | 1,681,465 | |||||||||||
Voya CLO 2014-2, Ltd.(h)(i) | 4.98 | % | 07/17/26 | 1,875 | 1,659,563 | |||||||||||
Total Structured Products | 106,193,720 | |||||||||||||||
Bonds and Notes–3.48% | ||||||||||||||||
| Aerospace & Defense–0.06% | ||||||||||||||||
LMI Aerospace, Inc.(h) | 7.38 | % | 07/15/19 | 1,501 | 1,512,257 | |||||||||||
| Business Equipment & Services–0.19% | ||||||||||||||||
ADT Corp. (The) | 6.25 | % | 10/15/21 | 2,222 | 2,410,870 | |||||||||||
First Data Corp.(h) | 6.75 | % | 11/01/20 | 1,977 | 2,122,804 | |||||||||||
| 4,533,674 | ||||||||||||||||
| Cable & Satellite Television–0.06% | ||||||||||||||||
UPC Broadband Holdings, B.V. (Netherlands)(h) | 7.25 | % | 11/15/21 | 1,074 | 1,181,400 | |||||||||||
UPC Broadband Holdings, B.V. (Netherlands)(h) | 6.88 | % | 01/15/22 | 173 | 190,084 | |||||||||||
| 1,371,484 | ||||||||||||||||
| Chemicals & Plastics–0.36% | ||||||||||||||||
Hexion Specialty Chemicals, Inc. | 6.63 | % | 04/15/20 | 7,205 | 6,898,787 | |||||||||||
Ineos Holdings Ltd.(h) | 6.13 | % | 08/15/18 | 1,025 | 1,048,062 | |||||||||||
Ineos Holdings Ltd.(h) | 8.38 | % | 02/15/19 | 241 | 256,665 | |||||||||||
Ineos Holdings Ltd.(h) | 7.50 | % | 05/01/20 | 157 | 167,598 | |||||||||||
| 8,371,112 | ||||||||||||||||
| Containers & Glass Products–0.40% | ||||||||||||||||
Ardagh Glass Finance PLC(h) | 6.25 | % | 01/31/19 | 1,631 | 1,651,387 | |||||||||||
Ardagh Glass Finance PLC(h) | 7.00 | % | 11/15/20 | 151 | 151,223 | |||||||||||
Ardagh Glass Finance PLC(h) | 6.00 | % | 06/30/21 | 375 | 366,563 | |||||||||||
Reynolds Group Holdings Inc. | 7.88 | % | 08/15/19 | 1,854 | 1,972,192 | |||||||||||
Reynolds Group Holdings Inc. | 9.88 | % | 08/15/19 | 1,879 | 2,022,274 | |||||||||||
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 | |||||||||||||
| Containers & Glass Products–(continued) | ||||||||||||||||
Reynolds Group Holdings Inc. | 5.75 | % | 10/15/20 | $ | 2,901 | $ | 3,031,545 | |||||||||
| 9,195,184 | ||||||||||||||||
| Electronics & Electrical–0.17% | ||||||||||||||||
Blackboard Inc.(h) | 7.75 | % | 11/15/19 | 4,194 | 3,973,815 | |||||||||||
| Food Products–0.01% | ||||||||||||||||
Chiquita Brands LLC | 7.88 | % | 02/01/21 | 190 | 209,238 | |||||||||||
| Forest Products–0.07% | ||||||||||||||||
Verso Paper Holdings LLC | 11.75 | % | 01/15/19 | 1,626 | 1,601,610 | |||||||||||
| Health Care–0.44% | ||||||||||||||||
Biomet Inc. | 6.50 | % | 08/01/20 | 469 | 502,416 | |||||||||||
Community Health Systems, Inc. | 6.88 | % | 02/01/22 | 971 | 1,043,825 | |||||||||||
DJO Finance LLC | 9.75 | % | 10/15/17 | 5,087 | 5,214,175 | |||||||||||
DJO Finance LLC | 8.75 | % | 03/15/18 | 1,386 | 1,457,033 | |||||||||||
Kinetic Concepts, Inc. | 10.50 | % | 11/01/18 | 1,764 | 1,940,400 | |||||||||||
| 10,157,849 | ||||||||||||||||
| Nonferrous Metals & Minerals–0.12% | ||||||||||||||||
TiZir Ltd. (United Kingdom)(h) | 9.00 | % | 09/28/17 | 3,600 | 2,754,000 | |||||||||||
| Oil & Gas–0.35% | ||||||||||||||||
Drill Rigs Holdings Inc.(h) | 6.50 | % | 10/01/17 | 7,260 | 5,786,660 | |||||||||||
Pacific Drilling S.A. (Luxembourg)(h) | 5.38 | % | 06/01/20 | 2,798 | 2,210,420 | |||||||||||
Seventy Seven Operating LLC | 6.50 | % | 07/15/22 | 236 | 126,260 | |||||||||||
| 8,123,340 | ||||||||||||||||
| Publishing–0.05% | ||||||||||||||||
Merrill Communications LLC(h) | 10.00 | % | 03/08/23 | 1,196 | 1,189,548 | |||||||||||
| Radio & Television–0.05% | ||||||||||||||||
Sinclair Television Group, Inc. | 6.38 | % | 11/01/21 | 1,208 | 1,283,500 | |||||||||||
| Retailers (except Food & Drug)–0.37% | ||||||||||||||||
Claire’s Stores Inc.(h) | 9.00 | % | 03/15/19 | 2,952 | 2,785,950 | |||||||||||
Claire’s Stores Inc.(h) | 6.13 | % | 03/15/20 | 2,079 | 1,829,520 | |||||||||||
Guitar Center, Inc.(h) | 6.50 | % | 04/15/19 | 4,669 | 4,003,667 | |||||||||||
| 8,619,137 | ||||||||||||||||
| Telecommunications–0.63% | ||||||||||||||||
Altice Financing SA (Luxembourg)(h) | 6.63 | % | 02/15/23 | 851 | 889,295 | |||||||||||
Avaya Inc.(h) | 7.00 | % | 04/01/19 | 2,835 | 2,877,728 | |||||||||||
Goodman Networks Inc. | 12.13 | % | 07/01/18 | 7,708 | 7,592,380 | |||||||||||
Wind Telecomunicazioni S.p.A. (Italy)(h) | 6.50 | % | 04/30/20 | 256 | 272,640 | |||||||||||
Wind Telecomunicazioni S.p.A. (Italy)(h) | 7.38 | % | 04/23/21 | 1,422 | 1,475,325 | |||||||||||
Windstream Corp. | 7.50 | % | 06/01/22 | 1,484 | 1,476,580 | |||||||||||
Windstream Corp. | 6.38 | % | 08/01/23 | 17 | 15,682 | |||||||||||
| 14,599,630 | ||||||||||||||||
| Utilities–0.15% | ||||||||||||||||
Calpine Corp.(h) | 6.00 | % | 01/15/22 | 807 | 884,674 | |||||||||||
Calpine Corp.(h) | 7.88 | % | 01/15/23 | — | 290 | |||||||||||
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 | |||||||||||||
| Utilities–(continued) | ||||||||||||||||
NRG Energy Inc.(h) | 6.25 | % | 07/15/22 | $ | 1,579 | $ | 1,650,055 | |||||||||
NRG Energy Inc. | 6.63 | % | 03/15/23 | 880 | 928,400 | |||||||||||
| 3,463,419 | ||||||||||||||||
Total Bonds and Notes | 80,958,797 | |||||||||||||||
| Shares | ||||||||||||||||
Common Stocks & Other Equity Interests–0.40% | ||||||||||||||||
| Aerospace & Defense–0.00% | ||||||||||||||||
IAP Worldwide Services(h)(j) | 134 | 93,737 | ||||||||||||||
| Automotive–0.01% | ||||||||||||||||
Dayco Products, LLC(h)(j) | 3,266 | 119,209 | ||||||||||||||
Dayco Products, LLC(h)(k) | 3,261 | 119,027 | ||||||||||||||
| 238,236 | ||||||||||||||||
| Building & Development–0.15% | ||||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class A | 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 | 17 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class D, Wts. expiring 07/15/15 | 24 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class E, Wts. expiring 07/15/15 | 27 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class F, Wts. expiring 07/15/15 | 30 | 0 | ||||||||||||||
Lake at Las Vegas Joint Venture, LLC, Class G, Wts. expiring 07/15/15 | 34 | 0 | ||||||||||||||
Stile Acquisition Corp. (Canada)(j) | 53,093 | 3,256,725 | ||||||||||||||
United Subcontractors, Inc.(h)(j) | 4,840 | 135,533 | ||||||||||||||
| 3,392,258 | ||||||||||||||||
| Business Equipment & Services–0.03% | ||||||||||||||||
Koosharem LLC(h)(j) | 43,971 | 560,630 | ||||||||||||||
| Cable & Satellite Television–0.09% | ||||||||||||||||
ION Media Networks, Inc.(k) | 4,471 | 2,147,421 | ||||||||||||||
| Chemicals & Plastics–0.00% | ||||||||||||||||
LyondellBasell Industries N.V. Class A(k) | 218 | 18,728 | ||||||||||||||
| Drugs–0.00% | ||||||||||||||||
BPA Laboratories Class A, Wts. expiring 04/29/24 (Acquired 04/29/14; Cost $0)(h)(j) | 3,490 | 0 | ||||||||||||||
BPA Laboratories Class B, Wts. expiring 04/29/24 (Acquired 04/29/14; Cost $0)(h)(j) | 5,595 | 0 | ||||||||||||||
| 0 | ||||||||||||||||
| Financial Intermediaries–0.00% | ||||||||||||||||
Bankruptcy Management Solutions, Inc.(h)(j) | 335 | 10,971 | ||||||||||||||
Bankruptcy Management Solutions, Inc. Class A, Wts. expiring 06/27/18 | 19 | 0 | ||||||||||||||
Bankruptcy Management Solutions, Inc. Class B, Wts. expiring 06/27/18 | 21 | 0 | ||||||||||||||
Bankruptcy Management Solutions, Inc. Class C, Wts. expiring 06/27/18 | 31 | 0 | ||||||||||||||
| 10,971 | ||||||||||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Floating Rate Fund
| Shares | Value | |||||||||||
| Food Products–0.00% | ||||||||||||
QCE LLC(h)(l) | 17 | $ | 17 | |||||||||
| Forest Products–0.00% | ||||||||||||
Xerium Technologies, Inc.(j) | 1,766 | 28,185 | ||||||||||
| Leisure Goods, Activities & Movies–0.00% | ||||||||||||
AMF Bowling Centers, Inc.(j) | 1,665 | 65,351 | ||||||||||
| Lodging & Casinos–0.03% | ||||||||||||
Twin River Worldwide Holdings, Inc.(h)(j) | 18,663 | 600,949 | ||||||||||
| Publishing–0.06% | ||||||||||||
F&W Publications, Inc.(h)(j) | 288 | 21,600 | ||||||||||
Merrill Communications LLC, Class A(h)(j) | 133,776 | 735,768 | ||||||||||
Tribune Media Co., Class A(m) | 9,050 | 597,029 | ||||||||||
Tribune Publishing Co.(m) | 2,262 | 48,633 | ||||||||||
| 1,403,030 | ||||||||||||
| Surface Transport–0.00% | ||||||||||||
U.S. Shipping Corp. (Acquired 09/28/07-09/30/09; Cost $87,805)(h)(j) | 87,805 | 74,634 | ||||||||||
U.S. Shipping Corp. (Acquired 09/28/07-09/30/09; Cost $0)(h)(j) | 6,189 | 62 | ||||||||||
| 74,696 | ||||||||||||
| Telecommunications–0.03% | ||||||||||||
FairPoint Communications, Inc.(j) | 44,928 | 759,733 | ||||||||||
| 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 | 9,393,942 | |||||||||||
Preferred Stock–0.01% | ||||||||||||
| Building & Development–0.01% | ||||||||||||
United Subcontractors, Inc. (Acquired 08/02/13; Cost $0)(h)(j) | 4,840 | 145,215 | ||||||||||
Money Market Funds–2.75% |
| |||||||||||
Liquid Assets Portfolio–Institutional Class,(n) | 31,898,596 | 31,898,596 | ||||||||||
Premier Portfolio–Institutional Class,(n) | 31,898,597 | 31,898,597 | ||||||||||
Total Money Market Funds | 63,797,193 | |||||||||||
TOTAL INVESTMENTS–101.96% (Cost $2,406,016,445) | 2,367,712,521 | |||||||||||
OTHER ASSETS LESS LIABILITIES–(1.96)% | (45,615,925 | ) | ||||||||||
NET ASSETS–100.00% | $ | 2,322,096,596 | ||||||||||
Investment Abbreviations:
| CDO | – Collateralized Debt Obligation | |
| CLO | – Collateralized Loan Obligation | |
| IBC | – International Bancshares Corp. | |
| 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.
21 Invesco Floating Rate Fund
Notes to Schedule of Investments:
| (a) | Variable rate senior loan 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 in default with respect to principal and/or interest payments. The value of this security at February 28, 2015 represented less than 1% of the Fund’s Net Assets. |
| (d) | This floating rate interest will settle after February 28, 2015, at which time the interest rate will be determined. |
| (e) | 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 7. |
| (f) | All or a portion of this security is Payment-in-Kind. |
| Issuer | Cash Rate | PIK Rate | ||||||
Lake at Las Vegas Joint Venture LLC, Exit Revolver Loan | — | % | 5.00 | % | ||||
QCE LLC, Term Loan | 0.00 | 15.00 | ||||||
| (g) | The borrower has filed for protection in federal bankruptcy court. |
| (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, 2015 was $150,042,702, which represented 6.46% of the Fund’s Net Assets. |
| (i) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 28, 2015. |
| (j) | Non-income producing securities acquired through the restructuring of senior loans. |
| (k) | Acquired through the restructuring of senior loans. |
| (l) | Non-income producing securities acquired as part of a bankruptcy restructuring. |
| (m) | Acquired as part of a bankruptcy restructuring. |
| (n) | 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, 2015
BBB | 0.5 | % | ||
BB | 32.7 | |||
B | 53.5 | |||
CCC | 8.3 | |||
Not-Rated | 4.5 | |||
Equity | 0.5 |
| † | 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. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco Floating Rate Fund
Statement of Assets and Liabilities
February 28, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $2,342,219,252) | $ | 2,303,915,328 | ||
Investments in affiliated money market funds, at value and cost | 63,797,193 | |||
Total investments, at value (Cost $2,406,016,445) | 2,367,712,521 | |||
Receivable for: | ||||
Investments sold | 39,613,792 | |||
Interest and fees | 14,028,736 | |||
Fund shares sold | 10,404,071 | |||
Investments matured (Cost $17,460,492) | 12,834,545 | |||
Investment for trustee deferred compensation and retirement plans | 163,455 | |||
Other assets | 234,308 | |||
Total assets | 2,444,991,428 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 111,302,772 | |||
Amount due to custodian | 192,977 | |||
Fund shares repurchased | 8,722,470 | |||
Income distributions | 1,173,200 | |||
Accrued fees to affiliates | 1,237,079 | |||
Accrued trustees’ and officers’ fees and benefits | 8,765 | |||
Accrued other operating expenses | 70,296 | |||
Trustee deferred compensation and retirement plans | 187,273 | |||
Total liabilities | 122,894,832 | |||
Net assets applicable to outstanding shares | $ | 2,322,096,596 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 2,385,879,833 | ||
Undistributed net investment income | (2,294,522 | ) | ||
Undistributed net realized gain (loss) | (18,558,844 | ) | ||
Net unrealized appreciation (depreciation) | (42,929,871 | ) | ||
| $ | 2,322,096,596 | |||
Net Assets: | ||||
Class A | $ | 836,015,977 | ||
Class C | $ | 595,957,916 | ||
Class R | $ | 11,193,286 | ||
Class Y | $ | 771,771,317 | ||
Class R5 | $ | 3,509,634 | ||
Class R6 | $ | 103,648,466 | ||
Shares outstanding, $0.01 par value per share |
| |||
Class A | 107,389,129 | |||
Class C | 76,895,744 | |||
Class R | 1,435,269 | |||
Class Y | 99,293,330 | |||
Class R5 | 450,491 | |||
Class R6 | 13,312,740 | |||
Class A: | ||||
Net asset value per share | $ | 7.78 | ||
Maximum offering price per share | ||||
(Net asset value of $7.78 ¸ 97.50%) | $ | 7.98 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 7.75 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 7.80 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 7.77 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 7.79 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 7.79 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 Invesco Floating Rate Fund
Statement of Operations
For the six months ended February 28, 2015
(Unaudited)
Investment income: |
| |||
Interest | $ | 66,593,926 | ||
Dividends | 711,463 | |||
Dividends from affiliated money market funds | 3,869 | |||
Other income | 605,156 | |||
Total investment income | 67,914,414 | |||
Expenses: | ||||
Advisory fees | 7,392,496 | |||
Administrative services fees | 244,266 | |||
Custodian fees | 196,869 | |||
Distributions fees: | ||||
Class A | 1,144,100 | |||
Class C | 2,372,682 | |||
Class R | 27,552 | |||
Interest, facilities and maintenance fees | 376,389 | |||
Transfer agent fees — A, C, R & Y | 1,289,809 | |||
Transfer agent fees — R5 | 2,526 | |||
Transfer agent fees — R6 | 958 | |||
Trustees’ and officers’ fees and benefits | 32,499 | |||
Other | 270,607 | |||
Total expenses | 13,350,753 | |||
Less: Fees waived and expense offset arrangement(s) | (12,272 | ) | ||
Net expenses | 13,338,481 | |||
Net investment income | 54,575,933 | |||
Realized and unrealized gain (loss): | ||||
Net realized gain (loss) from Investment securities | (7,413,657 | ) | ||
Change in net unrealized appreciation (depreciation) of investment securities | (47,397,594 | ) | ||
Net realized and unrealized gain (loss) | (54,811,251 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (235,318 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
24 Invesco Floating Rate Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 54,575,933 | $ | 100,606,717 | ||||
Net realized gain (loss) | (7,413,657 | ) | (2,940,982 | ) | ||||
Change in net unrealized appreciation (depreciation) | (47,397,594 | ) | 7,995,687 | |||||
Net increase (decrease) in net assets resulting from operations | (235,318 | ) | 105,661,422 | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (21,160,010 | ) | (44,823,675 | ) | ||||
Class C | (13,061,116 | ) | (22,528,888 | ) | ||||
Class R | (241,321 | ) | (344,787 | ) | ||||
Class Y | (18,595,826 | ) | (31,175,753 | ) | ||||
Class R5 | (127,476 | ) | (421,837 | ) | ||||
Class R6 | (2,394,519 | ) | (3,091,977 | ) | ||||
Total distributions to shareholders from net investment income | (55,580,268 | ) | (102,386,917 | ) | ||||
Share transactions–net: | ||||||||
Class A | (167,308,095 | ) | 65,718,204 | |||||
Class C | (80,429,944 | ) | 171,360,975 | |||||
Class R | 278,299 | 7,601,981 | ||||||
Class Y | (13,805,743 | ) | 251,164,235 | |||||
Class R5 | (4,413,159 | ) | (1,196,676 | ) | ||||
Class R6 | 22,573,417 | 19,879,757 | ||||||
Net increase (decrease) in net assets resulting from share transactions | (243,105,225 | ) | 514,528,476 | |||||
Net increase (decrease) in net assets | (298,920,811 | ) | 517,802,981 | |||||
Net assets: | ||||||||
Beginning of period | 2,621,017,407 | 2,103,214,426 | ||||||
End of period (includes undistributed net investment income of $(2,294,522) and $(1,290,187), respectively) | $ | 2,322,096,596 | $ | 2,621,017,407 | ||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
25 Invesco Floating Rate Fund
Statement of Cash Flows
For the six months ended February 28, 2015
(Unaudited)
Cash provided by operating activities: | ||||
Net increase (decrease) in net assets resulting from operations | $ | (235,318 | ) | |
Adjustments to reconcile net increase in net assets to net cash provided by operating activities: |
| |||
Purchases of investments | (700,912,889 | ) | ||
Proceeds from sales of investments | 956,618,425 | |||
Decrease in interest receivables and other assets | 375,794 | |||
Amortization of loan fees | (804,046 | ) | ||
Accretion of discount on investment securities | (3,516,018 | ) | ||
Decrease in accrued expenses and other payables | (170,426 | ) | ||
Net realized loss from investment securities | 7,413,657 | |||
Net change in unrealized depreciation on investment securities | 47,397,594 | |||
Net cash provided by operating activities | 306,166,773 | |||
Cash provided by (used in) financing activities: | ||||
Dividends paid to common shareholders from net investment income | (16,227,029 | ) | ||
Increase in payable for amount due custodian | 192,977 | |||
Proceeds from shares of beneficial interest sold | 452,578,973 | |||
Disbursements from shares of beneficial interest reacquired | (736,540,620 | ) | ||
Net cash provided by (used in) financing activities | (299,995,699 | ) | ||
Net increase in cash and cash equivalents | 6,171,074 | |||
Cash and cash equivalents at beginning of period | 57,626,119 | |||
Cash and cash equivalents at end of period | $ | 63,797,193 | ||
Non-cash financing activities: | ||||
Value of shares of beneficial interest issued in reinvestment of dividends paid to shareholders | $ | 39,430,959 | ||
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest, facilities and maintenance fees | $ | 223,612 | ||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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 securities) 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.
26 Invesco Floating Rate Fund
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 asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Swap agreements are fair valued using an evaluated quote, if available, provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end-of-day net present values, spreads, ratings, industry, company performance and returns of referenced assets.
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/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from the settlement date. Facility fees received may be amortized over the life of the loan. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Other income is comprised primarily of amendment fees which are recorded when received. Amendment fees are received in return for changes in the terms of the loan or note.
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 Floating Rate 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 net investment income, if any, 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 the credit agreement. |
| 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. | 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. |
| K. | 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. |
| L. | Industry Concentration — To the extent that the Fund is concentrated in securities of issuers in the banking and financial services industries, the Fund’s performance will depend to a greater extent on the overall condition of those industries. The value of these securities can be sensitive to changes in government regulation, interest rates and economic downturns in the U.S. and abroad. |
| M. | 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. |
| N. | 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
28 Invesco Floating Rate Fund
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”.
| O. | Leverage Risk — The Fund may utilize leverage to seek to enhance the yield of the Fund by borrowing. There are risks associated with borrowing in an effort to increase the yield and distributions on the shares, including that the costs of the financial leverage may exceed the income from investments made with such leverage, the higher volatility of the net asset value of the shares, and that fluctuations in the interest rates on the borrowing may affect the yield and distributions to the shareholders. There can be no assurance that the Fund’s leverage strategy will be successful. |
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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.61%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or 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, 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, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $11,835.
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, 2015, 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, 2015, 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $79,500 in
29 Invesco Floating Rate Fund
front-end sales commissions from the sale of Class A shares and $199,842 and $54,398 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. |
The following is a summary of the tiered valuation input levels, as of February 28, 2015. 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 year ended February 28, 2015, there were transfers from level 3 to level 2 of $29,278,350, due to third-party vendor quotations utilizing more than one market quote and from level 2 to level 3 of $40,948,661, due to third party vendor quotations utilizing single market quotes.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities | $ | 68,506,225 | $ | 1,651,275 | $ | 3,178,850 | $ | 73,336,350 | ||||||||
Variable Rate Senior Loan Interests | — | 1,972,033,015 | 135,190,639 | 2,107,223,654 | ||||||||||||
Bonds and Notes | — | 79,769,249 | 1,189,548 | 80,958,797 | ||||||||||||
Structured Products | — | 106,193,720 | — | 106,193,720 | ||||||||||||
Total Investments | $ | 68,506,225 | $ | 2,159,647,259 | $ | 139,559,037 | $ | 2,367,712,521 | ||||||||
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) during the six months ended February 28, 2015:
Beginning as of | Purchases | Sales | Accrued discounts/ premiums | Net realized gain | Net Change in Unrealized Appreciation/ (Depreciation) | Transfers into Level 3 | Transfers out of Level 3 | Ending Balance, as of | ||||||||||||||||||||||||||||
Variable Rate Senior Loan Interests | $ | 137,602,418 | $ | 32,604,679 | $ | (11,207,206 | ) | $ | 108,463 | $ | 24,484 | $ | (1,440,959 | ) | $ | 42,392,687 | $ | (64,893,927 | ) | $ | 135,190,639 | |||||||||||||||
Bonds & Notes | — | — | — | — | — | — | 1,189,548 | — | 1,189,548 | |||||||||||||||||||||||||||
Equity Securities | 2,970,561 | 198,785 | — | — | — | (84,250 | ) | 93,754 | — | 3,178,850 | ||||||||||||||||||||||||||
Total | $ | 140,572,979 | $ | 32,803,464 | $ | (11,207,206 | ) | $ | 108,463 | $ | 24,484 | $ | (1,525,209 | ) | $ | 43,675,989 | $ | (64,893,927 | ) | $ | 139,559,037 | |||||||||||||||
Securities 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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $437.
30 Invesco Floating Rate 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—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) $500,000,000 or (2) the limits set by its prospectus for borrowings. This agreement will expire on July 22, 2015.
Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7—Unfunded Loan Commitments
As of February 28, 2015, 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 | |||||||
Delta Air Lines, Inc. | Revolver Loan | $ | 1,144,857 | $ | 1,101,925 | |||||
Delta Air Lines, Inc. | Revolver Loan | 8,236,625 | 8,099,362 | |||||||
Lake at Las Vegas Joint Venture, LLC | Exit Revolver Loan | 10,794 | 5,775 | |||||||
Realogy Corp. | Revolver Loan | 5,983,634 | 5,774,207 | |||||||
Trans Union, LLC | Revolver Loan | 1,391,640 | 1,377,334 | |||||||
H.J. Heinz Co. | Revolver Loan | 10,580,654 | 10,518,017 | |||||||
Hearthside Group Holdings, LLC | Revolver Loan | 2,701,077 | 2,691,691 | |||||||
Equinox Holdings, Inc. | Revolver Loan | 1,866,265 | 1,679,639 | |||||||
Getty Images, Inc. | Revolver Loan | 6,977,012 | 6,000,230 | |||||||
David’s Bridal, Inc. | Asset-Backed Revolver Loan | 1,319,794 | 1,201,012 | |||||||
| $ | 40,212,352 | $ | 38,449,192 | |||||||
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2017 | $ | 2,739,285 | $ | — | $ | 2,739,285 | ||||||
| * | 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. |
31 �� Invesco Floating Rate 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, 2015 was $599,421,849 and $915,524,793, 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 | $ | 22,009,202 | ||
Aggregate unrealized (depreciation) of investment securities | (64,264,565 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (42,255,363 | ) | |
Cost of investments for tax purposes is $2,409,967,884.
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 15,248,299 | $ | 118,947,608 | 73,021,095 | $ | 582,061,700 | ||||||||||
Class C | 9,018,391 | 70,143,218 | 43,755,226 | 347,221,070 | ||||||||||||
Class R | 69,105 | 539,659 | 1,028,390 | 8,209,977 | ||||||||||||
Class Y | 30,660,470 | 238,192,054 | 86,284,466 | 686,988,793 | ||||||||||||
Class R5 | 107,266 | 834,809 | 670,297 | 5,353,051 | ||||||||||||
Class R6 | 3,310,129 | 25,933,565 | 3,394,845 | 27,056,438 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,918,682 | 14,959,769 | 3,944,046 | 31,431,898 | ||||||||||||
Class C | 1,239,707 | 9,622,629 | 2,116,573 | 16,796,382 | ||||||||||||
Class R | 28,347 | 221,309 | 39,884 | 318,622 | ||||||||||||
Class Y | 1,556,583 | 12,113,950 | 2,630,434 | 20,928,501 | ||||||||||||
Class R5 | 15,188 | 118,783 | 52,414 | 418,127 | ||||||||||||
Class R6 | 307,455 | 2,394,519 | 387,916 | 3,091,977 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (38,676,382 | ) | (301,215,472 | ) | (68,738,831 | ) | (547,775,394 | ) | ||||||||
Class C | (20,659,085 | ) | (160,195,791 | ) | (24,275,598 | ) | (192,656,477 | ) | ||||||||
Class R | (62,027 | ) | (482,669 | ) | (116,049 | ) | (926,618 | ) | ||||||||
Class Y | (33,995,456 | ) | (264,111,747 | ) | (57,403,642 | ) | (456,753,059 | ) | ||||||||
Class R5 | (688,056 | ) | (5,366,751 | ) | (873,072 | ) | (6,967,854 | ) | ||||||||
Class R6 | (743,399 | ) | (5,754,667 | ) | (1,286,994 | ) | (10,268,658 | ) | ||||||||
Net increase (decrease) in share activity | (31,344,783 | ) | $ | (243,105,225 | ) | 64,631,400 | $ | 514,528,476 | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 61% 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. |
32 Invesco Floating Rate Fund
NOTE 11—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.
At the six months ended February 28, 2015, 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 | ||||||
Barclays Bank PLC | $ | 6,977,012 | $ | 6,000,230 | ||||
Citibank N.A. | 5,983,634 | 5,774,207 | ||||||
Goldman Sachs Lending Partners LLC | 12,153,335 | 11,949,156 | ||||||
Total | $ | 25,113,981 | $ | 23,723,593 | ||||
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, | 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 expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | $ | 7.95 | $ | 0.18 | $ | (0.17 | ) | $ | 0.01 | $ | (0.18 | ) | $ | 7.78 | 0.13 | % | $ | 836,016 | 1.06 | %(e)(f) | 1.06 | %(e)(f) | 4.54 | %(e)(f) | 24 | % | ||||||||||||||||||||||
Year ended 08/31/14 | 7.93 | 0.32 | 0.03 | 0.35 | (0.33 | ) | 7.95 | 4.33 | 1,025,092 | 1.03 | (f) | 1.04 | (f) | 4.01 | (e) | 82 | ||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 7.92 | 0.16 | (0.17 | ) | (0.01 | ) | (0.16 | ) | 7.75 | (0.12 | ) | 595,958 | 1.56 | (e)(f) | 1.56 | (e)(f) | 4.04 | (e)(f) | 24 | |||||||||||||||||||||||||||||
Year ended 08/31/14 | 7.90 | 0.28 | 0.03 | 0.31 | (0.29 | ) | 7.92 | 3.91 | 691,152 | 1.53 | (f) | 1.54 | (f) | 3.51 | 82 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 7.97 | 0.17 | (0.17 | ) | 0.00 | (0.17 | ) | 7.80 | 0.01 | 11,193 | 1.31 | (e)(f) | 1.31 | (e)(f) | 4.29 | (e)(f) | 24 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 7.95 | 0.30 | 0.03 | 0.33 | (0.31 | ) | 7.97 | 4.18 | 11,152 | 1.28 | (f) | 1.29 | (f) | 3.76 | 82 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 7.94 | 0.19 | (0.17 | ) | 0.02 | (0.19 | ) | 7.77 | 0.25 | 771,771 | 0.81 | (e)(f) | 0.81 | (e)(f) | 4.79 | (e)(f) | 24 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 7.92 | 0.34 | 0.03 | 0.37 | (0.35 | ) | 7.94 | 4.69 | 802,508 | 0.78 | (f) | 0.79 | (f) | 4.26 | 82 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 7.96 | 0.19 | (0.17 | ) | 0.02 | (0.19 | ) | 7.79 | 0.27 | 3,510 | 0.80 | (e)(f) | 0.80 | (e)(f) | 4.80 | (e)(f) | 24 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 7.94 | 0.34 | 0.03 | 0.37 | (0.35 | ) | 7.96 | 4.72 | 8,087 | 0.76 | (f) | 0.77 | (f) | 4.28 | 82 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 7.95 | 0.19 | (0.16 | ) | 0.03 | (0.19 | ) | 7.79 | 0.44 | 103,648 | 0.70 | (e)(f) | 0.70 | (e)(f) | 4.90 | (e)(f) | 24 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 7.94 | 0.35 | 0.01 | 0.36 | (0.35 | ) | 7.95 | 4.66 | 83,025 | 0.69 | (f) | 0.70 | (f) | 4.35 | 82 | |||||||||||||||||||||||||||||||||
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 $922,865, $637,959, $11,112, $769,139, $5,275 and $96,570 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (f) | Ratio includes line of credit expense of 0.03%, 0.02%, 0.02%, 0.03%, 0.01% and 0.02% for the six months ended February 28, 2015 and the years ended August 31, 2014, August 31, 2013, August 31, 2012, August 31, 2011 and August 31, 2010, 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 September 24, 2012. |
| (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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,001.30 | $ | 5.26 | $ | 1,019.54 | $ | 5.31 | 1.06 | % | ||||||||||||
| C | 1,000.00 | 998.80 | 7.73 | 1,017.06 | 7.80 | 1.56 | ||||||||||||||||||
| R | 1,000.00 | 1,000.10 | 6.50 | 1,018.30 | 6.56 | 1.31 | ||||||||||||||||||
| Y | 1,000.00 | 1,002.50 | 4.02 | 1,020.78 | 4.06 | 0.81 | ||||||||||||||||||
| R5 | 1,000.00 | 1,002.70 | 3.97 | 1,020.83 | 4.01 | 0.80 | ||||||||||||||||||
| R6 | 1,000.00 | 1,003.10 | 3.48 | 1,021.32 | 3.51 | 0.70 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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, 2015 | ||
| ||||
Invesco Global Real Estate Income Fund
| ||||
| Nasdaq: | ||||
| A: ASRAX n B: SARBX n C: ASRCX n Y: ASRYX n R5: ASRIX n 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, 8/31/14 to 2/28/15, 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 | 2.82 | % | ||
Class B Shares | 2.53 | |||
Class C Shares | 2.53 | |||
Class Y Shares | 3.06 | |||
Class R5 Shares | 3.09 | |||
Class R6 Shares | 3.13 | |||
MSCI World Indexq (Broad Market Index) | 2.14 | |||
Custom Global Real Estate Income Index¢ (Style-Specific Index) | 5.45 | |||
Lipper Global Real Estate Funds Classification Average¿ (Peer Group) | 4.87 | |||
Source(s): qFactSet Research Systems Inc.; nInvesco, FactSet Research Systems Inc.; ¿Lipper Inc.
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 REITs Index, through August 31, 2011, and the FTSE EPRA/NAREIT Developed Index, which is computed using the net return by withholding applicable taxes, thereafter. 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 REITs Index is an unmanaged index considered representative of US REITs. The FTSE EPRA/NAREIT Developed Index is an unmanaged index considered representative of global real estate companies and real estate investment trusts. The index is computed using the net return, which withholds 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 2/28/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (5/31/02) | 9.25 | % | ||
10 Years | 6.38 | |||
5 Years | 9.82 | |||
1 Year | 5.58 | |||
Class B Shares | ||||
10 Years | 6.10 | % | ||
5 Years | 9.97 | |||
1 Year | 6.01 | |||
Class C Shares | ||||
10 Years | 6.11 | % | ||
5 Years | 10.25 | |||
1 Year | 10.02 | |||
Class Y Shares | ||||
10 Years | 7.12 | % | ||
5 Years | 11.34 | |||
1 Year | 12.16 | |||
Class R5 Shares | ||||
10 Years | 7.31 | % | ||
5 Years | 11.46 | |||
1 Year | 12.21 | |||
Class R6 Shares | ||||
10 Years | 7.11 | % | ||
5 Years | 11.35 | |||
1 Year | 12.30 | |||
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 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (5/31/02) | 9.16 | % | ||
10 Years | 5.55 | |||
5 Years | 9.37 | |||
1 Year | 8.06 | |||
Class B Shares | ||||
10 Years | 5.27 | % | ||
5 Years | 9.53 | |||
1 Year | 8.43 | |||
Class C Shares | ||||
10 Years | 5.27 | % | ||
5 Years | 9.81 | |||
1 Year | 12.43 | |||
Class Y Shares | ||||
10 Years | 6.29 | % | ||
5 Years | 10.90 | |||
1 Year | 14.61 | |||
Class R5 Shares | ||||
10 Years | 6.47 | % | ||
5 Years | 11.02 | |||
1 Year | 14.80 | |||
Class R6 Shares | ||||
10 Years | 6.28 | % | ||
5 Years | 10.88 | |||
1 Year | 14.89 | |||
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 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%, 0.92% 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.
| 3 Invesco Global Real Estate Income Fund |
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Real Estate Investment Trusts, Common Stocks & Other Equity Interests–58.19% |
| |||||||
| Australia–6.54% | ||||||||
Dexus Property Group | 1,639,853 | $ | 10,122,911 | |||||
Federation Centres | 3,350,870 | 7,802,742 | ||||||
Goodman Group | 2,535,475 | 12,362,814 | ||||||
Novion Property Group Pty Ltd. | 2,499,503 | 4,804,654 | ||||||
Scentre Group | 4,535,653 | 13,680,455 | ||||||
Stockland | 5,067,961 | 18,572,891 | ||||||
Westfield Corp. | 1,581,764 | 12,125,066 | ||||||
| 79,471,533 | ||||||||
| Belgium–0.15% | ||||||||
Aedifica S.A. | 26,644 | 1,802,456 | ||||||
| Canada–3.07% | ||||||||
Allied Properties REIT | 375,300 | 12,186,742 | ||||||
Artis REIT | 544,100 | 6,685,901 | ||||||
Canadian REIT | 179,800 | 6,731,712 | ||||||
Chartwell Retirement Residences | 454,825 | 4,657,408 | ||||||
H&R REIT | 363,900 | 7,039,281 | ||||||
| 37,301,044 | ||||||||
| China–0.26% | ||||||||
China Resources Land Ltd. | 1,164,000 | 3,091,673 | ||||||
| Finland–0.20% | ||||||||
Sponda Oyj | 484,261 | 2,423,540 | ||||||
| France–2.48% | ||||||||
Gecina S.A. | 24,591 | 3,232,199 | ||||||
ICADE | 25,154 | 2,254,521 | ||||||
Mercialys S.A. | 269,249 | 6,630,471 | ||||||
Unibail-Rodamco S.E. | 62,409 | 17,975,354 | ||||||
| 30,092,545 | ||||||||
| Germany–0.65% | ||||||||
Deutsche Euroshop AG | 85,762 | 4,378,917 | ||||||
Deutsche Wohnen AG | 128,550 | 3,543,999 | ||||||
| 7,922,916 | ||||||||
| Hong Kong–3.31% | ||||||||
Hongkong Land Holdings Ltd. | 330,000 | 2,491,500 | ||||||
Link REIT (The) | 2,758,000 | 17,602,439 | ||||||
New World Development Co. Ltd. | 4,253,000 | 5,017,529 | ||||||
Sino Land Co. Ltd. | 2,583,000 | 4,222,961 | ||||||
Sun Hung Kai Properties Ltd. | 392,000 | 6,146,007 | ||||||
Wharf Holdings Ltd. (The) | 651,000 | 4,746,648 | ||||||
| 40,227,084 | ||||||||
| Japan–7.22% | ||||||||
Activia Properties, Inc. | 831 | 7,362,588 | ||||||
Japan Hotel REIT Investment Corp. | 8,417 | 5,586,006 | ||||||
Japan Logistics Fund Inc. | 695 | 1,413,353 | ||||||
Japan Prime Realty Investment Corp. | 2,115 | 7,592,716 | ||||||
| Shares | Value | |||||||
| Japan–(continued) | ||||||||
Japan Real Estate Investment Corp. | 1,311 | $ | 6,530,893 | |||||
Japan Retail Fund Investment Corp. | 4,031 | 8,642,189 | ||||||
Kenedix Office Investment Corp. | 1,318 | 7,502,156 | ||||||
Kenedix Retail REIT Corp.(a) | 1,262 | 2,886,018 | ||||||
Mitsui Fudosan Co., Ltd. | 477,000 | 13,119,120 | ||||||
Mori Hills REIT Investment Corp. | 3,849 | 5,443,420 | ||||||
Nippon Prologis REIT Inc. | 3,459 | 7,979,639 | ||||||
Sumitomo Realty & Development Co., Ltd. | 279,000 | 9,600,247 | ||||||
United Urban Investment Corp. | 2,482 | 4,028,790 | ||||||
| 87,687,135 | ||||||||
| Netherlands–0.57% | ||||||||
Eurocommercial Properties N.V. | 75,431 | 3,509,125 | ||||||
Wereldhave N.V. | 49,088 | 3,375,168 | ||||||
| 6,884,293 | ||||||||
| Singapore–2.58% | ||||||||
Ascendas REIT | 3,888,600 | 7,047,873 | ||||||
CapitaCommercial Trust | 4,591,900 | 5,947,097 | ||||||
CDL Hospitality Trusts | 2,000,000 | 2,597,593 | ||||||
Frasers Centrepoint Trust | 3,812,000 | 5,706,252 | ||||||
Global Logistic Properties Ltd. | 1,557,000 | 2,964,161 | ||||||
Mapletree Industrial Trust | 6,265,000 | 7,102,601 | ||||||
| 31,365,577 | ||||||||
| South Africa–0.75% | ||||||||
Growthpoint Properties Ltd. | 1,645,163 | 4,185,032 | ||||||
Hyprop Investments Ltd. | 510,636 | 4,871,161 | ||||||
| 9,056,193 | ||||||||
| Sweden–0.74% | ||||||||
Castellum AB | 254,985 | 4,367,344 | ||||||
Fabege AB | 156,333 | 2,371,958 | ||||||
Wihlborgs Fastigheter AB | 108,064 | 2,281,226 | ||||||
| 9,020,528 | ||||||||
| United Kingdom–3.94% | ||||||||
Big Yellow Group PLC | 642,162 | 6,265,862 | ||||||
British Land Co. PLC | 314,472 | 4,015,386 | ||||||
Hammerson PLC | 962,563 | 10,038,612 | ||||||
Land Securities Group PLC | 1,422,495 | 27,584,147 | ||||||
| 47,904,007 | ||||||||
| United States–25.73% | ||||||||
AvalonBay Communities, Inc. | 124,526 | 20,962,707 | ||||||
Brixmor Property Group, Inc. | 437,800 | 11,120,120 | ||||||
Cohen & Steers Quality Income Realty Fund, Inc. | 357,173 | 4,336,080 | ||||||
CoreSite Realty Corp. | 116,600 | 5,531,504 | ||||||
Corrections Corp. of America | 160,477 | 6,401,427 | ||||||
EastGroup Properties, Inc. | 98,700 | 6,218,100 | ||||||
Essex Property Trust, Inc. | 54,200 | 12,055,706 | ||||||
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) | ||||||||
Federal Realty Investment Trust | 50,900 | $ | 7,229,327 | |||||
General Growth Properties, Inc. | 287,800 | 8,349,078 | ||||||
Geo Group Inc. (The) | 101,000 | 4,358,150 | ||||||
Government Properties Income Trust | 268,450 | 6,279,045 | ||||||
Health Care REIT, Inc. | 78,800 | 6,076,268 | ||||||
Healthcare Realty Trust, Inc. | 318,400 | 9,087,136 | ||||||
Healthcare Trust of America, Inc.–Class A | 589,800 | 16,366,950 | ||||||
Highwoods Properties, Inc. | 168,400 | 7,680,724 | ||||||
Host Hotels & Resorts Inc. | 197,800 | 4,153,800 | ||||||
Hudson Pacific Properties Inc. | 301,600 | 9,639,136 | ||||||
LaSalle Hotel Properties | 484,600 | 18,860,632 | ||||||
Mid-America Apartment Communities, Inc. | 292,300 | 21,182,981 | ||||||
National Health Investors, Inc. | 147,500 | 10,499,050 | ||||||
National Retail Properties Inc. | 209,000 | 8,410,160 | ||||||
Piedmont Office Realty Trust Inc.–Class A | 439,500 | 8,056,035 | ||||||
Prologis, Inc. | 139,200 | 5,945,232 | ||||||
Public Storage | 44,077 | 8,692,866 | ||||||
Realty Income Corp. | 188,166 | 9,419,590 | ||||||
Retail Opportunity Investments Corp. | 760,600 | 12,740,050 | ||||||
RLJ Lodging Trust | 530,500 | 16,875,205 | ||||||
Simon Property Group, Inc. | 118,300 | 22,519,588 | ||||||
UDR, Inc. | 413,439 | 13,205,242 | ||||||
Ventas, Inc. | 47,500 | 3,537,325 | ||||||
WP GLIMCHER Inc. | 384,200 | 6,658,186 | ||||||
| 312,447,400 | ||||||||
Total Real Estate Investment Trusts, Common Stocks & Other Equity Interests |
| 706,697,924 | ||||||
| Principal Amount | ||||||||
Mortgage-Backed Securities–19.48% |
| |||||||
| United Kingdom–0.75% | ||||||||
Hercules (Eclipse) PLC., Series 2006-4, Class B, Floating Rate Pass Through Ctfs., 0.92%, 10/25/18(b)(c) | GBP 4,690,779 | 6,980,654 | ||||||
Triton European Loan Conduit PLC (United Kingdom), | ||||||||
Series 26X, Class F, Floating Rate Pass Through Ctfs., 1.07%, 10/25/19(b)(c) | GBP 513,337 | 749,253 | ||||||
Series 26X, Class G, Floating Rate Pass Through Ctfs., 1.25%, 10/25/19(b)(c) | GBP 975,926 | 1,440,367 | ||||||
| 9,170,274 | ||||||||
| United States–18.73% | ||||||||
ACRE Commercial Mortgage Trust, | ||||||||
Series 2013-FL1, Class D, Floating Rate Pass Through Ctfs., 4.57%, 06/15/30(b)(d) | $ | 19,706,000 | 19,736,534 | |||||
Series 2013-FL1, Class C, Floating Rate Pass Through Ctfs., 3.17%, 06/15/30(b)(d) | 11,671,000 | 11,684,550 | ||||||
| Principal Amount | Value | |||||||
| United States–(continued) | ||||||||
Banc of America Merrill Lynch Commercial Mortgage Inc., | ||||||||
Series 2004-2, Class L, Pass Through Ctfs., 4.90%, 11/10/38(d) | $ | 600,000 | $ | 605,270 | ||||
Series 2005-5, Class F, Variable Rate Pass Through Ctfs., 5.24%, 10/10/45(b)(d) | 3,800,000 | 3,788,851 | ||||||
Banc of America Merrill Lynch Large Loan Inc., | ||||||||
Series 2014-FRR7, Class B, Floating Rate Pass Through Ctfs., 2.42%, 10/26/44(b)(d) | 4,900,000 | 4,647,883 | ||||||
Series 2014-ICTS, Class D, Floating Rate Pass Through Ctfs., 2.07%, 06/15/28(b)(d) | 3,300,000 | 3,300,861 | ||||||
Series 2014-ICTS, Class E, Floating Rate Pass Through Ctfs., 3.12%, 06/15/28(b)(d) | 7,350,000 | 7,329,552 | ||||||
Series 2015-ASHF, Class E, Floating Rate Pass Through Ctfs., 4.17%, 01/15/28(b)(d) | 1,400,000 | 1,400,000 | ||||||
Bear Stearns Commercial Mortgage Securities Trust, | ||||||||
Series 2004-PWR6, Class B, Pass Through Ctfs., 4.95%, 11/11/41(d) | 40,159 | 41,752 | ||||||
Series 2005-PWR8, Class C, Pass Through Ctfs., 4.86%, 06/11/41 | 4,900,000 | 4,879,430 | ||||||
Citigroup Commercial Mortgage Trust, Series 2014-388G, Class E, Floating Rate Pass Through Ctfs., 2.52%, 06/15/33(b)(d) | 11,700,000 | 11,681,426 | ||||||
Credit Suisse First Boston Mortgage Securities Corp., | ||||||||
Series 2005-C4, Class D, Variable Rate Pass Through Ctfs., 5.27%, 08/15/38(b) | 8,950,000 | 9,008,851 | ||||||
Series 2005-C5, Class C, Pass Through Ctfs., 5.10%, 08/15/38 | 4,975,000 | 5,050,793 | ||||||
Del Coronado Trust, | 12,420,000 | 12,421,242 | ||||||
FREMF Mortgage Trust, Series 2012-KF01, Class C, Floating Rate Pass Through Ctfs., 3.01%, 10/25/44(b)(d) | 1,278,000 | 1,348,105 | ||||||
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 | 954,273 | ||||||
GS Mortgage Securities Corp. Trust, | ||||||||
Series 2013-NYC5, Class F, Variable Rate Pass Through Ctfs., 3.65%, 01/10/30(b)(d) | 9,200,000 | 9,218,147 | ||||||
Series 2013-NYC5, Class G, Variable Rate Pass Through Ctfs., 3.65%, 01/10/30(b)(d) | 4,000,000 | 3,929,622 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Real Estate Income Fund
| Principal Amount | Value | |||||||
| United States–(continued) | ||||||||
GS Mortgage Securities Trust, | ||||||||
Series GSMS 2011-GC3, Class F, Pass Through Ctfs., 5.00%, 03/10/44(d) | $ | 4,900,000 | $ | 4,295,389 | ||||
Series GSMS 2011-GC3, Class E, Pass Through Ctfs., 5.00%, 03/10/44(d) | 7,888,000 | 7,731,802 | ||||||
Series GSMS 2011-GC5, Class E, Variable Rate Pass Through Ctfs., 5.31%, 08/10/44(b)(d) | 11,025,000 | 10,547,612 | ||||||
Hilton USA Trust, | ||||||||
Series 2013-HLF, Class DFL, Floating Rate Pass Through Ctfs., 2.92%, 11/05/30(b)(d) | 2,808,575 | 2,809,476 | ||||||
Series 2013-HLF, Class EFL, Floating Rate Pass Through Ctfs., 3.92%, 11/05/30(b)(d) | 12,195,130 | 12,204,380 | ||||||
Series 2014-ORL, Class E, Floating Rate Pass Through Ctfs., 3.42%, 07/15/29(b)(d) | 5,300,000 | 5,243,491 | ||||||
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class F, Variable Rate Pass Through Ctfs., 5.19%, 01/15/42(b)(d) | 7,950,000 | 7,812,755 | ||||||
JP Morgan Chase Commercial Mortgage Securities Trust, | ||||||||
Series 2011-C4, Class TAC1, Pass Through Ctfs., 7.99%, 07/15/46(d) | 1,871,089 | 2,065,729 | ||||||
Series 2014-PHH, Class E, Floating Rate Pass Through Ctfs., 3.47%, 08/15/27(b)(d) | 5,000,000 | 5,028,138 | ||||||
Merrill Lynch Mortgage Trust, | ||||||||
Series 2003-KEY1, Class F, Variable Rate Pass Through Ctfs., 6.70%, 11/12/35(b)(d) | 937,000 | 940,711 | ||||||
Series 2005-MCP1, Class E, Pass Through Ctfs., 5.13%, 06/12/43(d) | 4,500,000 | 4,478,967 | ||||||
Morgan Stanley Capital I Trust, | ||||||||
Series 2005-IQ10, Class B, Variable Rate Pass Through Ctfs., 5.24%, 09/15/42(b) | 6,475,000 | 6,601,169 | ||||||
Series 2006-IQ11, Class B, Variable Rate Pass Through Ctfs., 5.67%, 10/15/42(b) | 270,000 | 264,763 | ||||||
Series 2006-TOP23, Class C, Variable Rate Pass Through Ctfs., 5.81%, 08/12/41(b)(d) | 8,875,000 | 9,171,083 | ||||||
Series 2007-HQ11, Class AJ, Pass Through Ctfs., 5.51%, 02/12/44 | 5,000,000 | 5,185,755 | ||||||
Series 2007-TOP27, Class AJ, Variable Rate Pass Through Ctfs., 5.65%, 06/11/42(b) | 7,400,000 | 8,083,390 | ||||||
Starwood Retail Property Trust, Series 2014-STAR, Class E, Floating Rate Pass Through Ctfs., 4.32%, 11/15/27(b)(d) | 12,200,000 | 12,305,371 | ||||||
| Principal Amount | Value | |||||||
| United States–(continued) | ||||||||
Wachovia Bank Commercial Mortgage Trust, | ||||||||
Series 2005-C16, Class H, Variable Rate Pass Through Ctfs., 5.26%, 10/15/41(b)(d) | $ | 550,000 | $ | 556,388 | ||||
Series 2005-C19, Class F, Variable Rate Pass Through Ctfs., 5.42%, 05/15/44(b)(d) | 900,000 | 902,766 | ||||||
Series 2005-C19, Class G, Variable Rate Pass Through Ctfs., 5.43%, 05/15/44(b)(d) | 5,000,000 | 5,015,030 | ||||||
Series 2005-C19, Class H, Variable Rate Pass Through Ctfs., 5.43%, 05/15/44(b)(d) | 1,700,000 | 1,704,851 | ||||||
Series 2005-C21, Class D, Variable Rate Pass Through Ctfs., 5.24%, 10/15/44(b) | 3,450,000 | 3,491,052 | ||||||
| 227,467,210 | ||||||||
Total Mortgage-Backed Securities |
| 236,637,484 | ||||||
| Shares | ||||||||
Preferred Stocks–18.15% |
| |||||||
| Australia–0.40% | ||||||||
Goodman PLUS Trust, 6.46% Unsec. Sub. Gtd. Floating Rate Pfd.(b) | 60,179 | 4,881,078 | ||||||
| United States–17.75% | ||||||||
Alexandria Real Estate Equities Inc., Series D, $1.75 Conv. Pfd. | 252,000 | 7,363,138 | ||||||
American Tower Corp., Series A, $5.25 Conv. Pfd. | 63,640 | 6,717,202 | ||||||
CoreSite Realty Corp., Series A, 7.25% Pfd. | 292,585 | 7,677,430 | ||||||
Crown Castle International Corp., Series A, $4.50 Conv. Pfd. | 75,000 | 7,987,500 | ||||||
CubeSmart, Series A, 7.75% Pfd. | 336,352 | 9,061,323 | ||||||
Eagle Hospitality Properties Trust Inc., Series A, 8.25% Pfd. | 195,800 | 12,433 | ||||||
EPR Properties, Series E, $2.25 Conv. Pfd. | 162,800 | 5,616,600 | ||||||
Essex Property Trust, Inc., Series H, 7.13% Pfd. | 385,720 | 10,337,296 | ||||||
General Growth Properties, Inc., Series A, 6.38% Pfd. | 119,782 | 3,141,882 | ||||||
Health Care REIT, Inc., Series J, 6.50% Pfd. | 286,900 | 7,657,361 | ||||||
Hersha Hospitality Trust, Series B, 8.00% Pfd. | 340,500 | 8,992,605 | ||||||
Hudson Pacific Properties Inc., Series B, 8.38% Pfd. | 607,407 | 15,932,286 | ||||||
Kilroy Realty Corp., Series G, 6.88% Pfd. | 271,046 | 7,217,955 | ||||||
Kilroy Realty Corp., Series H, 6.38% Pfd. | 291,982 | 7,430,942 | ||||||
LaSalle Hotel Properties, Series H, 7.50% Pfd. | 249,210 | 6,511,857 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Real Estate Income Fund
| Shares | Value | |||||||
| United States–(continued) | ||||||||
National Retail Properties Inc., Series D, 6.63% Pfd. | 421,800 | $ | 11,173,482 | |||||
National Retail Properties Inc., Series E, 5.70% Pfd. | 47,000 | 1,194,857 | ||||||
Pebblebrook Hotel Trust, Series A, 7.88% Pfd. | 289,565 | 7,563,438 | ||||||
Pebblebrook Hotel Trust, Series B, 8.00% Pfd. | 155,910 | 4,131,615 | ||||||
Pebblebrook Hotel Trust, Series C, 6.50% Pfd. | 274,670 | 7,075,499 | ||||||
Public Storage, Series A, 5.88% Pfd. | 69,000 | 1,771,230 | ||||||
Public Storage, Series P, 6.50% Pfd. | 59,913 | 1,561,932 | ||||||
Public Storage, Series Q, 6.50% Pfd. | 160,432 | 4,331,664 | ||||||
Public Storage, Series R, 6.35% Pfd. | 326,034 | 8,643,161 | ||||||
Public Storage, Series Y, 6.38% Pfd. | 650,314 | 17,493,447 | ||||||
Realty Income Corp., Series F, 6.63% Pfd. | 144,942 | 3,877,199 | ||||||
Regency Centers Corp., Series 6, 6.63% Pfd. | 29,245 | 782,596 | ||||||
Regency Centers Corp., Series 7, 6.00% Pfd. | 30,162 | 763,099 | ||||||
Senior Housing Properties Trust, 5.63% Sr. Unsec. Pfd. | 100,000 | 2,492,000 | ||||||
SL Green Realty Corp., Series I, 6.50% Pfd. | 88,000 | 2,320,560 | ||||||
Summit Hotel Properties, Inc., Series A, 9.25% Pfd. | 67,294 | 1,857,314 | ||||||
Summit Hotel Properties, Inc., Series B, 7.88% Pfd. | 161,156 | 4,304,477 | ||||||
Terreno Realty Corp., Series A, 7.75% Pfd. | 111,651 | 2,990,014 | ||||||
Vornado Realty Trust, Series G, 6.63% Pfd. | 35,865 | 927,110 | ||||||
Vornado Realty Trust, Series I, 6.63% Pfd. | 281,574 | 7,208,294 | ||||||
Vornado Realty Trust, Series K, 5.70% Pfd. | 97,000 | 2,475,440 | ||||||
Weyerhaeuser Co., Series A, $3.19 Conv. Pfd. | 153,700 | 8,966,858 | ||||||
| 215,563,096 | ||||||||
Total Preferred Stocks | 220,444,174 | |||||||
| Principal Amount | Value | |||||||
U.S. Dollar Denominated Bonds & Notes –1.28% |
| |||||||
| Brazil–0.64% | ||||||||
BR Properties S.A., Sr. Unsec. Gtd. | $ | 7,700,000 | $ | 7,719,250 | ||||
| China–0.39% | ||||||||
Country Garden Holdings Co. Ltd., Sr. Unsec. Gtd. Notes, 11.13%, 02/23/18(d) | 4,500,000 | 4,774,050 | ||||||
| United States–0.25% | ||||||||
Host Hotels & Resorts L.P., Sr. Unsec. Global Notes, 5.88%, 06/15/19 | 2,055,000 | 2,151,328 | ||||||
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16 | 900,000 | 918,563 | ||||||
| 3,069,891 | ||||||||
Total U.S. Dollar Denominated Bonds & Notes |
| 15,563,191 | ||||||
Non U.S. Dollar Denominated Bonds & |
| |||||||
| Australia–0.22% | ||||||||
General Property Trust, Sr. Unsec. Gtd. Medium-Term Notes, 6.75%, 01/24/19 (Cost $3,222,987) | AUD 2,980,000 | 2,624,098 | ||||||
| Shares | ||||||||
Money Market Funds–2.31% |
| |||||||
Liquid Assets Portfolio–Institutional Class(f) | 14,045,771 | 14,045,771 | ||||||
Premier Portfolio–Institutional Class(f) | 14,045,771 | 14,045,771 | ||||||
Total Money Market Funds (Cost $28,091,542) | 28,091,542 | |||||||
TOTAL INVESTMENTS–99.63% |
| 1,210,058,413 | ||||||
OTHER ASSETS LESS LIABILITIES–0.37% |
| 4,481,009 | ||||||
NET ASSETS–100.00% | $ | 1,214,539,422 | ||||||
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 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Global Real Estate Income Fund
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, 2015. |
| (c) | Foreign denominated security. Principal amount is denominated in the 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, 2015 was $197,395,307, which represented 16.25% 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, 2015
United States | 62.4 | % | ||
Australia | 7.2 | |||
Japan | 7.2 | |||
United Kingdom | 4.7 | |||
Hong Kong | 3.3 | |||
Canada | 3.1 | |||
Singapore | 2.6 | |||
France | 2.5 | |||
Countries each less than 2.0% of portfolio | 4.3 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.7 |
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, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $1,095,554,380) | $ | 1,181,966,871 | ||
Investments in affiliated money market funds, at value and cost | 28,091,542 | |||
Total investments, at value (Cost $1,123,645,922) | 1,210,058,413 | |||
Foreign currencies, at value (Cost $2,468,698) | 2,470,766 | |||
Receivable for: | ||||
Investments sold | 279,090 | |||
Fund shares sold | 3,041,155 | |||
Dividends and interest | 2,369,479 | |||
Investment for trustee deferred compensation and retirement plans | 130,217 | |||
Other assets | 115,374 | |||
Total assets | 1,218,464,494 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares reacquired | 3,021,132 | |||
Accrued fees to affiliates | 630,891 | |||
Accrued trustees’ and officers’ fees and benefits | 6,696 | |||
Accrued other operating expenses | 117,391 | |||
Trustee deferred compensation and retirement plans | 148,962 | |||
Total liabilities | 3,925,072 | |||
Net assets applicable to shares outstanding | $ | 1,214,539,422 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 1,126,566,021 | ||
Undistributed net investment income | (13,515,951 | ) | ||
Undistributed net realized gain | 15,138,556 | |||
Net unrealized appreciation | 86,350,796 | |||
| $ | 1,214,539,422 | |||
Net Assets: | ||||
Class A | $ | 605,658,384 | ||
Class B | $ | 1,515,285 | ||
Class C | $ | 120,066,043 | ||
Class Y | $ | 460,258,530 | ||
Class R5 | $ | 25,256,674 | ||
Class R6 | $ | 1,784,506 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 63,724,044 | |||
Class B | 159,743 | |||
Class C | 12,658,980 | |||
Class Y | 48,562,520 | |||
Class R5 | 2,659,376 | |||
Class R6 | 187,702 | |||
Class A: | ||||
Net asset value per share | $ | 9.50 | ||
Maximum offering price per share | ||||
(Net asset value of $9.50 ¸ 94.50%) | $ | 10.05 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 9.49 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 9.48 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 9.48 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 9.50 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 9.51 | ||
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, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $822,716) | $ | 20,341,810 | ||
Dividends from affiliated money market funds | 6,615 | |||
Interest | 5,274,034 | |||
Total investment income | 25,622,459 | |||
Expenses: | ||||
Advisory fees | 4,282,480 | |||
Administrative services fees | 146,426 | |||
Custodian fees | 73,314 | |||
Distribution fees: | ||||
Class A | 720,422 | |||
Class B | 7,820 | |||
Class C | 584,188 | |||
Transfer agent fees — A, B, C and Y | 872,063 | |||
Transfer agent fees — R5 | 12,182 | |||
Transfer agent fees — R6 | 176 | |||
Trustees’ and officers’ fees and benefits | 23,229 | |||
Other | 183,387 | |||
Total expenses | 6,905,687 | |||
Less: Fees waived and expense offset arrangement(s) | (25,253 | ) | ||
Net expenses | 6,880,434 | |||
Net investment income | 18,742,025 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 15,484,414 | |||
Foreign currencies | (233,792 | ) | ||
| 15,250,622 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (420,060 | ) | ||
Foreign currencies | (54,182 | ) | ||
| (474,242 | ) | |||
Net realized and unrealized gain | 14,776,380 | |||
Net increase in net assets resulting from operations | $ | 33,518,405 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 18,742,025 | $ | 35,045,450 | ||||
Net realized gain | 15,250,622 | 8,931,020 | ||||||
Change in net unrealized appreciation (depreciation) | (474,242 | ) | 131,956,988 | |||||
Net increase in net assets resulting from operations | 33,518,405 | 175,933,458 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (14,303,104 | ) | (29,303,895 | ) | ||||
Class B | (33,699 | ) | (69,155 | ) | ||||
Class C | (2,461,019 | ) | (4,479,405 | ) | ||||
Class Y | (11,537,935 | ) | (14,944,102 | ) | ||||
Class R5 | (643,574 | ) | (1,233,982 | ) | ||||
Class R6 | (38,164 | ) | (3,215 | ) | ||||
Total distributions from net investment income | (29,017,495 | ) | (50,033,754 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (292,934 | ) | (7,329,405 | ) | ||||
Class B | (812 | ) | (20,716 | ) | ||||
Class C | (60,843 | ) | (1,307,959 | ) | ||||
Class Y | (234,608 | ) | (3,044,760 | ) | ||||
Class R5 | (12,797 | ) | (292,640 | ) | ||||
Class R6 | (758 | ) | (633 | ) | ||||
Total distributions from net realized gains | (602,752 | ) | (11,996,113 | ) | ||||
Share transactions–net: | ||||||||
Class A | (5,424,496 | ) | (71,036,172 | ) | ||||
Class B | (136,110 | ) | (356,965 | ) | ||||
Class C | 1,313,861 | (2,483,292 | ) | |||||
Class Y | 29,305,216 | 124,475,560 | ||||||
Class R5 | 416,171 | (1,406,971 | ) | |||||
Class R6 | 354,281 | 1,319,530 | ||||||
Net increase in net assets resulting from share transactions | 25,828,923 | 50,511,690 | ||||||
Net increase in net assets | 29,727,081 | 164,415,281 | ||||||
Net assets: | ||||||||
Beginning of period | 1,184,812,341 | 1,020,397,060 | ||||||
End of period (includes undistributed net investment income of $(13,515,951) and $(3,240,481), respectively) | $ | 1,214,539,422 | $ | 1,184,812,341 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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.
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
12 Invesco Global Real Estate Income 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 securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices 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/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (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
13 Invesco Global Real Estate Income Fund
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 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 net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
14 Invesco Global Real Estate Income Fund
| J. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (“Counterparties”) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
| 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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.73%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursemnt (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 reimbursemnt to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $24,861.
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, 2015, 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, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
15 Invesco Global Real Estate Income Fund
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, 2015, 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, 2015, IDI advised the Fund that IDI retained $57,750 in front-end sales commissions from the sale of Class A shares and $1,386, $419 and $4,238 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, 2015. 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, 2015, there were transfers from Level 1 to Level 2 of $22,719,367 and from Level 2 to Level 1 of $133,465,052, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | $ | 84,352,611 | $ | 2,624,098 | $ | — | $ | 86,976,709 | ||||||||
Belgium | 1,802,456 | — | — | 1,802,456 | ||||||||||||
Brazil | — | 7,719,250 | — | 7,719,250 | ||||||||||||
Canada | 37,301,044 | — | — | 37,301,044 | ||||||||||||
China | 3,091,673 | 4,774,050 | — | 7,865,723 | ||||||||||||
Finland | 2,423,540 | — | — | 2,423,540 | ||||||||||||
France | 12,117,191 | 17,975,354 | — | 30,092,545 | ||||||||||||
Germany | 7,922,916 | — | — | 7,922,916 | ||||||||||||
Hong Kong | 40,227,084 | — | — | 40,227,084 | ||||||||||||
Japan | 64,967,768 | 22,719,367 | — | 87,687,135 | ||||||||||||
Netherlands | 6,884,293 | — | — | 6,884,293 | ||||||||||||
Singapore | 28,401,416 | 2,964,161 | — | 31,365,577 | ||||||||||||
South Africa | 9,056,193 | — | — | 9,056,193 | ||||||||||||
Sweden | 6,648,570 | 2,371,958 | — | 9,020,528 | ||||||||||||
United Kingdom | 43,888,621 | 13,185,660 | — | 57,074,281 | ||||||||||||
United States | 547,531,610 | 239,107,529 | — | 786,639,139 | ||||||||||||
Total Investments | $ | 896,616,986 | $ | 313,441,427 | �� | $ | — | $ | 1,210,058,413 | |||||||
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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $392.
16 Invesco Global Real Estate 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
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2014.
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, 2015 was $316,775,554 and $276,667,556, 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 | $ | 77,397,628 | ||
Aggregate unrealized (depreciation) of investment securities | (18,449,359 | ) | ||
Net unrealized appreciation of investment securities | $ | 58,948,269 | ||
Cost of investments for tax purposes is $1,151,110,144.
17 Invesco Global Real Estate Income Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 9,066,328 | $ | 84,973,144 | 21,831,402 | $ | 194,598,629 | ||||||||||
Class B | 7,127 | 67,527 | 19,347 | 175,050 | ||||||||||||
Class C | 1,101,532 | 10,226,483 | 2,660,455 | 23,754,784 | ||||||||||||
Class Y | 9,994,772 | 92,808,801 | 30,854,297 | 277,083,008 | ||||||||||||
Class R5 | 300,020 | 2,802,077 | 571,384 | 5,091,729 | ||||||||||||
Class R6 | 62,198 | 580,523 | 154,100 | 1,425,572 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,074,014 | 9,796,359 | 3,295,294 | 28,602,726 | ||||||||||||
Class B | 2,914 | 26,543 | 8,822 | 76,364 | ||||||||||||
Class C | 212,279 | 1,934,158 | 553,619 | 4,795,746 | ||||||||||||
Class Y | 1,017,703 | 9,253,678 | 1,678,076 | 14,607,185 | ||||||||||||
Class R5 | 68,749 | 625,786 | 164,077 | 1,423,539 | ||||||||||||
Class R6 | 4,242 | 38,659 | 374 | 3,267 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 13,520 | 126,361 | 21,919 | 197,730 | ||||||||||||
Class B | (13,532 | ) | (126,361 | ) | (21,948 | ) | (197,730 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (10,784,965 | ) | (100,320,360 | ) | (33,038,903 | ) | (294,435,257 | ) | ||||||||
Class B | (10,976 | ) | (103,819 | ) | (46,209 | ) | (410,649 | ) | ||||||||
Class C | (1,168,474 | ) | (10,846,780 | ) | (3,501,043 | ) | (31,033,822 | ) | ||||||||
Class Y | (7,832,628 | ) | (72,757,263 | ) | (18,932,345 | ) | (167,214,633 | ) | ||||||||
Class R5 | (322,880 | ) | (3,011,692 | ) | (889,093 | ) | (7,922,239 | ) | ||||||||
Class R6 | (28,522 | ) | (264,901 | ) | (11,744 | ) | (109,309 | ) | ||||||||
Net increase in share activity | 2,763,421 | $ | 25,828,923 | 5,371,881 | $ | 50,511,690 | ||||||||||
| (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. |
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 02/28/15 | $ | 9.48 | $ | 0.15 | $ | 0.10 | $ | 0.25 | $ | (0.23 | ) | $ | (0.00 | ) | $ | (0.23 | ) | $ | 9.50 | 2.82 | % | $ | 605,658 | 1.21 | %(d) | 1.21 | %(d) | 3.19 | %(d) | 24 | % | |||||||||||||||||||||||||
Year ended 08/31/14 | 8.52 | 0.29 | 1.19 | 1.48 | (0.42 | ) | (0.10 | ) | (0.52 | ) | 9.48 | 18.13 | 609,824 | 1.27 | 1.27 | 3.26 | 61 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 9.46 | 0.11 | 0.12 | 0.23 | (0.20 | ) | (0.00 | ) | (0.20 | ) | 9.49 | 2.53 | 1,515 | 1.96 | (d) | 1.96 | (d) | 2.44 | (d) | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 8.51 | 0.23 | 1.18 | 1.41 | (0.36 | ) | (0.10 | ) | (0.46 | ) | 9.46 | 17.13 | 1,647 | 2.02 | 2.02 | 2.51 | 61 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 9.46 | 0.11 | 0.11 | 0.22 | (0.20 | ) | (0.00 | ) | (0.20 | ) | 9.48 | 2.42 | 120,066 | 1.96 | (d) | 1.96 | (d) | 2.44 | (d) | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 8.51 | 0.23 | 1.18 | 1.41 | (0.36 | ) | (0.10 | ) | (0.46 | ) | 9.46 | 17.14 | 118,319 | 2.02 | 2.02 | 2.51 | 61 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 9.45 | 0.16 | 0.11 | 0.27 | (0.24 | ) | (0.00 | ) | (0.24 | ) | 9.48 | 3.06 | 460,259 | 0.96 | (d) | 0.96 | (d) | 3.44 | (d) | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 8.50 | 0.32 | 1.17 | 1.49 | (0.44 | ) | (0.10 | ) | (0.54 | ) | 9.45 | 18.33 | 428,854 | 1.02 | 1.02 | 3.51 | 61 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 9.47 | 0.16 | 0.12 | 0.28 | (0.25 | ) | (0.00 | ) | (0.25 | ) | 9.50 | 3.09 | 25,257 | 0.91 | (d) | 0.91 | (d) | 3.49 | (d) | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 8.52 | 0.32 | 1.18 | 1.50 | (0.45 | ) | (0.10 | ) | (0.55 | ) | 9.47 | 18.40 | 24,749 | 0.91 | 0.91 | 3.62 | 61 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 9.48 | 0.17 | 0.11 | 0.28 | (0.25 | ) | (0.00 | ) | (0.25 | ) | 9.51 | 3.13 | 1,785 | 0.83 | (d) | 0.83 | (d) | 3.57 | (d) | 24 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 8.52 | 0.34 | 1.18 | 1.52 | (0.46 | ) | (0.10 | ) | (0.56 | ) | 9.48 | 18.62 | 1,420 | 0.87 | 0.87 | 3.66 | 61 | |||||||||||||||||||||||||||||||||||||||
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 $581,134, $1,577, $117,806, $448,514, $24,579 and $1,541 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 September 24, 2012. |
| (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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,028.20 | $ | 6.08 | $ | 1,018.79 | $ | 6.06 | 1.21 | % | ||||||||||||
| B | 1,000.00 | 1,025.30 | 9.84 | 1,015.08 | 9.79 | 1.96 | ||||||||||||||||||
| C | 1,000.00 | 1,025.30 | 9.84 | 1,015.08 | 9.79 | 1.96 | ||||||||||||||||||
| Y | 1,000.00 | 1,030.60 | 4.83 | 1,020.03 | 4.81 | 0.96 | ||||||||||||||||||
| R5 | 1,000.00 | 1,030.90 | 4.58 | 1,020.28 | 4.56 | 0.91 | ||||||||||||||||||
| R6 | 1,000.00 | 1,031.30 | 4.18 | 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, 2014 through February 28, 2015, 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
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, 2015 | ||
| ||||
Invesco Growth and Income Fund
| ||||
| Nasdaq: | ||||
| A: ACGIX ¡ B: ACGJX ¡ C: ACGKX ¡ R: ACGLX ¡ Y: ACGMX ¡ R5: ACGQX ¡ 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, 8/31/14 to 2/28/15, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
|
| |||
Class A Shares | 1.77 | % | ||
Class B Shares | 1.77 | |||
Class C Shares | 1.41 | |||
Class R Shares | 1.67 | |||
Class Y Shares | 1.91 | |||
Class R5 Shares | 1.96 | |||
Class R6 Shares | 2.05 | |||
S&P 500 Indexq (Broad Market Index) | 6.12 | |||
Russell 1000 Value Indexq (Style-Specific Index) | 3.48 | |||
Lipper Large-Cap Value Funds Index¢ (Peer Group Index) | 3.31 | |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US stock market. The Russell 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 2/28/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (8/1/46) | 9.53 | % | ||
10 Years | 6.80 | |||
5 Years | 11.97 | |||
1 Year | 3.76 | |||
Class B Shares | ||||
Inception (8/2/93) | 9.83 | % | ||
10 Years | 7.32 | |||
5 Years | 12.98 | |||
1 Year | 4.89 | |||
Class C Shares | ||||
Inception (8/2/93) | 9.33 | % | ||
10 Years | 6.62 | |||
5 Years | 12.41 | |||
1 Year | 7.99 | |||
Class R Shares | ||||
Inception (10/1/02) | 9.41 | % | ||
10 Years | 7.14 | |||
5 Years | 12.97 | |||
1 Year | 9.52 | |||
Class Y Shares | ||||
Inception (10/19/04) | 8.62 | % | ||
10 Years | 7.68 | |||
5 Years | 13.53 | |||
1 Year | 10.07 | |||
Class R5 Shares | ||||
10 Years | 7.60 | % | ||
5 Years | 13.65 | |||
1 Year | 10.18 | |||
Class R6 Shares | ||||
10 Years | 7.52 | % | ||
5 Years | 13.48 | |||
1 Year | 10.29 | |||
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
| Average Annual Total Returns | ||||
As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (8/1/46) | 9.55 | % | ||
10 Years | 6.84 | |||
5 Years | 11.97 | |||
1 Year | 4.10 | |||
Class B Shares | ||||
Inception (8/2/93) | 9.87 | % | ||
10 Years | 7.35 | |||
5 Years | 12.98 | |||
1 Year | 5.22 | |||
Class C Shares | ||||
Inception (8/2/93) | 9.37 | % | ||
10 Years | 6.67 | |||
5 Years | 12.42 | |||
1 Year | 8.34 | |||
Class R Shares | ||||
Inception (10/1/02) | 9.48 | % | ||
10 Years | 7.19 | |||
5 Years | 12.97 | |||
1 Year | 9.86 | |||
Class Y Shares | ||||
Inception (10/19/04) | 8.68 | % | ||
10 Years | 7.72 | |||
5 Years | 13.53 | |||
1 Year | 10.42 | |||
Class R5 Shares | ||||
10 Years | 7.64 | % | ||
5 Years | 13.64 | |||
1 Year | 10.53 | |||
Class R6 Shares | ||||
10 Years | 7.56 | % | ||
5 Years | 13.48 | |||
1 Year | 10.63 | |||
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 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 0.84%, 0.84%, 1.59%, 1.09%, 0.59%, 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 0.85%, 0.85%, 1.60%, 1.10%, 0.60%, 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 June 30, 2016. See current prospectus for more information. |
3 Invesco Growth and Income Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–96.52% |
| |||||||
| Aerospace & Defense–1.36% | ||||||||
General Dynamics Corp. | 928,600 | $ | 128,871,108 | |||||
| Agricultural Products–1.05% | ||||||||
Archer-Daniels-Midland Co. | 2,067,564 | 98,994,964 | ||||||
| Application Software–1.76% | ||||||||
Adobe Systems Inc.(b) | 1,088,117 | 86,070,055 | ||||||
Citrix Systems, Inc.(b) | 1,263,101 | 80,427,956 | ||||||
| 166,498,011 | ||||||||
| Asset Management & Custody Banks–2.49% | ||||||||
Northern Trust Corp. | 1,465,800 | 102,356,814 | ||||||
State Street Corp. | 1,780,285 | 132,542,218 | ||||||
| 234,899,032 | ||||||||
| Automobile Manufacturers–1.20% | ||||||||
General Motors Co. | 3,052,391 | 113,884,708 | ||||||
| Biotechnology–1.25% | ||||||||
Amgen Inc. | 750,003 | 118,290,473 | ||||||
| Broadcasting–0.26% | ||||||||
CBS Corp.–Class B | 408,951 | 24,169,004 | ||||||
| Cable & Satellite–2.71% | ||||||||
Comcast Corp.–Class A | 2,679,832 | 159,128,424 | ||||||
Time Warner Cable Inc. | 628,754 | 96,859,554 | ||||||
| 255,987,978 | ||||||||
| Communications Equipment–1.43% | ||||||||
Cisco Systems, Inc. | 4,595,441 | 135,611,464 | ||||||
| Construction Machinery & Heavy Trucks–0.71% | ||||||||
Caterpillar Inc. | 807,523 | 66,943,657 | ||||||
| Consumer Finance–0.37% | ||||||||
Synchrony Financial(b) | 1,099,977 | 35,144,265 | ||||||
| Diversified Banks–11.81% | ||||||||
Bank of America Corp. | 12,500,913 | 197,639,435 | ||||||
Citigroup Inc. | 7,763,755 | 406,976,037 | ||||||
Comerica Inc. | 2,058,004 | 94,215,423 | ||||||
JPMorgan Chase & Co. | 6,808,919 | 417,250,556 | ||||||
| 1,116,081,451 | ||||||||
| Diversified Chemicals–0.51% | ||||||||
Dow Chemical Co. (The) | 986,206 | 48,560,783 | ||||||
| Diversified Metals & Mining–0.25% | ||||||||
Freeport-McMoRan Inc. | 1,072,958 | 23,208,082 | ||||||
| Electric Utilities–0.52% | ||||||||
FirstEnergy Corp. | 1,418,222 | 49,609,406 | ||||||
| Shares | Value | |||||||
| Electronic Components–1.31% | ||||||||
Corning Inc. | 5,062,838 | $ | 123,533,247 | |||||
| General Merchandise Stores–1.76% | ||||||||
Target Corp. | 2,170,702 | 166,775,035 | ||||||
| Health Care Equipment–0.95% | ||||||||
Medtronic PLC | 1,156,991 | 89,770,932 | ||||||
| Health Care Services–0.77% | ||||||||
Express Scripts Holding Co.(b) | 854,560 | 72,458,142 | ||||||
| Hotels, Resorts & Cruise Lines–1.65% | ||||||||
Carnival Corp. | 3,535,174 | 155,512,304 | ||||||
| Household Products–1.16% | ||||||||
Procter & Gamble Co. (The) | 1,284,181 | 109,322,329 | ||||||
| Hypermarkets & Super Centers–1.49% | ||||||||
Wal-Mart Stores, Inc. | 1,672,313 | 140,357,230 | ||||||
| Industrial Conglomerates–2.89% | ||||||||
General Electric Co. | 10,493,314 | 272,721,231 | ||||||
| Industrial Machinery–1.20% | ||||||||
Ingersoll-Rand PLC | 1,689,181 | 113,496,071 | ||||||
| Insurance Brokers–3.01% | ||||||||
Aon PLC | 994,165 | 99,774,399 | ||||||
Marsh & McLennan Cos., Inc. | 1,760,678 | 100,164,972 | ||||||
Willis Group Holdings PLC | 1,767,149 | 84,328,350 | ||||||
| 284,267,721 | ||||||||
| Integrated Oil & Gas–5.65% | ||||||||
Exxon Mobil Corp. | 1,011,307 | 89,541,122 | ||||||
Occidental Petroleum Corp. | 1,116,613 | 86,961,820 | ||||||
Royal Dutch Shell PLC–Class A (United Kingdom) | 7,192,154 | 234,592,175 | ||||||
Total S.A. (France) | 2,282,661 | 122,579,538 | ||||||
| 533,674,655 | ||||||||
| Integrated Telecommunication Services–1.67% | ||||||||
Koninklijke KPN N.V. (Netherlands) | 6,349,906 | 21,655,615 | ||||||
Orange S.A. (France) | 1,419,471 | 25,850,782 | ||||||
Telecom Italia S.p.A. (Italy)(b) | 13,261,221 | 15,872,384 | ||||||
Telefonica S.A. (Spain) | 982,762 | 15,281,845 | ||||||
Verizon Communications Inc. | 1,606,446 | 79,438,755 | ||||||
| 158,099,381 | ||||||||
| Internet Software & Services–1.60% | ||||||||
eBay Inc.(b) | 2,613,078 | 151,323,347 | ||||||
| Investment Banking & Brokerage–4.71% | ||||||||
Charles Schwab Corp. (The) | 3,894,397 | 114,261,608 | ||||||
Goldman Sachs Group, Inc. (The) | 530,087 | 100,605,212 | ||||||
Morgan Stanley | 6,431,806 | 230,194,337 | ||||||
| 445,061,157 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Growth and Income Fund
| Shares | Value | |||||||
| IT Consulting & Other Services–1.35% | ||||||||
Amdocs Ltd. | 2,424,996 | $ | 127,312,290 | |||||
| Managed Health Care–2.42% | ||||||||
Anthem, Inc. | 771,454 | 112,979,438 | ||||||
UnitedHealth Group Inc. | 1,017,473 | 115,615,457 | ||||||
| 228,594,895 | ||||||||
| Movies & Entertainment–1.34% | ||||||||
Time Warner Inc. | 778,592 | 63,735,541 | ||||||
Viacom Inc.–Class B | 904,142 | 63,235,692 | ||||||
| 126,971,233 | ||||||||
| Multi-Utilities–0.70% | ||||||||
PG&E Corp. | 1,228,310 | 65,997,096 | ||||||
| Oil & Gas Drilling–0.47% | ||||||||
Ensco PLC–Class A | 1,817,822 | 44,482,104 | ||||||
| Oil & Gas Equipment & Services–1.29% | ||||||||
Baker Hughes Inc. | 1,943,224 | 121,470,932 | ||||||
| Oil & Gas Exploration & Production–3.00% | ||||||||
Anadarko Petroleum Corp. | 964,299 | 81,222,905 | ||||||
Apache Corp. | 1,651,035 | 108,704,144 | ||||||
Canadian Natural Resources Ltd. (Canada) | 3,228,920 | 93,922,825 | ||||||
| 283,849,874 | ||||||||
| Other Diversified Financial Services–1.29% | ||||||||
Voya Financial, Inc. | 2,751,258 | 121,578,091 | ||||||
| Packaged Foods & Meats–2.01% | ||||||||
Mondelez International Inc.–Class A | 3,032,797 | 112,016,357 | ||||||
Unilever N.V.–New York Shares (United Kingdom) | 1,792,002 | 77,898,327 | ||||||
| 189,914,684 | ||||||||
| Pharmaceuticals–7.66% | ||||||||
Eli Lilly and Co. | 1,852,311 | 129,976,663 | ||||||
Merck & Co., Inc. | 2,446,394 | 143,211,905 | ||||||
Novartis AG (Switzerland) | 1,443,189 | 147,821,612 | ||||||
Novartis AG–ADR (Switzerland) | 117,137 | 11,994,829 | ||||||
Pfizer Inc. | 2,272,795 | 78,002,325 | ||||||
Sanofi (France) | 980,191 | 96,200,914 | ||||||
Teva Pharmaceutical Industries Ltd.–ADR (Israel) | 2,049,165 | 116,843,388 | ||||||
| 724,051,636 | ||||||||
| Publishing–0.80% | ||||||||
Thomson Reuters Corp. | 1,926,011 | 75,592,080 | ||||||
| Railroads–1.08% | ||||||||
CSX Corp. | 2,971,836 | 101,963,693 | ||||||
| Shares | Value | |||||||
| Regional Banks–4.66% | ||||||||
BB&T Corp. | 2,056,598 | $ | 78,253,554 | |||||
Citizens Financial Group Inc. | 2,946,043 | 73,179,708 | ||||||
Fifth Third Bancorp | 4,238,079 | 82,049,209 | ||||||
First Horizon National Corp. | 2,876,831 | 41,109,915 | ||||||
PNC Financial Services Group, Inc. (The) | 1,802,479 | 165,755,969 | ||||||
| 440,348,355 | ||||||||
| Security & Alarm Services–1.03% | ||||||||
Tyco International PLC | 2,316,246 | 97,791,906 | ||||||
| Semiconductor Equipment–1.64% | ||||||||
Applied Materials, Inc. | 6,195,373 | 155,194,094 | ||||||
| Semiconductors–2.23% | ||||||||
Broadcom Corp.–Class A | 2,127,684 | 96,235,147 | ||||||
Intel Corp. | 3,435,596 | 114,233,567 | ||||||
| 210,468,714 | ||||||||
| Specialized Finance–0.71% | ||||||||
CME Group Inc.–Class A | 695,832 | 66,751,164 | ||||||
| Systems Software–2.62% | ||||||||
Microsoft Corp. | 2,610,914 | 114,488,579 | ||||||
Symantec Corp. | 5,275,670 | 132,735,857 | ||||||
| 247,224,436 | ||||||||
| Technology Hardware, Storage & Peripherals–0.78% | ||||||||
NetApp, Inc. | 1,911,440 | 73,877,156 | ||||||
| Tobacco–1.01% | ||||||||
Philip Morris International Inc. | 1,148,412 | 95,272,260 | ||||||
| Wireless Telecommunication Services–0.93% | ||||||||
Vodafone Group PLC–ADR (United Kingdom) | 2,544,744 | 87,946,353 | ||||||
Total Common Stocks & Other Equity Interests |
| 9,119,780,214 | ||||||
Money Market Funds–3.47% |
| |||||||
Liquid Assets Portfolio–Institutional Class(c) | 164,123,065 | 164,123,065 | ||||||
Premier Portfolio–Institutional Class(c) | 164,123,065 | 164,123,065 | ||||||
Total Money Market Funds |
| 328,246,130 | ||||||
TOTAL INVESTMENTS–99.99% |
| 9,448,026,344 | ||||||
OTHER ASSETS LESS LIABILITIES–0.01% |
| 1,082,968 | ||||||
NET ASSETS–100.00% |
| $ | 9,449,109,312 | |||||
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, 2015
Financials | 29.0 | % | ||
Information Technology | 14.7 | |||
Health Care | 13.1 | |||
Energy | 10.4 | |||
Consumer Discretionary | 9.7 | |||
Industrials | 8.3 | |||
Consumer Staples | 6.7 | |||
Telecommunication Services | 2.6 | |||
Utilities | 1.2 | |||
Materials | 0.8 | |||
Money Market Funds Plus Other Assets Less Liabilities | 3.5 |
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, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $6,636,759,381) | $ | 9,119,780,214 | ||
Investments in affiliated money market funds, at value and cost | 328,246,130 | |||
Total investments, at value (Cost $6,965,005,511) | 9,448,026,344 | |||
Foreign currencies, at value (Cost $1,012) | 1,003 | |||
Receivable for: | ||||
Investments sold | 760,502 | |||
Fund shares sold | 20,386,824 | |||
Dividends | 21,228,906 | |||
Investment for trustee deferred compensation and retirement plans | 636,974 | |||
Forward foreign currency contracts outstanding | 3,582,348 | |||
Other assets | 213,254 | |||
Total assets | 9,494,836,155 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 23,621,628 | |||
Fund shares reacquired | 15,960,354 | |||
Accrued fees to affiliates | 5,114,589 | |||
Accrued trustees’ and officers’ fees and benefits | 33,654 | |||
Accrued other operating expenses | 243,563 | |||
Trustee deferred compensation and retirement plans | 753,055 | |||
Total liabilities | 45,726,843 | |||
Net assets applicable to shares outstanding | $ | 9,449,109,312 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 6,746,606,866 | ||
Undistributed net investment income | 36,954,891 | |||
Undistributed net realized gain | 179,007,295 | |||
Net unrealized appreciation | 2,486,540,260 | |||
| $ | 9,449,109,312 | |||
Net Assets: |
| |||
Class A | $ | 5,041,927,988 | ||
Class B | $ | 67,478,869 | ||
Class C | $ | 332,246,069 | ||
Class R | $ | 160,460,489 | ||
Class Y | $ | 2,236,907,697 | ||
Class R5 | $ | 824,218,740 | ||
Class R6 | $ | 785,869,460 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 188,624,653 | |||
Class B | 2,544,295 | |||
Class C | 12,564,645 | |||
Class R | 6,000,653 | |||
Class Y | 83,611,537 | |||
Class R5 | 30,775,905 | |||
Class R6 | 29,336,578 | |||
Class A: | ||||
Net asset value per share | $ | 26.73 | ||
Maximum offering price per share | ||||
(Net asset value of $26.73 ¸ 94.50%) | $ | 28.29 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 26.52 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 26.44 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 26.74 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 26.75 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 26.78 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 26.79 | ||
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, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $2,267,536) | $ | 95,905,405 | ||
Dividends from affiliated money market funds | 70,442 | |||
Interest | 32,343 | |||
Total investment income | 96,008,190 | |||
Expenses: | ||||
Advisory fees | 16,435,922 | |||
Administrative services fees | 377,313 | |||
Custodian fees | 177,643 | |||
Distribution fees: | ||||
Class A | 6,292,646 | |||
Class B | 92,491 | |||
Class C | 1,624,726 | |||
Class R | 423,412 | |||
Transfer agent fees — A, B, C, R and Y | 7,861,021 | |||
Transfer agent fees — R5 | 408,880 | |||
Transfer agent fees — R6 | 4,065 | |||
Trustees’ and officers’ fees and benefits | 110,609 | |||
Other | 476,597 | |||
Total expenses | 34,285,325 | |||
Less: Fees waived and expense offset arrangement(s) | (229,683 | ) | ||
Net expenses | 34,055,642 | |||
Net investment income | 61,952,548 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 343,260,973 | |||
Foreign currencies | (259,563 | ) | ||
Forward foreign currency contracts | 85,703,134 | |||
| 428,704,544 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (325,966,613 | ) | ||
Foreign currencies | (70,330 | ) | ||
Forward foreign currency contracts | 3,328,104 | |||
| (322,708,839 | ) | |||
Net realized and unrealized gain | 105,995,705 | |||
Net increase in net assets resulting from operations | $ | 167,948,253 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 61,952,548 | $ | 190,760,236 | ||||
Net realized gain | 428,704,544 | 717,887,643 | ||||||
Change in net unrealized appreciation (depreciation) | (322,708,839 | ) | 866,967,078 | |||||
Net increase in net assets resulting from operations | 167,948,253 | 1,775,614,957 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (70,808,691 | ) | (61,612,058 | ) | ||||
Class B | (1,038,457 | ) | (1,179,649 | ) | ||||
Class C | (3,311,862 | ) | (1,447,199 | ) | ||||
Class R | (2,179,958 | ) | (1,736,950 | ) | ||||
Class Y | (33,074,224 | ) | (29,080,386 | ) | ||||
Class R5 | (12,756,118 | ) | (12,570,413 | ) | ||||
Class R6 | (10,810,103 | ) | (7,418,125 | ) | ||||
Total distributions from net investment income | (133,979,413 | ) | (115,044,780 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (452,856,731 | ) | (117,716,418 | ) | ||||
Class B | (6,596,296 | ) | (2,338,436 | ) | ||||
Class C | (29,434,651 | ) | (7,258,149 | ) | ||||
Class R | (15,312,972 | ) | (4,191,643 | ) | ||||
Class Y | (194,870,035 | ) | (45,186,746 | ) | ||||
Class R5 | (71,525,594 | ) | (18,438,457 | ) | ||||
Class R6 | (60,590,022 | ) | (8,430,934 | ) | ||||
Total distributions from net realized gains | (831,186,301 | ) | (203,560,783 | ) | ||||
Share transactions–net: | ||||||||
Class A | 177,747,553 | (288,693,649 | ) | |||||
Class B | (8,966,165 | ) | (34,204,390 | ) | ||||
Class C | 25,594,590 | (5,617,121 | ) | |||||
Class R | (5,957,397 | ) | (18,402,121 | ) | ||||
Class Y | 236,020,013 | 34,843,158 | ||||||
Class R5 | 12,408,956 | 29,578,569 | ||||||
Class R6 | 193,834,154 | 231,388,328 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 630,681,704 | (51,107,226 | ) | |||||
Net increase (decrease) in net assets | (166,535,757 | ) | 1,405,902,168 | |||||
Net assets: | ||||||||
Beginning of period | 9,615,645,069 | 8,209,742,901 | ||||||
End of period (includes undistributed net investment income of $36,954,891 and $108,981,756, respectively) | $ | 9,449,109,312 | $ | 9,615,645,069 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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.
10 Invesco Growth 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. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and
11 Invesco Growth and Income Fund
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 net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
| J. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon
12 Invesco Growth and Income Fund
exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (“Counterparties”) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
| K. | Put Options Purchased — The Fund may purchase put options including options on securities indexes, or foreign currency and/or futures contracts. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option’s underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option’s underlying instrument may be a security, securities index, or a futures contract. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund’s resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the securities hedged. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations as Net realized gain from Investment Securities. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased. |
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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 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 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $226,639.
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, 2015, 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, 2015, 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 Growth and Income 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.
For the six months ended February 28, 2015, 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, 2015, IDI advised the Fund that IDI retained $295,028 in front-end sales commissions from the sale of Class A shares and $2,680, $8,047 and $2,516 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2015, the Fund incurred $45,662 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, 2015. 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 | $ | 8,879,654,238 | $ | 568,372,106 | $ | — | $ | 9,448,026,344 | ||||||||
Forward Foreign Currency Contracts* | — | 3,582,348 | — | 3,582,348 | ||||||||||||
Total Investments | $ | 8,879,654,238 | $ | 571,954,454 | $ | — | $ | 9,451,608,692 | ||||||||
| * | 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, 2015:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | 8,249,246 | $ | (4,666,898 | ) | |||
| (a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
14 Invesco Growth and Income Fund
Effect of Derivative Investments for the six months ended February 28, 2015
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 | Options Purchased(a) | |||||||
Realized Gain (Loss): | ||||||||
Currency risk | $ | 85,703,134 | $ | — | ||||
Equity risk | — | (540,606 | ) | |||||
Change in Unrealized Appreciation: | ||||||||
Currency risk | 3,328,104 | — | ||||||
Equity risk | — | 426,922 | ||||||
Total | $ | 89,031,238 | $ | (113,684 | ) | |||
| (a) | Options purchased are included in the net realized gain (loss) from investment securities and net change in unrealized appreciation (depreciation) on investment securities. |
The table below summarizes the six months average notional value of forward foreign currency contracts and the three months average notational value of options purchased outstanding during the period.
| Forward Foreign Currency Contracts | Options Purchased | |||||||
Average notional value | $ | 823,650,380 | $ | 17,451,967 | ||||
| Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement Date
| Contract to | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||||
| Counterparty | Deliver | Receive | ||||||||||||||||||||||||
| 03/20/15 | Bank of New York Mellon (The) | CAD | 83,169,276 | USD | 65,754,780 | $ | 66,512,849 | $ | (758,069 | ) | ||||||||||||||||
| 03/20/15 | State Street Bank & Trust Co. | CAD | 83,277,914 | USD | 65,846,918 | 66,599,730 | (752,812 | ) | ||||||||||||||||||
| 03/20/15 | Bank of New York Mellon (The) | CHF | 55,266,164 | USD | 59,703,315 | 58,023,042 | 1,680,273 | |||||||||||||||||||
| 03/20/15 | State Street Bank & Trust Co. | CHF | 55,405,489 | USD | 59,843,223 | 58,169,317 | 1,673,906 | |||||||||||||||||||
| 03/20/15 | Bank of New York Mellon (The) | EUR | 122,404,982 | USD | 138,397,193 | 137,016,661 | 1,380,532 | |||||||||||||||||||
| 03/20/15 | State Street Bank & Trust Co. | EUR | 122,355,664 | USD | 138,333,478 | 136,961,455 | 1,372,023 | |||||||||||||||||||
| 03/20/15 | Bank of New York Mellon (The) | GBP | 80,119,963 | USD | 122,079,589 | 123,673,992 | (1,594,403 | ) | ||||||||||||||||||
| 03/20/15 | State Street Bank & Trust Co. | GBP | 80,139,477 | USD | 122,142,500 | 123,704,114 | (1,561,614 | ) | ||||||||||||||||||
| 03/20/15 | Bank of New York Mellon (The) | ILS | 170,064,330 | USD | 43,768,969 | 42,698,726 | 1,070,243 | |||||||||||||||||||
| 03/20/15 | State Street Bank & Trust Co. | ILS | 170,081,978 | USD | 43,775,426 | 42,703,157 | 1,072,269 | |||||||||||||||||||
Total Forward Foreign Currency Contracts — Currency Risk | $ | 3,582,348 | ||||||||||||||||||||||||
Currency Abbreviations:
| CAD | – Canadian Dollar | |
| CHF | – Swiss Franc | |
| EUR | – Euro | |
| GBP | – British Pound Sterling | |
| ILS | – Israeli Shekel | |
| USD | – U.S. Dollar |
Offsetting Assets and Liabilities
Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting arrangements on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the 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.
15 Invesco Growth and Income 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, 2015.
| Assets: | ||||||||||||||||||||||||
| Gross amounts of Recognized Assets | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in Statement of Assets & Liabilities | Collateral Received | Net Amount | ||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Bank of New York Mellon (The) | $ | 4,131,048 | $ | (2,352,472 | ) | $ | 1,778,576 | $ | — | $ | — | $ | 1,778,576 | |||||||||||
State Street Bank & Trust Co. | 4,118,198 | (2,314,426 | ) | 1,803,772 | — | — | 1,803,772 | |||||||||||||||||
Total | $ | 8,249,246 | $ | (4,666,898 | ) | $ | 3,582,348 | $ | — | $ | — | $ | 3,582,348 | |||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Gross amounts of Recognized Liabilities | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of liabilities presented in Statement of Assets & Liabilities | Collateral Pledged | Net Amount | ||||||||||||||||||||
| Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Bank of New York Mellon (The) | $ | 2,352,472 | $ | (2,352,472 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
State Street Bank & Trust Co. | 2,314,426 | (2,314,426 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 4,666,898 | $ | (4,666,898 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $3,044.
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2014.
16 Invesco Growth and Income Fund
NOTE 9—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended February 28, 2015 was $1,248,090,555 and $1,526,477,260, 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 | $ | 2,623,264,659 | ||
Aggregate unrealized (depreciation) of investment securities | (146,460,341 | ) | ||
Net unrealized appreciation of investment securities | $ | 2,476,804,318 | ||
Cost of investments for tax purposes is $6,971,222,026.
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 9,143,453 | $ | 251,575,823 | 20,450,645 | $ | 551,400,574 | ||||||||||
Class B | 15,542 | 426,994 | 55,993 | 1,492,955 | ||||||||||||
Class C | 635,157 | 17,136,674 | 1,054,947 | 28,254,914 | ||||||||||||
Class R | 535,206 | 14,757,430 | 1,443,041 | 39,138,626 | ||||||||||||
Class Y | 9,414,798 | 260,310,343 | 17,406,820 | 473,531,971 | ||||||||||||
Class R5 | 2,857,649 | 78,764,543 | 10,863,248 | 296,409,011 | ||||||||||||
Class R6 | 6,770,892 | 184,656,929 | 10,686,110 | 288,760,455 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 19,320,591 | 498,427,415 | 6,491,884 | 170,525,029 | ||||||||||||
Class B | 284,154 | 7,275,289 | 128,924 | 3,358,844 | ||||||||||||
Class C | 1,169,271 | 29,822,350 | 306,483 | 7,924,492 | ||||||||||||
Class R | 676,868 | 17,469,554 | 225,990 | 5,927,788 | ||||||||||||
Class Y | 8,481,982 | 219,052,161 | 2,711,161 | 71,425,728 | ||||||||||||
Class R5 | 3,258,853 | 84,280,873 | 1,172,727 | 30,940,210 | ||||||||||||
Class R6 | 2,680,220 | 69,295,197 | 594,490 | 15,775,850 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 434,132 | 12,004,750 | 970,672 | 26,486,043 | ||||||||||||
Class B | (437,405 | ) | (12,004,750 | ) | (977,570 | ) | (26,486,043 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (21,218,741 | ) | (584,260,435 | ) | (38,227,817 | ) | (1,037,105,295 | ) | ||||||||
Class B | (169,603 | ) | (4,663,698 | ) | (465,664 | ) | (12,570,146 | ) | ||||||||
Class C | (783,247 | ) | (21,364,434 | ) | (1,545,384 | ) | (41,796,527 | ) | ||||||||
Class R | (1,396,704 | ) | (38,184,381 | ) | (2,330,503 | ) | (63,468,535 | ) | ||||||||
Class Y | (8,834,250 | ) | (243,342,491 | ) | (18,798,733 | ) | (510,114,541 | ) | ||||||||
Class R5 | (5,326,240 | ) | (150,636,460 | ) | (10,842,356 | ) | (297,770,652 | ) | ||||||||
Class R6 | (2,160,050 | ) | (60,117,972 | ) | (2,670,780 | ) | (73,147,977 | ) | ||||||||
Net increase (decrease) in share activity | 25,352,528 | $ | 630,681,704 | (1,295,672 | ) | $ | (51,107,226 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 34% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
17 Invesco Growth and Income 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 | 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 02/28/15 | $ | 29.30 | $ | 0.17 | $ | 0.24 | $ | 0.41 | $ | (0.40 | ) | $ | (2.58 | ) | $ | (2.98 | ) | $ | 26.73 | 1.81 | %(c) | $ | 5,041,928 | 0.83 | %(d) | 0.83 | %(d) | 1.24 | %(d) | 14 | % | |||||||||||||||||||||||||
Year ended 08/31/14 | 24.92 | 0.55 | (e) | 4.78 | 5.33 | (0.33 | ) | (0.62 | ) | (0.95 | ) | 29.30 | 21.84 | (c) | 5,302,375 | 0.83 | 0.84 | 2.03 | (e)�� | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.48 | 0.31 | 4.47 | 4.78 | (0.34 | ) | — | (0.34 | ) | 24.92 | 23.57 | (c) | 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 | (c) | 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 | (c) | 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 | )(c) | 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 | |||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 29.10 | 0.17 | 0.23 | 0.40 | (0.40 | ) | (2.58 | ) | (2.98 | ) | 26.52 | 1.77 | (c)(h) | 67,479 | 0.83 | (d)(h) | 0.83 | (d)(h) | 1.24 | (d)(h) | 14 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 24.75 | 0.54 | (e) | 4.75 | 5.29 | (0.32 | ) | (0.62 | ) | (0.94 | ) | 29.10 | 21.86 | (c)(h) | 82,970 | 0.83 | (h) | 0.84 | (h) | 2.03 | (e)(h) | 31 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.34 | 0.31 | 4.44 | 4.75 | (0.34 | ) | — | (0.34 | ) | 24.75 | 23.57 | (c)(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 | (c)(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 | (c)(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 | )(c)(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 | ||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 29.01 | 0.07 | 0.23 | 0.30 | (0.29 | ) | (2.58 | ) | (2.87 | ) | 26.44 | 1.41 | (c) | 332,246 | 1.58 | (d) | 1.58 | (d) | 0.49 | (d) | 14 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 24.68 | 0.34 | (e) | 4.73 | 5.07 | (0.12 | ) | (0.62 | ) | (0.74 | ) | 29.01 | 20.94 | (c) | 334,902 | 1.58 | 1.59 | 1.28 | (e) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.29 | 0.14 | 4.42 | 4.56 | (0.17 | ) | — | (0.17 | ) | 24.68 | 22.63 | (c) | 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 | (c)(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 | (c)(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 | )(c) | 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 | ||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 29.31 | 0.14 | 0.24 | 0.38 | (0.37 | ) | (2.58 | ) | (2.95 | ) | 26.74 | 1.67 | (c) | 160,460 | 1.08 | (d) | 1.08 | (d) | 0.99 | (d) | 14 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 24.93 | 0.48 | (e) | 4.78 | 5.26 | (0.26 | ) | (0.62 | ) | (0.88 | ) | 29.31 | 21.53 | (c) | 181,301 | 1.08 | 1.09 | 1.78 | (e) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.49 | 0.25 | 4.47 | 4.72 | (0.28 | ) | — | (0.28 | ) | 24.93 | 23.26 | (c) | 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 | (c) | 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 | (c) | 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 | )(c) | 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 | |||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 29.33 | 0.21 | 0.23 | 0.44 | (0.44 | ) | (2.58 | ) | (3.02 | ) | 26.75 | 1.91 | (c) | 2,236,908 | 0.58 | (d) | 0.58 | (d) | 1.49 | (d) | 14 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 24.94 | 0.62 | (e) | 4.78 | 5.40 | (0.39 | ) | (0.62 | ) | (1.01 | ) | 29.33 | 22.17 | (c) | 2,186,472 | 0.58 | 0.59 | 2.28 | (e) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.50 | 0.37 | 4.47 | 4.84 | (0.40 | ) | — | (0.40 | ) | 24.94 | 23.86 | (c) | 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 | (c) | 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 | (c) | 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 | )(c) | 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 | |||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 29.36 | 0.22 | 0.24 | 0.46 | (0.46 | ) | (2.58 | ) | (3.04 | ) | 26.78 | 1.96 | (c) | 824,219 | 0.48 | (d) | 0.48 | (d) | 1.59 | (d) | 14 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 24.97 | 0.65 | (e) | 4.78 | 5.43 | (0.42 | ) | (0.62 | ) | (1.04 | ) | 29.36 | 22.27 | (c) | 880,275 | 0.47 | 0.48 | 2.39 | (e) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 20.53 | 0.39 | 4.47 | 4.86 | (0.42 | ) | — | (0.42 | ) | 24.97 | 23.96 | (c) | 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 | (c) | 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 | (c) | 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 | )(c) | 41,861 | 0.45 | (f) | 0.45 | (f) | 1.31 | (f) | 23 | ||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 29.36 | 0.23 | 0.25 | 0.48 | (0.47 | ) | (2.58 | ) | (3.05 | ) | 26.79 | 2.05 | (c) | 785,869 | 0.38 | (d) | 0.38 | (d) | 1.69 | (d) | 14 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 24.97 | 0.68 | (e) | 4.78 | 5.46 | (0.45 | ) | (0.62 | ) | (1.07 | ) | 29.36 | 22.38 | (c) | 647,350 | 0.38 | 0.39 | 2.48 | (e) | 31 | ||||||||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 21.23 | 0.43 | 3.66 | 4.09 | (0.35 | ) | — | (0.35 | ) | 24.97 | 19.45 | (c) | 335,549 | 0.38 | (f) | 0.38 | (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 year ended August 31, 2011, the portfolio turnover 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) | 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 $5,079,900, $74,606, $327,638, $170,768, $2,183,983, $824,271 and $701,480 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Net investment income per share and the ratio of net investment income to average net assets includes 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 $0.34 and 1.24%, $0.33 and 1.24%, $0.13 and 0.49%, $0.27 and 0.99%, $0.41 and 1.49%, $0.44 and 1.60% and $0.47 and 1.69% for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (f) | Annualized. |
18 Invesco Growth and Income Fund
| (g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (h) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.25%, 0.23%, 0.25% and 0.40% for the six months ended February 28, 2015 and the years ended August 31, 2014, 2013, 2012 and 2011 and the nine 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 0.97% 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,017.70 | $ | 4.15 | $ | 1,020.68 | $ | 4.16 | 0.83 | % | ||||||||||||
| B | 1,000.00 | 1,017.70 | 4.15 | 1,020.68 | 4.16 | 0.83 | ||||||||||||||||||
| C | 1,000.00 | 1,014.10 | 7.89 | 1,016.96 | 7.90 | 1.58 | ||||||||||||||||||
| R | 1,000.00 | 1,016.70 | 5.40 | 1,019.44 | 5.41 | 1.08 | ||||||||||||||||||
| Y | 1,000.00 | 1,019.10 | 2.90 | 1,021.92 | 2.91 | 0.58 | ||||||||||||||||||
| R5 | 1,000.00 | 1,019.60 | 2.40 | 1,022.41 | 2.41 | 0.48 | ||||||||||||||||||
| R6 | 1,000.00 | 1,020.50 | 1.90 | 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, 2014 through February 28, 2015, 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, 2015 | ||
| ||||
| 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, 8/31/14 to 2/28/15, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | -0.75 | % | |||
| Class B Shares | -1.17 | ||||
| Class C Shares | -1.09 | ||||
| Class R Shares | -0.80 | ||||
| Class Y Shares | -0.61 | ||||
| Investor Class Shares | -0.74 | ||||
| Class R5 Shares | -0.62 | ||||
| S&P 500 Index▼ (Broad Market Index) | 6.12 | ||||
| Russell 1000 Index▼ (Style-Specific Index) | 6.00 | ||||
| Lipper Equity Income Indexn (Peer Group Index) | 3.59 |
Source(s): ▼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 2/28/15, including maximum applicable sales charges
| Class A Shares | |||||
| Inception (3/31/06) | 4.90 | % | |||
| 5 Years | 11.59 | ||||
| 1 Year | 3.73 | ||||
| Class B Shares | |||||
| Inception (3/31/06) | 4.88 | % | |||
| 5 Years | 11.77 | ||||
| 1 Year | 3.94 | ||||
| Class C Shares | |||||
| Inception (3/31/06) | 4.78 | % | |||
| 5 Years | 11.98 | ||||
| 1 Year | 8.00 | ||||
| Class R Shares | |||||
| Inception (3/31/06) | 5.33 | % | |||
| 5 Years | 12.61 | ||||
| 1 Year | 9.56 | ||||
| Class Y Shares | |||||
| Inception | 5.78 | % | |||
| 5 Years | 13.15 | ||||
| 1 Year | 10.05 | ||||
| Investor Class Shares | |||||
| Inception | 5.59 | % | |||
| 5 Years | 12.87 | ||||
| 1 Year | 9.78 | ||||
| Class R5 Shares | |||||
| Inception (3/31/06) | 5.89 | % | |||
| 5 Years | 13.23 | ||||
| 1 Year | 10.21 | ||||
Class Y shares incepted on October 3, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
Investor Class shares incepted on April 25, 2008. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A share performance reflects any applicable fee waivers or expense reimbursements.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested
Average Annual Total Returns
As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges
| Class A Shares | |||||
| Inception (3/31/06) | 4.96 | % | |||
| 5 Years | 11.22 | ||||
| 1 Year | 4.26 | ||||
| Class B Shares | |||||
| Inception (3/31/06) | 4.94 | % | |||
| 5 Years | 11.38 | ||||
| 1 Year | 4.53 | ||||
| Class C Shares | |||||
| Inception (3/31/06) | 4.86 | % | |||
| 5 Years | 11.60 | ||||
| 1 Year | 8.61 | ||||
| Class R Shares | |||||
| Inception (3/31/06) | 5.39 | % | |||
| 5 Years | 12.21 | ||||
| 1 Year | 10.07 | ||||
| Class Y Shares | |||||
| Inception | 5.86 | % | |||
| 5 Years | 12.76 | ||||
| 1 Year | 10.66 | ||||
| Investor Class Shares | |||||
| Inception | 5.66 | % | |||
| 5 Years | 12.49 | ||||
| 1 Year | 10.40 | ||||
| Class R5 Shares | |||||
| Inception (3/31/06) | 5.97 | % | |||
| 5 Years | 12.84 | ||||
| 1 Year | 10.82 | ||||
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 1.14%, 1.89%, 1.89%, 1.39%, 0.89%, 1.14% and 0.75%, 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: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market |
strategists, economists and retirement experts wherever you may be.
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.02% |
| |||||||
| Agricultural Products–3.12% | ||||||||
Archer-Daniels-Midland Co. | 118,900 | $ | 5,692,932 | |||||
Bunge Ltd. | 61,000 | 4,988,580 | ||||||
| 10,681,512 | ||||||||
| Apparel Retail–1.09% | ||||||||
Abercrombie & Fitch Co.–Class A(b) | 122,400 | 3,028,176 | ||||||
Guess?, Inc. | 39,300 | 711,723 | ||||||
| 3,739,899 | ||||||||
| Application Software–0.17% | ||||||||
CDK Global Inc. | 12,500 | 585,375 | ||||||
| Biotechnology–2.04% | ||||||||
PDL BioPharma Inc.(b) | 264,000 | 1,842,720 | ||||||
United Therapeutics Corp.(c) | 33,200 | 5,147,660 | ||||||
| 6,990,380 | ||||||||
| Coal & Consumable Fuels–0.16% | ||||||||
Peabody Energy Corp.(b) | 68,300 | 539,570 | ||||||
| Commercial Printing–0.63% | ||||||||
R. R. Donnelley & Sons Co. | 113,800 | 2,170,166 | ||||||
| Communications Equipment–2.17% | ||||||||
Cisco Systems, Inc. | 227,200 | 6,704,672 | ||||||
InterDigital, Inc. | 13,900 | 734,893 | ||||||
| 7,439,565 | ||||||||
| Data Processing & Outsourced Services–2.73% | ||||||||
Computer Sciences Corp. | 36,100 | 2,560,212 | ||||||
Western Union Co. (The) | 200,400 | 3,911,808 | ||||||
Xerox Corp. | 211,300 | 2,884,245 | ||||||
| 9,356,265 | ||||||||
| Diversified REIT’s–0.25% | ||||||||
Lexington Realty Trust | 30,000 | 324,900 | ||||||
Liberty Property Trust | 14,400 | 535,968 | ||||||
| 860,868 | ||||||||
| Electric Utilities–10.99% | ||||||||
American Electric Power Co., Inc. | 96,200 | 5,539,196 | ||||||
Edison International | 87,800 | 5,641,150 | ||||||
Entergy Corp. | 76,300 | 6,066,613 | ||||||
Exelon Corp. | 161,400 | 5,474,688 | ||||||
FirstEnergy Corp. | 163,300 | 5,712,234 | ||||||
PPL Corp. | 161,100 | 5,493,510 | ||||||
Southern Co. (The) | 73,400 | 3,360,986 | ||||||
Xcel Energy, Inc. | 10,800 | 381,024 | ||||||
| 37,669,401 | ||||||||
| Environmental & Facilities Services–0.31% | ||||||||
Covanta Holding Corp. | 49,600 | 1,074,832 | ||||||
| Shares | Value | |||||||
| Fertilizers & Agricultural Chemicals–0.05% | ||||||||
Scotts Miracle-Gro Co. (The)–Class A | 2,500 | $ | 163,775 | |||||
| Food Distributors–0.89% | ||||||||
Sysco Corp. | 78,300 | 3,052,917 | ||||||
| Gas Utilities–1.08% | ||||||||
AGL Resources Inc. | 48,000 | 2,357,280 | ||||||
New Jersey Resources Corp. | 21,300 | 1,332,954 | ||||||
| 3,690,234 | ||||||||
| Health Care Distributors–2.32% | ||||||||
AmerisourceBergen Corp. | 50,000 | 5,138,000 | ||||||
Cardinal Health, Inc. | 32,100 | 2,824,479 | ||||||
| 7,962,479 | ||||||||
| Health Care Facilities–0.33% | ||||||||
HealthSouth Corp. | 26,000 | 1,129,960 | ||||||
| Health Care REIT’s–6.42% | ||||||||
HCP, Inc. | 126,900 | 5,375,484 | ||||||
Health Care REIT, Inc. | 71,800 | 5,536,498 | ||||||
Healthcare Trust of America, Inc.–Class A | 47,250 | 1,311,187 | ||||||
Medical Properties Trust Inc. | 90,500 | 1,370,170 | ||||||
National Health Investors, Inc. | 14,600 | 1,039,228 | ||||||
Omega Healthcare Investors, Inc.(b) | 100,900 | 4,042,054 | ||||||
Senior Housing Properties Trust | 148,500 | 3,318,975 | ||||||
| 21,993,596 | ||||||||
| Health Care Supplies–0.15% | ||||||||
Halyard Health Inc.(c) | 11,200 | 515,648 | ||||||
| Hotel and Resort REIT’s–0.81% | ||||||||
Hospitality Properties Trust | 71,200 | 2,193,672 | ||||||
RLJ Lodging Trust | 18,400 | 585,304 | ||||||
| 2,778,976 | ||||||||
| Integrated Oil & Gas–0.96% | ||||||||
Cenovus Energy Inc. (Canada) | 191,000 | 3,302,390 | ||||||
| Integrated Telecommunication Services–7.00% | ||||||||
AT&T Inc. | 180,000 | 6,220,800 | ||||||
BCE Inc. (Canada) | 45,200 | 1,980,212 | ||||||
CenturyLink Inc. | 162,400 | 6,148,464 | ||||||
Verizon Communications Inc. | 101,800 | 5,034,010 | ||||||
Windstream Holdings Inc. | 585,800 | 4,621,962 | ||||||
| 24,005,448 | ||||||||
| IT Consulting & Other Services–0.67% | ||||||||
Booz Allen Hamilton Holding Corp. | 20,800 | 619,008 | ||||||
Leidos Holdings, Inc. | 37,400 | 1,683,748 | ||||||
| 2,302,756 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Low Volatility Equity Yield Fund
| Shares | Value | |||||||
| Leisure Facilities–0.35% | ||||||||
Six Flags Entertainment Corp. | 26,500 | $ | 1,200,185 | |||||
| Life & Health Insurance–0.10% | ||||||||
Sun Life Financial Inc. (Canada) | 10,900 | 335,938 | ||||||
| Managed Health Care–0.66% | ||||||||
Health Net Inc.(c) | 39,700 | 2,276,795 | ||||||
| Mortgage REIT’s–5.60% | ||||||||
American Capital Agency Corp. | 223,500 | 4,790,723 | ||||||
Annaly Capital Management Inc. | 506,700 | 5,381,154 | ||||||
CYS Investments, Inc. | 208,600 | 1,896,174 | ||||||
Hatteras Financial Corp. | 69,500 | 1,275,325 | ||||||
MFA Financial, Inc. | 364,800 | 2,903,808 | ||||||
Two Harbors Investment Corp. | 283,100 | 2,955,564 | ||||||
| 19,202,748 | ||||||||
| Multi-Utilities–7.65% | ||||||||
Ameren Corp. | 129,300 | 5,483,613 | ||||||
Consolidated Edison, Inc. | 82,200 | 5,190,108 | ||||||
PG&E Corp. | 110,000 | 5,910,300 | ||||||
Public Service Enterprise Group Inc. | 153,300 | 6,447,798 | ||||||
TECO Energy, Inc. | 152,300 | 2,989,649 | ||||||
Vectren Corp. | 4,600 | 205,390 | ||||||
| 26,226,858 | ||||||||
| Office REIT’s–3.14% | ||||||||
Alexandria Real Estate Equities, Inc. | 20,800 | 1,994,928 | ||||||
Digital Realty Trust, Inc. | 90,400 | 6,000,752 | ||||||
Highwoods Properties, Inc. | 26,600 | 1,213,226 | ||||||
Piedmont Office Realty Trust Inc.–Class A(b) | 84,300 | 1,545,219 | ||||||
| 10,754,125 | ||||||||
| Office Services & Supplies–1.65% | ||||||||
Pitney Bowes Inc. | 224,400 | 5,199,348 | ||||||
West Corp. | 13,000 | 443,950 | ||||||
| 5,643,298 | ||||||||
| Oil & Gas Exploration & Production–1.18% | ||||||||
California Resources Corp.(c) | 77,100 | 552,036 | ||||||
Encana Corp. (Canada) | 133,500 | 1,742,175 | ||||||
Enerplus Corp. (Canada)(b) | 151,900 | 1,537,228 | ||||||
Pengrowth Energy Corp. (Canada)(b) | 65,500 | 217,460 | ||||||
| 4,048,899 | ||||||||
| Oil & Gas Refining & Marketing–2.37% | ||||||||
CVR Energy, Inc.(b) | 36,400 | 1,528,436 | ||||||
Valero Energy Corp. | 107,100 | 6,606,999 | ||||||
| 8,135,435 | ||||||||
| Packaged Foods & Meats–2.73% | ||||||||
ConAgra Foods, Inc. | 88,500 | 3,095,730 | ||||||
Pilgrim’s Pride Corp.(b) | 187,500 | 5,143,125 | ||||||
Pinnacle Foods Inc. | 30,600 | 1,110,780 | ||||||
| 9,349,635 | ||||||||
| Shares | Value | |||||||
| Personal Products–0.92% | ||||||||
Avon Products, Inc. | 371,300 | $ | 3,159,763 | |||||
| Pharmaceuticals–5.15% | ||||||||
Eli Lilly and Co. | 83,700 | 5,873,229 | ||||||
Johnson & Johnson | 50,400 | 5,166,504 | ||||||
Pfizer Inc. | 193,000 | 6,623,760 | ||||||
| 17,663,493 | ||||||||
| Property & Casualty Insurance–0.46% | ||||||||
AmTrust Financial Services, Inc.(b) | 20,500 | 1,104,950 | ||||||
Aspen Insurance Holdings Ltd. | 10,300 | 472,255 | ||||||
| 1,577,205 | ||||||||
| Reinsurance–0.18% | ||||||||
Validus Holdings, Ltd. | 14,800 | 616,272 | ||||||
| Residential REIT’s–1.66% | ||||||||
Equity Lifestyle Properties, Inc. | 17,700 | 953,499 | ||||||
Equity Residential | 61,300 | 4,721,939 | ||||||
| 5,675,438 | ||||||||
| Retail REIT’s–1.64% | ||||||||
CBL & Associates Properties, Inc. | 24,400 | 488,488 | ||||||
Kimco Realty Corp. | 46,400 | 1,219,392 | ||||||
Regency Centers Corp. | 34,500 | 2,264,235 | ||||||
Retail Properties of America, Inc.–Class A | 105,200 | 1,665,316 | ||||||
| 5,637,431 | ||||||||
| Semiconductors–0.90% | ||||||||
Intel Corp. | 92,800 | 3,085,600 | ||||||
| Soft Drinks–1.73% | ||||||||
Dr Pepper Snapple Group, Inc. | 75,300 | 5,932,887 | ||||||
| Specialized REIT’s–2.60% | ||||||||
Corrections Corp. of America | 28,700 | 1,144,843 | ||||||
Extra Space Storage Inc. | 13,500 | 888,030 | ||||||
Gaming and Leisure Properties, Inc. | 19,200 | 649,920 | ||||||
Geo Group Inc. (The) | 57,500 | 2,481,125 | ||||||
Iron Mountain Inc. | 91,200 | 3,351,600 | ||||||
Potlatch Corp | 9,600 | 383,328 | ||||||
| 8,898,846 | ||||||||
| Steel–0.99% | ||||||||
United States Steel Corp.(b) | 141,700 | 3,393,715 | ||||||
| Systems Software–2.54% | ||||||||
CA, Inc. | 113,500 | 3,691,020 | ||||||
Microsoft Corp. | 114,300 | 5,012,055 | ||||||
| 8,703,075 | ||||||||
| Technology Hardware, Storage & Peripherals–3.90% | ||||||||
Hewlett-Packard Co. | 173,700 | 6,051,708 | ||||||
Lexmark International, Inc.–Class A | 86,500 | 3,690,090 | ||||||
NetApp, Inc. | 94,200 | 3,640,830 | ||||||
| 13,382,628 | ||||||||
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–1.14% | ||||||||
New York Community Bancorp, | 234,500 | $ | 3,895,045 | |||||
| Tobacco–3.44% | ||||||||
Altria Group, Inc. | 122,100 | 6,873,009 | ||||||
Philip Morris International Inc. | 59,100 | 4,902,936 | ||||||
| 11,775,945 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $304,343,109) |
| 332,577,271 | ||||||
| Principal Amount | ||||||||
U.S. Treasury Bills–0.21% |
| |||||||
0.04%, 03/12/15 | $ | 725,000 | 724,999 | |||||
| Shares | ||||||||
Money Market Funds–2.64% |
| |||||||
Liquid Assets Portfolio–Institutional Class(f) | 4,531,916 | 4,531,916 | ||||||
| Shares | Value | |||||||
Premier Portfolio–Institutional | 4,531,916 | $ | 4,531,916 | |||||
Total Money Market Funds |
| 9,063,832 | ||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.87% |
| 342,366,102 | ||||||
Investments Purchased with Cash Collateral from Securities on Loan |
| |||||||
Money Market Funds–4.55% |
| |||||||
Liquid Assets Portfolio–Institutional Class (Cost $15,594,380)(f)(g) | 15,594,380 | 15,594,380 | ||||||
TOTAL INVESTMENTS–104.42% |
| 357,960,482 | ||||||
OTHER ASSETS LESS LIABILITIES–(4.42)% |
| (15,165,291 | ) | |||||
NET ASSETS–100.00% |
| $ | 342,795,191 | |||||
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) | All or a portion of this security was out on loan at February 28, 2015. |
| (c) | Non-income producing security. |
| (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) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
| (f) | The money market fund and the Fund are affiliated by having the same investment adviser. |
| (g) | 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, 2015. |
| Counterparty | Gross Amount of Securities on Loan at Value | Cash Collateral Received for Securities Loaned* | Net Amount | |||||||||
State Street Bank and Trust Co. | $ | 15,230,603 | $ | (15,230,603 | ) | $ | — | |||||
| * | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2015
Financials | 23.7 | % | ||
Utilities | 19.7 | |||
Information Technology | 13.1 | |||
Consumer Staples | 12.8 | |||
Health Care | 10.7 | |||
Telecommunication Services | 7.0 | |||
Energy | 4.7 | |||
Industrials | 2.9 | |||
Consumer Discretionary | 1.4 | |||
Materials | 1.0 | |||
U.S. Treasury Bills, Plus Money Market Funds, Plus Other Assets Less Liabilities | 3.0 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Low Volatility Equity Yield Fund
Statement of Assets and Liabilities
February 28, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $305,068,099)* | $ | 333,302,270 | ||
Investments in affiliated money market funds, at value and cost | 24,658,212 | |||
Total investments, at value (Cost $329,726,311) | 357,960,482 | |||
Receivable for: | ||||
Fund shares sold | 340,163 | |||
Dividends | 1,043,723 | |||
Investment for trustee deferred compensation and retirement plans | 226,866 | |||
Other assets | 57,172 | |||
Total assets | 359,628,406 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 700,110 | |||
Collateral upon return of securities loaned | 15,594,380 | |||
Variation margin — futures | 31,667 | |||
Accrued fees to affiliates | 224,399 | |||
Accrued trustees’ and officers’ fees and benefits | 3,154 | |||
Accrued other operating expenses | 31,302 | |||
Trustee deferred compensation and retirement plans | 248,203 | |||
Total liabilities | 16,833,215 | |||
Net assets applicable to shares outstanding | $ | 342,795,191 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 348,884,469 | ||
Undistributed net investment income | 4,803,159 | |||
Undistributed net realized gain (loss) | (39,460,269 | ) | ||
Net unrealized appreciation | 28,567,832 | |||
| $ | 342,795,191 | |||
Net Assets: |
| |||
Class A | $ | 214,250,959 | ||
Class B | $ | 8,734,234 | ||
Class C | $ | 37,104,149 | ||
Class R | $ | 195,628 | ||
Class Y | $ | 5,848,764 | ||
Investor Class | $ | 61,445,824 | ||
Class R5 | $ | 15,215,633 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 20,155,345 | |||
Class B | 833,867 | |||
Class C | 3,550,790 | |||
Class R | 18,499 | |||
Class Y | 547,685 | |||
Investor Class | 5,761,430 | |||
Class R5 | 1,422,820 | |||
Class A: | ||||
Net asset value per share | $ | 10.63 | ||
Maximum offering price per share | ||||
(Net asset value of $10.63 ¸ 94.50%) | $ | 11.25 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.47 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.45 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.58 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.68 | ||
Investor Class: | ||||
Net asset value and offering price per share | $ | 10.67 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.69 | ||
| * | At February 28, 2015, securities with an aggregate value of $15,230,603 were on loan to brokers. |
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, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $43,811) | $ | 7,388,085 | ||
Dividends from affiliated money market funds (includes securities lending income of $52,512) | 54,254 | |||
Total investment income | 7,442,339 | |||
Expenses: | ||||
Advisory fees | 1,025,041 | |||
Administrative services fees | 54,639 | |||
Custodian fees | 5,783 | |||
Distribution fees: | ||||
Class A | 268,437 | |||
Class B | 51,481 | |||
Class C | 188,094 | |||
Class R | 466 | |||
Investor Class | 77,902 | |||
Transfer agent fees — A, B, C, R, Y and Investor | 335,408 | |||
Transfer agent fees — R5 | 4,067 | |||
Trustees’ and officers’ fees and benefits | 16,930 | |||
Other | 98,156 | |||
Total expenses | 2,126,404 | |||
Less: Fees waived and expense offset arrangement(s) | (7,674 | ) | ||
Net expenses | 2,118,730 | |||
Net investment income | 5,323,609 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain from: | ||||
Investment securities | 3,607,844 | |||
Futures contracts | 479,330 | |||
| 4,087,174 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (12,553,067 | ) | ||
Futures contracts | 42,521 | |||
| (12,510,546 | ) | |||
Net realized and unrealized gain (loss) | (8,423,372 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (3,099,763 | ) | |
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 5,323,609 | $ | 9,377,063 | ||||
Net realized gain | 4,087,174 | 50,484,109 | ||||||
Change in net unrealized appreciation (depreciation) | (12,510,546 | ) | 11,013,580 | |||||
Net increase (decrease) in net assets resulting from operations | (3,099,763 | ) | 70,874,752 | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (2,944,214 | ) | (5,646,913 | ) | ||||
Class B | (106,542 | ) | (254,144 | ) | ||||
Class C | (373,320 | ) | (751,282 | ) | ||||
Class R | (2,233 | ) | (4,843 | ) | ||||
Class Y | (81,593 | ) | (131,250 | ) | ||||
Investor Class | (857,939 | ) | (1,690,488 | ) | ||||
Class R5 | (233,869 | ) | (439,228 | ) | ||||
Total distributions from net investment income | (4,599,710 | ) | (8,918,148 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (16,015,987 | ) | (3,264,831 | ) | ||||
Class B | (767,920 | ) | (212,478 | ) | ||||
Class C | (2,824,412 | ) | (616,876 | ) | ||||
Class R | (12,014 | ) | (3,433 | ) | ||||
Class Y | (415,907 | ) | (68,027 | ) | ||||
Investor Class | (4,650,584 | ) | (956,050 | ) | ||||
Class R5 | (1,117,222 | ) | (215,652 | ) | ||||
Total distributions from net realized gains | (25,804,046 | ) | (5,337,347 | ) | ||||
Share transactions–net: | ||||||||
Class A | 10,219,219 | (9,469,200 | ) | |||||
Class B | (2,204,520 | ) | (3,423,364 | ) | ||||
Class C | 681,464 | (3,531,091 | ) | |||||
Class R | 5,338 | (26,497 | ) | |||||
Class Y | 995,440 | 444,728 | ||||||
Investor Class | 2,048,146 | (9,352,837 | ) | |||||
Class R5 | 396,947 | 877,747 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 12,142,034 | (24,480,514 | ) | |||||
Net increase (decrease) in net assets | (21,361,485 | ) | 32,138,743 | |||||
Net assets: | ||||||||
Beginning of period | 364,156,676 | 332,017,933 | ||||||
End of period (includes undistributed net investment income of $4,803,159 and $4,079,260, respectively) | $ | 342,795,191 | $ | 364,156,676 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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 securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. 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 net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 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 affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
| J. | 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 (“Counterparties”) 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 |
12 Invesco Low Volatility Equity Yield Fund
| 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. |
| K. | 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 $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% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.59%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $6,338.
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, 2015, 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, 2015, 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
13 Invesco Low Volatility Equity Yield Fund
charges, that may be paid by any class of shares of the Fund. For the six months ended February 28, 2015, 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, 2015, IDI advised the Fund that IDI retained $9,004 in front-end sales commissions from the sale of Class A shares and $198, $590 and $981 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, 2015. 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 | $ | 357,235,483 | $ | — | $ | — | $ | 357,235,483 | ||||||||
U.S. Treasury Securities | — | 724,999 | — | 724,999 | ||||||||||||
| 357,235,483 | 724,999 | — | 357,960,482 | |||||||||||||
Futures Contracts* | 333,661 | — | — | 333,661 | ||||||||||||
Total Investments | $ | 357,569,144 | $ | 724,999 | $ | — | $ | 358,294,143 | ||||||||
| * | 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, 2015:
| Value | ||||||||
| Risk Exposure/ Derivative Type | Assets | Liabilities | ||||||
Market risk: | ||||||||
Futures contracts(a) | $ | 333,661 | $ | — | ||||
| (a) | Includes cumulative appreciation 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, 2015
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 Contracts | ||||
Realized Gain: | ||||
Market risk | $ | 479,330 | ||
Change in Unrealized Appreciation: | ||||
Market risk | 42,521 | |||
Total | $ | 521,851 | ||
14 Invesco Low Volatility Equity Yield Fund
The table below summarizes the average notional value of futures contracts outstanding during the period.
| Futures Contracts | ||||
Average notional value | $ | 8,657,091 | ||
| Open Futures Contracts | ||||||||||||||||||||
| Futures Contracts — Market Risk | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
E-Mini S&P 500 Index | Long | 89 | March-2015 | $ | 9,357,460 | $ | 333,661 | |||||||||||||
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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $1,336.
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
August 31, 2016 | $ | 20,591,619 | $ | — | $ | 20,591,619 | ||||||
August 31, 2018 | 22,297,581 | — | 22,297,581 | |||||||||
| $ | 42,889,200 | $ | — | $ | 42,889,200 | |||||||
| * | 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, 2015 was $152,327,224 and $163,647,750, 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 | $ | 37,148,907 | ||
Aggregate unrealized (depreciation) of investment securities | (9,233,114 | ) | ||
Net unrealized appreciation of investment securities | $ | 27,915,793 | ||
Cost of investments for tax purposes is $330,044,689.
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 433,492 | $ | 4,758,484 | 942,877 | $ | 10,325,144 | ||||||||||
Class B | 5,995 | 64,859 | 19,559 | 214,463 | ||||||||||||
Class C | 129,642 | 1,395,925 | 248,245 | 2,662,846 | ||||||||||||
Class R | 4,071 | 43,107 | 6,518 | 69,319 | ||||||||||||
Class Y | 112,524 | 1,255,067 | 162,907 | 1,791,033 | ||||||||||||
Investor Class | 156,578 | 1,736,422 | 486,151 | 5,236,634 | ||||||||||||
Class R5 | 59,417 | 667,615 | 135,907 | 1,500,816 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,664,641 | 17,313,163 | 764,241 | 8,048,990 | ||||||||||||
Class B | 73,448 | 752,525 | 38,089 | 394,085 | ||||||||||||
Class C | 263,316 | 2,691,029 | 108,516 | 1,121,474 | ||||||||||||
Class R | 1,232 | 12,769 | 731 | 7,634 | ||||||||||||
Class Y | 37,978 | 396,670 | �� | 14,543 | 154,082 | |||||||||||
Investor Class | 510,439 | 5,325,239 | 243,096 | 2,566,955 | ||||||||||||
Class R5 | 128,987 | 1,349,346 | 61,598 | 654,033 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 173,567 | 1,908,199 | 158,984 | 1,737,656 | ||||||||||||
Class B | (176,000 | ) | (1,908,199 | ) | (161,092 | ) | (1,737,656 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (1,249,261 | ) | (13,760,627 | ) | (2,738,197 | ) | (29,580,990 | ) | ||||||||
Class B | (101,923 | ) | (1,113,705 | ) | (214,003 | ) | (2,294,256 | ) | ||||||||
Class C | (312,132 | ) | (3,405,490 | ) | (687,387 | ) | (7,315,411 | ) | ||||||||
Class R | (4,462 | ) | (50,538 | ) | (9,723 | ) | (103,450 | ) | ||||||||
Class Y | (58,976 | ) | (656,297 | ) | (139,361 | ) | (1,500,387 | ) | ||||||||
Investor Class | (457,504 | ) | (5,013,515 | ) | (1,608,307 | ) | (17,156,426 | ) | ||||||||
Class R5 | (142,648 | ) | (1,620,014 | ) | (116,076 | ) | (1,277,102 | ) | ||||||||
Net increase (decrease) in share activity | 1,252,421 | $ | 12,142,034 | (2,282,184 | ) | $ | (24,480,514 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 22% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
16 Invesco 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 02/28/15 | $ | 11.75 | $ | 0.17 | $ | (0.29 | ) | $ | (0.12 | ) | $ | (0.15 | ) | $ | (0.85 | ) | $ | (1.00 | ) | $ | 10.63 | (0.75 | )% | $ | 214,251 | 1.14 | %(d) | 1.14 | %(d) | 3.16 | %(d) | 45 | % | |||||||||||||||||||||||
Year ended 08/31/14 | 9.98 | 0.31 | 1.92 | 2.23 | (0.29 | ) | (0.17 | ) | (0.46 | ) | 11.75 | 22.91 | 224,786 | 1.14 | 1.14 | 2.80 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.59 | 0.13 | (0.29 | ) | (0.16 | ) | (0.11 | ) | (0.85 | ) | (0.96 | ) | 10.47 | (1.17 | ) | 8,734 | 1.89 | (d) | 1.89 | (d) | 2.41 | (d) | 45 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 9.84 | 0.22 | 1.90 | 2.12 | (0.20 | ) | (0.17 | ) | (0.37 | ) | 11.59 | 22.08 | 11,962 | 1.89 | 1.89 | 2.05 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.56 | 0.13 | (0.28 | ) | (0.15 | ) | (0.11 | ) | (0.85 | ) | (0.96 | ) | 10.45 | (1.09 | ) | 37,104 | 1.89 | (d) | 1.89 | (d) | 2.41 | (d) | 45 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 9.82 | 0.22 | 1.89 | 2.11 | (0.20 | ) | (0.17 | ) | (0.37 | ) | 11.56 | 22.01 | 40,119 | 1.89 | 1.89 | 2.05 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.69 | 0.16 | (0.28 | ) | (0.12 | ) | (0.14 | ) | (0.85 | ) | (0.99 | ) | 10.58 | (0.80 | ) | 196 | 1.39 | (d) | 1.39 | (d) | 2.91 | (d) | 45 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 9.93 | 0.28 | 1.91 | 2.19 | (0.26 | ) | (0.17 | ) | (0.43 | ) | 11.69 | 22.60 | 206 | 1.39 | 1.39 | 2.55 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.80 | 0.19 | (0.29 | ) | (0.10 | ) | (0.17 | ) | (0.85 | ) | (1.02 | ) | 10.68 | (0.61 | ) | 5,849 | 0.89 | (d) | 0.89 | (d) | 3.41 | (d) | 45 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.02 | 0.33 | 1.94 | 2.27 | (0.32 | ) | (0.17 | ) | (0.49 | ) | 11.80 | 23.24 | 5,383 | 0.89 | 0.89 | 3.05 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.78 | 0.17 | (0.28 | ) | (0.11 | ) | (0.15 | ) | (0.85 | ) | (1.00 | ) | 10.67 | (0.65 | ) | 61,446 | 1.14 | (d) | 1.14 | (d) | 3.16 | (d) | 45 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.01 | 0.31 | 1.92 | 2.23 | (0.29 | ) | (0.17 | ) | (0.46 | ) | 11.78 | 22.85 | 65,428 | 1.14 | 1.14 | 2.80 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 11.82 | 0.20 | (0.30 | ) | (0.10 | ) | (0.18 | ) | (0.85 | ) | (1.03 | ) | 10.69 | (0.62 | ) | 15,216 | 0.75 | (d) | 0.75 | (d) | 3.55 | (d) | 45 | |||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.03 | 0.35 | 1.94 | 2.29 | (0.33 | ) | (0.17 | ) | (0.50 | ) | 11.82 | 23.48 | 16,272 | 0.75 | 0.75 | 3.19 | 109 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
| (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 $216,529, $10,381, $37,931, $188, $5,660, $62,838 and $15,094 for Class A, Class B, Class C, Class R, Class Y, Investor Class and Class R5 shares, respectively. |
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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 992.50 | $ | 5.63 | $ | 1,019.14 | $ | 5.71 | 1.14 | % | ||||||||||||
| B | 1,000.00 | 988.30 | 9.32 | 1,015.42 | 9.44 | 1.89 | ||||||||||||||||||
| C | 1,000.00 | 989.10 | 9.32 | 1,015.42 | 9.44 | 1.89 | ||||||||||||||||||
| R | 1,000.00 | 992.00 | 6.87 | 1,017.90 | 6.95 | 1.39 | ||||||||||||||||||
| Y | 1,000.00 | 993.90 | 4.40 | 1,020.38 | 4.46 | 0.89 | ||||||||||||||||||
| Investor | 1,000.00 | 992.60 | 5.63 | 1,019.14 | 5.71 | 1.14 | ||||||||||||||||||
| R5 | 1,000.00 | 993.80 | 3.71 | 1,021.08 | 3.76 | 0.75 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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, 2015 | ||
| ||||
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, 8/31/14 to 2/28/15, 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 | 2.64 | % | ||
| Class B Shares | 2.64 | |||
| Class C Shares | 2.24 | |||
| Class Y Shares | 2.76 | |||
| S&P Municipal Bond Index‚ (Broad Market Index) | 2.17 | |||
| S&P Municipal Bond Pennsylvania 5+ Year Investment Grade Index‚ (Style-Specific Index)* | 2.86 | |||
| Barclays Pennsylvania Municipal Index‚ (Former Style-Specific Index)* | 2.16 | |||
| Lipper Pennsylvania Municipal Debt Funds Indexn (Peer Group Index) | 2.92 | |||
Source(s): ‚FactSet Research Systems Inc.; nLipper Inc.
| * | The Fund has elected to use the S&P Municipal Bond Pennsylvania 5+ Year Investment Grade Index as its style-specific index rather than the Barclays Pennsylvania Municipal Index because the S&P Municipal Bond Pennsylvania 5+ Year Investment Grade Index more closely reflects the performance of the types of securities in which the Fund invests. |
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 Pennsylvania Municipal Index is an unmanaged index considered representative of Pennsylvania investment-grade municipal bonds.
The S&P Municipal Bond Pennsylvania 5+ Year Investment Grade Index is a subset of the broad S&P Municipal Bond Index. This index of market value-weighted investment-grade US municipal bonds seeks to measure the performance of Pennsylvania issued US municipals whose maturities are equal to or greater than five years.
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 2/28/15, including maximum applicable sales charges | ||||
Class A Shares | ||||
| Inception (5/1/87) | 5.74 | % | ||
| 10 Years | 3.43 | |||
| 5 Years | 4.31 | |||
| 1 Year | 3.73 | |||
| Class B Shares | ||||
| Inception (5/3/93) | 4.28 | % | ||
| 10 Years | 3.57 | |||
| 5 Years | 4.85 | |||
| 1 Year | 3.28 | |||
| Class C Shares | ||||
| Inception (8/13/93) | 3.68 | % | ||
| 10 Years | 3.12 | |||
| 5 Years | 4.43 | |||
| 1 Year | 6.53 | |||
| Class Y Shares | ||||
| 10 Years | 4.01 | % | ||
| 5 Years | 5.48 | |||
| 1 Year | 8.55 | |||
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 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges | ||||
| Class A Shares | ||||
| Inception (5/1/87) | 5.75 | % | ||
| 10 Years | 3.47 | |||
| 5 Years | 4.52 | |||
| 1 Year | 7.16 | |||
| Class B Shares | ||||
| Inception (5/3/93) | 4.29 | % | ||
| 10 Years | 3.59 | |||
| 5 Years | 5.06 | |||
| 1 Year | 6.86 | |||
| Class C Shares | ||||
| Inception (8/13/93) | 3.69 | % | ||
| 10 Years | 3.15 | |||
| 5 Years | 4.65 | |||
| 1 Year | 10.09 | |||
| Class Y Shares | ||||
| 10 Years | 4.04 | % | ||
| 5 Years | 5.68 | |||
| 1 Year | 12.15 | |||
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 1.09%, 1.09%, 1.81% and 0.84%, 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: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio manage- ment teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory andsub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment manage-ment services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
| Sincerely, |
 |
| Philip Taylor |
| Senior Managing Director, Invesco Ltd. |
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Interest Rate | Maturity Date | Principal Amount (000) | Value | |||||||||||||
Municipal Obligations–101.17% |
| |||||||||||||||
| Pennsylvania–95.88% | ||||||||||||||||
Allegheny (County of) Higher Education Building Authority (Chatham University); Series 2012 A, University RB | 5.00 | % | 09/01/35 | $ | 1,000 | $ | 1,071,020 | |||||||||
Allegheny (County of) Higher Education Building Authority (Duquesne University); | ||||||||||||||||
Series 1998, Ref. University RB (INS–AMBAC)(a) | 5.50 | % | 03/01/20 | 1,750 | 1,994,492 | |||||||||||
Series 2011 A, University RB | 5.50 | % | 03/01/31 | 550 | 627,710 | |||||||||||
Allegheny (County of) Higher Education Building Authority (Robert Morris University); Series 2008 A, University RB | 6.00 | % | 10/15/38 | 1,000 | 1,103,140 | |||||||||||
Allegheny (County of) Hospital Development Authority (Ohio Valley General Hospital); Series 2005 A, RB | 5.00 | % | 04/01/25 | 1,600 | 1,600,208 | |||||||||||
Allegheny (County of) Hospital Development Authority (University of Pittsburgh Medical Center); Series 2009, RB | 5.63 | % | 08/15/39 | 1,250 | 1,429,462 | |||||||||||
Allegheny (County of) Industrial Development Authority (Residential Resources, Inc.); Series 2006, Lease RB | 5.10 | % | 09/01/26 | 980 | 992,132 | |||||||||||
Allegheny (County of) Redevelopment Authority (Pittsburgh Mills); Series 2004, Tax Allocation RB | 5.60 | % | 07/01/23 | 1,220 | 1,239,361 | |||||||||||
Allegheny (County of) Residential Finance Authority; Series 2006 TT, Single Family Mortgage RB (CEP–GNMA)(b) | 5.00 | % | 05/01/35 | 655 | 662,690 | |||||||||||
Allegheny (County of); Series 2008 C 61, Unlimited Tax GO Bonds (INS–AGC)(a) | 5.00 | % | 12/01/33 | 500 | 557,550 | |||||||||||
Beaver (County of) Industrial Development Authority (FirstEnergy Generation Corp.); Series 2008 A, Ref. PCR | 2.15 | % | 03/01/17 | 700 | 705,789 | |||||||||||
Beaver (County of) Industrial Development Authority; Series 2008 A, Ref. PCR(c) | 2.70 | % | 04/02/18 | 230 | 233,420 | |||||||||||
Beaver (County of); | ||||||||||||||||
Series 2009, Unlimited Tax GO Notes(c)(d) | 5.55 | % | 11/15/17 | 65 | 73,577 | |||||||||||
Series 2009, Unlimited Tax GO Notes (INS–AGM)(a) | 5.55 | % | 11/15/31 | 1,325 | 1,472,366 | |||||||||||
Berks (County of) Industrial Development Authority (One Douglassville); Series 2007 A, Ref. RB(b) | 6.13 | % | 11/01/34 | 440 | 447,102 | |||||||||||
Berks (County of) Municipal Authority (Reading Hospital Medical Center); Series 2012 A, RB | 5.00 | % | 11/01/40 | 1,000 | 1,109,160 | |||||||||||
Bethlehem (City of); | ||||||||||||||||
Series 2014, Gtd. Ref. Water RB | 5.00 | % | 11/15/30 | 425 | 484,402 | |||||||||||
Series 2014, Gtd. Ref. Water RB | 5.00 | % | 11/15/31 | 425 | 482,834 | |||||||||||
Bethlehem Area School District; Series 2010, Unlimited Tax GO Bonds (INS–AGM)(a) | 5.25 | % | 01/15/26 | 1,000 | 1,154,670 | |||||||||||
Bucks (County of) Industrial Development Authority (Lutheran Community Telford Center); Series 2007, RB | 5.75 | % | 01/01/37 | 2,000 | 2,030,360 | |||||||||||
Central Bradford Progress Authority (Guthrie Healthcare System); Series 2011, RB | 5.38 | % | 12/01/41 | 1,100 | 1,267,464 | |||||||||||
Centre (County of) Hospital Authority (Mt. Nittany Medical Center); Series 2011, RB | 6.25 | % | 11/15/41 | 500 | 591,980 | |||||||||||
Chartiers Valley Industrial & Commercial Development Authority (Asbury Health Center); | ||||||||||||||||
Series 2006, Ref. First Mortgage RB | 5.25 | % | 12/01/15 | 500 | 513,260 | |||||||||||
Series 2006, Ref. First Mortgage RB | 5.75 | % | 12/01/22 | 900 | 931,041 | |||||||||||
Chester (County of) Industrial Development Authority (Renaissance Academy Charter School); Series 2014, RB | 5.00 | % | 10/01/44 | 1,000 | 1,054,210 | |||||||||||
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 | 266,988 | |||||||||||
Cumberland (County of) Municipal Authority (Asbury Pennsylvania Obligated Group); Series 2010, RB | 6.00 | % | 01/01/40 | 870 | 936,764 | |||||||||||
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 | 815,325 | |||||||||||
Cumberland (County of) Municipal Authority (Diakon Lutheran Ministries); Series 2007, RB | 5.00 | % | 01/01/36 | 1,000 | 1,023,550 | |||||||||||
Cumberland (County of) Municipal Authority (Messiah Village); Series 2008 A, RB | 5.63 | % | 07/01/28 | 1,000 | 1,077,110 | |||||||||||
Dauphin (County of) General Authority (Pinnacle Health System); Series 2009 A, Health System RB | 6.00 | % | 06/01/36 | 2,215 | 2,589,911 | |||||||||||
Dauphin (County of) General Authority (Riverfront Office); Series 1998, Office & Parking RB | 6.00 | % | 01/01/25 | 940 | 942,538 | |||||||||||
Delaware (County of) Authority (Cabrini College); Series 1999, College RB (INS–Radian)(a) | 5.75 | % | 07/01/23 | 220 | 220,440 | |||||||||||
Delaware (County of) Authority (Neumann College); Series 2008, College RB | 6.25 | % | 10/01/38 | 110 | 111,585 | |||||||||||
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 | $ | 1,537,860 | |||||||||
Delaware River Port Authority (Port District); | ||||||||||||||||
Series 2012, Ref. RB | 5.00 | % | 01/01/25 | 540 | 623,538 | |||||||||||
Series 2012, Ref. RB | 5.00 | % | 01/01/27 | 535 | 610,884 | |||||||||||
Delaware River Port Authority; Series 2010 D, RB | 5.00 | % | 01/01/40 | 1,000 | 1,116,950 | |||||||||||
Delaware Valley Regional Financial Authority; | ||||||||||||||||
Series 2002, RB | 5.75 | % | 07/01/17 | 1,160 | 1,283,911 | |||||||||||
Series 2002, RB | 5.75 | % | 07/01/32 | 1,000 | 1,227,260 | |||||||||||
Doylestown (City of) Hospital Authority; Series 2013 A, RB (INS–AGM)(a) | 5.00 | % | 07/01/24 | 1,000 | 1,146,240 | |||||||||||
East Hempfield (Township of) Industrial Development Authority (Student Services Inc. Student Housing); | ||||||||||||||||
Series 2013, RB | 5.00 | % | 07/01/35 | 500 | 533,870 | |||||||||||
Series 2014, RB | 5.00 | % | 07/01/39 | 250 | 266,948 | |||||||||||
Erie (City of) Higher Education Building Authority (Mercyhurst College); | ||||||||||||||||
Series 2004 B, Ref. College RB | 5.00 | % | 03/15/23 | 905 | 906,511 | |||||||||||
Series 2008, College RB | 5.50 | % | 03/15/38 | 500 | 548,075 | |||||||||||
Franklin (County of) Industrial Development Authority (Chambersburg Hospital); Series 2010, RB | 5.38 | % | 07/01/42 | 1,000 | 1,108,870 | |||||||||||
Geisinger Authority (Geisinger Health System Foundation); Series 2011 A1, Health System RB | 5.13 | % | 06/01/41 | 500 | 560,520 | |||||||||||
Lancaster (County of) Hospital Authority (Brethren Village); Series 2008 A, RB | 6.50 | % | 07/01/40 | 350 | 366,734 | |||||||||||
Lancaster (County of) Hospital Authority (Masonic Villages); Series 2015, Ref. RB | 5.00 | % | 11/01/35 | 210 | 237,248 | |||||||||||
Lehigh (County of) Authority; Series 2013 A, Water & Sewer RB | 5.00 | % | 12/01/38 | 930 | 1,057,736 | |||||||||||
Lehigh (County of) General Purpose Authority (Bible Fellowship Church Homes, Inc.); Series 2013, RB | 5.25 | % | 07/01/42 | 825 | 858,314 | |||||||||||
Lehigh (County of) General Purpose Authority (Kidspeace Obligation Group); | ||||||||||||||||
Series 2014 A, RB | 7.50 | % | 02/01/44 | 683 | 664,355 | |||||||||||
Series 2014 B, Conv. CAB RB(e) | 7.50 | % | 02/01/44 | 172 | 25,437 | |||||||||||
Series 2014 C, RB(f) | 0.00 | % | 02/01/44 | 516 | 5 | |||||||||||
Lycoming (County of) Authority (Pennsylvania College of Technology); Series 2011, RB | 5.00 | % | 07/01/30 | 750 | 821,520 | |||||||||||
Lycoming (County of) Authority (Susquehanna Health System); Series 2009 A, Heath System RB | 5.75 | % | 07/01/39 | 1,250 | 1,372,687 | |||||||||||
Monroe (County of) Hospital Authority (Pocono Medical Center); Series 2007, RB | 5.13 | % | 01/01/37 | 1,500 | 1,561,380 | |||||||||||
Montgomery (County of) Higher Education & Health Authority (Abington Memorial Hospital Obligated Group); Series 2012, RB | 5.00 | % | 06/01/31 | 1,400 | 1,564,458 | |||||||||||
Montgomery (County of) Higher Education & Health Authority (Holy Redeemer Health System); Series 2014, Ref. RB | 5.00 | % | 10/01/27 | 390 | 428,142 | |||||||||||
Montgomery (County of) Industrial Development Authority (ACTS Retirement-Life Communities, Inc.); | ||||||||||||||||
Series 2009 A-1, RB | 6.25 | % | 11/15/29 | 1,000 | 1,148,300 | |||||||||||
Series 2012, Ref. RB | 5.00 | % | 11/15/28 | 900 | 973,755 | |||||||||||
Montgomery (County of) Industrial Development Authority (Philadelphia Presbytery Homes, Inc.); Series 2010, RB | 6.63 | % | 12/01/30 | 1,500 | 1,748,025 | |||||||||||
Montgomery (County of) Industrial Development Authority (Whitemarsh Community); Series 2008, Mortgage RB(c)(d) | 7.00 | % | 02/01/18 | 500 | 535,185 | |||||||||||
Montgomery (County of) Industrial Development Authority (Whitemarsh Continuing Care); Series 2005, Mortgage RB | 6.13 | % | 02/01/28 | 1,100 | 1,102,673 | |||||||||||
Northampton (County of) General Purpose Authority (Lehigh University); Series 2009, Higher Education RB | 5.50 | % | 11/15/33 | 1,000 | 1,144,500 | |||||||||||
Northampton (County of) General Purpose Authority (St. Luke’s Hospital); | ||||||||||||||||
Series 2008 A, Hospital RB | 5.50 | % | 08/15/35 | 1,000 | 1,118,790 | |||||||||||
Series 2010 C, Hospital RB(c) | 4.50 | % | 08/15/16 | 1,000 | 1,049,600 | |||||||||||
Northampton (County of) Industrial Development Authority (Morningstar Senior Living, Inc.); Series 2012, RB | 5.00 | % | 07/01/32 | 535 | 562,472 | |||||||||||
Pennsylvania (Commonwealth of); First Series 2014, Unlimited Tax GO Bonds(g) | 5.00 | % | 06/15/34 | 3,000 | 3,454,710 | |||||||||||
Pennsylvania (State of) Economic Development Financing Agency (Forum Place); Series 2012, Governmental Lease RB | 5.00 | % | 03/01/34 | 500 | 558,450 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Amtrak); Series 2012 A, Ref. Exempt Facilities RB(b) | 5.00 | % | 11/01/41 | 1,200 | 1,302,540 | |||||||||||
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 (National Gypson Co.); Series 2014, Ref. Exempt Facilities RB(b)(h) | 5.50 | % | 11/01/44 | $ | 635 | $ | 657,403 | |||||||||
Pennsylvania (State of) Economic Development Financing Authority (PA Bridges FINCO LP); Series 2015, RB(b) | 5.00 | % | 06/30/42 | 1,585 | 1,738,919 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Philadelphia Biosolids Facility); Series 2009, Sewage Sludge Disposal RB | 6.25 | % | 01/01/32 | 1,000 | 1,107,880 | |||||||||||
Pennsylvania (State of) Economic Development Financing Authority (Shippingport); Series 2006 A, Exempt Facilities RB(c) | 2.55 | % | 12/03/18 | 1,500 | 1,529,760 | |||||||||||
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 | 1,341,093 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (AICUP Financing Program–Del Valley College); Series 2012, RB | 5.00 | % | 11/01/42 | 535 | 565,939 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Edinboro University Foundation); | ||||||||||||||||
Series 2008, RB | 5.88 | % | 07/01/38 | 750 | 796,275 | |||||||||||
Series 2010, RB | 6.00 | % | 07/01/43 | 500 | 549,020 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (La Salle University); Series 2012, RB | 5.00 | % | 05/01/42 | 1,180 | 1,271,839 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Shippensburg University Student Services); Series 2012, RB | 5.00 | % | 10/01/35 | 1,300 | 1,369,329 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (St. Joseph’s University); Series 2010 A, RB | 5.00 | % | 11/01/34 | 500 | 548,270 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Temple University); First Series 2012, RB | 5.00 | % | 04/01/42 | 570 | 641,182 | |||||||||||
Pennsylvania (State of) Higher Educational Facilities Authority (Thomas Jefferson University); Series 2015, Ref. RB | 5.25 | % | 09/01/50 | 845 | 946,983 | |||||||||||
Pennsylvania (State of) Turnpike Commission; | ||||||||||||||||
Series 2008 B-1, Sub. RB | 5.50 | % | 06/01/33 | 1,000 | 1,114,160 | |||||||||||
Series 2009 C, Sub. Conv. CAB RB (INS–AGM)(a)(e) | 6.25 | % | 06/01/33 | 2,000 | 2,356,240 | |||||||||||
Series 2009 E, Sub. Conv. CAB RB(e) | 6.38 | % | 12/01/38 | 1,435 | 1,554,248 | |||||||||||
Series 2010 A 1, Motor License Fund Special RB | 5.00 | % | 12/01/38 | 500 | 540,805 | |||||||||||
Series 2010 A-2, Motor License Fund Special Conv. CAB RB(e) | 5.50 | % | 12/01/34 | 1,000 | 1,061,900 | |||||||||||
Series 2010 B 2, Conv. CAB RB(e) | 5.00 | % | 12/01/30 | 625 | 655,931 | |||||||||||
Series 2010 B 2, Conv. CAB RB(e) | 5.13 | % | 12/01/35 | 500 | 521,840 | |||||||||||
Philadelphia (City of) Authority for Industrial Development (The Children’s Hospital of Philadelphia); Series 2014 A, Hospital RB(g) | 5.00 | % | 07/01/42 | 1,500 | 1,721,745 | |||||||||||
Philadelphia (City of) Hospitals & Higher Education Facilities Authority (Jefferson Health System); Series 2010 B, RB(c)(d) | 5.00 | % | 05/15/20 | 1,500 | 1,779,075 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Architecture & Design Charter High School); Series 2013, RB | 6.13 | % | 03/15/43 | 585 | 636,234 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Discovery Charter School); Series 2012, RB | 6.25 | % | 04/01/42 | 1,000 | 1,074,450 | |||||||||||
Philadelphia (City of) Industrial Development Authority (First Philadelphia Preparatory Charter School); Series 2014 A, RB | 7.00 | % | 06/15/33 | 875 | 971,478 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Independence Charter School); Series 2007 A, RB | 5.50 | % | 09/15/37 | 1,235 | 1,262,911 | |||||||||||
Philadelphia (City of) Industrial Development Authority (MaST Charter School); Series 2010, RB | 6.00 | % | 08/01/35 | 700 | 770,182 | |||||||||||
Philadelphia (City of) Industrial Development Authority (New Foundations Charter School); Series 2012, RB | 6.63 | % | 12/15/41 | 750 | 833,093 | |||||||||||
Philadelphia (City of) Industrial Development Authority (Performing Arts Charter School); Series 2013, RB(h) | 6.50 | % | 06/15/33 | 945 | 970,128 | |||||||||||
Philadelphia (City of); | ||||||||||||||||
Ninth Series 2010, Gas Works RB | 5.25 | % | 08/01/40 | 1,000 | 1,150,800 | |||||||||||
Series 2005 A, Airport RB (INS–NATL)(a)(b) | 5.00 | % | 06/15/25 | 1,000 | 1,013,810 | |||||||||||
Series 2009 A, Ref. Unlimited Tax GO Bonds (INS–AGC)(a) | 5.50 | % | 08/01/24 | 1,000 | 1,159,900 | |||||||||||
Series 2010 C, Water & Wastewater RB (INS–AGM)(a) | 5.00 | % | 08/01/35 | 1,250 | 1,407,800 | |||||||||||
Series 2011, Unlimited Tax GO Bonds | 6.00 | % | 08/01/36 | 500 | 586,405 | |||||||||||
Philadelphia School District; Series 2008 E, Limited Tax GO Bonds (INS–BHAC)(a) | 5.13 | % | 09/01/23 | 1,500 | 1,693,380 | |||||||||||
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 | 1,130,640 | |||||||||||
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) | ||||||||||||||||
Pittsburgh (City of) Water & Sewer Authority; Series 2013 A, Ref. First Lien RB | 5.00 | % | 09/01/31 | $ | 500 | $ | 574,215 | |||||||||
Southcentral (Region of) General Authority (Wellspan Health Obligated Group); | ||||||||||||||||
Series 2014, Ref. RB(g) | 5.00 | % | 06/01/44 | 3,180 | 3,605,484 | |||||||||||
Series 2014, Ref. RB | 5.00 | % | 06/01/44 | 635 | 719,963 | |||||||||||
State Public School Building Authority (Harrisburg School District); Series 2009 A, RB (INS–AGC)(a) | 5.00 | % | 11/15/33 | 1,000 | 1,098,290 | |||||||||||
Susquehanna Area Regional Airport Authority; Series 2012 A, Airport System RB(b) | 5.00 | % | 01/01/27 | 1,185 | 1,305,704 | |||||||||||
Union (County of) Hospital Authority (Evangelical Community Hospital); Series 2011, Ref. & Improvement RB | 7.00 | % | 08/01/41 | 1,000 | 1,206,580 | |||||||||||
Washington (County of) Industrial Development Authority (Washington Jefferson College); Series 2010, College RB | 5.25 | % | 11/01/30 | 500 | 571,080 | |||||||||||
Washington (County of) Redevelopment Authority (Victory Centre Tanger Outlet Development); Series 2006 A, Tax Allocation RB | 5.45 | % | 07/01/35 | 1,400 | 1,428,840 | |||||||||||
West View (Borough of) Municipal Authority; Series 2014, Water RB | 5.00 | % | 11/15/39 | 850 | 969,247 | |||||||||||
Westmoreland (County of) Industrial Development Authority (Redstone Presbyterian Senior Care Obligated Group); | ||||||||||||||||
Series 2005 A, Retirement Community RB(c)(d) | 5.75 | % | 01/01/16 | 2,500 | 2,614,050 | |||||||||||
Series 2005 A, Retirement Community RB(c)(d) | 5.88 | % | 01/01/16 | 900 | 942,003 | |||||||||||
Westmoreland (County of) Municipal Authority; Series 2013, RB | 5.00 | % | 08/15/31 | 750 | 860,813 | |||||||||||
Wilkes-Barre (City of) Finance Authority (University of Scranton); Series 2010, RB | 5.00 | % | 11/01/40 | 850 | 938,621 | |||||||||||
| 122,808,001 | ||||||||||||||||
| Guam–3.69% | ||||||||||||||||
Guam (Territory of) (Section 30); Series 2009 A, Limited Obligation RB | 5.75 | % | 12/01/34 | 1,250 | 1,386,750 | |||||||||||
Guam (Territory of) Power Authority; | ||||||||||||||||
Series 2010 A, RB | 5.50 | % | 10/01/40 | 410 | 461,069 | |||||||||||
Series 2012 A, Ref. RB | 5.00 | % | 10/01/34 | 520 | 579,311 | |||||||||||
Guam (Territory of) Waterworks Authority; | ||||||||||||||||
Series 2010, Water & Wastewater System RB | 5.63 | % | 07/01/40 | 1,000 | 1,111,460 | |||||||||||
Series 2014 A, Ref. Water & Wastewater System RB | 5.00 | % | 07/01/29 | 285 | 316,889 | |||||||||||
Guam (Territory of); Series 2011 A, Business Privilege Tax RB | 5.13 | % | 01/01/42 | 785 | 867,535 | |||||||||||
| 4,723,014 | ||||||||||||||||
| Virgin Islands–1.60% | ||||||||||||||||
Virgin Islands (Government of) Port Authority; Series 2014 A, Ref. Marine RB(b) | 5.00 | % | 09/01/29 | 575 | 643,276 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note–Diageo); Series 2009 A, Sub. RB | 6.63 | % | 10/01/29 | 750 | 856,852 | |||||||||||
Virgin Islands (Government of) Public Finance Authority (Matching Fund Loan Note); Series 2010 A, Sr. Lien RB | 5.00 | % | 10/01/29 | 500 | 549,245 | |||||||||||
| 2,049,373 | ||||||||||||||||
TOTAL INVESTMENTS(i)–101.17% (Cost $119,176,260) | 129,580,388 | |||||||||||||||
FLOATING RATE NOTE OBLIGATIONS–(4.00)% | ||||||||||||||||
Notes with interest and fee rate ranging of 0.55% at 02/28/15 and maturities of collateral ranging from 06/15/34 to 07/01/42 (See Note 1J)(j) | (5,120,000 | ) | ||||||||||||||
OTHER ASSETS LESS LIABILITIES–2.83% | 3,622,532 | |||||||||||||||
NET ASSETS–100.00% | $ | 128,082,920 | ||||||||||||||
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 | |
| Gtd. | – Guaranteed | |
| INS | – Insurer | |
| 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 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Pennsylvania Tax Free Income Fund
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) | 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) | Convertible CAB. The interest rate shown represents the coupon rate at which the bond will accrue at a specified future date. |
| (f) | Zero coupon bond issued at a discount. |
| (g) | Underlying security related to TOBS Trusts entered into by the Fund. See Note 1J. |
| (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, 2015 was $1,627,531, which represented 1.27% of the Fund’s Net Assets. |
| (i) | 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. | 6.7 | % | ||
| (j) | Floating rate note obligations related to securities held. The interest and fee rates shown reflect the rates in effect at February 28, 2015. At February 28, 2015, the Fund’s investments with a value of $8,781,939 are held by TOB Trusts and serve as collateral for the $5,120,000 in the floating rate note obligations outstanding at that date. |
Portfolio Composition
By credit sector, based on Total Investments
as of February 28, 2015
Revenue Bonds | 87.6 | % | ||
General Obligation Bonds | 7.8 | |||
Advanced Refunded | 4.6 |
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, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $119,176,260) | $ | 129,580,388 | ||
Cash | 3,034,587 | |||
Receivable for: | ||||
Investments sold | 1,119,211 | |||
Fund shares sold | 65,029 | |||
Interest | 1,455,258 | |||
Investment for trustee deferred compensation and retirement plans | 34,005 | |||
Other assets | 38,038 | |||
Total assets | 135,326,516 | |||
Liabilities: | ||||
Floating rate note obligations | 5,120,000 | |||
Payable for: | ||||
Investments purchased | 1,723,196 | |||
Fund shares reacquired | 151,203 | |||
Dividends | 130,882 | |||
Accrued fees to affiliates | 44,960 | |||
Accrued trustees’ and officers’ fees and benefits | 2,964 | |||
Accrued other operating expenses | 33,488 | |||
Trustee deferred compensation and retirement plans | 36,903 | |||
Total liabilities | 7,243,596 | |||
Net assets applicable to shares outstanding | $ | 128,082,920 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 128,520,269 | ||
Undistributed net investment income | 490,739 | |||
Undistributed net realized gain (loss) | (11,332,216 | ) | ||
Net unrealized appreciation | 10,404,128 | |||
| $ | 128,082,920 | |||
Net Assets: | ||||
Class A | $ | 113,796,619 | ||
Class B | $ | 1,421,738 | ||
Class C | $ | 9,524,427 | ||
Class Y | $ | 3,340,136 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 6,835,668 | |||
Class B | 85,223 | |||
Class C | 571,271 | |||
Class Y | 200,441 | |||
Class A: | ||||
Net asset value per share | $ | 16.65 | ||
Maximum offering price per share | ||||
(Net asset value of $16.65 ¸ 95.75%) | $ | 17.39 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 16.68 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 16.67 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 16.66 | ||
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, 2015
(Unaudited)
Investment income: | ||||
Interest | $ | 2,956,320 | ||
Expenses: | ||||
Advisory fees | 382,151 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 2,090 | |||
Distribution fees: | ||||
Class A | 141,250 | |||
Class B | 1,882 | |||
Class C | 48,722 | |||
Interest, facilities and maintenance fees | 31,670 | |||
Transfer agent fees | 46,397 | |||
Trustees’ and officers’ fees and benefits | 11,564 | |||
Other | 73,451 | |||
Total expenses | 763,971 | |||
Net investment income | 2,192,349 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from investment securities | (1,726,852 | ) | ||
Change in net unrealized appreciation of investment securities | 2,851,722 | |||
Net realized and unrealized gain | 1,124,870 | |||
Net increase in net assets resulting from operations | $ | 3,317,219 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 2,192,349 | $ | 4,983,924 | ||||
Net realized gain (loss) | (1,726,852 | ) | (2,475,247 | ) | ||||
Change in net unrealized appreciation | 2,851,722 | 11,214,093 | ||||||
Net increase in net assets resulting from operations | 3,317,219 | 13,722,770 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (1,941,346 | ) | (4,337,929 | ) | ||||
Class B | (25,834 | ) | (59,962 | ) | ||||
Class C | (135,153 | ) | (310,949 | ) | ||||
Class Y | (53,586 | ) | (99,215 | ) | ||||
Total distributions from net investment income | (2,155,919 | ) | (4,808,055 | ) | ||||
Share transactions–net: | ||||||||
Class A | (1,110,081 | ) | (12,996,752 | ) | ||||
Class B | (136,282 | ) | (282,934 | ) | ||||
Class C | (367,859 | ) | (1,740,082 | ) | ||||
Class Y | 601,981 | (14,839 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | (1,012,241 | ) | (15,034,607 | ) | ||||
Net increase (decrease) in net assets | 149,059 | (6,119,892 | ) | |||||
Net assets: | ||||||||
Beginning of period | 127,933,861 | 134,053,753 | ||||||
End of period (includes undistributed net investment income of $490,739 and $454,309, respectively) | $ | 128,082,920 | $ | 127,933,861 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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 may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. 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 net investment income, if any, 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. | Floating Rate Note Obligations — The Fund invests in inverse floating rate securities, such as Tender Option Bonds (“TOBs”), for investment purposes and to enhance the yield of the Fund. Such securities may be purchased in the secondary market without first owning an underlying bond but generally are created through the sale of fixed rate bonds by the Fund to special purpose trusts established by a broker dealer or by the Fund (“TOB Trusts”) in exchange for cash and residual interests in the TOB Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The TOB 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 TOB Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the TOB Trusts for redemption at par at each reset date. The residual interests held by the Fund (inverse floating rate securities) 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 TOB Trust to the Fund, thereby collapsing the TOB Trust. Inverse floating rate securities 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. |
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 decreases in the value of such securities in response to changes in interest rates to a greater extent than fixed rate securities 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 notes created by the TOB Trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such notes for repayment of principal, may not be able to be remarketed to third parties. In such cases, the TOB Trust holding the fixed rate bonds may be collapsed with the entity that contributed the fixed rate bonds to the TOB Trust. In the case where a TOB Trust is collapsed with the Fund, the Fund will be required to repay the principal amount of the tendered securities, which may require the Fund to sell other portfolio holdings to raise cash to meet that obligation. The Fund could therefore be required to sell other portfolio holdings at a disadvantageous time or price to raise cash to meet this obligation, which risk will be heightened during times of market volatility, illiquidity or uncertainty. The embedded leverage in the TOB Trust could cause the Fund to lose more money than the value of the asset it has contributed to the TOB Trust and greater levels of leverage create the potential for greater losses.
The Fund accounts for the transfer of fixed rate bonds to the TOB 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 TOB Trusts as a component of Interest, facilities and maintenance fees on the Statement of Operations.
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. The Fund expects to utilize a Volcker Rule-compliant TOB structure that is substantially similar to the current structure where the residual holder, such as the Fund, would serve as sponsor of the TOB Trust. There currently can be no assurances however, that the Fund’s TOB Trusts can be restructured this way 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 atypical, 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.
| K. | Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located. |
Since many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities.
There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service.
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% | |||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.60%.
14 Invesco Pennsylvania Tax Free Income Fund
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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, 2015. 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, 2015, 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, 2015, 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $3,981 in front-end sales commissions from the sale of Class A shares and $98 and $10 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, 2015, 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.
15 Invesco Pennsylvania Tax Free Income Fund
NOTE 4—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 5—Cash Balances 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 TOB 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, 2015 were $5,397,143 and 1.18%, 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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, 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 | |||||||||
Not subject to expiration | 424,414 | 536,593 | 961,007 | |||||||||
| $ | 7,074,446 | $ | 536,593 | $ | 7,611,039 | |||||||
| * | 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 month’s ended February 28, 2015 was $11,022,596 and $13,515,231, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 11,104,484 | ||
Aggregate unrealized (depreciation) of investment securities | (504,339 | ) | ||
Net unrealized appreciation of investment securities | $ | 10,600,145 | ||
Cost of investments for tax purposes is $118,980,243.
16 Invesco Pennsylvania Tax Free Income Fund
NOTE 8—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 203,447 | $ | 3,385,106 | 269,977 | $ | 4,297,667 | ||||||||||
Class B | 220 | 3,693 | 715 | 11,620 | ||||||||||||
Class C | 30,206 | 501,947 | 36,704 | 581,058 | ||||||||||||
Class Y | 38,819 | 646,369 | 44,355 | 709,714 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 74,070 | 1,232,942 | 168,578 | 2,690,022 | ||||||||||||
Class B | 589 | 9,840 | 1,644 | 26,235 | ||||||||||||
Class C | 4,956 | 82,598 | 12,381 | 197,653 | ||||||||||||
Class Y | 1,627 | 27,114 | 3,026 | 48,313 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 5,302 | 88,179 | 14,675 | 232,134 | ||||||||||||
Class B | (5,293 | ) | (88,179 | ) | (14,640 | ) | (232,134 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (349,566 | ) | (5,816,308 | ) | (1,280,624 | ) | (20,216,575 | ) | ||||||||
Class B | (3,688 | ) | (61,636 | ) | (5,707 | ) | (88,655 | ) | ||||||||
Class C | (57,072 | ) | (952,404 | ) | (159,172 | ) | (2,518,793 | ) | ||||||||
Class Y | (4,316 | ) | (71,502 | ) | (49,444 | ) | (772,866 | ) | ||||||||
Net increase (decrease) in share activity | (60,699 | ) | $ | (1,012,241 | ) | (957,532 | ) | $ | (15,034,607 | ) | ||||||
| (a) | There are entities that are record owners of more than 5% outstanding shares of the Fund and in the aggregate own 46% 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 | 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: Ratio of | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | $ | 16.50 | $ | 0.29 | $ | 0.14 | $ | 0.43 | $ | (0.28 | ) | $ | 16.65 | 2.64 | %(d) | $ | 113,797 | 1.15 | %(e) | 1.10 | %(e) | 3.49 | %(e) | 8 | % | |||||||||||||||||||||||
Year ended 08/31/14 | 15.39 | 0.62 | 1.09 | 1.71 | (0.60 | ) | 16.50 | 11.33 | (d) | 113,872 | 1.09 | 1.07 | 3.93 | 10 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.05 | 0.63 | (1.65 | ) | (1.02 | ) | (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 | ) | 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 | ) | 15.85 | 1.58 | (d) | 130,344 | 1.02 | 1.00 | 4.47 | 13 | |||||||||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 15.93 | 0.66 | 0.38 | 1.04 | (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 | ) | 15.93 | 13.60 | (g) | 141,191 | 1.21 | 1.13 | 5.05 | 17 | ||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 16.53 | 0.29 | 0.14 | 0.43 | (0.28 | ) | 16.68 | 2.64 | (d)(h) | 1,422 | 1.15 | (e)(h) | 1.10 | (e)(h) | 3.49 | (e)(h) | 8 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 15.42 | 0.63 | 1.08 | 1.71 | (0.60 | ) | 16.53 | 11.32 | (d)(h) | 1,544 | 1.09 | (h) | 1.07 | (h) | 3.93 | (h) | 10 | |||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.09 | 0.63 | (1.66 | ) | (1.03 | ) | (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 | ) | 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 | ) | 15.86 | 1.68 | (d)(h) | 3,062 | 1.02 | (h) | 1.00 | (h) | 4.47 | (h) | 13 | ||||||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 15.89 | 0.59 | 0.38 | 0.97 | (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 | ) | 15.89 | 13.21 | (i)(j) | 5,364 | 1.57 | (j) | 1.49 | (j) | 4.70 | (j) | 17 | |||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 16.53 | 0.23 | 0.14 | 0.37 | (0.23 | ) | 16.67 | 2.24 | (d) | 9,524 | 1.90 | (e) | 1.85 | (e) | 2.74 | (e) | 8 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 15.41 | 0.51 | 1.09 | 1.60 | (0.48 | ) | 16.53 | 10.56 | (d)(k) | 9,804 | 1.81 | (k) | 1.79 | (k) | 3.21 | (k) | 10 | |||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.08 | 0.50 | (1.66 | ) | (1.16 | ) | (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 | ) | 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 | ) | 15.88 | 0.89 | (d) | 9,670 | 1.77 | 1.75 | 3.72 | 13 | |||||||||||||||||||||||||||||||||
Eleven months ended 08/31/10 | 15.95 | 0.55 | 0.38 | 0.93 | (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 | ) | 15.95 | 12.74 | (l) | 6,776 | 1.96 | 1.89 | 4.28 | 17 | ||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 16.51 | 0.31 | 0.14 | 0.45 | (0.30 | ) | 16.66 | 2.76 | (d) | 3,340 | 0.90 | (e) | 0.85 | (e) | 3.74 | (e) | 8 | |||||||||||||||||||||||||||||||
Year ended 08/31/14 | 15.40 | 0.66 | 1.09 | 1.75 | (0.64 | ) | 16.51 | 11.60 | (d) | 2,713 | 0.84 | 0.82 | 4.18 | 10 | ||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 17.06 | 0.67 | (1.65 | ) | (0.98 | ) | (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 | ) | 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 | ) | 15.86 | 1.84 | (d) | 179 | 0.77 | 0.75 | 4.72 | 13 | |||||||||||||||||||||||||||||||||
Eleven months ended 08/31/10(m) | 15.94 | 0.19 | 0.36 | 0.55 | (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 year ended September 30, 2009, 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 based on average daily net assets (000’s omitted) of $114,119, $1,518, $9,859 and $2,943 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%, 0.25% and 0.74% for the six months ended February 28, 2015, the years ended August 31, 2014, August 31, 2013 and August 31, 2011 and the eleven 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 to average net assets reflect actual 12b-1 fees of less than 0.97% for the year ended August 31, 2014. |
| (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) | 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,026.40 | $ | 5.78 | $ | 1,019.09 | $ | 5.76 | 1.15 | % | ||||||||||||
| B | 1,000.00 | 1,026.40 | 5.78 | 1,019.09 | 5.76 | 1.15 | ||||||||||||||||||
| C | 1,000.00 | 1,022.40 | 9.53 | 1,015.37 | 9.49 | 1.90 | ||||||||||||||||||
| Y | 1,000.00 | 1,027.60 | 4.52 | 1,020.33 | 4.51 | 0.90 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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. |
| ||||||
| 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
| 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 0.59%,1.35%, 1.35% and 0.35%, 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. | |||
Fund vs. Indexes | ||||
Cumulative total returns, 8/31/14 to 2/28/15, 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
| 5.83%
| |||
Class B Shares
| 5.40
| |||
Class C Shares
| 5.42
| |||
Class Y Shares
| 5.95
| |||
S&P 500 Indexq (Broad Market/Style-Specific Index)
| 6.12
| |||
Lipper S&P 500 Objective Funds Indexn (Peer Group Index)
| 5.96
| |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc. | ||||
The S&P 500® Index is an unmanaged index considered representative of the US stock market. | ||||
The 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.
| ||||
| 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. | |||||||||
Average Annual Total Returns | Average Annual Total Returns | |||||||||
As of 2/28/15, including maximum applicable sales charges
| As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges
| |||||||||
Class A Shares | Class A Shares | |||||||||
Inception (9/26/97) | 5.69% | Inception (9/26/97) | 5.60% | |||||||
10 Years | 6.84 | 10 Years | 6.53 | |||||||
5 Years | 14.24 | 5 Years | 13.52 | |||||||
1 Year | 8.53 | 1 Year | 6.81 | |||||||
Class B Shares |
Class B Shares | |||||||||
Inception (9/26/97) | 5.66% | Inception (9/26/97) | 5.57% | |||||||
10 Years | 6.80 | 10 Years | 6.49 | |||||||
5 Years | 14.45 | 5 Years | 13.72 | |||||||
1 Year | 8.99 | 1 Year | 7.18 | |||||||
Class C Shares |
Class C Shares | |||||||||
Inception (9/26/97) | 5.24% | Inception (9/26/97) | 5.15% | |||||||
10 Years | 6.66 | 10 Years | 6.35 | |||||||
5 Years | 14.69 | 5 Years | 13.97 | |||||||
1 Year | 12.94 | 1 Year | 11.22 | |||||||
Class Y Shares |
Class Y Shares | |||||||||
Inception (9/26/97) | 6.29% | Inception (9/26/97) | 6.20% | |||||||
10 Years | 7.72 | 10 Years | 7.40 | |||||||
5 Years | 15.83 | 5 Years | 15.10 | |||||||
1 Year | 15.14 | 1 Year | 13.28 | |||||||
| 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. | |||||||||
2 Invesco S&P 500 Index Fund
Letters to Shareholders
 | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment | |
Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee. 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
 | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. | |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it. 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. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us. | ||
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.78% |
| |||||||
| Advertising–0.15% | ||||||||
Interpublic Group of Cos., Inc. (The) | 17,308 | $ | 385,968 | |||||
Omnicom Group Inc. | 10,270 | 816,876 | ||||||
| 1,202,844 | ||||||||
| Aerospace & Defense–2.69% | ||||||||
Boeing Co. (The) | 27,439 | 4,139,173 | ||||||
General Dynamics Corp. | 13,028 | 1,808,026 | ||||||
Honeywell International Inc. | 32,396 | 3,329,661 | ||||||
L-3 Communications Holdings, Inc. | 3,494 | 452,228 | ||||||
Lockheed Martin Corp. | 11,113 | 2,223,156 | ||||||
Northrop Grumman Corp. | 8,359 | 1,385,170 | ||||||
Precision Castparts Corp. | 5,898 | 1,275,737 | ||||||
Raytheon Co. | 12,761 | 1,388,014 | ||||||
Rockwell Collins, Inc. | 5,501 | 490,029 | ||||||
Textron Inc. | 11,424 | 506,198 | ||||||
United Technologies Corp. | 35,088 | 4,277,578 | ||||||
| 21,274,970 | ||||||||
| Agricultural & Farm Machinery–0.17% | ||||||||
Deere & Co. | 14,833 | 1,343,870 | ||||||
| Agricultural Products–0.16% | ||||||||
Archer-Daniels-Midland Co. | 26,643 | 1,275,667 | ||||||
| Air Freight & Logistics–0.72% | ||||||||
C.H. Robinson Worldwide, Inc. | 6,053 | 449,738 | ||||||
Expeditors International of Washington, Inc. | 7,989 | 385,869 | ||||||
FedEx Corp. | 10,901 | 1,929,259 | ||||||
United Parcel Service, Inc.–Class B | 28,846 | 2,934,503 | ||||||
| 5,699,369 | ||||||||
| Airlines–0.35% | ||||||||
Delta Air Lines, Inc. | 34,637 | 1,542,039 | ||||||
Southwest Airlines Co. | 28,089 | 1,214,569 | ||||||
| 2,756,608 | ||||||||
| Alternative Carriers–0.08% | ||||||||
Level 3 Communications, Inc.(b) | 11,539 | 621,491 | ||||||
| Aluminum–0.09% | ||||||||
Alcoa Inc. | 48,786 | 721,545 | ||||||
| Apparel Retail–0.56% | ||||||||
Gap, Inc. (The) | 11,043 | 459,389 | ||||||
L Brands, Inc. | 10,174 | 934,584 | ||||||
Ross Stores, Inc. | 8,683 | 918,748 | ||||||
TJX Cos., Inc. (The) | 28,510 | 1,956,926 | ||||||
Urban Outfitters, Inc.(b) | 4,139 | 161,256 | ||||||
| 4,430,903 | ||||||||
| Apparel, Accessories & Luxury Goods–0.45% | ||||||||
Coach, Inc. | 11,405 | 496,688 | ||||||
Fossil Group, Inc.(b) | 1,826 | 157,054 | ||||||
| Shares | Value | |||||||
| Apparel, Accessories & Luxury Goods–(continued) | ||||||||
Michael Kors Holdings Ltd.(b) | 8,521 | $ | 574,400 | |||||
PVH Corp. | 3,409 | 363,161 | ||||||
Ralph Lauren Corp. | 2,507 | 344,487 | ||||||
Under Armour, Inc.–Class A(b) | 6,897 | 531,138 | ||||||
VF Corp. | 14,298 | 1,096,085 | ||||||
| 3,563,013 | ||||||||
| Application Software–0.69% | ||||||||
Adobe Systems Inc.(b) | 19,608 | 1,550,993 | ||||||
Autodesk, Inc.(b) | 9,415 | 604,819 | ||||||
Citrix Systems, Inc.(b) | 6,661 | 424,139 | ||||||
Intuit Inc. | 11,816 | 1,153,596 | ||||||
salesforce.com, inc.(b) | 24,286 | 1,684,963 | ||||||
| 5,418,510 | ||||||||
| Asset Management & Custody Banks–1.26% | ||||||||
Affiliated Managers Group, Inc.(b) | 2,299 | 497,550 | ||||||
Ameriprise Financial, Inc. | 7,636 | 1,020,399 | ||||||
Bank of New York Mellon Corp. (The) | 46,588 | 1,823,454 | ||||||
BlackRock, Inc. | 5,271 | 1,957,755 | ||||||
Franklin Resources, Inc. | 16,226 | 873,445 | ||||||
Invesco Ltd.(c) | 17,830 | 718,014 | ||||||
Legg Mason, Inc. | 4,175 | 239,102 | ||||||
Northern Trust Corp. | 9,161 | 639,713 | ||||||
State Street Corp. | 17,278 | 1,286,347 | ||||||
T. Rowe Price Group Inc. | 10,734 | 886,628 | ||||||
| 9,942,407 | ||||||||
| Auto Parts & Equipment–0.37% | ||||||||
BorgWarner, Inc. | 9,409 | 578,277 | ||||||
Delphi Automotive PLC (United Kingdom) | 12,253 | 966,026 | ||||||
Johnson Controls, Inc. | 27,570 | 1,400,832 | ||||||
| 2,945,135 | ||||||||
| Automobile Manufacturers–0.59% | ||||||||
Ford Motor Co. | 159,282 | 2,602,668 | ||||||
General Motors Co. | 55,854 | 2,083,913 | ||||||
| 4,686,581 | ||||||||
| Automotive Retail–0.32% | ||||||||
AutoNation, Inc.(b) | 3,134 | 192,741 | ||||||
AutoZone, Inc.(b) | 1,325 | 851,551 | ||||||
CarMax, Inc.(b) | 8,913 | 598,151 | ||||||
O’Reilly Automotive, Inc.(b) | 4,197 | 873,522 | ||||||
| 2,515,965 | ||||||||
| Biotechnology–2.96% | ||||||||
Alexion Pharmaceuticals, Inc.(b) | 8,205 | 1,479,936 | ||||||
Amgen Inc. | 31,480 | 4,965,025 | ||||||
Biogen Idec Inc.(b) | 9,772 | 4,002,513 | ||||||
Celgene Corp.(b) | 33,054 | 4,017,053 | ||||||
Gilead Sciences, Inc.(b) | 62,437 | 6,464,103 | ||||||
Regeneron Pharmaceuticals, Inc.(b) | 3,070 | 1,270,489 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Biotechnology–(continued) | ||||||||
Vertex Pharmaceuticals Inc.(b) | 9,953 | $ | 1,188,687 | |||||
| 23,387,806 | ||||||||
| Brewers–0.06% | ||||||||
Molson Coors Brewing Co.–Class B | 6,594 | 500,419 | ||||||
| Broadcasting–0.26% | ||||||||
CBS Corp.–Class B | 19,733 | 1,166,220 | ||||||
Discovery Communications, Inc.–Class A(b) | 6,182 | 199,679 | ||||||
Discovery Communications, Inc.–Class C(b) | 11,309 | 345,037 | ||||||
Scripps Networks Interactive Inc.–Class A | 4,213 | 304,600 | ||||||
| 2,015,536 | ||||||||
| Building Products–0.08% | ||||||||
Allegion PLC | 4,011 | 231,555 | ||||||
Masco Corp. | 14,743 | 386,119 | ||||||
| 617,674 | ||||||||
| Cable & Satellite–1.28% | ||||||||
Cablevision Systems Corp.–Class A | 9,058 | 170,109 | ||||||
Comcast Corp.–Class A | 106,623 | 6,331,274 | ||||||
DIRECTV(b) | 20,785 | 1,841,551 | ||||||
Time Warner Cable Inc. | 11,608 | 1,788,212 | ||||||
| 10,131,146 | ||||||||
| Casinos & Gaming–0.06% | ||||||||
Wynn Resorts Ltd. | 3,351 | 477,517 | ||||||
| Coal & Consumable Fuels–0.04% | ||||||||
CONSOL Energy Inc. | 9,525 | 306,705 | ||||||
| Commodity Chemicals–0.19% | ||||||||
LyondellBasell Industries N.V.–Class A | 17,197 | 1,477,394 | ||||||
| Communications Equipment–1.63% | ||||||||
Cisco Systems, Inc. | 211,631 | 6,245,231 | ||||||
F5 Networks, Inc.(b) | 3,037 | 358,715 | ||||||
Harris Corp. | 4,335 | 336,743 | ||||||
Juniper Networks, Inc. | 15,932 | 380,934 | ||||||
Motorola Solutions, Inc. | 8,766 | 595,562 | ||||||
QUALCOMM, Inc. | 68,808 | 4,989,268 | ||||||
| 12,906,453 | ||||||||
| Computer & Electronics Retail–0.08% | ||||||||
Best Buy Co., Inc. | 12,048 | 459,029 | ||||||
GameStop Corp.–Class A | 4,510 | 166,734 | ||||||
| 625,763 | ||||||||
| Construction & Engineering–0.11% | ||||||||
Fluor Corp. | 6,495 | 376,710 | ||||||
Jacobs Engineering Group, Inc.(b) | 5,402 | 239,525 | ||||||
Quanta Services, Inc.(b) | 9,008 | 259,250 | ||||||
| 875,485 | ||||||||
| Construction Machinery & Heavy Trucks–0.53% | ||||||||
Caterpillar Inc. | 25,055 | 2,077,059 | ||||||
Cummins Inc. | 7,030 | 999,877 | ||||||
Joy Global Inc. | 4,094 | 181,446 | ||||||
| Shares | Value | |||||||
| Construction Machinery & Heavy Truck–(continued) | ||||||||
PACCAR Inc. | 14,654 | $ | 938,589 | |||||
| 4,196,971 | ||||||||
| Construction Materials–0.10% | ||||||||
Martin Marietta Materials, Inc. | 2,607 | 371,054 | ||||||
Vulcan Materials Co. | 5,492 | 455,836 | ||||||
| 826,890 | ||||||||
| Consumer Electronics–0.08% | ||||||||
Garmin Ltd. | 5,006 | 248,448 | ||||||
Harman International Industries, Inc. | 2,848 | 392,995 | ||||||
| 641,443 | ||||||||
| Consumer Finance–0.80% | ||||||||
American Express Co. | 36,825 | 3,004,552 | ||||||
Capital One Financial Corp. | 23,009 | 1,811,038 | ||||||
Discover Financial Services | 18,767 | 1,144,412 | ||||||
Navient Corp. | 16,977 | 363,308 | ||||||
| 6,323,310 | ||||||||
| Data Processing & Outsourced Services–1.98% | ||||||||
Alliance Data Systems Corp.(b) | 2,647 | 737,216 | ||||||
Automatic Data Processing, Inc. | 19,950 | 1,772,358 | ||||||
Computer Sciences Corp. | 5,813 | 412,258 | ||||||
Fidelity National Information Services, Inc. | 11,742 | 793,642 | ||||||
Fiserv, Inc.(b) | 10,096 | 788,195 | ||||||
MasterCard, Inc.–Class A | 40,554 | 3,655,132 | ||||||
Paychex, Inc. | 13,513 | 673,420 | ||||||
Total System Services, Inc. | 6,846 | 261,517 | ||||||
Visa Inc.–Class A | 20,213 | 5,483,989 | ||||||
Western Union Co. (The) | 21,629 | 422,198 | ||||||
Xerox Corp. | 44,409 | 606,183 | ||||||
| 15,606,108 | ||||||||
| Department Stores–0.25% | ||||||||
Kohl’s Corp. | 8,359 | 616,894 | ||||||
Macy’s, Inc. | 14,289 | 910,495 | ||||||
Nordstrom, Inc. | 5,862 | 471,481 | ||||||
| 1,998,870 | ||||||||
| Distillers & Vintners–0.18% | ||||||||
Brown-Forman Corp.–Class B | 6,487 | 594,793 | ||||||
Constellation Brands, Inc.–Class A(b) | 6,943 | 796,501 | ||||||
| 1,391,294 | ||||||||
| Distributors–0.08% | ||||||||
Genuine Parts Co. | 6,325 | 607,706 | ||||||
| Diversified Banks–4.72% | ||||||||
Bank of America Corp. | 435,236 | 6,881,081 | ||||||
Citigroup Inc. | 125,378 | 6,572,315 | ||||||
Comerica Inc. | 7,435 | 340,374 | ||||||
JPMorgan Chase & Co. | 154,709 | 9,480,567 | ||||||
U.S. Bancorp | 74,055 | 3,303,594 | ||||||
Wells Fargo & Co. | 195,372 | 10,704,432 | ||||||
| 37,282,363 | ||||||||
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–0.76% | ||||||||
Dow Chemical Co. (The) | 45,849 | $ | 2,257,605 | |||||
E. I. du Pont de Nemours and Co. | 37,493 | 2,918,830 | ||||||
Eastman Chemical Co. | 6,146 | 457,631 | ||||||
FMC Corp. | 5,514 | 349,643 | ||||||
| 5,983,709 | ||||||||
| Diversified Metals & Mining–0.12% | ||||||||
Freeport-McMoRan Inc. | 43,004 | 930,177 | ||||||
| Diversified Support Services–0.04% | ||||||||
Cintas Corp. | 4,032 | 336,591 | ||||||
| Drug Retail–1.00% | ||||||||
CVS Health Corp. | 47,444 | 4,928,008 | ||||||
Walgreens Boots Alliance, Inc. | 35,999 | 2,990,797 | ||||||
| 7,918,805 | ||||||||
| Electric Utilities–1.68% | ||||||||
American Electric Power Co., Inc. | 20,247 | 1,165,822 | ||||||
Duke Energy Corp. | 29,271 | 2,299,237 | ||||||
Edison International | 13,483 | 866,283 | ||||||
Entergy Corp. | 7,468 | 593,781 | ||||||
Eversource Energy | 13,110 | 678,443 | ||||||
Exelon Corp. | 35,569 | 1,206,500 | ||||||
FirstEnergy Corp. | 17,414 | 609,142 | ||||||
NextEra Energy, Inc. | 18,064 | 1,868,901 | ||||||
Pepco Holdings, Inc. | 10,424 | 282,907 | ||||||
Pinnacle West Capital Corp. | 4,582 | 293,615 | ||||||
PPL Corp. | 27,523 | 938,534 | ||||||
Southern Co. (The) | 37,239 | 1,705,174 | ||||||
Xcel Energy, Inc. | 20,928 | 738,340 | ||||||
| 13,246,679 | ||||||||
| Electrical Components & Equipment–0.54% | ||||||||
AMETEK, Inc. | 10,177 | 540,806 | ||||||
Eaton Corp. PLC(b) | 19,641 | 1,394,707 | ||||||
Emerson Electric Co. | 28,705 | 1,662,594 | ||||||
Rockwell Automation, Inc. | 5,618 | 657,531 | ||||||
| 4,255,638 | ||||||||
| Electronic Components–0.25% | ||||||||
Amphenol Corp.–Class A | 12,807 | 723,083 | ||||||
Corning Inc. | 53,050 | 1,294,420 | ||||||
| 2,017,503 | ||||||||
| Electronic Equipment & Instruments–0.02% | ||||||||
FLIR Systems, Inc. | 5,859 | 189,129 | ||||||
| Electronic Manufacturing Services–0.15% | ||||||||
TE Connectivity Ltd. (Switzerland) | 16,830 | 1,213,948 | ||||||
| Environmental & Facilities Services–0.24% | ||||||||
Republic Services, Inc. | 10,446 | 427,450 | ||||||
Stericycle, Inc.(b) | 3,513 | 474,150 | ||||||
Waste Management, Inc. | 17,624 | 960,155 | ||||||
| 1,861,755 | ||||||||
| Shares | Value | |||||||
| Fertilizers & Agricultural Chemicals–0.47% | ||||||||
CF Industries Holdings, Inc. | 2,070 | $ | 633,896 | |||||
Monsanto Co. | 20,033 | 2,412,574 | ||||||
Mosaic Co. (The) | 13,061 | 695,629 | ||||||
| 3,742,099 | ||||||||
| Food Distributors–0.12% | ||||||||
Sysco Corp. | 24,330 | 948,627 | ||||||
| Food Retail–0.29% | ||||||||
Kroger Co. (The) | 20,324 | 1,446,053 | ||||||
Whole Foods Market, Inc. | 14,888 | 841,023 | ||||||
| 2,287,076 | ||||||||
| Footwear–0.36% | ||||||||
NIKE, Inc.–Class B | 28,879 | 2,804,728 | ||||||
| Gas Utilities–0.03% | ||||||||
AGL Resources Inc. | 4,947 | 242,947 | ||||||
| General Merchandise Stores–0.50% | ||||||||
Dollar General Corp.(b) | 12,557 | 911,889 | ||||||
Dollar Tree, Inc.(b) | 8,510 | 678,077 | ||||||
Family Dollar Stores, Inc. | 3,974 | 312,913 | ||||||
Target Corp. | 26,361 | 2,025,316 | ||||||
| 3,928,195 | ||||||||
| Gold–0.07% | ||||||||
Newmont Mining Corp. | 20,643 | 543,530 | ||||||
| Health Care Distributors–0.57% | ||||||||
AmerisourceBergen Corp. | 8,597 | 883,428 | ||||||
Cardinal Health, Inc. | 13,696 | 1,205,111 | ||||||
McKesson Corp. | 9,596 | 2,194,605 | ||||||
Patterson Cos. Inc. | 3,541 | 177,316 | ||||||
| 4,460,460 | ||||||||
| Health Care Equipment–2.12% | ||||||||
Abbott Laboratories | 62,318 | 2,952,004 | ||||||
Baxter International Inc. | 22,430 | 1,551,035 | ||||||
Becton, Dickinson and Co. | 7,944 | 1,165,544 | ||||||
Boston Scientific Corp.(b) | 54,897 | 927,759 | ||||||
C.R. Bard, Inc. | 3,117 | 527,209 | ||||||
CareFusion Corp.(b) | 8,438 | 506,955 | ||||||
Edwards Lifesciences Corp.(b) | 4,447 | 591,540 | ||||||
Intuitive Surgical, Inc.(b) | 1,499 | 749,500 | ||||||
Medtronic PLC | 58,649 | 4,550,576 | ||||||
St. Jude Medical, Inc. | 11,832 | 788,958 | ||||||
Stryker Corp. | 12,368 | 1,171,868 | ||||||
Varian Medical Systems, Inc.(b) | 4,163 | 387,034 | ||||||
Zimmer Holdings, Inc. | 7,029 | 846,221 | ||||||
| 16,716,203 | ||||||||
| Health Care Facilities–0.19% | ||||||||
HCA Holdings, Inc.(b) | 12,561 | 898,614 | ||||||
Tenet Healthcare Corp.(b) | 4,066 | 188,256 | ||||||
Universal Health Services, Inc.–Class B | 3,719 | 421,548 | ||||||
| 1,508,418 | ||||||||
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 REIT’s–0.36% | ||||||||
HCP, Inc. | 19,006 | $ | 805,094 | |||||
Health Care REIT, Inc. | 13,560 | 1,045,611 | ||||||
Ventas, Inc. | 13,244 | 986,281 | ||||||
| 2,836,986 | ||||||||
| Health Care Services–0.51% | ||||||||
DaVita HealthCare Partners Inc.(b) | 7,114 | 530,704 | ||||||
Express Scripts Holding Co.(b) | 30,372 | 2,575,242 | ||||||
Laboratory Corp. of America Holdings(b) | 4,098 | 504,177 | ||||||
Quest Diagnostics Inc. | 5,980 | 419,437 | ||||||
| 4,029,560 | ||||||||
| Health Care Supplies–0.04% | ||||||||
DENTSPLY International Inc. | 5,856 | 310,427 | ||||||
| Health Care Technology–0.11% | ||||||||
Cerner Corp.(b) | 12,577 | 906,299 | ||||||
| Home Entertainment Software–0.09% | ||||||||
Electronic Arts Inc.(b) | 12,867 | 735,735 | ||||||
| Home Furnishings–0.09% | ||||||||
Leggett & Platt, Inc. | 5,694 | 256,515 | ||||||
Mohawk Industries, Inc.(b) | 2,574 | 474,517 | ||||||
| 731,032 | ||||||||
| Home Improvement Retail–1.17% | ||||||||
Home Depot, Inc. (The) | 54,539 | 6,258,350 | ||||||
Lowe’s Cos., Inc. | 40,264 | 2,983,160 | ||||||
| 9,241,510 | ||||||||
| Homebuilding–0.13% | ||||||||
D.R. Horton, Inc. | 13,730 | 374,966 | ||||||
Lennar Corp.–Class A | 7,391 | 371,102 | ||||||
PulteGroup Inc. | 13,809 | 311,531 | ||||||
| 1,057,599 | ||||||||
| Homefurnishing Retail–0.07% | ||||||||
Bed Bath & Beyond Inc.(b) | 7,665 | 572,269 | ||||||
| Hotel and Resort REIT’s–0.08% | ||||||||
Host Hotels & Resorts Inc. | 31,341 | 658,161 | ||||||
| Hotels, Resorts & Cruise Lines–0.40% | ||||||||
Carnival Corp. | 18,640 | 819,974 | ||||||
Marriott International Inc.–Class A | 8,794 | 730,782 | ||||||
Royal Caribbean Cruises Ltd. | 6,910 | 528,062 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 7,389 | 593,558 | ||||||
Wyndham Worldwide Corp. | 5,100 | 466,548 | ||||||
| 3,138,924 | ||||||||
| Household Appliances–0.09% | ||||||||
Whirlpool Corp. | 3,221 | 682,691 | ||||||
| Household Products–1.81% | ||||||||
Clorox Co. (The) | 5,354 | 581,659 | ||||||
Colgate-Palmolive Co. | 35,455 | 2,510,923 | ||||||
Kimberly-Clark Corp. | 15,414 | 1,690,299 | ||||||
Procter & Gamble Co. (The) | 111,829 | 9,520,003 | ||||||
| 14,302,884 | ||||||||
| Shares | Value | |||||||
| Housewares & Specialties–0.06% | ||||||||
Newell Rubbermaid Inc. | 11,219 | $ | 440,795 | |||||
| Human Resource & Employment Services–0.04% | ||||||||
Robert Half International, Inc. | 5,624 | 348,463 | ||||||
| Hypermarkets & Super Centers–1.03% | ||||||||
Costco Wholesale Corp. | 18,116 | 2,662,327 | ||||||
Wal-Mart Stores, Inc. | 65,363 | 5,485,917 | ||||||
| 8,148,244 | ||||||||
| Independent Power Producers & Energy Traders–0.09% | ||||||||
AES Corp. (The) | 27,149 | 352,123 | ||||||
NRG Energy, Inc. | 13,992 | 335,528 | ||||||
| 687,651 | ||||||||
| Industrial Conglomerates–2.30% | ||||||||
3M Co. | 26,521 | 4,472,767 | ||||||
Danaher Corp. | 25,301 | 2,208,271 | ||||||
General Electric Co.(d) | 415,607 | 10,801,626 | ||||||
Roper Industries, Inc. | 4,144 | 694,410 | ||||||
| 18,177,074 | ||||||||
| Industrial Gases–0.39% | ||||||||
Air Products and Chemicals, Inc. | 7,959 | 1,242,718 | ||||||
Airgas, Inc. | 2,753 | 322,707 | ||||||
Praxair, Inc. | 12,058 | 1,542,218 | ||||||
| 3,107,643 | ||||||||
| Industrial Machinery–0.76% | ||||||||
Dover Corp. | 6,842 | 492,966 | ||||||
Flowserve Corp. | 5,672 | 352,402 | ||||||
Illinois Tool Works Inc. | 14,884 | 1,471,432 | ||||||
Ingersoll-Rand PLC | 10,986 | 738,149 | ||||||
Pall Corp. | 4,437 | 447,294 | ||||||
Parker Hannifin Corp. | 6,151 | 754,666 | ||||||
Pentair PLC (United Kingdom) | 7,729 | 513,747 | ||||||
Snap-on Inc. | 2,425 | 357,033 | ||||||
Stanley Black & Decker Inc. | 6,482 | 637,440 | ||||||
Xylem, Inc. | 7,526 | 268,678 | ||||||
| 6,033,807 | ||||||||
| Industrial REIT’s–0.11% | ||||||||
Prologis, Inc. | 20,692 | 883,755 | ||||||
| Insurance Brokers–0.31% | ||||||||
Aon PLC | 11,800 | 1,184,248 | ||||||
Marsh & McLennan Cos., Inc. | 22,385 | 1,273,483 | ||||||
| 2,457,731 | ||||||||
| Integrated Oil & Gas–3.44% | ||||||||
Chevron Corp. | 78,237 | 8,346,323 | ||||||
Exxon Mobil Corp. | 175,250 | 15,516,635 | ||||||
Hess Corp. | 10,516 | 789,542 | ||||||
Occidental Petroleum Corp. | 32,091 | 2,499,247 | ||||||
| 27,151,747 | ||||||||
| Integrated Telecommunication Services–2.19% | ||||||||
AT&T Inc. | 214,670 | 7,418,995 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Integrated Telecommunication Services–(continued) | ||||||||
CenturyLink Inc. | 23,619 | $ | 894,215 | |||||
Frontier Communications Corp. | 41,471 | 330,939 | ||||||
Verizon Communications Inc. | 171,740 | 8,492,543 | ||||||
Windstream Holdings Inc. | 24,946 | 196,824 | ||||||
| 17,333,516 | ||||||||
| Internet Retail–1.35% | ||||||||
Amazon.com, Inc.(b) | 15,712 | 5,973,074 | ||||||
Expedia, Inc. | 4,135 | 379,386 | ||||||
Netflix Inc.(b) | 2,492 | 1,183,476 | ||||||
Priceline Group Inc. (The)(b) | 2,165 | 2,679,144 | ||||||
TripAdvisor Inc.(b) | 4,612 | 411,621 | ||||||
| 10,626,701 | ||||||||
| Internet Software & Services–3.19% | ||||||||
Akamai Technologies, Inc.(b) | 7,365 | 511,941 | ||||||
eBay Inc.(b) | 46,789 | 2,709,551 | ||||||
Facebook Inc.–Class A(b) | 86,533 | 6,833,511 | ||||||
Google Inc.–Class A(b) | 11,796 | 6,636,784 | ||||||
Google Inc.–Class C(b) | 11,785 | 6,580,744 | ||||||
VeriSign, Inc.(b) | 4,529 | 289,947 | ||||||
Yahoo! Inc.(b) | 36,462 | 1,614,537 | ||||||
| 25,177,015 | ||||||||
| Investment Banking & Brokerage–0.91% | ||||||||
Charles Schwab Corp. (The) | 47,555 | 1,395,264 | ||||||
E*TRADE Financial Corp.(b) | 11,952 | 311,170 | ||||||
Goldman Sachs Group, Inc. (The) | 16,763 | 3,181,450 | ||||||
Morgan Stanley | 63,186 | 2,261,427 | ||||||
| 7,149,311 | ||||||||
| IT Consulting & Other Services–1.31% | ||||||||
Accenture PLC–Class A | 25,970 | 2,338,079 | ||||||
Cognizant Technology Solutions Corp.–Class A(b) | 25,200 | 1,574,622 | ||||||
International Business Machines Corp. | 38,090 | 6,168,295 | ||||||
Teradata Corp.(b) | 6,367 | 283,459 | ||||||
| 10,364,455 | ||||||||
| Leisure Products–0.08% | ||||||||
Hasbro, Inc. | 4,638 | 289,017 | ||||||
Mattel, Inc. | 14,022 | 369,059 | ||||||
| 658,076 | ||||||||
| Life & Health Insurance–0.88% | ||||||||
Aflac, Inc. | 18,647 | 1,160,776 | ||||||
Lincoln National Corp. | 10,751 | 619,687 | ||||||
MetLife, Inc. | 47,016 | 2,389,823 | ||||||
Principal Financial Group, Inc. | 11,302 | 578,323 | ||||||
Prudential Financial, Inc. | 18,954 | 1,532,431 | ||||||
Torchmark Corp. | 5,323 | 283,450 | ||||||
Unum Group | 10,428 | 349,964 | ||||||
| 6,914,454 | ||||||||
| Life Sciences Tools & Services–0.43% | ||||||||
Agilent Technologies, Inc. | 13,802 | 582,582 | ||||||
PerkinElmer, Inc. | 4,674 | 219,678 | ||||||
| Shares | Value | |||||||
| Life Sciences Tools & Services–(continued) | ||||||||
Thermo Fisher Scientific, Inc. | 16,555 | $ | 2,152,150 | |||||
Waters Corp.(b) | 3,450 | 415,311 | ||||||
| 3,369,721 | ||||||||
| Managed Health Care–1.26% | ||||||||
Aetna Inc. | 14,555 | 1,448,950 | ||||||
Anthem, Inc. | 11,171 | 1,635,993 | ||||||
Cigna Corp. | 10,825 | 1,316,645 | ||||||
Humana Inc. | 6,345 | 1,042,991 | ||||||
UnitedHealth Group Inc. | 39,721 | 4,513,497 | ||||||
| 9,958,076 | ||||||||
| Metal & Glass Containers–0.07% | ||||||||
Ball Corp. | 5,708 | 409,321 | ||||||
Owens-Illinois, Inc.(b) | 6,824 | 178,516 | ||||||
| 587,837 | ||||||||
| Motorcycle Manufacturers–0.07% | ||||||||
Harley-Davidson, Inc. | 8,867 | 563,675 | ||||||
| Movies & Entertainment–1.69% | ||||||||
Time Warner Inc. | 34,701 | 2,840,624 | ||||||
Twenty-First Century Fox, Inc.–Class A | 76,740 | 2,685,900 | ||||||
Viacom Inc.–Class B | 15,288 | 1,069,243 | ||||||
Walt Disney Co. (The) | 64,564 | 6,719,821 | ||||||
| 13,315,588 | ||||||||
| Multi-Line Insurance–0.61% | ||||||||
American International Group, Inc. | 57,936 | 3,205,599 | ||||||
Assurant, Inc. | 2,872 | 175,967 | ||||||
Genworth Financial Inc.–Class A(b) | 20,554 | 159,293 | ||||||
Hartford Financial Services Group, Inc. (The) | 17,857 | 731,423 | ||||||
Loews Corp. | 12,386 | 507,950 | ||||||
| 4,780,232 | ||||||||
| Multi-Sector Holdings–1.45% | ||||||||
Berkshire Hathaway Inc.–Class B(b) | 75,469 | 11,124,885 | ||||||
Leucadia National Corp. | 13,112 | 311,148 | ||||||
| 11,436,033 | ||||||||
| Multi-Utilities–1.15% | ||||||||
Ameren Corp. | 10,041 | 425,839 | ||||||
CenterPoint Energy, Inc. | 17,787 | 369,792 | ||||||
CMS Energy Corp. | 11,383 | 399,885 | ||||||
Consolidated Edison, Inc. | 12,120 | 765,257 | ||||||
Dominion Resources, Inc. | 24,165 | 1,742,055 | ||||||
DTE Energy Co. | 7,324 | 600,788 | ||||||
Integrys Energy Group, Inc. | 3,335 | 249,224 | ||||||
NiSource Inc. | 13,065 | 560,619 | ||||||
PG&E Corp. | 19,661 | 1,056,385 | ||||||
Public Service Enterprise Group Inc. | 20,943 | 880,863 | ||||||
SCANA Corp. | 5,898 | 335,891 | ||||||
Sempra Energy | 9,565 | 1,034,933 | ||||||
TECO Energy, Inc. | 9,712 | 190,647 | ||||||
Wisconsin Energy Corp. | 9,332 | 475,745 | ||||||
| 9,087,923 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Office REIT’s–0.21% | ||||||||
Boston Properties, Inc. | 6,335 | $ | 870,492 | |||||
Vornado Realty Trust | 7,225 | 795,039 | ||||||
| 1,665,531 | ||||||||
| Office Services & Supplies–0.02% | ||||||||
Pitney Bowes Inc. | 8,317 | 192,705 | ||||||
| Oil & Gas Drilling–0.15% | ||||||||
Diamond Offshore Drilling, Inc. | 2,757 | 83,896 | ||||||
Ensco PLC–Class A | 9,696 | 237,261 | ||||||
Helmerich & Payne, Inc. | 4,479 | 300,362 | ||||||
Nabors Industries Ltd. | 11,978 | 153,438 | ||||||
Noble Corp. PLC | 10,427 | 173,505 | ||||||
Transocean Ltd. | 14,091 | 227,288 | ||||||
| 1,175,750 | ||||||||
| Oil & Gas Equipment & Services–1.12% | ||||||||
Baker Hughes Inc. | 17,906 | 1,119,304 | ||||||
Cameron International Corp.(b) | 8,170 | 384,643 | ||||||
FMC Technologies, Inc.(b) | 9,677 | 386,402 | ||||||
Halliburton Co. | 35,072 | 1,505,992 | ||||||
National Oilwell Varco Inc. | 17,819 | 968,463 | ||||||
Schlumberger Ltd. | 53,255 | 4,481,941 | ||||||
| 8,846,745 | ||||||||
| Oil & Gas Exploration & Production–1.88% | ||||||||
Anadarko Petroleum Corp. | 20,959 | 1,765,377 | ||||||
Apache Corp. | 15,580 | 1,025,787 | ||||||
Cabot Oil & Gas Corp. | 17,092 | 495,668 | ||||||
Chesapeake Energy Corp. | 21,470 | 358,120 | ||||||
Cimarex Energy Co. | 3,650 | 400,332 | ||||||
ConocoPhillips | 50,942 | 3,321,418 | ||||||
Denbury Resources Inc. | 14,590 | 122,556 | ||||||
Devon Energy Corp. | 15,914 | 980,143 | ||||||
EOG Resources, Inc. | 22,679 | 2,034,760 | ||||||
EQT Corp. | 6,269 | 500,329 | ||||||
Marathon Oil Corp. | 27,930 | 778,130 | ||||||
Murphy Oil Corp. | 6,904 | 351,344 | ||||||
Newfield Exploration Co.(b) | 5,678 | 187,544 | ||||||
Noble Energy, Inc. | 14,913 | 704,341 | ||||||
Pioneer Natural Resources Co. | 6,161 | 939,676 | ||||||
QEP Resources Inc. | 6,858 | 147,310 | ||||||
Range Resources Corp. | 6,981 | 345,839 | ||||||
Southwestern Energy Co.(b) | 14,613 | 366,494 | ||||||
| 14,825,168 | ||||||||
| Oil & Gas Refining & Marketing–0.61% | ||||||||
Marathon Petroleum Corp. | 11,595 | 1,217,475 | ||||||
Phillips 66 | 22,907 | 1,797,283 | ||||||
Tesoro Corp. | 5,223 | 479,680 | ||||||
Valero Energy Corp. | 21,572 | 1,330,777 | ||||||
| 4,825,215 | ||||||||
| Oil & Gas Storage & Transportation–0.71% | ||||||||
Kinder Morgan Inc. | 70,319 | 2,883,782 | ||||||
ONEOK, Inc. | 8,615 | 381,300 | ||||||
Spectra Energy Corp. | 27,769 | 985,522 | ||||||
Williams Cos., Inc. (The) | 27,840 | 1,365,273 | ||||||
| 5,615,877 | ||||||||
| Shares | Value | |||||||
| Packaged Foods & Meats–1.39% | ||||||||
Campbell Soup Co. | 7,413 | $ | 345,372 | |||||
ConAgra Foods, Inc. | 17,581 | 614,983 | ||||||
General Mills, Inc. | 24,986 | 1,343,997 | ||||||
Hershey Co. (The) | 6,132 | 636,379 | ||||||
Hormel Foods Corp. | 5,559 | 325,257 | ||||||
JM Smucker Co. (The) | 4,239 | 488,969 | ||||||
Kellogg Co. | 10,431 | 672,591 | ||||||
Keurig Green Mountain Inc. | 5,027 | 641,345 | ||||||
Kraft Foods Group, Inc. | 24,369 | 1,561,078 | ||||||
McCormick & Co., Inc. | 5,348 | 403,132 | ||||||
Mead Johnson Nutrition Co. | 8,360 | 875,793 | ||||||
Mondelez International Inc.–Class A | 69,525 | 2,567,906 | ||||||
Tyson Foods, Inc.–Class A | 12,126 | 500,925 | ||||||
| 10,977,727 | ||||||||
| Paper Packaging–0.12% | ||||||||
Avery Dennison Corp. | 3,802 | 203,597 | ||||||
MeadWestvaco Corp. | 6,912 | 366,751 | ||||||
Sealed Air Corp. | 8,738 | 411,822 | ||||||
| 982,170 | ||||||||
| Paper Products–0.13% | ||||||||
International Paper Co. | 17,531 | 988,924 | ||||||
| Personal Products–0.12% | ||||||||
Avon Products, Inc. | 17,988 | 153,078 | ||||||
Estee Lauder Cos. Inc. (The)–Class A | 9,268 | 766,185 | ||||||
| 919,263 | ||||||||
| Pharmaceuticals–6.24% | ||||||||
AbbVie Inc. | 65,938 | 3,989,249 | ||||||
Actavis PLC(b) | 10,969 | 3,195,928 | ||||||
Allergan, Inc. | 12,328 | 2,869,219 | ||||||
Bristol-Myers Squibb Co. | 68,650 | 4,182,158 | ||||||
Eli Lilly and Co. | 40,550 | 2,845,394 | ||||||
Endo International PLC(b) | 6,362 | 544,587 | ||||||
Hospira, Inc.(b) | 7,022 | 614,706 | ||||||
Johnson & Johnson | 115,843 | 11,875,066 | ||||||
Mallinckrodt PLC (b) | 4,825 | 563,174 | ||||||
Merck & Co., Inc. | 117,986 | 6,906,900 | ||||||
Mylan Inc.(b) | 15,489 | 887,907 | ||||||
Perrigo Co. PLC | 5,824 | 899,633 | ||||||
Pfizer Inc. | 260,760 | 8,949,283 | ||||||
Zoetis Inc. | 20,747 | 956,229 | ||||||
| 49,279,433 | ||||||||
| Property & Casualty Insurance–0.83% | ||||||||
ACE Ltd. | 13,728 | 1,565,129 | ||||||
Allstate Corp. (The) | 17,358 | 1,225,475 | ||||||
Chubb Corp. (The) | 9,758 | 980,191 | ||||||
Cincinnati Financial Corp. | 6,088 | 321,203 | ||||||
Progressive Corp. (The) | 22,137 | 589,951 | ||||||
Travelers Cos., Inc. (The) | 13,714 | 1,473,432 | ||||||
XL Group PLC | 10,679 | 386,580 | ||||||
| 6,541,961 | ||||||||
| Publishing–0.09% | ||||||||
Gannett Co., Inc. | 9,345 | 330,813 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Publishing–(continued) | ||||||||
News Corp.–Class A(b) | 20,645 | $ | 356,642 | |||||
| 687,455 | ||||||||
| Railroads–0.98% | ||||||||
CSX Corp. | 41,195 | 1,413,400 | ||||||
Kansas City Southern | 4,580 | 530,547 | ||||||
Norfolk Southern Corp. | 12,806 | 1,397,903 | ||||||
Union Pacific Corp. | 36,795 | 4,424,967 | ||||||
| 7,766,817 | ||||||||
| Real Estate Services–0.05% | ||||||||
CBRE Group, Inc.–Class A(b) | 11,571 | 396,422 | ||||||
| Regional Banks–0.88% | ||||||||
BB&T Corp. | 29,809 | 1,134,233 | ||||||
Fifth Third Bancorp | 34,101 | 660,195 | ||||||
Huntington Bancshares Inc. | 33,706 | 368,744 | ||||||
KeyCorp | 35,853 | 499,432 | ||||||
M&T Bank Corp. | 5,466 | 661,386 | ||||||
PNC Financial Services Group, Inc. (The) | 21,777 | 2,002,613 | ||||||
Regions Financial Corp. | 56,966 | 547,443 | ||||||
SunTrust Banks, Inc. | 21,580 | 884,780 | ||||||
Zions Bancorp. | 8,397 | 224,494 | ||||||
| 6,983,320 | ||||||||
| Research & Consulting Services–0.16% | ||||||||
Dun & Bradstreet Corp. (The) | 1,533 | 203,092 | ||||||
Equifax Inc. | 4,989 | 465,823 | ||||||
Nielsen N.V. | 13,405 | 606,040 | ||||||
| 1,274,955 | ||||||||
| Residential REIT’s–0.37% | ||||||||
Apartment Investment & Management Co.–Class A | 6,050 | 227,964 | ||||||
AvalonBay Communities, Inc. | 5,462 | 919,473 | ||||||
Equity Residential | 14,996 | 1,155,142 | ||||||
Essex Property Trust, Inc. | 2,645 | 588,327 | ||||||
| 2,890,906 | ||||||||
| Restaurants–1.21% | ||||||||
Chipotle Mexican Grill, Inc.(b) | 1,282 | 852,492 | ||||||
Darden Restaurants, Inc. | 5,488 | 351,232 | ||||||
McDonald’s Corp. | 40,276 | 3,983,296 | ||||||
Starbucks Corp. | 30,968 | 2,895,043 | ||||||
Yum! Brands, Inc. | 18,105 | 1,468,497 | ||||||
| 9,550,560 | ||||||||
| Retail REIT’s–0.52% | ||||||||
General Growth Properties, Inc. | 25,970 | 753,390 | ||||||
Kimco Realty Corp. | 17,026 | 447,443 | ||||||
Macerich Co. (The) | 5,822 | 487,010 | ||||||
Simon Property Group, Inc. | 12,861 | 2,448,220 | ||||||
| 4,136,063 | ||||||||
| Security & Alarm Services–0.13% | ||||||||
ADT Corp. (The) | 7,235 | 283,757 | ||||||
Tyco International PLC | 17,318 | 731,166 | ||||||
| 1,014,923 | ||||||||
| Shares | Value | |||||||
| Semiconductor Equipment–0.28% | ||||||||
Applied Materials, Inc. | 50,424 | $ | 1,263,121 | |||||
KLA-Tencor Corp. | 6,806 | 442,084 | ||||||
Lam Research Corp. | 6,577 | 542,339 | ||||||
| 2,247,544 | ||||||||
| Semiconductors–2.05% | ||||||||
Altera Corp. | 12,614 | 466,844 | ||||||
Analog Devices, Inc. | 12,879 | 753,937 | ||||||
Avago Technologies Ltd. (Singapore) | 10,465 | 1,335,543 | ||||||
Broadcom Corp.–Class A | 22,295 | 1,008,403 | ||||||
First Solar, Inc.(b) | 3,081 | 184,075 | ||||||
Intel Corp. | 200,101 | 6,653,358 | ||||||
Linear Technology Corp. | 9,871 | 475,634 | ||||||
Microchip Technology Inc. | 8,316 | 426,361 | ||||||
Micron Technology, Inc.(b) | 44,425 | 1,362,515 | ||||||
NVIDIA Corp. | 21,369 | 471,400 | ||||||
Texas Instruments Inc. | 43,715 | 2,570,442 | ||||||
Xilinx, Inc. | 10,944 | 463,697 | ||||||
| 16,172,209 | ||||||||
| Soft Drinks–1.91% | ||||||||
Coca-Cola Co. (The) | 163,148 | 7,064,308 | ||||||
Coca-Cola Enterprises, Inc. | 9,203 | 425,179 | ||||||
Dr Pepper Snapple Group, Inc. | 8,045 | 633,866 | ||||||
Monster Beverage Corp.(b) | 5,965 | 841,781 | ||||||
PepsiCo, Inc. | 61,938 | 6,130,623 | ||||||
| 15,095,757 | ||||||||
| Specialized Consumer Services–0.05% | ||||||||
H&R Block, Inc. | 11,387 | 388,866 | ||||||
| Specialized Finance–0.57% | ||||||||
CME Group Inc.–Class A | 13,103 | 1,256,971 | ||||||
Intercontinental Exchange, Inc. | 4,663 | 1,097,484 | ||||||
McGraw Hill Financial, Inc. | 11,235 | 1,158,328 | ||||||
Moody’s Corp. | 7,596 | 736,356 | ||||||
NASDAQ OMX Group, Inc. (The) | 4,899 | 245,734 | ||||||
| 4,494,873 | ||||||||
| Specialized REIT’s–0.69% | ||||||||
American Tower Corp. | 17,380 | 1,723,053 | ||||||
Crown Castle International Corp. | 13,816 | 1,192,459 | ||||||
Iron Mountain Inc. | 7,716 | 283,563 | ||||||
Plum Creek Timber Co., Inc. | 7,278 | 316,156 | ||||||
Public Storage | 6,003 | 1,183,912 | ||||||
Weyerhaeuser Co. | 21,701 | 761,922 | ||||||
| 5,461,065 | ||||||||
| Specialty Chemicals–0.59% | ||||||||
Ecolab Inc. | 11,178 | 1,291,506 | ||||||
International Flavors & Fragrances Inc. | 3,350 | 408,465 | ||||||
PPG Industries, Inc. | 5,678 | 1,336,488 | ||||||
Sherwin-Williams Co. (The) | 3,376 | 962,835 | ||||||
Sigma-Aldrich Corp. | 4,948 | 683,121 | ||||||
| 4,682,415 | ||||||||
| Specialty Stores–0.22% | ||||||||
PetSmart, Inc. | 4,133 | 342,667 | ||||||
Staples, Inc. | 26,478 | 443,904 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco S&P 500 Index Fund
| Shares | Value | |||||||
| Specialty Stores–(continued) | ||||||||
Tiffany & Co. | 4,656 | $ | 410,752 | |||||
Tractor Supply Co. | 5,666 | 499,288 | ||||||
| 1,696,611 | ||||||||
| Steel–0.10% | ||||||||
Allegheny Technologies, Inc. | 4,501 | 151,504 | ||||||
Nucor Corp. | 13,201 | 620,843 | ||||||
| 772,347 | ||||||||
| Systems Software–2.85% | ||||||||
CA, Inc. | 13,256 | 431,085 | ||||||
Microsoft Corp. | 341,140 | 14,958,989 | ||||||
Oracle Corp. | 133,878 | 5,866,534 | ||||||
Red Hat, Inc.(b) | 7,772 | 537,200 | ||||||
Symantec Corp. | 28,561 | 718,595 | ||||||
| 22,512,403 | ||||||||
| Technology Hardware, Storage & Peripherals–4.98% | ||||||||
Apple Inc. | 242,723 | 31,180,197 | ||||||
EMC Corp. | 84,216 | 2,437,211 | ||||||
Hewlett-Packard Co. | 77,237 | 2,690,937 | ||||||
NetApp, Inc. | 12,899 | 498,546 | ||||||
SanDisk Corp. | 9,131 | 729,841 | ||||||
Seagate Technology PLC | 13,542 | 827,687 | ||||||
Western Digital Corp. | 9,033 | 966,350 | ||||||
| 39,330,769 | ||||||||
| Thrifts & Mortgage Finance–0.05% | ||||||||
Hudson City Bancorp, Inc. | 19,913 | 194,351 | ||||||
People’s United Financial Inc. | 12,745 | 192,832 | ||||||
| 387,183 | ||||||||
| Shares | Value | |||||||
| Tires & Rubber–0.04% | ||||||||
Goodyear Tire & Rubber Co. (The) | 11,362 | $ | 303,706 | |||||
| Tobacco–1.51% | ||||||||
Altria Group, Inc. | 81,798 | 4,604,409 | ||||||
Lorillard, Inc. | 14,899 | 1,019,390 | ||||||
Philip Morris International Inc. | 64,301 | 5,334,411 | ||||||
Reynolds American Inc. | 12,752 | 964,306 | ||||||
| 11,922,516 | ||||||||
| Trading Companies & Distributors–0.18% | ||||||||
Fastenal Co. | 11,286 | 468,933 | ||||||
United Rentals, Inc.(b) | 4,156 | 386,758 | ||||||
W.W. Grainger, Inc. | 2,510 | 594,644 | ||||||
| 1,450,335 | ||||||||
| Trucking–0.03% | ||||||||
Ryder System, Inc. | 2,189 | 205,744 | ||||||
Total Common Stocks & Other Equity Interests |
| 772,357,781 | ||||||
Money Market Funds–2.12% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 8,383,379 | 8,383,379 | ||||||
Premier Portfolio–Institutional Class(e) | 8,383,379 | 8,383,379 | ||||||
Total Money Market Funds | 16,766,758 | |||||||
TOTAL INVESTMENTS–99.90% |
| 789,124,539 | ||||||
OTHER ASSETS LESS LIABILITIES–0.10% |
| 769,182 | ||||||
NET ASSETS–100.00% |
| $ | 789,893,721 | |||||
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 1l 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, 2015
Information Technology | 19.5 | % | ||
Financials | 15.5 | |||
Health Care | 14.4 | |||
Consumer Discretionary | 12.4 | |||
Industrials | 10.0 | |||
Consumer Staples | 9.6 | |||
Energy | 7.9 | |||
Materials | 3.2 | |||
Utilities | 3.0 | |||
Telecommunication Services | 2.3 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.2 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco S&P 500 Index Fund
Statement of Assets and Liabilities
February 28, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $365,861,788) | $ | 771,639,767 | ||
Investments in affiliates, at value (Cost $17,190,179) | 17,484,772 | |||
Total investments, at value (Cost $383,051,967) | 789,124,539 | |||
Receivable for: | ||||
Fund shares sold | 2,196,025 | |||
Dividends | 1,663,989 | |||
Investment for trustee deferred compensation and retirement plans | 67,211 | |||
Other assets | 37,804 | |||
Total assets | 793,089,568 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 96,186 | |||
Fund shares reacquired | 2,169,593 | |||
Variation margin — futures | 61,360 | |||
Accrued fees to affiliates | 681,509 | |||
Accrued trustees’ and officers’ fees and benefits | 4,684 | |||
Accrued other operating expenses | 104,631 | |||
Trustee deferred compensation and retirement plans | 77,884 | |||
Total liabilities | 3,195,847 | |||
Net assets applicable to shares outstanding | $ | 789,893,721 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 445,846,634 | ||
Undistributed net investment income | 2,943,322 | |||
Undistributed net realized gain (loss) | (65,515,644 | ) | ||
Net unrealized appreciation | 406,619,409 | |||
| $ | 789,893,721 | |||
Net Assets: |
| |||
Class A | $ | 583,082,420 | ||
Class B | $ | 6,764,881 | ||
Class C | $ | 156,289,210 | ||
Class Y | $ | 43,757,210 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 25,708,538 | |||
Class B | 303,932 | |||
Class C | 7,103,526 | |||
Class Y | 1,909,310 | |||
Class A: | ||||
Net asset value per share | $ | 22.68 | ||
Maximum offering price per share | ||||
(Net asset value of $22.68 ¸ 94.50%) | $ | 24.00 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 22.26 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 22.00 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 22.92 | ||
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, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $914) | $ | 7,688,068 | ||
Dividends from affiliates | 11,686 | |||
Total investment income | 7,699,754 | |||
Expenses: | ||||
Advisory fees | 441,481 | |||
Administrative services fees | 92,056 | |||
Custodian fees | 18,477 | |||
Distribution fees: | ||||
Class A | 699,081 | |||
Class B | 37,102 | |||
Class C | 676,204 | |||
Transfer agent fees | 503,877 | |||
Trustees’ and officers’ fees and benefits | 17,613 | |||
Other | 165,613 | |||
Total expenses | 2,651,504 | |||
Less: Fees waived and expense offset arrangement(s) | (9,506 | ) | ||
Net expenses | 2,641,998 | |||
Net investment income | 5,057,756 | |||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 5,500,881 | |||
Futures contracts | 910,417 | |||
| 6,411,298 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 30,998,059 | |||
Futures contracts | 358,400 | |||
| 31,356,459 | ||||
Net realized and unrealized gain | 37,767,757 | |||
Net increase in net assets resulting from operations | $ | 42,825,513 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
February 28, 2015 | August 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 5,057,756 | $ | 8,742,956 | ||||
Net realized gain | 6,411,298 | 11,844,995 | ||||||
Change in net unrealized appreciation | 31,356,459 | 121,029,821 | ||||||
Net increase in net assets resulting from operations | 42,825,513 | 141,617,772 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (6,708,188 | ) | (7,179,915 | ) | ||||
Class B | (41,456 | ) | (81,335 | ) | ||||
Class C | (776,452 | ) | (813,327 | ) | ||||
Class Y | (488,720 | ) | (436,370 | ) | ||||
Total distributions from net investment income | (8,014,816 | ) | (8,510,947 | ) | ||||
Share transactions–net: | ||||||||
Class A | (482,054 | ) | (14,239,028 | ) | ||||
Class B | (1,725,772 | ) | (4,900,844 | ) | ||||
Class C | 24,888,641 | 10,893,429 | ||||||
Class Y | 17,241,501 | (2,285,605 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | 39,922,316 | (10,532,048 | ) | |||||
Net increase in net assets | 74,733,013 | 122,574,777 | ||||||
Net assets: | ||||||||
Beginning of period | 715,160,708 | 592,585,931 | ||||||
End of period (includes undistributed net investment income of $2,943,322 and $5,900,382, respectively) | $ | 789,893,721 | $ | 715,160,708 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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 securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net
14 Invesco S&P 500 Index Fund
asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
15 Invesco S&P 500 Index Fund
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
| I. | 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 (“Counterparties”) 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% | |||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.12%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
16 Invesco S&P 500 Index Fund
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $9,144.
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, 2015, 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, 2015, 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $44,715 in front-end sales commissions from the sale of Class A shares and $97, $1,671 and $7,753 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, 2015. 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 | $ | 789,124,539 | $ | — | $ | — | $ | 789,124,539 | ||||||||
Futures Contracts* | 546,837 | — | — | 546,837 | ||||||||||||
Total Investments | $ | 789,671,376 | $ | — | $ | — | $ | 789,671,376 | ||||||||
| * | Unrealized appreciation. |
17 Invesco S&P 500 Index 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, 2015:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Market risk: | ||||||||
Futures contracts(a) | $ | 546,837 | $ | — | ||||
| (a) | Includes cumulative appreciation 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, 2015
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| Location of Gain on Statement of Operations | ||||
| Futures Contracts | ||||
Realized Gain: | ||||
Market risk | $ | 910,417 | ||
Change in Unrealized Appreciation: | ||||
Market risk | 358,400 | |||
Total | $ | 1,268,817 | ||
The table below summarizes the average notional value of futures contracts outstanding during the period.
| Futures Contracts | ||||
Average notional value | $ | 12,281,266 | ||
| Open Futures Contracts — Market Risk | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
E-Mini S&P 500 Index | Long | 173 | March-2015 | $ | 18,189,220 | $ | 546,837 | |||||||||||||
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, 2015.
Value 08/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain (Loss) | Value 02/28/15 | Dividend Income | ||||||||||||||||||||||
Invesco Ltd. | $ | 702,489 | $ | 25,329 | $ | — | $ | (9,804 | ) | $ | — | $ | 718,014 | $ | 8,832 | |||||||||||||
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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $362.
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 eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of August 31, 2014, 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 | — | 5,448,529 | 5,448,529 | |||||||||
| $ | 42,437,495 | $ | 5,448,529 | $ | 47,886,024 | |||||||
| * | 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, 2015 was $44,723,268 and $14,537,678, 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 | $ | 389,399,467 | ||
Aggregate unrealized (depreciation) of investment securities | (7,179,376 | ) | ||
Net unrealized appreciation of investment securities | $ | 382,220,091 | ||
Cost of investments for tax purposes is $406,904,448.
19 Invesco S&P 500 Index Fund
NOTE 11—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 2,756,420 | $ | 59,966,406 | 3,235,124 | $ | 64,183,686 | ||||||||||
Class B | 9,768 | 210,537 | 42,427 | 815,218 | ||||||||||||
Class C | 1,537,723 | 32,569,136 | 1,352,961 | 26,035,607 | ||||||||||||
Class Y | 956,540 | 21,219,792 | 848,531 | 17,239,541 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 281,199 | 6,051,406 | 341,048 | 6,486,732 | ||||||||||||
Class B | 1,733 | 36,649 | 3,781 | 70,771 | ||||||||||||
Class C | 32,806 | 685,648 | 39,586 | 732,740 | ||||||||||||
Class Y | 21,191 | 460,483 | 21,684 | 416,553 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 54,937 | 1,211,783 | 196,646 | 3,877,345 | ||||||||||||
Class B | (56,057 | ) | (1,211,783 | ) | (200,486 | ) | (3,877,345 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (3,090,876 | ) | (67,711,649 | ) | (4,501,173 | ) | (88,786,791 | ) | ||||||||
Class B | (35,297 | ) | (761,175 | ) | (99,776 | ) | (1,909,488 | ) | ||||||||
Class C | (395,536 | ) | (8,366,143 | ) | (823,310 | ) | (15,874,918 | ) | ||||||||
Class Y | (201,947 | ) | (4,438,774 | ) | (998,411 | ) | (19,941,699 | ) | ||||||||
Net increase (decrease) in share activity | 1,872,604 | $ | 39,922,316 | (541,368 | ) | $ | (10,532,048 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and own, in the aggregate, 56% 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. |
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 on securities | Total from operations | Dividends from net investment income | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | $ | 21.69 | $ | 0.16 | $ | 1.09 | $ | 1.25 | $ | (0.26 | ) | $ | 22.68 | 5.83 | % | $ | 583,082 | 0.59 | %(d) | 0.59 | %(d) | 1.50 | %(d) | 2 | % | |||||||||||||||||||||||
Year ended 08/31/14 | 17.67 | 0.29 | 4.01 | 4.30 | (0.28 | ) | 21.69 | 24.54 | (e) | 557,688 | 0.59 | (e) | 0.59 | (e) | 1.45 | (e) | 5 | |||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 21.24 | 0.08 | 1.06 | 1.14 | (0.12 | ) | 22.26 | 5.40 | 6,765 | 1.34 | (d) | 1.34 | (d) | 0.75 | (d) | 2 | ||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 17.32 | 0.13 | 3.94 | 4.07 | (0.15 | ) | 21.24 | 23.60 | 8,150 | 1.35 | 1.35 | 0.69 | 5 | |||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 20.99 | 0.08 | 1.05 | 1.13 | (0.12 | ) | 22.00 | 5.42 | 156,289 | 1.34 | (d) | 1.34 | (d) | 0.75 | (d) | 2 | ||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 17.12 | 0.13 | 3.89 | 4.02 | (0.15 | ) | 20.99 | 23.59 | 124,452 | 1.35 | 1.35 | 0.69 | 5 | |||||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 14.79 | 0.14 | 2.37 | 2.51 | (0.18 | ) | 17.12 | 17.14 | (f) | 91,761 | 1.36 | (f) | 1.36 | (f) | 0.90 | (f) | 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 | (f) | 68,753 | 1.27 | (f) | 1.27 | (f) | 0.76 | (f) | 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 | |||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 21.94 | 0.19 | 1.10 | 1.29 | (0.31 | ) | 22.92 | 5.95 | 43,757 | 0.34 | (d) | 0.34 | (d) | 1.75 | (d) | 2 | ||||||||||||||||||||||||||||||||
Year ended 08/31/14 | 17.87 | 0.34 | 4.05 | 4.39 | (0.32 | ) | 21.94 | 24.83 | 24,870 | 0.35 | 0.35 | 1.69 | 5 | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
| (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) | 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) of $563,900, $7,482, $136,362 and $34,157 for Class A, Class B, Class C and Class Y shares, respectively. |
| (e) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.24% for the year ended August 31, 2014. |
| (f) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.99% and 0.91% for the years ended August 31, 2013 and 2011, respectively. |
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, 2014 through February 28, 2015.
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 | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,058.30 | $ | 3.01 | $ | 1,021.87 | $ | 2.96 | 0.59 | % | ||||||||||||
| B | 1,000.00 | 1,054.00 | 6.82 | 1,018.15 | 6.71 | 1.34 | ||||||||||||||||||
| C | 1,000.00 | 1,054.20 | 6.83 | 1,018.15 | 6.71 | 1.34 | ||||||||||||||||||
| Y | 1,000.00 | 1,059.50 | 1.74 | 1,023.11 | 1.71 | 0.34 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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
Go Paperless with eDelivery | ||||
Visit invesco.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that’s all about eeees:
| ||||
– environmentally friendly. Go green by reducing the number of trees used to produce paper.
| – efficient. Stop waiting for regular mail. Your documents will be sent via email as soon as they’re available.
| |||
– economical. Help reduce your fund’s printing and delivery expenses and put more capital back in your fund’s returns. | – easy. Download, save and print files using your home computer with a few clicks of your mouse. | |||
This service is provided by Invesco Investment Services, Inc.
| ||||
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
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, 2015 | ||
| ||||
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, 8/31/14 to 2/28/15, 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 | 10.40 | % | ||
Class B Shares | 10.42 | |||
Class C Shares | 10.07 | |||
Class Y Shares | 10.49 | |||
Class R5 Shares | 10.54 | |||
Class R6 Shares | 10.71 | |||
S&P 500 Indexq (Broad Market Index) | 6.12 | |||
Russell 2000 Growth Index¢ (Style-Specific Index) | 9.11 | |||
Lipper Small-Cap Growth Funds Index¢ (Peer Group Index) | 7.79 | |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US stock market. The Russell 2000® 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 2/28/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (11/27/00) | 4.60 | % | ||
10 Years | 8.81 | |||
5 Years | 14.79 | |||
1 Year | 0.31 | |||
Class B Shares | ||||
Inception (11/27/00) | 4.59 | % | ||
10 Years | 9.09 | |||
5 Years | 15.84 | |||
1 Year | 1.82 | |||
Class C Shares | ||||
Inception (11/27/00) | 4.24 | % | ||
10 Years | 8.62 | |||
5 Years | 15.25 | |||
1 Year | 4.54 | |||
Class Y Shares | ||||
Inception (2/2/06) | 8.26 | % | ||
5 Years | 16.39 | |||
1 Year | 6.47 | |||
Class R5 Shares | ||||
10 Years | 9.52 | % | ||
5 Years | 16.31 | |||
1 Year | 6.62 | |||
Class R6 Shares | ||||
10 Years | 9.55 | % | ||
5 Years | 16.37 | |||
1 Year | 6.79 | |||
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.
| Average Annual Total Returns | ||||
| As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (11/27/00) | 4.17 | % | ||
10 Years | 8.11 | |||
5 Years | 13.33 | |||
1 Year | -2.56 | |||
Class B Shares | ||||
Inception (11/27/00) | 4.16 | % | ||
10 Years | 8.35 | |||
5 Years | 14.37 | |||
1 Year | -1.19 | |||
Class C Shares | ||||
Inception (11/27/00) | 3.82 | % | ||
10 Years | 7.92 | |||
5 Years | 13.80 | |||
1 Year | 1.56 | |||
Class Y Shares | ||||
Inception (2/2/06) | 7.64 | % | ||
5 Years | 14.92 | |||
1 Year | 3.43 | |||
Class R5 Shares | ||||
10 Years | 8.81 | % | ||
5 Years | 14.84 | |||
1 Year | 3.58 | |||
Class R6 Shares | ||||
10 Years | 8.83 | % | ||
5 Years | 14.87 | |||
1 Year | 3.66 | |||
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 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 1.32%, 1.32%, 2.07%, 1.07%, 0.94% and 0.84%, 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.
3 Invesco Small Cap Discovery Fund
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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, 2015
(Unaudited)
| Shares | Value | |||||||
Common Stocks & Other Equity Interests–92.79% |
| |||||||
| Aerospace & Defense–0.81% | ||||||||
TASER International, Inc.(b)(c) | 295,431 | $ | 6,936,720 | |||||
| Apparel, Accessories & Luxury Goods–1.01% | ||||||||
G-III Apparel Group, Ltd.(c) | 82,602 | 8,692,208 | ||||||
| Application Software–6.19% | ||||||||
Aspen Technology, Inc.(c) | 70,723 | 2,730,262 | ||||||
Cadence Design Systems, Inc.(c) | 646,101 | 11,859,184 | ||||||
Guidewire Software Inc.(c) | 212,060 | 11,803,260 | ||||||
Manhattan Associates, Inc.(c) | 168,546 | 8,402,018 | ||||||
Qlik Technologies Inc.(c) | 98,741 | 3,203,158 | ||||||
SolarWinds, Inc.(c) | 166,399 | 8,441,421 | ||||||
Ultimate Software Group, Inc. (The)(c) | 40,157 | 6,611,649 | ||||||
| 53,050,952 | ||||||||
| Asset Management & Custody Banks–1.02% | ||||||||
Affiliated Managers Group, Inc.(c) | 40,235 | 8,707,659 | ||||||
| Auto Parts & Equipment–2.62% | ||||||||
Gentherm Inc.(c) | 282,232 | 13,109,676 | ||||||
Tenneco Inc.(c) | 160,274 | 9,334,358 | ||||||
| 22,444,034 | ||||||||
| Biotechnology–4.56% | ||||||||
Clovis Oncology Inc.(b)(c) | 98,584 | 7,537,733 | ||||||
Esperion Therapeutics, Inc.(c) | 35,899 | 2,241,892 | ||||||
Exact Sciences Corp.(b)(c) | 296,225 | 6,656,176 | ||||||
Intercept Pharmaceuticals, Inc.(c) | 20,315 | 4,497,131 | ||||||
Medivation Inc.(c) | 97,926 | 11,509,243 | ||||||
Synageva BioPharma Corp.(b)(c) | 67,709 | 6,684,910 | ||||||
| 39,127,085 | ||||||||
| Building Products–3.64% | ||||||||
A.O. Smith Corp. | 146,083 | 9,207,612 | ||||||
American Woodmark Corp.(c) | 58,733 | 3,092,880 | ||||||
Lennox International Inc. | 81,801 | 8,528,572 | ||||||
Owens Corning Inc. | 133,587 | 5,298,060 | ||||||
Trex Co., Inc.(c) | 100,129 | 5,041,495 | ||||||
| 31,168,619 | ||||||||
| Commodity Chemicals–0.44% | ||||||||
Methanex Corp. (Canada) | 69,734 | 3,786,556 | ||||||
| Communications Equipment–0.72% | ||||||||
ARRIS Group Inc.(c) | 209,017 | 6,140,919 | ||||||
| Construction Machinery & Heavy Trucks–0.91% | ||||||||
Manitowoc Co., Inc. (The) | 353,762 | 7,828,753 | ||||||
| Consumer Electronics–1.28% | ||||||||
Harman International Industries, Inc. | 79,298 | 10,942,331 | ||||||
| Shares | Value | |||||||
| Data Processing & Outsourced Services–2.19% | ||||||||
Euronet Worldwide, Inc.(c) | 139,303 | $ | 7,870,619 | |||||
Jack Henry & Associates, Inc. | 95,837 | 6,277,324 | ||||||
WEX Inc.(c) | 43,126 | 4,614,051 | ||||||
| 18,761,994 | ||||||||
| Electronic Components–0.97% | ||||||||
Belden Inc. | 93,699 | 8,318,597 | ||||||
| Electronic Equipment & Instruments–0.55% | ||||||||
Cognex Corp.(c) | 105,589 | 4,718,772 | ||||||
| Electronic Manufacturing Services–0.38% | ||||||||
IPG Photonics Corp.(c) | 33,658 | 3,227,802 | ||||||
| Environmental & Facilities Services–0.46% | ||||||||
Clean Harbors, Inc.(b)(c) | 70,373 | 3,919,072 | ||||||
| General Merchandise Stores–2.25% | ||||||||
Burlington Stores, Inc.(c) | 178,403 | 9,913,855 | ||||||
Tuesday Morning Corp.(c) | 494,637 | 9,388,210 | ||||||
| 19,302,065 | ||||||||
| Health Care Equipment–3.91% | ||||||||
DexCom Inc.(c) | 155,061 | 9,418,405 | ||||||
Globus Medical, Inc.–Class A(c) | 288,123 | 6,995,626 | ||||||
Thoratec Corp.(c) | 208,384 | 8,485,397 | ||||||
Wright Medical Group, Inc.(c) | 351,171 | 8,649,342 | ||||||
| 33,548,770 | ||||||||
| Health Care Facilities–4.35% | ||||||||
Acadia Healthcare Co., Inc.(c) | 218,805 | 13,835,040 | ||||||
Capital Senior Living Corp.(c) | 331,146 | 8,278,650 | ||||||
Tenet Healthcare Corp.(c) | 131,052 | 6,067,708 | ||||||
VCA, Inc.(c) | 170,327 | 9,075,022 | ||||||
| 37,256,420 | ||||||||
| Health Care Services–1.52% | ||||||||
Team Health Holdings, Inc.(c) | 219,469 | 13,007,928 | ||||||
| Health Care Supplies–0.89% | ||||||||
Align Technology, Inc.(c) | 133,123 | 7,634,604 | ||||||
| Homefurnishing Retail–0.71% | ||||||||
Mattress Firm Holding Corp.(b)(c) | 99,375 | 6,052,931 | ||||||
| Housewares & Specialties–0.97% | ||||||||
Jarden Corp.(c) | 157,116 | 8,338,146 | ||||||
| Human Resource & Employment Services–0.93% | ||||||||
TrueBlue, Inc.(c) | 346,347 | 7,969,444 | ||||||
| Industrial Conglomerates–1.01% | ||||||||
Carlisle Cos. Inc. | 92,622 | 8,620,330 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Small Cap Discovery Fund
| Shares | Value | |||||||
| Industrial Machinery–2.09% | ||||||||
EnPro Industries, Inc. | 120,236 | $ | 7,907,922 | |||||
ITT Corp. | 102,428 | 4,206,718 | ||||||
Woodward Inc. | 119,767 | 5,814,688 | ||||||
| 17,929,328 | ||||||||
| Internet Software & Services–3.00% | ||||||||
CoStar Group Inc.(c) | 46,358 | 9,232,659 | ||||||
Dealertrack Technologies Inc.(c) | 92,569 | 3,681,469 | ||||||
Marketo, Inc.(c) | 259,219 | 7,245,171 | ||||||
Wix.com Ltd. (Israel)(c) | 304,500 | 5,581,485 | ||||||
| 25,740,784 | ||||||||
| Investment Banking & Brokerage–1.90% | ||||||||
Evercore Partners Inc.–Class A | 178,976 | 9,168,940 | ||||||
Stifel Financial Corp.(c) | 129,614 | 7,098,959 | ||||||
| 16,267,899 | ||||||||
| IT Consulting & Other Services–0.71% | ||||||||
InterXion Holding N.V. (Netherlands)(c) | 192,447 | 6,133,286 | ||||||
| Leisure Products–1.69% | ||||||||
Brunswick Corp. | 266,806 | 14,471,557 | ||||||
| Life Sciences Tools & Services–5.52% | ||||||||
Bio-Techne Corp. | 93,461 | 9,115,252 | ||||||
Bruker Corp.(c) | 328,001 | 6,241,859 | ||||||
Fluidigm Corp.(c) | 276,175 | 12,206,935 | ||||||
PAREXEL International Corp.(c) | 197,548 | 12,733,944 | ||||||
VWR Corp.(b)(c) | 284,151 | 6,975,907 | ||||||
| 47,273,897 | ||||||||
| Marine–0.44% | ||||||||
Kirby Corp.(c) | 49,046 | 3,780,466 | ||||||
| Movies & Entertainment–2.16% | ||||||||
Cinemark Holdings, Inc. | 284,417 | 11,581,460 | ||||||
Lions Gate Entertainment Corp. | 212,457 | 6,923,974 | ||||||
| 18,505,434 | ||||||||
| Office Services & Supplies–0.93% | ||||||||
Steelcase Inc.–Class A | 425,771 | 7,970,433 | ||||||
| Oil & Gas Exploration & Production–3.51% | ||||||||
Diamondback Energy Inc.(c) | 136,569 | 9,725,079 | ||||||
Laredo Petroleum Inc.(b)(c) | 370,310 | 4,417,798 | ||||||
PDC Energy, Inc.(c) | 69,869 | 3,610,830 | ||||||
RSP Permian Inc.(c) | 263,982 | 7,169,751 | ||||||
Whiting Petroleum Corp.(c) | 152,409 | 5,155,996 | ||||||
| 30,079,454 | ||||||||
| Packaged Foods & Meats–1.82% | ||||||||
Hain Celestial Group, Inc. (The)(c) | 116,304 | 7,272,489 | ||||||
WhiteWave Foods Co.–Class A (The)(c) | 203,486 | 8,332,752 | ||||||
| 15,605,241 | ||||||||
| Pharmaceuticals–4.23% | ||||||||
Flamel Technologies S.A.–ADR (France)(c) | 255,411 | 3,997,182 | ||||||
| Shares | Value | |||||||
| Pharmaceuticals–(continued) | ||||||||
IGI Laboratories, Inc.(b)(c) | 576,316 | $ | 6,639,161 | |||||
Impax Laboratories, Inc.(c) | 264,414 | 10,653,240 | ||||||
Pacira Pharmaceuticals, Inc.(c) | 130,677 | 14,997,799 | ||||||
| 36,287,382 | ||||||||
| Real Estate Services–0.82% | ||||||||
Realogy Holdings Corp.(c) | 152,690 | 7,023,740 | ||||||
| Regional Banks–2.24% | ||||||||
Signature Bank(c) | 63,178 | 7,793,006 | ||||||
SVB Financial Group(c) | 92,523 | 11,371,077 | ||||||
| 19,164,083 | ||||||||
| Research & Consulting Services–0.79% | ||||||||
Corporate Executive Board Co. (The) | 86,191 | 6,740,998 | ||||||
| Restaurants–4.11% | ||||||||
Fiesta Restaurant Group, Inc.(c) | 101,001 | 6,566,075 | ||||||
Jack in the Box Inc. | 112,913 | 10,917,558 | ||||||
Shake Shack Inc.–Class A(b)(c) | 50,273 | 2,169,280 | ||||||
Texas Roadhouse, Inc. | 236,792 | 8,912,851 | ||||||
Zoe’s Kitchen Inc.(b)(c) | 194,586 | 6,676,246 | ||||||
| 35,242,010 | ||||||||
| Semiconductors–6.18% | ||||||||
Cavium Inc.(c) | 199,966 | 13,695,671 | ||||||
Cypress Semiconductor Corp.(b)(c) | 535,827 | 7,903,448 | ||||||
Integrated Device Technology, Inc.(c) | 442,286 | 9,128,783 | ||||||
Power Integrations, Inc. | 110,289 | 6,050,455 | ||||||
Qorvo, Inc.(c) | 111,623 | 7,746,636 | ||||||
Silicon Laboratories Inc.(c) | 166,140 | 8,413,330 | ||||||
| 52,938,323 | ||||||||
| Specialty Chemicals–1.77% | ||||||||
Cytec Industries Inc. | 134,464 | 7,063,394 | ||||||
PolyOne Corp. | 204,988 | 8,146,223 | ||||||
| 15,209,617 | ||||||||
| Specialty Stores–0.74% | ||||||||
Tractor Supply Co. | 72,013 | 6,345,786 | ||||||
| Steel–0.68% | ||||||||
Commercial Metals Co. | 388,146 | 5,841,597 | ||||||
| Systems Software–1.06% | ||||||||
Barracuda Networks, Inc.(c) | 237,911 | 9,062,030 | ||||||
| Tires & Rubber–0.69% | ||||||||
Cooper Tire & Rubber Co. | 156,181 | 5,944,249 | ||||||
| Trading Companies & Distributors–0.69% | ||||||||
WESCO International, Inc.(c) | 84,688 | 5,879,888 | ||||||
| Trucking–0.73% | ||||||||
ArcBest Corp. | 149,576 | 6,264,243 | ||||||
Total Common Stocks & Other Equity Interests |
| 795,204,436 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Small Cap Discovery Fund
| Shares | Value | |||||||
Money Market Funds–6.51% |
| |||||||
Liquid Assets Portfolio–Institutional Class(d) | 27,907,240 | $ | 27,907,240 | |||||
Premier Portfolio–Institutional Class(d) | 27,907,240 | 27,907,240 | ||||||
Total Money Market Funds |
| 55,814,480 | ||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.30% (Cost $616,360,609) |
| 851,018,916 | ||||||
Investments Purchased with Cash Collateral from Securities on Loan |
| |||||||
Money Market Funds–6.13% |
| |||||||
Liquid Assets Portfolio–Institutional Class (Cost $52,559,674)(d)(e) | 52,559,674 | 52,559,674 | ||||||
TOTAL INVESTMENTS–105.43% |
| 903,578,590 | ||||||
OTHER ASSETS LESS LIABILITIES–(5.43)% |
| (46,571,232 | ) | |||||
NET ASSETS–100.00% |
| $ | 857,007,358 | |||||
Investment Abbreviations:
| ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
| (a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
| (b) | All or a portion of this security was out on loan at February 28, 2015. |
| (c) | Non-income producing security. |
| (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, 2015. |
| Counterparty | Gross Amount of Securities on Loan at Value | Cash Collateral Received for Securities Loaned* | Net Amount | |||||||||
Brown Brothers Harriman | $ | 51,015,536 | $ | (51,015,536 | ) | $ | — | |||||
| * | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of February 28, 2015
Health Care | 24.2 | % | ||
Information Technology | 19.9 | |||
Consumer Discretionary | 18.2 | |||
Industrials | 15.5 | |||
Financials | 6.0 | |||
Energy | 3.5 | |||
Materials | 2.9 | |||
Consumer Staples | 2.6 | |||
Money Market Funds Plus Other Assets Less Liabilities | 7.2 |
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, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $560,546,129)* | $ | 795,204,436 | ||
Investments in affiliated money market funds, at value and cost | 108,374,154 | |||
Total investments, at value (Cost $668,920,283) | 903,578,590 | |||
Receivable for: | ||||
Investments sold | 12,120,531 | |||
Fund shares sold | 1,230,630 | |||
Dividends | 284,179 | |||
Investment for trustee deferred compensation and retirement plans | 107,928 | |||
Other assets | 66,521 | |||
Total assets | 917,388,379 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 6,201,255 | |||
Fund shares reacquired | 808,990 | |||
Collateral upon return of securities loaned | 52,559,674 | |||
Accrued fees to affiliates | 632,860 | |||
Accrued trustees’ and officers’ fees and benefits | 4,106 | |||
Accrued other operating expenses | 48,899 | |||
Trustee deferred compensation and retirement plans | 125,237 | |||
Total liabilities | 60,381,021 | |||
Net assets applicable to shares outstanding | $ | 857,007,358 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 599,357,628 | ||
Undistributed net investment income (loss) | (8,315,372 | ) | ||
Undistributed net realized gain | 31,306,795 | |||
Net unrealized appreciation | 234,658,307 | |||
| $ | 857,007,358 | |||
Net Assets: |
| |||
Class A | $ | 522,088,525 | ||
Class B | $ | 9,431,016 | ||
Class C | $ | 59,115,331 | ||
Class Y | $ | 105,445,110 | ||
Class R5 | $ | 46,598,759 | ||
Class R6 | $ | 114,328,617 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 46,957,567 | |||
Class B | 950,236 | |||
Class C | 6,372,017 | |||
Class Y | 9,133,990 | |||
Class R5 | 4,019,796 | |||
Class R6 | 9,843,067 | |||
Class A: | ||||
Net asset value per share | $ | 11.12 | ||
Maximum offering price per share | ||||
(Net asset value of $11.12 ¸ 94.50%) | $ | 11.77 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 9.92 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 9.28 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 11.54 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 11.59 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 11.62 | ||
| * | At February 28, 2015, securities with an aggregate value of $51,015,536 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, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $9,542) | $ | 1,597,666 | ||
Dividends from affiliated money market funds (includes securities lending income of $194,431) | 198,987 | |||
Total investment income | 1,796,653 | |||
Expenses: | ||||
Advisory fees | 3,172,539 | |||
Administrative services fees | 105,887 | |||
Custodian fees | 9,147 | |||
Distribution fees: | ||||
Class A | 618,018 | |||
Class B | 11,693 | |||
Class C | 259,438 | |||
Transfer agent fees — A, B, C and Y | 807,692 | |||
Transfer agent fees — R5 | 22,279 | |||
Transfer agent fees — R6 | 1,060 | |||
Trustees’ and officers’ fees and benefits | 19,113 | |||
Other | 107,590 | |||
Total expenses | 5,134,456 | |||
Less: Fees waived and expense offset arrangement(s) | (15,580 | ) | ||
Net expenses | 5,118,876 | |||
Net investment income (loss) | (3,322,223 | ) | ||
Realized and unrealized gain from: | ||||
Net realized gain from investment securities | 44,385,615 | |||
Change in net unrealized appreciation of investment securities | 39,720,052 | |||
Net realized and unrealized gain | 84,105,667 | |||
Net increase in net assets resulting from operations | $ | 80,783,444 | ||
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, 2015 and the year ended August 31, 2014
(Unaudited)
| February 28, 2015 | August 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (3,322,223 | ) | $ | (7,306,432 | ) | ||
Net realized gain | 44,385,615 | 145,820,748 | ||||||
Change in net unrealized appreciation (depreciation) | 39,720,052 | (25,746,767 | ) | |||||
Net increase in net assets resulting from operations | 80,783,444 | 112,767,549 | ||||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (73,267,898 | ) | (83,192,368 | ) | ||||
Class B | (1,515,016 | ) | (1,952,149 | ) | ||||
Class C | (9,251,581 | ) | (9,359,747 | ) | ||||
Class Y | (15,070,292 | ) | (24,205,240 | ) | ||||
Class R5 | (6,371,266 | ) | (6,651,766 | ) | ||||
Class R6 | (15,078,987 | ) | (10,227,636 | ) | ||||
Total distributions from net realized gains | (120,555,040 | ) | (135,588,906 | ) | ||||
Share transactions–net: | ||||||||
Class A | 18,826,805 | 1,500,037 | ||||||
Class B | (172,234 | ) | (1,951,636 | ) | ||||
Class C | 7,107,741 | 5,350,077 | ||||||
Class Y | (4,672,773 | ) | (42,967,605 | ) | ||||
Class R5 | 3,244,744 | 1,899,903 | ||||||
Class R6 | 9,263,721 | 39,545,974 | ||||||
Net increase in net assets resulting from share transactions | 33,598,004 | 3,376,750 | ||||||
Net increase (decrease) in net assets | (6,173,592 | ) | (19,444,607 | ) | ||||
Net assets: | ||||||||
Beginning of period | 863,180,950 | 882,625,557 | ||||||
End of period (includes undistributed net investment income (loss) of $(8,315,372) and $(4,993,149), respectively) | $ | 857,007,358 | $ | 863,180,950 | ||||
Notes to Financial Statements
February 28, 2015
(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 thirteen 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 securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based
10 Invesco Small Cap Discovery Fund
on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
| E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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% | |||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.78%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, 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 Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, 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,
12 Invesco Small Cap Discovery Fund
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, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees of $14,931.
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, 2015, 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, 2015, 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, 2015, 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, 2015, IDI advised the Fund that IDI retained $36,265 in front-end sales commissions from the sale of Class A shares and $754, $866 and $530 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended February 28, 2015, the Fund incurred $7,623 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available 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, 2015, 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—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, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $649.
13 Invesco Small Cap Discovery Fund
NOTE 5—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2014.
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, 2015 was $200,760,520 and $335,625,768, 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 | $ | 239,088,742 | ||
Aggregate unrealized (depreciation) of investment securities | (6,437,231 | ) | ||
Net unrealized appreciation of investment securities | $ | 232,651,511 | ||
Cost of investments for tax purposes is $670,927,079.
14 Invesco Small Cap Discovery Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | Year ended August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 4,083,401 | $ | 45,274,443 | 11,162,845 | $ | 136,194,937 | ||||||||||
Class B | 7,524 | 76,740 | 39,041 | 438,517 | ||||||||||||
Class C | 516,178 | 4,760,883 | 1,160,335 | 12,325,902 | ||||||||||||
Class Y | 1,014,949 | 11,759,952 | 3,179,180 | 39,762,440 | ||||||||||||
Class R5 | 89,282 | 994,655 | 326,211 | 4,170,947 | ||||||||||||
Class R6 | 566,089 | 6,426,718 | 3,554,223 | 41,450,915 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 7,017,482 | 70,244,991 | 7,095,938 | 80,255,054 | ||||||||||||
Class B | 160,889 | 1,438,345 | 182,437 | 1,873,622 | ||||||||||||
Class C | 1,051,442 | 8,800,570 | 906,196 | 8,880,723 | ||||||||||||
Class Y | 1,411,863 | 14,669,252 | 2,050,361 | 23,866,200 | ||||||||||||
Class R5 | 610,714 | 6,369,745 | 570,336 | 6,650,122 | ||||||||||||
Class R6 | 1,442,820 | 15,077,466 | 876,263 | 10,225,992 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 65,470 | 728,881 | 205,429 | 2,466,712 | ||||||||||||
Class B | (72,730 | ) | (728,881 | ) | (225,501 | ) | (2,466,712 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (8,828,107 | ) | (97,421,510 | ) | (18,171,031 | ) | (217,416,666 | ) | ||||||||
Class B | (96,160 | ) | (958,438 | ) | (161,282 | ) | (1,797,063 | ) | ||||||||
Class C | (685,972 | ) | (6,453,712 | ) | (1,521,901 | ) | (15,856,548 | ) | ||||||||
Class Y | (2,717,057 | ) | (31,101,977 | ) | (8,846,264 | ) | (106,596,245 | ) | ||||||||
Class R5 | (368,518 | ) | (4,119,656 | ) | (725,066 | ) | (8,921,166 | ) | ||||||||
Class R6 | (1,076,055 | ) | (12,240,463 | ) | (983,764 | ) | (12,130,933 | ) | ||||||||
Net increase in share activity | 4,193,504 | $ | 33,598,004 | 673,986 | $ | 3,376,750 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 39% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
15 Invesco Small Cap Discovery Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Distributions from net realized gains | Net asset value, end of period(b) | 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(c) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | $ | 11.83 | $ | (0.05 | ) | $ | 1.09 | $ | 1.04 | $ | (1.75 | ) | $ | 11.12 | 10.40 | %(d) | $ | 522,089 | 1.33 | %(e) | 1.33 | %(e) | (0.89 | )%(e) | 25 | % | ||||||||||||||||||||||
Year ended 08/31/14 | 12.20 | (0.10 | ) | 1.62 | 1.52 | (1.89 | ) | 11.83 | 13.15 | (d) | 527,759 | 1.32 | 1.32 | (0.85 | ) | 79 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.85 | (0.08 | ) | 2.56 | 2.48 | (1.13 | ) | 12.20 | 25.31 | (d) | 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 | 14.33 | (d) | 607,073 | 1.38 | 1.43 | (0.80 | ) | 78 | ||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.74 | (0.11 | ) | 1.93 | 1.82 | — | 10.56 | 20.82 | (d) | 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 | (9.15 | )(d) | 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 | 38.82 | (g) | 748,998 | 1.39 | 1.39 | (1.04 | ) | 234 | |||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.75 | (0.04 | ) | 0.96 | 0.92 | (1.75 | ) | 9.92 | 10.31 | (d)(h) | 9,431 | 1.33 | (e)(h) | 1.33 | (e)(h) | (0.89 | )(e)(h) | 25 | ||||||||||||||||||||||||||||||
Year ended 08/31/14 | 11.25 | (0.09 | ) | 1.48 | 1.39 | (1.89 | ) | 10.75 | 13.11 | (d)(h) | 10,216 | 1.32 | (h) | 1.32 | (h) | (0.85 | )(h) | 79 | ||||||||||||||||||||||||||||||
Year ended 08/31/13 | 10.09 | (0.07 | ) | 2.36 | 2.29 | (1.13 | ) | 11.25 | 25.34 | (d)(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 | 14.40 | (d)(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 | 20.90 | (d)(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 | (9.41 | )(d)(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 | 38.71 | (i)(j) | 23,169 | 1.53 | (j) | 1.53 | (j) | (1.19 | )(j) | 234 | |||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.19 | (0.07 | ) | 0.91 | 0.84 | (1.75 | ) | 9.28 | 10.07 | (d)(k) | 59,115 | 2.04 | (e)(k) | 2.04 | (e)(k) | (1.60 | )(e)(k) | 25 | ||||||||||||||||||||||||||||||
Year ended 08/31/14 | 10.83 | (0.17 | ) | 1.42 | 1.25 | (1.89 | ) | 10.19 | 12.21 | (d) | 55,961 | 2.07 | 2.07 | (1.60 | ) | 79 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 9.82 | (0.15 | ) | 2.29 | 2.14 | (1.13 | ) | 10.83 | 24.43 | (d) | 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 | 13.43 | (d) | 48,486 | 2.13 | 2.18 | (1.55 | ) | 78 | ||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.10 | (0.17 | ) | 1.80 | 1.63 | — | 9.73 | 20.12 | (d)(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 | (9.50 | )(d) | 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 | 37.69 | (l) | 62,523 | 2.14 | 2.14 | (1.79 | ) | 234 | |||||||||||||||||||||||||||||||||
Class Y(m) | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 12.20 | (0.04 | ) | 1.13 | 1.09 | (1.75 | ) | 11.54 | 10.49 | (d) | 105,445 | 1.08 | (e) | 1.08 | (e) | (0.64 | )(e) | 25 | ||||||||||||||||||||||||||||||
Year ended 08/31/14 | 12.50 | (0.07 | ) | 1.66 | 1.59 | (1.89 | ) | 12.20 | 13.42 | (d) | 114,973 | 1.07 | 1.07 | (0.60 | ) | 79 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13 | 11.06 | (0.05 | ) | 2.62 | 2.57 | (1.13 | ) | 12.50 | 25.67 | (d) | 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 | 14.60 | (d) | 206,367 | 1.13 | 1.18 | (0.55 | ) | 78 | ||||||||||||||||||||||||||||||||
Year ended 08/31/11 | 8.84 | (0.09 | ) | 1.97 | 1.88 | — | 10.72 | 21.27 | (d) | 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 | (9.15 | )(d) | 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 | 39.20 | (n) | 267,593 | 1.14 | 1.14 | (0.76 | ) | 234 | |||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 12.23 | (0.03 | ) | 1.14 | 1.11 | (1.75 | ) | 11.59 | 10.63 | (d) | 46,599 | 0.94 | (e) | 0.94 | (e) | (0.50 | )(e) | 25 | ||||||||||||||||||||||||||||||
Year ended 08/31/14 | 12.52 | (0.05 | ) | 1.65 | 1.60 | (1.89 | ) | 12.23 | 13.49 | (d) | 45,126 | 0.94 | 0.94 | (0.47 | ) | 79 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 11.48 | (0.04 | ) | 2.21 | 2.17 | (1.13 | ) | 12.52 | 21.25 | (d) | 44,037 | 0.93 | (f) | 0.94 | (f) | (0.33 | )(f) | 70 | ||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 12.25 | (0.02 | ) | 1.14 | 1.12 | (1.75 | ) | 11.62 | 10.71 | (d) | 114,329 | 0.84 | (e) | 0.84 | (e) | (0.40 | )(e) | 25 | ||||||||||||||||||||||||||||||
Year ended 08/31/14 | 12.52 | (0.04 | ) | 1.66 | 1.62 | (1.89 | ) | 12.25 | 13.67 | (d) | 109,145 | 0.84 | 0.84 | (0.37 | ) | 79 | ||||||||||||||||||||||||||||||||
Year ended 08/31/13(o) | 11.48 | (0.03 | ) | 2.20 | 2.17 | (1.13 | ) | 12.52 | 21.25 | (d) | 68,425 | 0.83 | (f) | 0.84 | (f) | (0.23 | )(f) | 70 | ||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share, for fiscal years ended prior to August 31, 2013. |
| (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 $498,512, $9,432, $54,673, $105,194, $44,942 and $106,936 for Class A, Class B, Class C, 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 (loss) to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.25%, 0.25%, 0.27% and 0.54% for the six months ended February 28, 2015, and the years ended August 31, 2014, 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 0.96% and 0.93% for the six months ended February 28, 2015 and 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,104.00 | $ | 6.94 | $ | 1,018.20 | $ | 6.66 | 1.33 | % | ||||||||||||
| B | 1,000.00 | 1,104.20 | 6.94 | 1,018.20 | 6.66 | 1.33 | ||||||||||||||||||
| C | 1,000.00 | 1,100.70 | 10.63 | 1,014.68 | 10.19 | 2.04 | ||||||||||||||||||
| Y | 1,000.00 | 1,104.90 | 5.64 | 1,019.44 | 5.41 | 1.08 | ||||||||||||||||||
| R5 | 1,000.00 | 1,105.40 | 4.91 | 1,020.13 | 4.71 | 0.94 | ||||||||||||||||||
| R6 | 1,000.00 | 1,107.10 | 4.39 | 1,020.63 | 4.21 | 0.84 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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. |
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Semiannual Report to Shareholders
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February 28, 2015 | ||
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| Invesco Strategic Real Return Fund | ||||
Nasdaq: | ||||
| A: SRRAX n C: SRRCX n R: SRRQX n Y: SRRYX n R5: SRRFX n R6: SRRSX | ||||
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| 2 | Fund Performance | |||
| 3 | Letters to Shareholders | |||
| 4 | Schedule of Investments | |||
| 8 | Financial Statements | |||
| 10 | Notes to Financial Statements | |||
| 16 | Financial Highlights | |||
| 17 | Fund Expenses | |||
| 18 | Distribution Information | |||
| 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, 8/31/14 to 2/28/15, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
| Class A Shares | –0.46 | % | |||
| Class C Shares | –0.73 | ||||
| Class R Shares | –0.58 | ||||
| Class Y Shares | –0.23 | ||||
| Class R5 Shares | –0.23 | ||||
| Class R6 Shares | –0.23 | ||||
| Bank of America Merrill Lynch Current 10 Year Treasury Index▼ (Broad Market Index) | 4.14 | ||||
| Custom Strategic Real Return Indexn (Style-Specific Index) | –0.05 | ||||
| Lipper Inflation Protected Bond Fund Index¿ (Peer Group Index) | –1.32 |
Source(s): ▼Bloomberg L.P.; nInvesco, Bloomberg L.P., FactSet Research Systems Inc.,
S&P Dow Jones Indices LLC; ¿Lipper Inc.
The Bank of America Merrill Lynch Current 10 Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the US government having a maturity of approximately 10 years.
The Custom Strategic Real Return Index consists of 45% Bank of America Merrill Lynch US Inflation Linked Treasury Index, 30% S&P/LSTA Leveraged Loan Total Return Index and 25% Bank of America Merrill Lynch US High Yield Constrained Index.
The Lipper Inflation Protected Bond Fund Index is an index based on the total return of certain mutual funds within the Fund’s designated category as determined by Lipper.
The Bank of America Merrill Lynch US Inflation Linked Treasury Index is an unmanaged index composed of Treasury Inflation Protected Securities with at least $1 billion in outstanding face value, a remaining term to final maturity of greater than one year and that have interest and principal payments tied to inflation.
The S&P/LSTA Leveraged Loan Total Return Index is a weekly total-return index that tracks the current outstanding balance and spread over Libor for fully funded term loans.
The Bank of America Merrill Lynch US High Yield Constrained Index tracks the performance of below-investment-grade, US-dollar-denominated corporate bonds publicly issued in the US domestic market.
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
Cumulative Total Returns
As of 2/28/15, including maximum applicable sales charges
| Class A Shares | |||||
| Inception (4/30/14) | –0.62 | % | |||
| Class C Shares | |||||
| Inception (4/30/14) | 0.41 | % | |||
| Class R Shares | |||||
| Inception (4/30/14) | 1.78 | % | |||
| Class Y Shares | |||||
| Inception (4/30/14) | 2.26 | % | |||
| Class R5 Shares | |||||
| Inception (4/30/14) | 2.26 | % | |||
| Class R6 Shares | |||||
| Inception (4/30/14) | 2.26 | % | |||
Cumulative Total Returns
As of 12/31/14, the most recent calendar quarter end, including maximum applicable sales charges
| Class A Shares | |||||
| Inception (4/30/14) | –2.49 | % | |||
| Class C Shares | |||||
| Inception (4/30/14) | –1.46 | % | |||
| Class R Shares | |||||
| Inception (4/30/14) | –0.10 | % | |||
| Class Y Shares | |||||
| Inception (4/30/14) | 0.19 | % | |||
| Class R5 Shares | |||||
| Inception (4/30/14) | 0.19 | % | |||
| Class R6 Shares | |||||
| Inception (4/30/14) | 0.19 | % | |||
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 0.82%, 1.57%, 1.07%, 0.57%, 0.57%, and 0.57%, respectively.1,2 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 1.83%, 2.58%, 2.08%, 1.58%, 1.55% and 1.50%, 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, 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 April 30, 2015. See current prospectus for more information. |
| 2 | Total annual Fund operating expenses after any contractual fee waivers by the adviser in effect through at least June 30, 2016. See current prospectus for more information. |
| 2 Invesco Strategic Real Return Fund |
Letters to Shareholders
Bruce Crockett | Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invesco’s mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: ensuring that Invesco offers a diverse lineup of mutual funds that your financial adviser can use to strive to meet your financial needs as your investment goals change over time; monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management team’s investment performance within the context of the investment strategy described in the fund’s prospectus; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. |
We believe one of the most important services we provide our fund shareholders is the annual review of the funds’ advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
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 complete list of its investments as of the close of the reporting period. I hope you find this report of interest. Invesco’s efforts to help investors achieve their financial objectives include providing timely information about the markets, the economy and investing. 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. You can access information about your account by completing a simple, secure online registration. Click on the “Need to register” link in the “Account Access” box on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow you to obtain the same detailed information, monitor your account and create customizable watch lists. Also, they allow you to access investment insights from our investment leaders, market strategists, economists and retirement experts wherever you may be. |
In addition to the resources accessible on our website and through our mobile app, 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. Our goal is to provide you the information you want, when and where you want it.
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.
All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPhone and iPad are trademarks 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 Strategic Real Return Fund |
Schedule of Investments(a)
February 28, 2015
(Unaudited)
| Principal Amount | Value | |||||||
U.S. Treasury Securities–45.21% |
| |||||||
| U.S. Treasury Bills–0.06% | ||||||||
0.08%, 08/20/15(b)(c) | $ | 10,000 | $ | 9,997 | ||||
| U.S. Treasury Inflation — Indexed Notes–32.21%(d) | ||||||||
0.13%, 04/15/16 | 275,636 | 278,709 | ||||||
2.50%, 07/15/16 | 159,357 | 167,785 | ||||||
2.38%, 01/15/17 | 136,286 | 144,669 | ||||||
0.13%, 04/15/17 | 311,306 | 316,828 | ||||||
2.63%, 07/15/17 | 105,408 | 114,658 | ||||||
1.63%, 01/15/18 | 123,343 | 131,476 | ||||||
0.13%, 04/15/18 | 343,479 | 349,745 | ||||||
1.38%, 07/15/18 | 108,935 | 116,603 | ||||||
2.13%, 01/15/19 | 109,412 | 120,233 | ||||||
0.13%, 04/15/19 | 340,853 | 346,481 | ||||||
1.88%, 07/15/19 | 114,418 | 125,998 | ||||||
1.38%, 01/15/20 | 137,960 | 148,928 | ||||||
1.25%, 07/15/20 | 235,894 | 255,241 | ||||||
1.13%, 01/15/21 | 266,315 | 285,622 | ||||||
0.63%, 07/15/21 | 253,269 | 265,301 | ||||||
0.13%, 01/15/22 | 289,569 | 292,107 | ||||||
0.13%, 07/15/22 | 284,999 | 287,946 | ||||||
0.13%, 01/15/23 | 282,921 | 284,170 | ||||||
0.38%, 07/15/23 | 280,616 | 287,910 | ||||||
0.63%, 01/15/24 | 278,873 | 290,918 | ||||||
0.13%, 07/15/24 | 275,028 | 275,393 | ||||||
0.25%, 01/15/25 | 98,186 | 98,993 | ||||||
2.38%, 01/15/25 | 236,782 | 287,569 | ||||||
| 5,273,283 | ||||||||
| U.S. Treasury Inflation — Indexed Bonds–12.94%(d) | ||||||||
2.00%, 01/15/26 | 160,963 | 191,115 | ||||||
2.38%, 01/15/27 | 133,957 | 165,857 | ||||||
1.75%, 01/15/28 | 116,615 | 136,735 | ||||||
3.63%, 04/15/28 | 165,571 | 234,400 | ||||||
2.50%, 01/15/29 | 102,847 | 131,797 | ||||||
3.88%, 04/15/29 | 187,191 | 275,895 | ||||||
3.38%, 04/15/32 | 43,673 | 64,251 | ||||||
2.13%, 02/15/40 | 116,291 | 156,233 | ||||||
2.13%, 02/15/41 | 173,774 | 235,960 | ||||||
0.75%, 02/15/42 | 164,257 | 167,542 | ||||||
0.63%, 02/15/43 | 157,346 | 155,405 | ||||||
1.38%, 02/15/44 | 158,245 | 187,627 | ||||||
0.75%, 02/15/45 | 14,955 | 15,259 | ||||||
| 2,118,076 | ||||||||
Total U.S. Treasury Securities |
| 7,401,356 | ||||||
| Shares | Value | |||||||
Senior Loan Fund–30.35% |
| |||||||
| Fixed-Income Funds–30.35% | ||||||||
Invesco Floating Rate Fund–Class R6 (Cost $5,081,130)(e) | 638,567 | $ | 4,968,048 | |||||
Principal Amount | ||||||||
U.S. Dollar Denominated Bonds and Notes–23.08% |
| |||||||
| Aerospace & Defense–0.12% | ||||||||
Bombardier Inc. (Canada), Sr. Unsec. Notes, 7.50%, 03/15/25(f) | $ | 20,000 | 20,000 | |||||
| Airlines–0.19% | ||||||||
Air Canada (Canada), Sr. Unsec. Gtd. Notes, 7.75%, 04/15/21(f) | 25,000 | 26,844 | ||||||
American Airlines Group Inc., Sr. Unsec. Gtd. Notes, 4.63%, 03/01/20(f) | 5,000 | 5,031 | ||||||
| 31,875 | ||||||||
| Apparel Retail–0.25% | ||||||||
Men’s Wearhouse Inc. (The), Sr. Unsec. Gtd. Notes, 7.00%, 07/01/22(f) | 38,000 | 40,280 | ||||||
| Asset Management & Custody Banks–0.04% | ||||||||
Alphabet Holding Co., Inc., Sr. Unsec. PIK Global Notes, 8.50%, 11/01/17(g) | 7,000 | 6,895 | ||||||
| Auto Parts & Equipment–0.92% | ||||||||
Dana Holding Corp., Sr. Unsec. Notes, 5.38%, 09/15/21 | 125,000 | 131,562 | ||||||
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 12/15/24 | 18,000 | 18,855 | ||||||
| 150,417 | ||||||||
| Automotive Retail–0.01% | ||||||||
CST Brands, Inc., Sr. Unsec. Gtd. Global Notes, 5.00%, 05/01/23 | 2,000 | 2,080 | ||||||
| Broadcasting–0.16% | ||||||||
Sinclair Television Group Inc., Sr. Unsec. Gtd. Notes, 5.63%, 08/01/24(f) | 25,000 | 25,438 | ||||||
| Building Products–0.97% | ||||||||
Builders FirstSource Inc., Sr. Sec. Notes, 7.63%, 06/01/21(f) | 25,000 | 25,500 | ||||||
Gibraltar Industries Inc., Sr. Unsec. Gtd. Sub. Global Notes, 6.25%, 02/01/21 | 125,000 | 128,125 | ||||||
USG Corp., Sr. Unsec. Gtd. Notes, 5.50%, 03/01/25(f) | 5,000 | 5,137 | ||||||
| 158,762 | ||||||||
| Cable & Satellite–1.09% | ||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., Sr. Unsec. Gtd. Global Notes, 5.25%, 09/30/22 | 50,000 | 51,625 | ||||||
DISH DBS Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 05/01/20 | 125,000 | 126,719 | ||||||
| 178,344 | ||||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Strategic Real Return Fund
Principal Amount | Value | |||||||
| Casinos & Gaming–0.17% | ||||||||
Boyd Gaming Corp., Sr. Unsec. Gtd. Global Notes, 9.00%, 07/01/20 | $ | 25,000 | $ | 27,063 | ||||
| Coal & Consumable Fuels–0.04% | ||||||||
Peabody Energy Corp., Sr. Unsec. Gtd. Notes, 6.50%, 09/15/20 | 8,000 | 6,820 | ||||||
| Commercial Printing–0.04% | ||||||||
Multi-Color Corp., Sr. Unsec. Gtd. Notes, 6.13%, 12/01/22(f) | 6,000 | 6,255 | ||||||
| Computer & Electronics Retail–0.12% | ||||||||
Rent-A-Center, Inc., Sr. Unsec. Gtd. Global Notes, 4.75%, 05/01/21 | 22,000 | 19,030 | ||||||
| Construction & Engineering–0.02% | ||||||||
AECOM, Sr. Unsec. Gtd. Notes, 5.75%, 10/15/22(f) | 3,000 | 3,177 | ||||||
| Construction Machinery & Heavy Trucks–1.65% | ||||||||
Meritor Inc., Sr. Unsec. Gtd. Notes, 6.25%, 02/15/24 | 125,000 | 127,812 | ||||||
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21 | 82,000 | 83,435 | ||||||
Oshkosh Corp., Sr. Unsec. Gtd. Notes, 5.38%, 03/01/25(f) | 58,000 | 59,595 | ||||||
| 270,842 | ||||||||
| Construction Materials–0.25% | ||||||||
Building Materials Corp. of America, Sr. Unsec. Notes, 5.38%, 11/15/24(f) | 25,000 | 25,828 | ||||||
Unifrax I LLC/Unifrax Holding Co., Sr. Unsec. Gtd. Notes, 7.50%, 02/15/19(f) | 15,000 | 15,075 | ||||||
| 40,903 | ||||||||
| Consumer Finance–0.03% | ||||||||
Ally Financial Inc., Sr. Unsec. Global Notes, 5.13%, 09/30/24 | 4,000 | 4,240 | ||||||
| Data Processing & Outsourced Services–0.58% | ||||||||
First Data Corp., Sr. Unsec. Gtd. Sub. Global Notes, 11.75%, 08/15/21 | 81,000 | 94,466 | ||||||
| Department Stores–0.20% | ||||||||
1011778 BC ULC/ New Red Finance, Inc. (Canada), Sec. Notes, 6.00%, 04/01/22(f) | 32,000 | 33,360 | ||||||
| Distillers & Vintners–0.03% | ||||||||
Constellation Brands Inc., Sr. Unsec. Gtd. Notes, 4.75%, 11/15/24 | 5,000 | 5,363 | ||||||
| Gas Utilities–0.05% | ||||||||
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., | 4,000 | 4,090 | ||||||
Sr. Unsec. Global Notes, 5.50%, 06/01/24 | 4,000 | 4,080 | ||||||
| 8,170 | ||||||||
| General Merchandise Stores–0.16% | ||||||||
Family Tree Escrow LLC, Sr. Sec. Notes, 5.75%, 03/01/23(f) | 25,000 | 26,438 | ||||||
Principal Amount | Value | |||||||
| Health Care Facilities–0.87% | ||||||||
HCA, Inc., Sr. Unsec. Gtd. Notes, 5.38%, 02/01/25 | $ | 7,000 | $ | 7,464 | ||||
Tenet Healthcare Corp., Sr. Unsec. Global Notes, 6.75%, 02/01/20 | 125,000 | 134,687 | ||||||
| 142,151 | ||||||||
| Health Care Services–0.98% | ||||||||
MPH Acquisition Holdings LLC, Sr. Unsec. Gtd. Notes, 6.63%, 04/01/22(f) | 125,000 | 133,281 | ||||||
Omnicare Inc., Sr. Unsec. Gtd. Notes, 5.00%, 12/01/24 | 25,000 | 26,469 | ||||||
| 159,750 | ||||||||
| Home Improvement Retail–0.15% | ||||||||
Hillman Group Inc. (The), Sr. Unsec. Notes, 6.38%, 07/15/22(f) | 25,000 | 24,750 | ||||||
| Homebuilding–0.30% | ||||||||
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/21 | 25,000 | 24,562 | ||||||
K. Hovnanian Enterprises Inc., Sr. Unsec. Gtd. Notes, 7.00%, 01/15/19(f) | 25,000 | 23,750 | ||||||
| 48,312 | ||||||||
| Household Products–0.81% | ||||||||
Reynolds Group Issuer Inc./LLC, Sr. Unsec. Gtd. Global Notes, 8.25%, 02/15/21 | 125,000 | 132,187 | ||||||
| Independent Power Producers & Energy Traders–0.11% | ||||||||
Calpine Corp., Sr. Unsec. Global Notes, 5.38%, 01/15/23 | 9,000 | 9,158 | ||||||
5.50%, 02/01/24 | 9,000 | 9,056 | ||||||
| 18,214 | ||||||||
| Industrial Machinery–0.01% | ||||||||
EnPro Industries, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 09/15/22(f) | 2,000 | 2,065 | ||||||
| Integrated Oil & Gas–0.17% | ||||||||
California Resources Corp., Sr. Unsec. Gtd. Notes, 5.50%, 09/15/21(f) | 30,000 | 27,525 | ||||||
| Integrated Telecommunication Services–0.10% | ||||||||
CenturyLink, Inc., Series V, Sr. Unsec. Global Notes, 5.63%, 04/01/20 | 15,000 | 16,130 | ||||||
| Internet Software & Services–1.47% | ||||||||
CyrusOne L.P./CyrusOne Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 11/15/22 | 75,000 | 79,875 | ||||||
EarthLink Holdings Corp., Sr. Unsec. Gtd. Global Notes, 8.88%, 05/15/19 | 102,000 | 105,570 | ||||||
Equinix Inc., Sr. Unsec. Notes, 5.38%, 01/01/22 | 52,000 | 54,600 | ||||||
| 240,045 | ||||||||
| Metal & Glass Containers–0.40% | ||||||||
Berry Plastics Corp., Sec. Gtd. Notes, 5.50%, 05/15/22 | 63,000 | 66,150 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Strategic Real Return Fund
Principal Amount | Value | |||||||
| Oil & Gas Equipment & Services–0.70% | ||||||||
Exterran Partners, L.P./EXLP Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 04/01/21 | $ | 123,000 | $ | 114,390 | ||||
| Oil & Gas Exploration & Production–1.40% | ||||||||
Antero Resources Corp., Sr. Unsec. Gtd. Notes, 5.13%, 12/01/22(f) | 16,000 | 15,840 | ||||||
Antero Resources Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.38%, 11/01/21 | 10,000 | 10,100 | ||||||
Carrizo Oil & Gas, Inc., | 10,000 | 10,475 | ||||||
Sr. Unsec. Gtd. Notes, 7.50%, 09/15/20 | 17,000 | 17,510 | ||||||
Chaparral Energy, Inc., Sr. Unsec. Gtd. Global Notes, 9.88%, 10/01/20 | 6,000 | 4,890 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 6.63%, 08/15/20 | 8,000 | 8,760 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, | 11,000 | 10,890 | ||||||
5.88%, 05/01/22 | 7,000 | 7,455 | ||||||
Concho Resources Inc., | 3,000 | 3,135 | ||||||
5.50%, 04/01/23 | 13,000 | 13,585 | ||||||
Sr. Unsec. Gtd. Notes, 6.50%, 01/15/22 | 3,000 | 3,225 | ||||||
Denbury Resources Inc., Sr. Unsec. Gtd. Sub. Notes, 5.50%, 05/01/22 | 18,000 | 16,920 | ||||||
Diamondback Energy, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 10/01/21 | 12,000 | 12,660 | ||||||
Laredo Petroleum, Inc., Sr. Unsec. Gtd. Global Notes, | 6,000 | 6,225 | ||||||
9.50%, 02/15/19 | 11,000 | 11,522 | ||||||
Newfield Exploration Co., Sr. Unsec. Sub. Notes, 6.88%, 02/01/20 | 9,000 | 9,338 | ||||||
Parsley Energy LLC/Parsley Finance Corp., Sr. Unsec. Notes, 7.50%, 02/15/22(f) | 12,000 | 12,360 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 5.00%, 08/15/22 | 7,000 | 7,175 | ||||||
SandRidge Energy, Inc., Sr. Unsec. Gtd. Global Notes, | 10,000 | 7,450 | ||||||
7.50%, 02/15/23 | 3,000 | 2,175 | ||||||
8.75%, 01/15/20 | 5,000 | 3,900 | ||||||
SM Energy Co., | 5,000 | 5,175 | ||||||
Sr. Unsec. Notes, 6.13%, 11/15/22(f) | 9,000 | 9,270 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Notes, | 7,000 | 6,965 | ||||||
5.75%, 03/15/21 | 12,000 | 11,940 | ||||||
| 228,940 | ||||||||
| Oil & Gas Storage & Transportation–0.55% | ||||||||
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20 | 65,000 | 75,075 | ||||||
Principal Amount | Value | |||||||
| Oil & Gas Storage & Transportation–(continued) | ||||||||
MarkWest Energy Partners, L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, | $ | 4,000 | $ | 4,130 | ||||
6.50%, 08/15/21 | 8,000 | 8,520 | ||||||
Tesoro Logistics L.P./Tesoro Logistics Finance Corp., Sr. Unsec. Gtd. Notes, 6.25%, 10/15/22(f) | 2,000 | 2,115 | ||||||
| 89,840 | ||||||||
| Packaged Foods & Meats–0.05% | ||||||||
WhiteWave Foods Co. (The), Sr. Unsec. Gtd. Notes, 5.38%, 10/01/22 | 7,000 | 7,525 | ||||||
| Paper Packaging–0.10% | ||||||||
Graphic Packaging International Inc., Sr. Unsec. Gtd. Notes, | 2,000 | 2,093 | ||||||
4.88%, 11/15/22 | 14,000 | 14,647 | ||||||
| 16,740 | ||||||||
| Paper Products–0.05% | ||||||||
Mercer International Inc., Sr. Unsec. Gtd. Notes, 7.00%, 12/01/19(f) | 7,000 | 7,385 | ||||||
| Personal Products–0.15% | ||||||||
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18 | 24,000 | 25,320 | ||||||
| Pharmaceuticals–0.15% | ||||||||
Valeant Pharmaceuticals International, Inc., Sr. Unsec. Gtd. Notes, 5.50%, 03/01/23(f) | 25,000 | 25,344 | ||||||
| Renewable Electricity–0.07% | ||||||||
TerraForm Power Operating, LLC, Sr. Unsec. Gtd. Notes, 5.88%, 02/01/23(f) | 11,000 | 11,495 | ||||||
| Semiconductor Equipment–0.71% | ||||||||
Amkor Technology Inc., Sr. Unsec. Global Notes, 6.38%, 10/01/22 | 112,000 | 117,040 | ||||||
| Specialized Consumer Services–0.16% | ||||||||
ServiceMaster Co., LLC (The), Sr. Unsec. Gtd. Global Notes, 7.00%, 08/15/20 | 25,000 | 26,719 | ||||||
| Specialized Finance–1.70% | ||||||||
Aircastle Ltd., Sr. Unsec. Global Notes, 7.63%, 04/15/20 | 125,000 | 145,312 | ||||||
CIT Group Inc., Sr. Unsec. Global Notes, 5.00%, 08/15/22 | 125,000 | 133,438 | ||||||
| 278,750 | ||||||||
| Specialized REIT’s–0.80% | ||||||||
Crown Castle International Corp., Sr. Unsec. Notes, 4.88%, 04/15/22 | 125,000 | 131,250 | ||||||
| Specialty Stores–0.35% | ||||||||
Michaels Stores Inc., Sr. Unsec. Gtd. Sub. Notes, 5.88%, 12/15/20(f) | 55,000 | 56,856 | ||||||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Strategic Real Return Fund
Principal Amount | Value | |||||||
| Steel–0.29% | ||||||||
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 10/01/21 | $ | 12,000 | $ | 10,500 | ||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Notes, 6.25%, 03/01/21 | 25,000 | 27,282 | ||||||
Cliffs Natural Resources Inc., Sr. Unsec. Global Notes, 5.90%, 03/15/20 | 13,000 | 9,490 | ||||||
| 47,272 | ||||||||
| Technology Distributors–0.05% | ||||||||
CDW LLC/CDW Finance Corp., Sr. Unsec. Gtd. Notes, 5.00%, 09/01/23 | 8,000 | 8,080 | ||||||
| Trading Companies & Distributors–0.95% | ||||||||
International Lease Finance Corp., Sr. Unsec. Notes, 8.25%, 12/15/20 | 125,000 | 155,937 | ||||||
| Wireless Telecommunication Services–2.39% | ||||||||
Intelsat Luxembourg S.A. (Luxembourg), Sr. Unsec. Gtd. Global Bonds, 7.75%, 06/01/21 | 125,000 | 116,406 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/28 | 20,000 | 18,900 | ||||||
Principal Amount | Value | |||||||
| Wireless Telecommunication Services–(continued) | ||||||||
Sprint Communications Inc., Sr. Unsec. Global Notes, 6.00%, 11/15/22 | $ | 125,000 | $ | 121,094 | ||||
T-Mobile USA, Inc., Sr. Unsec. Gtd. Global Bonds, 6.84%, 04/28/23 | 125,000 | 134,375 | ||||||
| 390,775 | ||||||||
Total U.S. Dollar Denominated Bonds and Notes |
| 3,777,155 | ||||||
| Shares | ||||||||
Money Market Funds–2.14% |
| |||||||
Liquid Assets Portfolio–Institutional Class(h) | 175,136 | 175,136 | ||||||
Premier Portfolio–Institutional Class(h) | 175,135 | 175,135 | ||||||
Total Money Market Funds |
| 350,271 | ||||||
TOTAL INVESTMENTS–100.78% |
| 16,496,830 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.78)% |
| (127,188 | ) | |||||
NET ASSETS–100.00% |
| $ | 16,369,642 | |||||
Investment Abbreviations:
| Gtd. | – Guaranteed | |
| PIK | – Payment in Kind | |
| 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) | 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. |
| (c) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
| (d) | Principal amount of security and interest payments are adjusted for inflation. See Note 1I. |
| (e) | Invesco Floating Rate Fund and the Fund are affiliated by either having the same investment adviser or an investment adviser under common control with the Fund’s investment adviser. The value of this security as of February 28, 2015 represented 30.35% of the Fund’s Net Assets. See Note 5. |
| (f) | 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, 2015 was $669,994, which represented 4.09% of the Fund’s Net Assets. |
| (g) | All or a portion of this security is Payment-in-Kind. |
| Issuer | Cash Rate | PIK Rate | ||||||
Alphabet Holding Co., Inc. | 7.75 | % | 8.50 | % | ||||
| (h) | 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, 2015
U.S. Treasury Securities | 45.2 | % | ||
Common Stocks | 30.3 | |||
U.S. Dollar Denominated Bonds and Notes | 23.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 1.4 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Strategic Real Return Fund
Statement of Assets and Liabilities
February 28, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $10,994,585) | $ | 11,178,511 | ||
Investments in affiliates, at value (Cost $5,431,401) | 5,318,319 | |||
Total investments, at value (Cost $16,425,986) | 16,496,830 | |||
Receivable for: | ||||
Investments sold | 130,852 | |||
Fund shares sold | 2,946 | |||
Dividends and interest | 92,491 | |||
Investment for trustee deferred compensation and retirement plans | 2,601 | |||
Other assets | 19,928 | |||
Total assets | 16,745,648 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 320,313 | |||
Fund shares reacquired | 506 | |||
Variation margin — futures | 156 | |||
Accrued fees to affiliates | 7,529 | |||
Accrued trustees’ and officers’ fees and benefits | 2,979 | |||
Accrued other operating expenses | 41,922 | |||
Trustee deferred compensation and retirement plans | 2,601 | |||
Total liabilities | 376,006 | |||
Net assets applicable to shares outstanding | $ | 16,369,642 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 16,521,104 | ||
Undistributed net investment income | (131,676 | ) | ||
Undistributed net realized gain (loss) | (90,972 | ) | ||
Net unrealized appreciation | 71,186 | |||
| $ | 16,369,642 | |||
Net Assets: |
| |||
Class A | $ | 8,520,035 | ||
Class C | $ | 425,366 | ||
Class R | $ | 9,892 | ||
Class Y | $ | 7,394,557 | ||
Class R5 | $ | 9,896 | ||
Class R6 | $ | 9,896 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 862,043 | |||
Class C | 43,072 | |||
Class R | 1,001 | |||
Class Y | 748,001 | |||
Class R5 | 1,001 | |||
Class R6 | 1,001 | |||
Class A: | ||||
Net asset value per share | $ | 9.88 | ||
Maximum offering price per share | ||||
(Net asset value of $9.88 ¸ 97.50%) | $ | 10.13 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 9.88 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 9.88 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 9.89 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 9.89 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 9.89 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Strategic Real Return Fund
Statement of Operations
For the six months ended February 28, 2015
(Unaudited)
Investment income: |
| |||
Dividends from affiliates | $ | 121,350 | ||
Interest | 34,901 | |||
Total investment income | 156,251 | |||
Expenses: | ||||
Advisory fees | 31,133 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 3,137 | |||
Distribution fees: | ||||
Class A | 9,899 | |||
Class C | 1,559 | |||
Class R | 24 | |||
Transfer agent fees — A, C, R and Y | 2,176 | |||
Transfer agent fees — R5 | 5 | |||
Transfer agent fees — R6 | 5 | |||
Trustees’ and officers’ fees and benefits | 10,802 | |||
Registration and filing fees | 46,440 | |||
Reports to shareholders | 9,500 | |||
Professional services fees | 23,559 | |||
Other | 10,650 | |||
Total expenses | 173,684 | |||
Less: Fees waived and expenses reimbursed | (135,719 | ) | ||
Net expenses | 37,965 | |||
Net investment income | 118,286 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (79,457 | ) | ||
Futures contracts | (13,948 | ) | ||
| (93,405 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (71,697 | ) | ||
Futures contracts | 69 | |||
| (71,628 | ) | |||
Net realized and unrealized gain (loss) | (165,033 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (46,747 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Strategic Real Return Fund
Statement of Changes in Net Assets
For the six months ended February 28, 2015 and the period April 30, 2014 (commencement date) through August 31, 2014
(Unaudited)
February 28, 2015 | April 30, 2014 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 118,286 | $ | 224,456 | ||||
Net realized gain (loss) | (93,405 | ) | 4,055 | |||||
Change in net unrealized appreciation (depreciation) | (71,628 | ) | 142,814 | |||||
Net increase (decrease) in net assets resulting from operations | (46,747 | ) | 371,325 | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (145,714 | ) | (101,299 | ) | ||||
Class C | (4,265 | ) | (114 | ) | ||||
Class R | (169 | ) | (127 | ) | ||||
Class Y | (144,589 | ) | (104,346 | ) | ||||
Class R5 | (193 | ) | (140 | ) | ||||
Class R6 | (193 | ) | (140 | ) | ||||
Total distributions from net investment income | (295,123 | ) | (206,166 | ) | ||||
Share transactions–net: | ||||||||
Class A | 812,419 | 7,797,368 | ||||||
Class C | 372,708 | 53,818 | ||||||
Class R | — | 10,010 | ||||||
Class Y | — | 7,480,010 | ||||||
Class R5 | — | 10,010 | ||||||
Class R6 | — | 10,010 | ||||||
Net increase in net assets resulting from share transactions | 1,185,127 | 15,361,226 | ||||||
Net increase in net assets | 843,257 | 15,526,385 | ||||||
Net assets: | ||||||||
Beginning of period | 15,526,385 | — | ||||||
End of period (includes undistributed net investment income of $(131,676) and $45,161, respectively) | $ | 16,369,642 | $ | 15,526,385 | ||||
Notes to Financial Statements
February 28, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Strategic Real Return 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 thirteen 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 to mitigate the effects of unanticipated inflation and to provide current income.
The Fund currently consists of six different classes of shares: Class A, Class C, Class R, Class Y, Class R5 and Class R6. Class 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 — Securities, including restricted securities, are valued according to the following policy. |
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a
10 Invesco Strategic Real Return Fund
particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked 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 asked 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/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Fund’s investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from net investment income, if any, are declared and paid monthly. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
11 Invesco Strategic Real Return Fund
| 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. | Treasury Inflation-Protected Securities — The Fund may invest in Treasury Inflation-Protected Securities (“TIPS”). TIPS are fixed income securities whose principal value is periodically adjusted to the rate of inflation. The principal value of TIPS will be adjusted upward or downward, and any increase or decrease in the principal amount of TIPS will be included as interest income in the Statement of Operations, even though investors do not receive their principal until maturity. |
| 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. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
| K. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (“Counterparties”) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
| L. | 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 Counterparties 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 |
12 Invesco Strategic Real Return Fund
| 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. | 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 $1 billion | 0 | .40% | ||||
Next $2.5 billion | 0 | .35% | ||||
Over $3.5 billion | 0 | .33% | ||||
For the six months ended February 28, 2015, the effective advisory fees incurred by the Fund was 0.40%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc., Invesco Canada Ltd. and Invesco PowerShares Capital Management LLC (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Affiliated Sub-Adviser(s).
The Adviser has 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 C, Class R, Class Y, Class R5 and Class R6 shares to 0.78%, 1.53%, 1.03%, 0.53%, 0.53% and 0.53%, respectively, of average daily net assets. Effective May 1, 2015 through December 31, 2015, the Adviser has 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 C, Class R, Class Y, Class R5 and Class R6 shares to 0.79%, 1.54%, 1.04%, 0.54%, 0.54% and 0.54%, 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. Acquired Fund Fees and Expenses are not operating expenses of the Fund directly, but are fees and expenses, including management fees, of the investment companies in which the Fund invests. As a result, the total annual fund operating expenses after expense reimbursement may exceed the expense limits above. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives on the Fund’s investments in certain affiliated funds.
For the six months ended February 28, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $133,533 and reimbursed class level expenses of $1,108, $44, $1, $1,023, $5 and $5 of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended February 28, 2015, 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, 2015, 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, 1.00% of the average daily net assets of Class C shares and 0.50% of the average
13 Invesco Strategic Real Return Fund
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, 2015, 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, 2015, IDI advised the Fund that IDI retained $1,093 in front-end sales commissions from the sale of Class A shares.
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, 2015. 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 | $ | 5,318,319 | $ | — | $ | — | $ | 5,318,319 | ||||||||
U.S. Treasury Securities | — | 7,401,356 | — | 7,401,356 | ||||||||||||
Corporate Debt Securities | — | 3,777,155 | — | 3,777,155 | ||||||||||||
| 5,318,319 | 11,178,511 | — | 16,496,830 | |||||||||||||
Futures Contracts* | 342 | — | — | 342 | ||||||||||||
Total Investments | $ | 5,318,661 | $ | 11,178,511 | $ | — | $ | 16,497,172 | ||||||||
| * | 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, 2015:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Interest rate risk: | ||||||||
Futures contracts(a) | $ | 342 | $ | — | ||||
| (a) | Includes cumulative appreciation 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, 2015
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 Contracts | ||||
Realized Gain (Loss): | ||||
Interest rate risk | $ | (13,948 | ) | |
Change in Unrealized Appreciation: | ||||
Interest rate risk | 69 | |||
Total | $ | (13,879 | ) | |
14 Invesco Strategic Real Return Fund
The table below summarizes the average notional value futures contracts outstanding during the period.
| Futures Contracts | ||||
Average notional value | $ | 445,112 | ||
| Open Futures Contracts — Interest Rate Risk | ||||||||||||||||||||
| Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
U.S. Treasury 10 Year Notes | Short | 1 | June-2015 | $ | (127,797 | ) | $ | 342 | ||||||||||||
NOTE 5—Investments in Affiliates
The Fund’s Adviser and the adviser for Invesco Floating Rate Fund are subsidiaries of Invesco Ltd. and therefore, Invesco Floating Rate Fund is considered to be affiliated with the Fund. The following is a summary of the transactions in, and earnings from, investments in Invesco Floating Rate Fund for the six months ended February 28, 2015.
Value 08/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain (Loss) | Value 02/28/15 | Dividend Income | ||||||||||||||||||||||
Invesco Floating Rate Fund | $ | 4,952,598 | $ | 121,551 | $ | — | $ | (106,101 | ) | $ | — | $ | 4,968,048 | $ | 121,325 | |||||||||||||
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. The Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund’s total assets.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from 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 loss carryforwards will retain their character as either short-term or long-term capital losses. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of August 31, 2014.
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, 2015 was $1,456,697 and $1,536,552, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $1,622,856 and $441,432, 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 | $ | 247,581 | ||
Aggregate unrealized (depreciation) of investment securities | (193,967 | ) | ||
Net unrealized appreciation of investment securities | $ | 53,614 | ||
Cost of investments for tax purposes is $16,443,216.
15 Invesco Strategic Real Return Fund
NOTE 10—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended February 28, 2015(a) | April 30, 2014 (commencement date) through August 31, 2014 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 89,067 | $ | 877,440 | 783,367 | $ | 7,836,144 | ||||||||||
Class C | 40,177 | 396,652 | 5,340 | 53,818 | ||||||||||||
Class R | — | — | 1,001 | 10,010 | ||||||||||||
Class Y | — | — | 748,001 | 7,480,010 | ||||||||||||
Class R5 | — | — | 1,001 | 10,010 | ||||||||||||
Class R6 | — | — | 1,001 | 10,010 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,022 | 10,011 | 165 | 1,666 | ||||||||||||
Class C | 420 | 4,112 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (7,578 | ) | (75,032 | ) | (4,000 | ) | (40,442 | ) | ||||||||
Class C | (2,865 | ) | (28,056 | ) | — | — | ||||||||||
Net increase in share activity | 120,243 | $ | 1,185,127 | 1,535,876 | $ | 15,361,226 | ||||||||||
| (a) | 91% of the outstanding shares of the Fund are owned by the Adviser. |
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 (both | Less: Total from investment operations | Dividends from net investment income | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net to average | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | $ | 10.11 | $ | 0.07 | $ | (0.12 | ) | $ | (0.05 | ) | $ | (0.18 | ) | $ | 9.88 | (0.46 | )% | $ | 8,520 | 0.59 | %(d)(e) | 2.33 | %(d)(e) | 1.42 | %(d)(e) | 13 | % | |||||||||||||||||||||||||||||||||
Year ended 08/31/14(f) | 10.00 | 0.14 | 0.10 | 0.24 | (0.13 | ) | 10.11 | 2.44 | 7,880 | 0.59 | (g) | 2.87 | (g) | 4.21 | (g) | 13 | ||||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.10 | 0.03 | (0.11 | ) | (0.08 | ) | (0.14 | ) | 9.88 | (0.73 | ) | 425 | 1.34 | (d)(e) | 3.08 | (d)(e) | 0.67 | (d)(e) | 13 | |||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/14(f) | 10.00 | 0.12 | 0.09 | 0.21 | (0.11 | ) | 10.10 | 2.14 | 54 | 1.34 | (g) | 3.62 | (g) | 3.46 | (g) | 13 | ||||||||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.11 | 0.06 | (0.12 | ) | (0.06 | ) | (0.17 | ) | 9.88 | (0.58 | ) | 10 | 0.84 | (d)(e) | 2.58 | (d)(e) | 1.17 | (d)(e) | 13 | |||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/14(f) | 10.00 | 0.14 | 0.10 | 0.24 | (0.13 | ) | 10.11 | 2.37 | 10 | 0.84 | (g) | 3.12 | (g) | 3.96 | (g) | 13 | ||||||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.11 | 0.08 | (0.11 | ) | (0.03 | ) | (0.19 | ) | 9.89 | (0.23 | ) | 7,395 | 0.34 | (d)(e) | 2.08 | (d)(e) | 1.67 | (d)(e) | 13 | |||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/14(f) | 10.00 | 0.15 | 0.10 | 0.25 | (0.14 | ) | 10.11 | 2.50 | 7,563 | 0.34 | (g) | 2.62 | (g) | 4.46 | (g) | 13 | ||||||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.11 | 0.08 | (0.11 | ) | (0.03 | ) | (0.19 | ) | 9.89 | (0.23 | ) | 10 | 0.34 | (d)(e) | 2.16 | (d)(e) | 1.67 | (d)(e) | 13 | |||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/14(f) | 10.00 | 0.15 | 0.10 | 0.25 | (0.14 | ) | 10.11 | 2.50 | 10 | 0.34 | (g) | 2.68 | (g) | 4.46 | (g) | 13 | ||||||||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 02/28/15 | 10.11 | 0.08 | (0.11 | ) | (0.03 | ) | (0.19 | ) | 9.89 | (0.23 | ) | 10 | 0.34 | (d)(e) | 2.16 | (d)(e) | 1.67 | (d)(e) | 13 | |||||||||||||||||||||||||||||||||||||||||
Year ended 08/31/14(f) | 10.00 | 0.15 | 0.10 | 0.25 | (0.14 | ) | 10.11 | 2.50 | 10 | 0.34 | (g) | 2.68 | (g) | 4.46 | (g) | 13 | ||||||||||||||||||||||||||||||||||||||||||||
| (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 $7,984, $314, $10, $7,367, $10 and $10 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | In addition to the fees and expenses which the Fund bears directly; the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Because the underlying funds have varied expenses and fee levels and the Fund may own different proportions at different times, the amount of fees and expenses incurred indirectly by the Fund will vary. Estimated underlying fund expenses are not expenses that are incurred directly by your Fund. They are expenses that are incurred directly by the underlying funds and are deducted from the value of the funds your Fund invests in. The effect of the estimated underlying fund expenses that you bear indirectly is included in your Fund’s total return. Estimated acquired fund fees from underlying funds were 0.21%. |
| (f) | Commencement date of April 30, 2014. |
| (g) | Annualized |
16 Invesco Strategic Real Return 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, 2014 through February 28, 2015.
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 (09/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
| Ending Account Value (02/28/15)1 | Expenses Paid During Period2 | Ending Account Value (02/28/15) | Expenses Paid During Period2 | |||||||||||||||||||||
| A | $ | 1,000.00 | $ | 995.40 | $ | 2.92 | $ | 1,021.87 | $ | 2.96 | 0.59 | % | ||||||||||||
| C | 1,000.00 | 992.70 | 6.62 | 1,018.15 | 6.71 | 1.34 | ||||||||||||||||||
| R | 1,000.00 | 994.20 | 4.15 | 1,020.63 | 4.21 | 0.84 | ||||||||||||||||||
| Y | 1,000.00 | 997.70 | 1.68 | 1,023.11 | 1.71 | 0.34 | ||||||||||||||||||
| R5 | 1,000.00 | 997.70 | 1.68 | 1,023.11 | 1.71 | 0.34 | ||||||||||||||||||
| R6 | 1,000.00 | 997.70 | 1.68 | 1,023.11 | 1.71 | 0.34 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period September 1, 2014 through February 28, 2015, 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 Strategic Real Return Fund
Distribution Information
Correction Notice
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 of 2014. 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.
| Net Income | Gain from Sale of Securities | Return of Principal | Total Distribution | |||||||||||||||
| 12/12/2014 | Class A | $ | 0.0129 | $ | 0.000 | $ | 0.0206 | $ | 0.0335 | |||||||||
| 12/12/2014 | Class C | $ | 0.0067 | $ | 0.000 | $ | 0.0206 | $ | 0.0273 | |||||||||
| 12/12/2014 | Class R | $ | 0.0108 | $ | 0.000 | $ | 0.0206 | $ | 0.0314 | |||||||||
| 12/12/2014 | Class Y | $ | 0.0149 | $ | 0.000 | $ | 0.0206 | $ | 0.0355 | |||||||||
| 12/12/2014 | Class R5 | $ | 0.0149 | $ | 0.000 | $ | 0.0206 | $ | 0.0355 | |||||||||
| 12/12/2014 | Class R6 | $ | 0.0149 | $ | 0.000 | $ | 0.0206 | $ | 0.0355 | |||||||||
Please note that the information in the preceding chart is for financial accounting purposes only. Shareholders should be aware that the tax treatment of distributions likely differs from GAAP treatment. The tax treatment of distributions was set forth in a Form 1099-DIV for the 2014 calendar year. This information is being provided to comply with certain Securities and Exchange Commission requirements.
18 Invesco Strategic Real Return 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 SRR-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, 2015, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of February 12, 2015 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 8, 2015 | |
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By: | /s/ Philip A. Taylor | |
| Philip A. Taylor | ||
| Principal Executive Officer | ||
| Date: | May 8, 2015 | |
| By: | /s/ Sheri Morris | |
| Sheri Morris | ||
| Principal Financial Officer | ||
| Date: | May 8, 2015 | |
EXHIBIT INDEX
| 12(a) (1) | Not applicable. | |
| 12(a) (2) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
| 12(a) (3) | Not applicable. | |
| 12(b) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. | |