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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 811-05426
AIM Investment Funds (Invesco Investment Funds)
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Name and address of agent for service)
Registrant’s telephone number, including area code: (713) 626-1919
Date of fiscal year end: 10/31
Date of reporting period: 4/30/15
Item 1. Report to Stockholders.
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco All Cap Market Neutral Fund | ||||
Nasdaq: | ||||
A: CPNAX ¡ C: CPNCX ¡ R: CPNRX ¡ Y: CPNYX ¡ R5: CPNFX ¡ R6: CPNSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
10 Financial Statements | ||||
13 Notes to Financial Statements | ||||
20 Financial Highlights | ||||
21 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||
Fund vs. Indexes | ||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | –4.58 | % | ||
Class C Shares | –4.98 | |||
Class R Shares | –4.68 | |||
Class Y Shares | –4.38 | |||
Class R5 Shares | –4.38 | |||
Class R6 Shares | –4.38 | |||
Citigroup 90-Day Treasury Bill Indexq (Broad Market/Style-Specific Index) | 0.01 | |||
Lipper Alternative Equity Market Neutral Indexn (Peer Group Index) | 0.24 | |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc. |
| |||
The Citigroup 90-Day Treasury Bill Index is an unmanaged index representative of three-month Treasury bills. |
| |||
The Lipper Alternative Equity Market Neutral Index is an unmanaged index considered representative of funds that employ portfolio strategies generating consistent returns in both up and down markets by selecting positions with a total net market exposure of zero. | ||||
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.
|
|
Average Annual Total Returns | ||||||
As of 4/30/15, including maximum applicable sales charges | ||||||
Class A Shares | ||||||
Inception (12/17/13) | –2.57 | % | ||||
1 Year | –7.27 | |||||
Class C Shares | ||||||
Inception (12/17/13) | 0.80 | % | ||||
1 Year | –3.48 | |||||
Class R Shares | ||||||
Inception (12/17/13) | 1.31 | % | ||||
1 Year | –2.02 | |||||
Class Y Shares | ||||||
Inception (12/17/13) | 1.82 | % | ||||
1 Year | –1.54 | |||||
Class R5 Shares | ||||||
Inception (12/17/13) | 1.82 | % | ||||
1 Year | –1.54 | |||||
Class R6 Shares | ||||||
Inception (12/17/13) | 1.82 | % | ||||
1 Year | –1.54 |
Average Annual Total Returns | ||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | ||||||
Class A Shares | ||||||
Inception (12/17/13) | –0.37 | % | ||||
1 Year | –2.14 | |||||
Class C Shares | ||||||
Inception (12/17/13) | 3.33 | % | ||||
1 Year | 1.76 | |||||
Class R Shares | ||||||
Inception (12/17/13) | 3.87 | % | ||||
1 Year | 3.24 | |||||
Class Y Shares | ||||||
Inception (12/17/13) | 4.41 | % | ||||
1 Year | 3.83 | |||||
Class R5 Shares | ||||||
Inception (12/17/13) | 4.41 | % | ||||
1 Year | 3.83 | |||||
Class R6 Shares | ||||||
Inception (12/17/13) | 4.41 | % | ||||
1 Year | 3.83 |
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 1.62%, 2.37%, 1.87%, 1.37%, 1.37% and 1.37%, 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 4.37%, 5.12%, 4.62%, 4.12%, 4.09% and 4.08%, 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 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco All Cap Market Neutral 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 seirvices 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 |
PhilipTaylor | 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 All Cap Market Neutral Fund |
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–88.06% |
| |||||||
Aerospace & Defense–1.37% | ||||||||
Ducommun Inc.(b) | 3,500 | $ | 106,400 | |||||
Huntington Ingalls Industries Inc. | 1,550 | 203,964 | ||||||
310,364 | ||||||||
Agricultural Products–1.37% | ||||||||
Archer-Daniels-Midland Co. | 6,350 | 310,388 | ||||||
Airlines–1.32% | ||||||||
JetBlue Airways Corp.(b) | 14,600 | 299,738 | ||||||
Alternative Carriers–1.03% | ||||||||
Inteliquent, Inc. | 12,300 | 233,823 | ||||||
Aluminum–0.05% | ||||||||
Century Aluminum Co.(b) | 950 | 12,246 | ||||||
Apparel Retail–0.16% | ||||||||
Tilly’s Inc.–Class A(b) | 2,700 | 36,018 | ||||||
Apparel, Accessories & Luxury Goods–0.16% | ||||||||
Perry Ellis International, Inc.(b) | 1,500 | 35,880 | ||||||
Application Software–0.27% | ||||||||
Aware, Inc. | 4,000 | 16,800 | ||||||
CDK Global Inc. | 950 | 45,524 | ||||||
62,324 | ||||||||
Auto Parts & Equipment–0.94% | ||||||||
China Automotive Systems, Inc. (China) | 8,600 | 63,210 | ||||||
Tower International Inc.(b) | 5,800 | 149,988 | ||||||
213,198 | ||||||||
Biotechnology–12.23% | ||||||||
Acorda Therapeutics Inc.(b) | 6,200 | 186,434 | ||||||
Anacor Pharmaceuticals, Inc.(b) | 5,800 | 305,602 | ||||||
BioSpecifics Technologies Corp.(b) | 1,800 | 68,958 | ||||||
Eagle Pharmaceuticals, Inc.(b) | 1,200 | 63,240 | ||||||
Emergent Biosolutions, Inc.(b) | 1,600 | 47,504 | ||||||
Infinity Pharmaceuticals, Inc.(b) | 18,150 | 229,960 | ||||||
MacroGenics, Inc.(b) | 9,600 | 274,656 | ||||||
Medivation Inc.(b) | 900 | 108,666 | ||||||
NewLink Genetics Corp.(b) | 6,350 | 283,210 | ||||||
PDL BioPharma Inc. | 15,650 | 104,386 | ||||||
Prothena Corp. PLC (Ireland)(b) | 5,950 | 192,840 | ||||||
Repligen Corp.(b) | 10,250 | 302,477 | ||||||
Sangamo BioSciences, Inc.(b) | 19,550 | 241,833 | ||||||
United Therapeutics Corp.(b) | 2,300 | 367,287 | ||||||
2,777,053 | ||||||||
Cable & Satellite–0.37% | ||||||||
Cablevision Systems Corp.–Class A | 3,750 | 74,925 | ||||||
Comcast Corp.–Class A | 150 | 8,664 | ||||||
83,589 |
Shares | Value | |||||||
Casinos & Gaming–0.92% | ||||||||
Isle of Capri Casinos, Inc.(b) | 14,650 | $ | 208,323 | |||||
Coal & Consumable Fuels–0.59% | ||||||||
Peabody Energy Corp. | 28,400 | 134,332 | ||||||
Commodity Chemicals–1.69% | ||||||||
LyondellBasell Industries N.V.–Class A | 3,700 | 383,024 | ||||||
Communications Equipment–2.05% | ||||||||
Black Box Corp. | 4,150 | 82,585 | ||||||
InterDigital, Inc. | 3,750 | 205,200 | ||||||
Polycom, Inc.(b) | 13,650 | 178,132 | ||||||
465,917 | ||||||||
Computer & Electronics Retail–1.28% | ||||||||
Best Buy Co., Inc. | 8,350 | 289,327 | ||||||
Construction & Engineering–0.77% | ||||||||
Argan, Inc. | 5,400 | 174,474 | ||||||
Construction Machinery & Heavy Trucks–0.39% | ||||||||
Allison Transmission Holdings, Inc. | 2,900 | 88,972 | ||||||
Consumer Electronics–0.41% | ||||||||
ZAGG Inc.(b) | 11,200 | 93,296 | ||||||
Consumer Finance–1.17% | ||||||||
Ally Financial Inc.(b) | 1,850 | 40,497 | ||||||
Credit Acceptance Corp.(b) | 100 | 23,620 | ||||||
Nelnet, Inc.–Class A | 2,000 | 89,540 | ||||||
Santander Consumer USA Holdings Inc. | 4,500 | 111,105 | ||||||
264,762 | ||||||||
Data Processing & Outsourced Services–1.48% | ||||||||
Computer Sciences Corp. | 3,650 | 235,242 | ||||||
Higher One Holdings, Inc.(b) | 18,050 | 50,720 | ||||||
Information Services Group, Inc. | 12,850 | 50,501 | ||||||
336,463 | ||||||||
Distillers & Vintners–0.37% | ||||||||
MGP Ingredients, Inc. | 6,000 | 84,240 | ||||||
Electrical Components & Equipment–0.50% | ||||||||
General Cable Corp. | 3,550 | 57,900 | ||||||
SL Industries, Inc.(b) | 1,350 | 56,066 | ||||||
113,966 | ||||||||
Electronic Manufacturing Services–1.15% | ||||||||
Sanmina Corp.(b) | 12,800 | 260,224 | ||||||
Footwear–0.05% | ||||||||
Rocky Brands, Inc. | 500 | 11,220 | ||||||
General Merchandise Stores–1.25% | ||||||||
Big Lots, Inc. | 6,200 | 282,534 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco All Cap Market Neutral Fund
Shares | Value | |||||||
Gold–1.68% | ||||||||
Gold Resource Corp. | 21,350 | $ | 71,950 | |||||
Newmont Mining Corp. | 11,650 | 308,608 | ||||||
380,558 | ||||||||
Health Care Services–0.96% | ||||||||
Alliance HealthCare Services, Inc.(b) | 4,000 | 85,080 | ||||||
RadNet, Inc.(b) | 15,750 | 131,985 | ||||||
217,065 | ||||||||
Health Care Supplies–0.20% | ||||||||
Halyard Health Inc.(b) | 950 | 46,056 | ||||||
Health Care Technology–0.42% | ||||||||
Merge Healthcare Inc.(b) | 19,100 | 94,927 | ||||||
Home Entertainment Software–0.65% | ||||||||
Electronic Arts Inc.(b) | 2,550 | 148,130 | ||||||
Household Products–0.58% | ||||||||
Central Garden & Pet Co.–Class A(b) | 13,450 | 131,810 | ||||||
Human Resource & Employment Services–1.29% | ||||||||
Insperity, Inc. | 6,100 | 293,776 | ||||||
Integrated Oil & Gas–0.05% | ||||||||
Occidental Petroleum Corp. | 150 | 12,015 | ||||||
Internet Retail–0.76% | ||||||||
Nutrisystem, Inc. | 9,050 | 172,403 | ||||||
Internet Software & Services–4.11% | ||||||||
AOL Inc.(b) | 1,950 | 77,805 | ||||||
Constant Contact, Inc.(b) | 5,800 | 202,130 | ||||||
Demand Media, Inc.(b) | 6,750 | 43,268 | ||||||
DHI Group, Inc.(b) | 18,700 | 142,120 | ||||||
Earthlink Holdings Corp. | 34,800 | 164,604 | ||||||
Monster Worldwide, Inc.(b) | 18,250 | 107,492 | ||||||
TechTarget, Inc.(b) | 10,850 | 117,397 | ||||||
United Online, Inc.(b) | 4,950 | 78,358 | ||||||
933,174 | ||||||||
Investment Banking & Brokerage–0.53% | ||||||||
INTL FCStone Inc.(b) | 3,750 | 120,375 | ||||||
IT Consulting & Other Services–0.93% | ||||||||
Hackett Group, Inc. (The) | 1,050 | 10,080 | ||||||
Leidos Holdings, Inc. | 3,850 | 160,314 | ||||||
NCI, Inc.–Class A | 4,000 | 40,800 | ||||||
211,194 | ||||||||
Leisure Products–0.25% | ||||||||
Nautilus, Inc.(b) | 3,400 | 57,154 | ||||||
Life Sciences Tools & Services–0.49% | ||||||||
Cambrex Corp.(b) | 400 | 15,396 | ||||||
PAREXEL International Corp.(b) | 1,500 | 95,363 | ||||||
110,759 |
Shares | Value | |||||||
Managed Health Care–3.06% | ||||||||
Centene Corp.(b) | 5,700 | $ | 353,343 | |||||
Health Net Inc.(b) | 6,500 | 342,225 | ||||||
695,568 | ||||||||
Office Services & Supplies–0.64% | ||||||||
Pitney Bowes Inc. | 6,500 | 145,405 | ||||||
Office REIT’s–1.36% | ||||||||
CoreSite Realty Corp. | 6,400 | 307,712 | ||||||
Oil & Gas Drilling–0.72% | ||||||||
Pioneer Energy Services Corp.(b) | 21,850 | 162,783 | ||||||
Oil & Gas Equipment & Services–2.54% | ||||||||
Cameron International Corp.(b) | 1,050 | 57,561 | ||||||
Oil States International, Inc.(b) | 3,050 | 145,149 | ||||||
Superior Energy Services, Inc. | 14,650 | 373,575 | ||||||
576,285 | ||||||||
Oil & Gas Exploration & Production–8.06% | ||||||||
California Resources Corp. | 7,600 | 70,680 | ||||||
Chesapeake Energy Corp. | 21,150 | 333,535 | ||||||
Clayton Williams Energy, Inc.(b) | 3,100 | 172,577 | ||||||
Denbury Resources Inc. | 36,400 | 320,684 | ||||||
Encana Corp. (Canada) | 23,450 | 333,224 | ||||||
Enerplus Corp. (Canada) | 21,400 | 269,854 | ||||||
Kosmos Energy Ltd.(b) | 19,900 | 194,622 | ||||||
Penn West Petroleum Ltd. (Canada) | 54,650 | 134,986 | ||||||
1,830,162 | ||||||||
Oil & Gas Refining & Marketing–5.23% | ||||||||
Adams Resources & Energy, Inc. | 850 | 39,610 | ||||||
Green Plains Inc. | 6,900 | 214,866 | ||||||
Marathon Petroleum Corp. | 250 | 24,643 | ||||||
REX American Resources Corp.(b) | 3,100 | 195,982 | ||||||
Tesoro Corp. | 4,250 | 364,777 | ||||||
Valero Energy Corp. | 6,100 | 347,090 | ||||||
1,186,968 | ||||||||
Oil & Gas Storage & Transportation–0.55% | ||||||||
Teekay Tankers Ltd.–Class A | 19,700 | 124,110 | ||||||
Packaged Foods & Meats–1.36% | ||||||||
Pilgrim’s Pride Corp. | 12,500 | 308,750 | ||||||
Paper Products–0.45% | ||||||||
Mercer International, Inc.(b) | 7,150 | 102,245 | ||||||
Personal Products–0.22% | ||||||||
Avon Products, Inc. | 6,050 | 49,429 | ||||||
Pharmaceuticals–4.48% | ||||||||
Cumberland Pharmaceuticals Inc.(b) | 3,450 | 22,632 | ||||||
Lannett Co., Inc.(b) | 6,050 | 347,875 | ||||||
Sagent Pharmaceuticals Inc.(b) | 10,000 | 233,100 | ||||||
SciClone Pharmaceuticals, Inc.(b) | 17,300 | 141,341 | ||||||
Sucampo Pharmaceuticals, Inc.–Class A(b) | 15,350 | 272,616 | ||||||
1,017,564 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco All Cap Market Neutral Fund
Shares | Value | |||||||
Property & Casualty Insurance–0.87% | ||||||||
Universal Insurance Holdings, Inc. | 8,250 | $ | 198,165 | |||||
Regional Banks–0.05% | ||||||||
Century Bancorp, Inc.–Class A | 300 | 11,589 | ||||||
Research & Consulting Services–0.36% | ||||||||
CRA International Inc.(b) | 950 | 27,740 | ||||||
VSE Corp. | 750 | 53,355 | ||||||
81,095 | ||||||||
Residential REIT’s–0.10% | ||||||||
Equity Residential | 300 | 22,158 | ||||||
Retail REIT’s–0.13% | ||||||||
Urban Edge Properties | 1,350 | 30,551 | ||||||
Semiconductors–4.65% | ||||||||
Fairchild Semiconductor International, Inc.(b) | 9,900 | 179,834 | ||||||
Integrated Device Technology, Inc.(b) | 16,600 | 301,954 | ||||||
Intel Corp. | 9,950 | 323,872 | ||||||
Skyworks Solutions, Inc. | 2,700 | 249,075 | ||||||
1,054,735 | ||||||||
Specialized REIT’s–0.41% | ||||||||
Geo Group Inc. (The) | 2,400 | 93,600 | ||||||
Specialty Stores–0.49% | ||||||||
Build-A-Bear Workshop, Inc.(b) | 6,000 | 110,580 | ||||||
Steel–1.31% | ||||||||
United States Steel Corp. | 12,350 | 296,647 |
Shares | Value | |||||||
Technology Hardware, Storage & Peripherals–3.74% | ||||||||
Apple Inc. | 2,700 | $ | 337,905 | |||||
Hewlett-Packard Co. | 5,900 | 194,523 | ||||||
Lexmark International, Inc.–Class A | 5,850 | 259,681 | ||||||
NetApp, Inc. | 1,550 | 56,188 | ||||||
848,297 | ||||||||
Tires & Rubber–0.41% | ||||||||
Cooper Tire & Rubber Co. | 2,200 | 93,478 | ||||||
Trucking–0.63% | ||||||||
Covenant Transport Group, Inc.–Class A(b) | 1,850 | 56,370 | ||||||
P.A.M. Transportation Services, Inc.(b) | 260 | 15,233 | ||||||
USA Truck Inc.(b) | 2,950 | 72,452 | ||||||
144,055 | ||||||||
Total Common Stocks & Other Equity Interests |
| 19,987,022 | ||||||
Money Market Funds–10.16% |
| |||||||
Liquid Assets Portfolio–Institutional Class(c) | 1,153,232 | 1,153,232 | ||||||
Premier Portfolio–Institutional Class(c) | 1,153,232 | 1,153,232 | ||||||
Total Money Market Funds |
| 2,306,464 | ||||||
TOTAL INVESTMENTS–98.22% |
| 22,293,486 | ||||||
OTHER ASSETS LESS LIABILITIES–1.78% |
| 404,971 | ||||||
NET ASSETS–100.00% |
| $ | 22,698,457 |
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 money market fund and the Fund are affiliated by having the same investment adviser. |
Total Return Swap Agreements Outstanding | ||||||||||||||||||||
Reference Entity | Counterparty | Expiration Date | Floating Rate Index(1) | Notional Value | Unrealized Appreciation | Value of Reference Entities | ||||||||||||||
Equity Securities — Short | Morgan Stanley & Co. LLC | 04/24/17 | Federal Funds floating rate | $ | (20,724,385 | ) | $ | 737,556 | (2) | $ | (19,974,235 | ) |
(1) | The Fund receives or pays the total return on the short positions underlying the total return swap and pays or receives a specific Federal Funds floating rate. |
(2) | Amount includes $(12,594) of dividends receivable short and financing fees payable from the Fund to the Counterparty. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco All Cap Market Neutral Fund
The following table represents the individual short positions and related values of equity securities underlying the total return swap with Morgan Stanley & Co. LLC as of April 30, 2015.
Shares | Value | |||||||
Equity Securities — Short |
| |||||||
Agricultural Products | ||||||||
Darling Ingredients Inc. | (4,150 | ) | $ | (56,689 | ) | |||
Airlines | ||||||||
Spirit Airlines Inc. | (3,900 | ) | (267,033 | ) | ||||
Apparel Retail | ||||||||
Aeropostale, Inc. | (4,050 | ) | (12,515 | ) | ||||
Men’s Wearhouse, Inc. (The) | (3,250 | ) | (183,918 | ) | ||||
(196,433 | ) | |||||||
Application Software | ||||||||
Datawatch Corp. | (3,200 | ) | (23,392 | ) | ||||
Digital Turbine, Inc. | (7,300 | ) | (26,499 | ) | ||||
(49,891 | ) | |||||||
Asset Management & Custody Banks | ||||||||
Financial Engines Inc. | (3,250 | ) | (137,052 | ) | ||||
Automobile Manufacturers | ||||||||
Tesla Motors, Inc. | (1,300 | ) | (293,865 | ) | ||||
Automotive Retail | ||||||||
CarMax, Inc. | (1,350 | ) | (91,948 | ) | ||||
Biotechnology | ||||||||
Advaxis, Inc. | (9,150 | ) | (153,811 | ) | ||||
Arrowhead Research Corp. | (13,200 | ) | (91,080 | ) | ||||
Biogen Inc. | (220 | ) | (82,265 | ) | ||||
CytRx Corp. | (15,300 | ) | (67,167 | ) | ||||
Exact Sciences Corp. | (12,650 | ) | (264,385 | ) | ||||
Fibrocell Science, Inc. | (10,050 | ) | (33,668 | ) | ||||
Galectin Therapeutics Inc. | (4,310 | ) | (12,887 | ) | ||||
Intercept Pharmaceuticals, Inc. | (1,150 | ) | (290,731 | ) | ||||
Keryx Biopharmaceuticals, Inc. | (19,000 | ) | (202,540 | ) | ||||
La Jolla Pharmaceutical Co. | (4,000 | ) | (76,040 | ) | ||||
Mirati Therapeutics, Inc. (Canada) | (5,450 | ) | (151,455 | ) | ||||
Navidea Biopharmaceuticals Inc. | (35,950 | ) | (48,532 | ) | ||||
NeoStem, Inc. | (12,550 | ) | (36,144 | ) | ||||
Northwest Biotherapeutics, Inc. | (15,350 | ) | (120,651 | ) | ||||
Ohr Pharmaceutical, Inc. | (7,000 | ) | (19,670 | ) | ||||
Ovascience Inc. | (9,400 | ) | (232,603 | ) | ||||
Raptor Pharmaceuticals Corp. | (15,750 | ) | (159,390 | ) | ||||
Seattle Genetics, Inc. | (8,350 | ) | (286,739 | ) | ||||
Synageva BioPharma Corp. | (1,950 | ) | (179,322 | ) | ||||
Synta Pharmaceuticals Corp. | (25,950 | ) | (58,388 | ) | ||||
Vanda Pharmaceuticals Inc. | (9,700 | ) | (88,755 | ) | ||||
(2,656,223 | ) | |||||||
Brewers | ||||||||
Boston Beer Co., Inc. (The)–Class A | (680 | ) | (168,504 | ) |
Shares | Value | |||||||
Casinos & Gaming | ||||||||
Wynn Resorts Ltd. | (1,900 | ) | $ | (211,033 | ) | |||
Coal & Consumable Fuels | ||||||||
Solazyme Inc. | (19,850 | ) | (76,423 | ) | ||||
Communications Equipment | ||||||||
Ubiquiti Networks Inc. | (6,550 | ) | (187,134 | ) | ||||
ViaSat, Inc. | (2,950 | ) | (177,354 | ) | ||||
(364,488 | ) | |||||||
Computer & Electronics Retail | ||||||||
Conn’s, Inc. | (2,200 | ) | (61,534 | ) | ||||
Construction & Engineering | ||||||||
MasTec, Inc. | (8,150 | ) | (146,211 | ) | ||||
Construction Materials | ||||||||
Martin Marietta Materials, Inc. | (2,250 | ) | (320,962 | ) | ||||
Consumer Electronics | ||||||||
Turtle Beach Corp. | (6,670 | ) | (14,674 | ) | ||||
Diversified Metals & Mining | ||||||||
Freeport-McMoRan Inc. | (3,350 | ) | (77,955 | ) | ||||
Diversified REIT’s | ||||||||
American Realty Capital Properties, Inc. | (33,950 | ) | (306,568 | ) | ||||
Electrical Components & Equipment | ||||||||
SolarCity Corp. | (5,000 | ) | (300,250 | ) | ||||
Electronic Components | ||||||||
InvenSense Inc. | (12,900 | ) | (192,468 | ) | ||||
Electronic Equipment & Instruments | ||||||||
CUI Global, Inc. | (6,600 | ) | (36,366 | ) | ||||
Fertilizers & Agricultural Chemicals | ||||||||
American Vanguard Corp. | (7,200 | ) | (78,552 | ) | ||||
Gold | ||||||||
Franco-Nevada Corp. (Canada) | (3,500 | ) | (181,405 | ) | ||||
Yamana Gold Inc. (Brazil) | (64,650 | ) | (246,963 | ) | ||||
(428,368 | ) | |||||||
Health Care Equipment | ||||||||
CytoSorbents Corp. | (8,250 | ) | (58,163 | ) | ||||
GenMark Diagnostics Inc. | (5,950 | ) | (57,120 | ) | ||||
Rockwell Medical, Inc. | (11,700 | ) | (113,607 | ) | ||||
Tandem Diabetes Care, Inc. | (4,550 | ) | (60,743 | ) | ||||
Veracyte, Inc. | (5,400 | ) | (49,410 | ) | ||||
(339,043 | ) | |||||||
Health Care Supplies | ||||||||
Cerus Corp. | (30,900 | ) | (137,196 | ) | ||||
STAAR Surgical Co. | (12,650 | ) | (111,953 | ) | ||||
TearLab Corp. | (7,410 | ) | (19,192 | ) | ||||
Unilife Corp. | (19,050 | ) | (63,818 | ) | ||||
(332,159 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco All Cap Market Neutral Fund
Shares | Value | |||||||
Health Care Technology | ||||||||
athenahealth Inc. | (2,200 | ) | $ | (269,852 | ) | |||
Homebuilding | ||||||||
KB Home | (8,300 | ) | (120,267 | ) | ||||
Standard Pacific Corp. | (20,750 | ) | (168,075 | ) | ||||
(288,342 | ) | |||||||
Industrial Machinery | ||||||||
ARC Group Worldwide, Inc. | (6,200 | ) | (43,090 | ) | ||||
Chart Industries, Inc. | (3,100 | ) | (125,705 | ) | ||||
(168,795 | ) | |||||||
Insurance Brokers | ||||||||
eHealth, Inc. | (5,550 | ) | (68,043 | ) | ||||
Internet Retail | ||||||||
Amazon.com, Inc. | (680 | ) | (286,810 | ) | ||||
zulily, inc.–Class A | (6,500 | ) | (81,023 | ) | ||||
(367,833 | ) | |||||||
Internet Software & Services | ||||||||
ChannelAdvisor Corp. | (8,100 | ) | (82,863 | ) | ||||
Cornerstone OnDemand, Inc. | (1,450 | ) | (41,513 | ) | ||||
Dealertrack Technologies Inc. | (3,000 | ) | (117,930 | ) | ||||
Google Inc.–Class A | (40 | ) | (21,951 | ) | ||||
Millennial Media Inc. | (29,100 | ) | (45,105 | ) | ||||
Pandora Media Inc. | (16,800 | ) | (299,712 | ) | ||||
Yelp Inc.(b) | (6,000 | ) | (236,340 | ) | ||||
(845,414 | ) | |||||||
Investment Banking & Brokerage | ||||||||
RCS Capital Corp.–Class A | (25,450 | ) | (218,615 | ) | ||||
Life Sciences Tools & Services | ||||||||
Accelerate Diagnostics, Inc. | (11,050 | ) | (251,940 | ) | ||||
NanoString Technologies, Inc. | (5,200 | ) | (62,088 | ) | ||||
(314,028 | ) | |||||||
Mortgage REIT’s | ||||||||
Altisource Residential Corp. | (14,100 | ) | (270,015 | ) | ||||
Movies & Entertainment | ||||||||
Lions Gate Entertainment Corp. | (9,000 | ) | (279,090 | ) | ||||
Oil & Gas Drilling | ||||||||
Diamond Offshore Drilling, Inc. | (10,250 | ) | (343,068 | ) | ||||
Rowan Cos. PLC–Class A | (1,950 | ) | (41,320 | ) | ||||
(384,388 | ) | |||||||
Oil & Gas Equipment & Services | ||||||||
CARBO Ceramics Inc. | (1,850 | ) | (81,825 | ) | ||||
McDermott International, Inc. | (43,900 | ) | (230,475 | ) | ||||
(312,300 | ) | |||||||
Oil & Gas Exploration & Production | ||||||||
Antero Resources Corp. | (2,700 | ) | (119,637 | ) | ||||
Emerald Oil, Inc. | (23,970 | ) | (15,341 | ) |
Shares | Value | |||||||
Oil & Gas Exploration & Production—(continued) | ||||||||
Laredo Petroleum Inc. | (21,200 | ) | $ | (334,960 | ) | |||
Midstates Petroleum Co. Inc. | (21,700 | ) | (24,955 | ) | ||||
Miller Energy Resources Inc. | (9,800 | ) | (7,106 | ) | ||||
Oasis Petroleum Inc. | (14,050 | ) | (252,057 | ) | ||||
Ring Energy Inc. | (6,800 | ) | (82,552 | ) | ||||
Rosetta Resources, Inc. | (7,450 | ) | (170,083 | ) | ||||
Sanchez Energy Corp. | (21,100 | ) | (309,959 | ) | ||||
SM Energy Co. | (5,550 | ) | (321,733 | ) | ||||
Whiting Petroleum Corp. | (8,600 | ) | (326,026 | ) | ||||
(1,964,409 | ) | |||||||
Oil & Gas Storage & Transportation | ||||||||
Enbridge Inc. (Canada) | (5,700 | ) | (298,281 | ) | ||||
GasLog Ltd. (Monaco) | (13,600 | ) | (303,144 | ) | ||||
Golar LNG Ltd. (Bermuda) | (8,650 | ) | (311,357 | ) | ||||
Scorpio Tankers Inc. (Monaco) | (29,900 | ) | (279,266 | ) | ||||
(1,192,048 | ) | |||||||
Packaged Foods & Meats | ||||||||
Post Holdings Inc. | (5,250 | ) | (246,435 | ) | ||||
Personal Products | ||||||||
Elizabeth Arden, Inc. | (7,050 | ) | (99,193 | ) | ||||
Nu Skin Enterprises, Inc.–Class A | (4,950 | ) | (279,922 | ) | ||||
(379,115 | ) | |||||||
Pharmaceuticals | ||||||||
Akorn, Inc. | (6,850 | ) | (285,234 | ) | ||||
Alimera Sciences Inc. | (12,750 | ) | (55,590 | ) | ||||
Ampio Pharmaceuticals, Inc. | (13,550 | ) | (32,655 | ) | ||||
Assembly Biosciences, Inc. | (5,900 | ) | (78,588 | ) | ||||
Omeros Corp. | (3,950 | ) | (79,474 | ) | ||||
TherapeuticsMD, Inc. | (38,650 | ) | (250,452 | ) | ||||
Theravance, Inc. | (11,700 | ) | (190,125 | ) | ||||
(972,118 | ) | |||||||
Real Estate Development | ||||||||
Howard Hughes Corp. | (1,950 | ) | (289,516 | ) | ||||
Real Estate Services | ||||||||
Altisource Asset Management Corp. | (550 | ) | (123,200 | ) | ||||
Kennedy-Wilson Holdings Inc. | (8,000 | ) | (198,240 | ) | ||||
(321,440 | ) | |||||||
Semiconductor Equipment | ||||||||
Rubicon Technology, Inc. | (7,700 | ) | (29,568 | ) | ||||
SunEdison, Inc. | (11,850 | ) | (300,042 | ) | ||||
(329,610 | ) | |||||||
Semiconductors | ||||||||
Cree, Inc. | (7,800 | ) | (247,104 | ) | ||||
QuickLogic Corp. | (18,850 | ) | (33,176 | ) | ||||
SunPower Corp. | (700 | ) | (22,533 | ) | ||||
Synaptics Inc. | (3,550 | ) | (300,756 | ) | ||||
(603,569 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco All Cap Market Neutral Fund
Shares | Value | |||||||
Specialty Chemicals | ||||||||
Senomyx, Inc. | (15,050 | ) | $ | (87,140 | ) | |||
W.R. Grace & Co. | (2,100 | ) | (203,112 | ) | ||||
(290,252 | ) | |||||||
Specialty Stores | ||||||||
Cabela’s Inc. | (5,150 | ) | (271,611 | ) | ||||
Steel | ||||||||
A.M. Castle & Co. | (7,400 | ) | (29,008 | ) | ||||
Carpenter Technology Corp. | (3,900 | ) | (168,675 | ) | ||||
(197,683 | ) | |||||||
Systems Software | ||||||||
CommVault Systems, Inc. | (3,350 | ) | (153,262 | ) | ||||
FireEye, Inc. | (7,150 | ) | (295,295 | ) | ||||
NetSuite Inc. | (1,800 | ) | (172,026 | ) | ||||
(620,583 | ) | |||||||
Technology Hardware, Storage & Peripherals | ||||||||
3D Systems Corp. | (8,300 | ) | (208,247 | ) | ||||
Nimble Storage, Inc. | (12,500 | ) | (305,750 | ) | ||||
Silicon Graphics International Corp. | (1,940 | ) | (15,733 | ) | ||||
Stratasys Ltd. | (5,250 | ) | (196,613 | ) | ||||
Violin Memory, Inc. | (32,150 | ) | (109,632 | ) | ||||
(835,975 | ) | |||||||
Thrifts & Mortgage Finance | ||||||||
LendingTree, Inc. | (350 | ) | (19,261 | ) | ||||
Trading Companies & Distributors | ||||||||
MRC Global Inc. | (10,300 | ) | (150,380 | ) | ||||
Wireless Telecommunication Services | ||||||||
Sprint Corp. | (58,250 | ) | (298,823 | ) | ||||
Total Equity Securities – Short |
| $ | (19,974,235 | ) |
Portfolio Composition
By sector, based on Total Investments
as of April 30, 2015
Portfolio | Equity Securities Short(a) | Total Investments | ||||||||||
Health Care | 11.7 | % | 12.0 | % | 23.7 | % | ||||||
Information Technology | 10.2 | 9.2 | 19.4 | |||||||||
Energy | 9.5 | 9.1 | 18.6 | |||||||||
Consumer Discretionary | 4.2 | 4.9 | 9.1 | |||||||||
Financials | 2.5 | 3.9 | 6.4 | |||||||||
Industrials | 3.7 | 2.6 | 6.3 | |||||||||
Materials | 2.8 | 2.8 | 5.6 | |||||||||
Consumer Staples | 2.1 | 2.0 | 4.1 | |||||||||
Telecommunication Services | 0.6 | 0.7 | 1.3 | |||||||||
Money Market Funds | 5.5 | — | 5.5 | |||||||||
Total | 52.8 | % | 47.2 | % | 100.0 | % |
(a) | Represents the value of the equity securities underlying the equity short portfolio swap with Morgan Stanley & Co. LLC. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco All Cap Market Neutral Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $18,525,111) | $ | 19,987,022 | ||
Investments in affiliated money market funds, at value and cost | 2,306,464 | |||
Total investments, at value (Cost $20,831,575) | 22,293,486 | |||
Receivable for: | ||||
Investments sold | 1,313,969 | |||
Fund shares sold | 20,057 | |||
Dividends | 1,918 | |||
Fund expenses absorbed | 42,582 | |||
Swaps receivables | 10,763 | |||
Investment for trustee deferred compensation and retirement plans | 3,673 | |||
Unrealized appreciation on swap agreements — OTC | 737,556 | |||
Other assets | 41,196 | |||
Total assets | 24,465,200 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 1,616,693 | |||
Fund shares reacquired | 63,260 | |||
Accrued fees to affiliates | 4,502 | |||
Accrued trustees’ and officers’ fees and benefits | 1,803 | |||
Accrued other operating expenses | 76,812 | |||
Trustee deferred compensation and retirement plans | 3,673 | |||
Total liabilities | 1,766,743 | |||
Net assets applicable to shares outstanding | $ | 22,698,457 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 23,229,066 | ||
Undistributed net investment income (loss) | (439,154 | ) | ||
Undistributed net realized gain (loss) | (2,290,922 | ) | ||
Net unrealized appreciation | 2,199,467 | |||
$ | 22,698,457 |
Net Assets: |
| |||
Class A | $ | 8,759,851 | ||
Class C | $ | 1,079,614 | ||
Class R | $ | 278,887 | ||
Class Y | $ | 11,466,134 | ||
Class R5 | $ | 512,519 | ||
Class R6 | $ | 601,452 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 857,611 | |||
Class C | 106,750 | |||
Class R | 27,399 | |||
Class Y | 1,118,788 | |||
Class R5 | 50,001 | |||
Class R6 | 58,684 | |||
Class A: | ||||
Net asset value per share | $ | 10.21 | ||
Maximum offering price per share | ||||
(Net asset value of $10.21 ¸ 94.50%) | $ | 10.80 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.11 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.18 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.25 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.25 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.25 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco All Cap Market Neutral Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $1,827) | $ | 279,599 | ||
Dividends from affiliated money market funds | 766 | |||
Interest | 82,124 | |||
Total investment income | 362,489 | |||
Expenses: | ||||
Advisory fees | 190,237 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 6,502 | |||
Distribution fees: | ||||
Class A | 14,573 | |||
Class C | 5,681 | |||
Class R | 744 | |||
Dividends on short sales | 89,368 | |||
Interest, facilities and maintenance fees | 484,166 | |||
Transfer agent fees — A, C, R and Y | 16,774 | |||
Transfer agent fees — R5 | 36 | |||
Transfer agent fees — R6 | 38 | |||
Trustees’ and officers’ fees and benefits | 9,590 | |||
Other | 86,767 | |||
Total expenses | 929,270 | |||
Less: Fees waived and expenses reimbursed | (129,174 | ) | ||
Net expenses | 800,096 | |||
Net investment income (loss) | (437,607 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (53,515 | ) | ||
Securities sold short | (1,859,307 | ) | ||
Swap agreements | 10,231 | |||
(1,902,591 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 375,083 | |||
Securities sold short | (501,159 | ) | ||
Swap agreements | 737,556 | |||
611,480 | ||||
Net realized and unrealized gain (loss) | (1,291,111 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (1,728,718 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco All Cap Market Neutral Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 17, 2013 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 17, 2013 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (437,607 | ) | $ | (315,332 | ) | ||
Net realized gain (loss) | (1,902,591 | ) | (387,164 | ) | ||||
Change in net unrealized appreciation | 611,480 | 1,587,987 | ||||||
Net increase (decrease) in net assets resulting from operations | (1,728,718 | ) | 885,491 | |||||
Share transactions–net: | ||||||||
Class A | (383,921 | ) | 9,349,083 | |||||
Class C | 295,755 | 848,820 | ||||||
Class R | 258,429 | 38,619 | ||||||
Class Y | (2,197,559 | ) | 14,247,251 | |||||
Class R5 | (112,321 | ) | 604,228 | |||||
Class R6 | 45,289 | 548,011 | ||||||
Net increase (decrease) in net assets resulting from share transactions | (2,094,328 | ) | 25,636,012 | |||||
Net increase (decrease) in net assets | (3,823,046 | ) | 26,521,503 | |||||
Net assets: | ||||||||
Beginning of period | 26,521,503 | — | ||||||
End of period (includes undistributed net investment income (loss) of $(439,154) and $(1,547), respectively) | $ | 22,698,457 | $ | 26,521,503 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco All Cap Market Neutral Fund
Statement of Cash Flows
For the six months ended April 30, 2015
(Unaudited)
Cash provided by (used in) operating activities: | ||||
Net increase (decrease) in net assets resulting from operations | $ | (1,728,718 | ) | |
Adjustments to reconcile the change in net assets applicable from operations to net cash provided by (used in) operating activities: |
| |||
Purchases of investments | (30,440,600 | ) | ||
Net cash activity from swap agreements | (737,556 | ) | ||
Proceeds from sales of investments | 31,325,096 | |||
Decrease in receivables and other assets | 23,877,651 | |||
Decrease in securities sold short | (24,302,923 | ) | ||
Decrease in accrued expenses and other payables | (28,034 | ) | ||
Net realized loss from investment securities | 53,515 | |||
Net change in unrealized appreciation on investment securities | (375,083 | ) | ||
Net cash provided by (used in) operating activities | (2,356,652 | ) | ||
Cash provided by (used in) financing activities: | ||||
Proceeds from shares of beneficial interest sold | 20,301,296 | |||
Disbursements from shares of beneficial interest reacquired | (22,462,183 | ) | ||
Net cash provided by (used in) financing activities | (2,160,887 | ) | ||
Net increase (decrease) in cash and cash equivalents | (4,517,539 | ) | ||
Cash at beginning of period | 6,824,003 | |||
Cash at end of period | $ | 2,306,464 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco All Cap Market Neutral Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 positive return over a full market cycle from a broadly diversified portfolio of stocks while seeking to limit exposure to the general risks associated with stock market investing.
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. |
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
13 Invesco All Cap Market Neutral Fund
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) and short stock rebate income are recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) and dividend expense on short sales are recorded on the ex-dividend date. 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 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.
14 Invesco All Cap Market Neutral Fund
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Sold Short — The Fund may enter into short sales of securities which it concurrently holds (“covered”) or for which it holds no corresponding position (“not covered”). Securities sold short represent a liability of the Fund to acquire specific securities at prevailing market prices at a future date in order to satisfy the obligation to deliver the securities sold. The liability is recorded on the books of the Fund at the market value of the common stock determined each day in accordance with the Fund’s security valuations policy. The Fund will incur a loss if the price of the security increases between the date of short sale and the date on which the Fund replaces the borrowed security. The Fund realizes a gain if the price of the security declines between those dates. For positions not covered, there is no ceiling on the ultimate price paid for the securities to cover the short position and therefore, the loss could exceed the amount of proceeds received. |
The Fund is required to segregate cash or securities as collateral in margin accounts with the broker at a level that is equal to the obligation to the broker who delivered such securities to the buyer on behalf of the Fund. The short stock rebate presented in the Statement of Operations represents the net income earned on short sale proceeds held on deposit with the broker and margin interest earned or incurred on short sale transactions. The Fund may also earn or incur margin interest on short sale transactions. Margin interest is the income earned (or expenses incurred) as a result of the market value of securities sold short being less than (or greater than) the proceeds received on the short sales.
J. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, volatility, variance, index, currency and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, equity, currency or credit risk. Such transactions are agreements between two parties (“Counterparties”). 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, volatility, variance, 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.
A total return swap is an agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income generated and capital gains, if any. The unrealized appreciation (depreciation) on total return swaps includes dividends on the underlying equity securities and financing rate payable from the Counterparty. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and Counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the Counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
K. | 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. |
15 Invesco All Cap Market Neutral Fund
L. | Collateral — To the extent the Fund has designated or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||
First $10 billion | 1.25% | |||
Over $10 billion | 1.15% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.25%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.62%, 2.37%, 1.87%, 1.37%, 1.37% and 1.37% 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $112,325 and reimbursed class level expenses of $6,684, $651, $171, $9,269, $36 and $38 for 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 April 30, 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $3,789 in front-end sales commissions from the sale of Class A shares and $216 from Class C shares for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
16 Invesco All Cap Market Neutral Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | $ | 22,293,486 | $ | — | $ | — | $ | 22,293,486 | ||||||||
Swap Agreements* | — | 737,556 | — | 737,556 | ||||||||||||
Total Investments | $ | 22,293,486 | $ | 737,556 | $ | — | $ | 23,031,042 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/ Derivative Type | Assets | Liabilities | ||||||
Equity risk: | ||||||||
Swap agreements(a) | $ | 737,556 | $ | — |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized appreciation on swap agreements — OTC. |
Effect of Derivative Investments for the six months ended April 30, 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 | ||||
Swap Agreements | ||||
Realized Gain: | ||||
Equity risk | $ | 10,231 | ||
Change in Unrealized Appreciation: | ||||
Equity risk | 737,556 | |||
Total | $ | 747,787 |
The table below summarizes the one month average notional value of swap agreements outstanding during the period.
Swap Agreements | ||||
Average notional value | $ | 20,724,385 |
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.
17 Invesco All Cap Market Neutral 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 April 30, 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 | |||||||||||||||||||||
Morgan Stanley & Co. LLC | $ | 748,319 | $ | — | $ | 748,319 | $ | — | $ | — | $ | 748,319 |
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. Obligations under the deferred compensation plan 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. 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 October 31, 2014 as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
Not subject to expiration | $ | 193,580 | $ | — | $ | 193,580 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $26,711,000 and $31,538,843, 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 | $ | 2,102,794 | ||
Aggregate unrealized (depreciation) of investment securities | (784,076 | ) | ||
Net unrealized appreciation of investment securities | $ | 1,318,718 |
Cost of investments for tax purposes is $20,974,768.
18 Invesco All Cap Market Neutral Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 17, 2013 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 644,948 | $ | 7,035,673 | 951,991 | $ | 9,785,091 | ||||||||||
Class C | 89,455 | 963,509 | 130,154 | 1,361,251 | ||||||||||||
Class R | 26,398 | 287,415 | 3,713 | 38,619 | ||||||||||||
Class Y | 1,071,151 | 11,771,438 | 1,373,449 | 14,321,343 | ||||||||||||
Class R5 | — | — | 60,560 | 606,027 | ||||||||||||
Class R6 | 7,482 | 81,021 | 54,496 | 548,011 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (697,740 | ) | (7,419,594 | ) | (41,588 | ) | (436,008 | ) | ||||||||
Class C | (63,304 | ) | (667,754 | ) | (49,555 | ) | (512,431 | ) | ||||||||
Class R | (2,712 | ) | (28,986 | ) | — | — | ||||||||||
Class Y | (1,318,755 | ) | (13,968,997 | ) | (7,057 | ) | (74,092 | ) | ||||||||
Class R5 | (10,386 | ) | (112,321 | ) | (173 | ) | (1,799 | ) | ||||||||
Class R6 | (3,294 | ) | (35,732 | ) | — | — | ||||||||||
Net increase (decrease) in share activity | (256,757 | ) | $ | (2,094,328 | ) | 2,475,990 | $ | 25,636,012 |
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 30% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by this entity is also owned beneficially. |
In addition, 45% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. |
19 Invesco All Cap Market Neutral 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 | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets (including interest expense and dividends on short sales expense) with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets (including interest expense and dividends on short sales expense) without fee waivers and/or expenses absorbed | Ratio of expenses to average net assets (excluding interest expense and dividends on short sales expense) with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets (excluding interest expense and dividends on short sales expense) without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Ratio of interest expense and dividends on short sales to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.70 | $ | (0.16 | ) | $ | (0.33 | ) | $ | (0.49 | ) | $ | 10.21 | (4.58 | )% | $ | 8,760 | 5.37 | %(d) | 6.22 | %(d) | 1.60 | %(d) | 2.45 | %(d) | (2.99 | )%(d) | 3.77 | % | 99 | % | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.27 | ) | 0.97 | 0.70 | 10.70 | 7.00 | 9,742 | 4.53 | (f) | 7.28 | (f) | 1.60 | (f) | 4.35 | (f) | (3.03 | )(f) | 2.93 | (f) | 105 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.63 | (0.20 | ) | (0.32 | ) | (0.52 | ) | 10.11 | (4.89 | ) | 1,080 | 6.12 | (d) | 6.97 | (d) | 2.35 | (d) | 3.20 | (d) | (3.74 | )(d) | 3.77 | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.34 | ) | 0.97 | 0.63 | 10.63 | 6.30 | 857 | 5.28 | (f) | 8.03 | (f) | 2.35 | (f) | 5.10 | (f) | (3.78 | )(f) | 2.93 | (f) | 105 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.68 | (0.17 | ) | (0.33 | ) | (0.50 | ) | 10.18 | (4.68 | ) | 279 | 5.62 | (d) | 6.47 | (d) | 1.85 | (d) | 2.70 | (d) | (3.24 | )(d) | 3.77 | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.29 | ) | 0.97 | 0.68 | 10.68 | 6.80 | 40 | 4.78 | (f) | 7.53 | (f) | 1.85 | (f) | 4.60 | (f) | (3.28 | )(f) | 2.93 | (f) | 105 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.72 | (0.15 | ) | (0.32 | ) | (0.47 | ) | 10.25 | (4.38 | ) | 11,466 | 5.12 | (d) | 5.97 | (d) | 1.35 | (d) | 2.20 | (d) | (2.74 | )(d) | 3.77 | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.25 | ) | 0.97 | 0.72 | 10.72 | 7.20 | 14,651 | 4.28 | (f) | 7.03 | (f) | 1.35 | (f) | 4.10 | (f) | (2.78 | )(f) | 2.93 | (f) | 105 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.72 | (0.15 | ) | (0.32 | ) | (0.47 | ) | 10.25 | (4.38 | ) | 513 | 5.12 | (d) | 5.87 | (d) | 1.35 | (d) | 2.10 | (d) | (2.74 | )(d) | 3.77 | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.25 | ) | 0.97 | 0.72 | 10.72 | 7.20 | 648 | 4.28 | (f) | 7.00 | (f) | 1.35 | (f) | 4.07 | (f) | (2.78 | )(f) | 2.93 | (f) | 105 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.72 | (0.15 | ) | (0.32 | ) | (0.47 | ) | 10.25 | (4.38 | ) | 601 | 5.12 | (d) | 5.87 | (d) | 1.35 | (d) | 2.10 | (d) | (2.74 | )(d) | 3.77 | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.25 | ) | 0.97 | 0.72 | 10.72 | 7.20 | 584 | 4.28 | (f) | 6.99 | (f) | 1.35 | (f) | 4.06 | (f) | (2.78 | )(f) | 2.93 | (f) | 105 |
(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 $11,755, $1,146, $300, $16,300, $577 and $612 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of December 17, 2013. |
(f) | Annualized. |
20 Invesco All Cap Market Neutral Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 954.20 | $ | 26.02 | $ | 998.17 | $ | 26.60 | 5.37 | % | ||||||||||||
C | 1,000.00 | 950.20 | 29.59 | 994.45 | 30.26 | 6.12 | ||||||||||||||||||
R | 1,000.00 | 953.20 | 27.22 | 996.93 | 27.83 | 5.62 | ||||||||||||||||||
Y | 1,000.00 | 956.20 | 24.83 | 999.40 | 25.38 | 5.12 | ||||||||||||||||||
R5 | 1,000.00 | 956.20 | 24.83 | 999.40 | 25.38 | 5.12 | ||||||||||||||||||
R6 | 1,000.00 | 956.20 | 24.83 | 999.40 | 25.38 | 5.12 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 All Cap Market Neutral 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: 811-05426 and 033-19338 | ACMN-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Balanced-Risk Allocation Fund | ||||
Nasdaq: | ||||
A: ABRZX ¡ B: ABRBX ¡ C: ABRCX ¡ R: ABRRX ¡ Y: ABRYX ¡ R5: ABRIX ¡ R6: ALLFX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Consolidated Schedule of Investments | ||||
8 Consolidated Financial Statements | ||||
10 Notes to Consolidated Financial Statements | ||||
19 Consolidated 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, 10/31/14 to 4/30/15, 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 | 4.12 | % | ||||
Class B Shares | 3.72 | |||||
Class C Shares | 3.80 | |||||
Class R Shares | 3.97 | |||||
Class Y Shares | 4.22 | |||||
Class R5 Shares | 4.23 | |||||
Class R6 Shares | 4.26 | |||||
S&P 500 Index‚ (Broad Market Index) | 4.40 | |||||
Custom Balanced-Risk Allocation Broad Indexn (Style-Specific Index) | 3.57 | |||||
Custom Balanced-Risk Allocation Style Indexn (Style-Specific Index) | 3.95 | |||||
Lipper Alternative Global Macro Funds Index¿ (Peer Group Index)* | 2.34 | |||||
Source(s): ‚FactSet Research Systems Inc.; nInvesco, FactSet Research Systems Inc.; ¿Lipper Inc. *The Fund’s former peer group index, the Lipper Global Flexible Portfolio Funds Index, has been discontinued. The Fund’s new peer group index is the Lipper Alternative Global Macro Funds Index. | ||||||
The S&P 500® Index is an unmanaged index considered representative of the US stock market. | ||||||
The Custom Balanced-Risk Allocation Broad Index consists of 60% S&P 500 Index and 40% Barclays U.S. Aggregate Index. | ||||||
The Custom Balanced-Risk Allocation Style Index consists of 60% MSCI World Index and 40% Barclays U.S. Aggregate Index. Effective December 1, 2009, the fixed income component of the Custom Balanced-Risk Allocation Style Index changed from the JP Morgan GBI Global (Traded) Index to the Barclays U.S. Aggregate Index. | ||||||
The Lipper Alternative Global Macro Funds Index is an unmanaged index considered representative of alternative global macro funds tracked by Lipper. | ||||||
The Lipper Global Flexible Portfolio Funds Index is an equally weighted representation of the largest funds in the Lipper Global Flexible Portfolio Funds classification. These funds allocate their investments across various asset classes, including both domestic and foreign stocks, bonds and money market instruments, with a focus on total return. The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market. 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 JP Morgan GBI Global (Traded) Index is a total return, market capitalization weighted index, rebalanced monthly, consisting of the following countries: Australia, Germany, Spain, Belgium, Italy, Sweden, Canada, Japan, the United Kingdom, Denmark, the Netherlands and the United States. 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.
|
2 | Invesco Balanced-Risk Allocation Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (6/2/09) | 8.30 | % | |||||
5 Years | 6.91 | ||||||
1 Year | 0.86 | ||||||
Class B Shares | |||||||
Inception (6/2/09) | 8.41 | % | |||||
5 Years | 7.01 | ||||||
1 Year | 1.00 | ||||||
Class C Shares | |||||||
Inception (6/2/09) | 8.52 | % | |||||
5 Years | 7.32 | ||||||
1 Year | 4.95 | ||||||
Class R Shares | |||||||
Inception (6/2/09) | 9.05 | % | |||||
5 Years | 7.85 | ||||||
1 Year | 6.41 | ||||||
Class Y Shares | |||||||
Inception (6/2/09) | 9.61 | % | |||||
5 Years | 8.40 | ||||||
1 Year | 6.95 | ||||||
Class R5 Shares | |||||||
Inception (6/2/09) | 9.62 | % | |||||
5 Years | 8.41 | ||||||
1 Year | 6.97 | ||||||
Class R6 Shares | |||||||
Inception | 9.51 | % | |||||
1 Year | 8.32 | ||||||
5 Years | 7.08 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (6/2/09) | 8.38 | % | |||||
5 Years | 7.35 | ||||||
1 Year | 1.64 | ||||||
Class B Shares | |||||||
Inception (6/2/09) | 8.48 | % | |||||
5 Years | 7.46 | ||||||
1 Year | 1.69 | ||||||
Class C Shares | |||||||
Inception (6/2/09) | 8.60 | % | |||||
5 Years | 7.76 | ||||||
1 Year | 5.67 | ||||||
Class R Shares | |||||||
Inception (6/2/09) | 9.13 | % | |||||
5 Years | 8.29 | ||||||
1 Year | 7.22 | ||||||
Class Y Shares | |||||||
Inception (6/2/09) | 9.71 | % | |||||
5 Years | 8.87 | ||||||
1 Year | 7.74 | ||||||
Class R5 Shares | |||||||
Inception (6/2/09) | 9.72 | % | |||||
5 Years | 8.88 | ||||||
1 Year | 7.76 | ||||||
Class R6 Shares | |||||||
Inception | 9.60 | % | |||||
1 Year | 8.77 | ||||||
5 Years | 7.88 |
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.
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 1.25%, 2.00%, 2.00%, 1.50%, 1.00%, 0.98% and 0.88%, 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 1.29%, 2.04%, 2.04%, 1.54%, 1.04%, 1.02% and 0.92%, respectively.1 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expensese currently or in the past, returns would have been lower. See current prospectus for more information.
1 | The expense ratio includes acquired fund fees and expenses of the underlying funds in which the Fund invests of 0.05% for Invesco Balanced-Risk Allocation Fund. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
3 | Invesco Balanced-Risk Allocation 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 Balanced-Risk Allocation Fund |
Consolidated Schedule of Investments
April 30, 2015
(Unaudited)
Interest Rate | Maturity Date | Principal Amount | Value | |||||||||||||
U.S. Treasury Securities–32.81% |
| |||||||||||||||
U.S. Treasury Bills–13.92%(a) | ||||||||||||||||
U.S. Treasury Bills | 0.07 | % | 06/04/15 | $ | 173,050,000 | $ | 173,049,990 | |||||||||
U.S. Treasury Bills | 0.10 | % | 06/11/15 | 180,550,000 | 180,549,986 | |||||||||||
U.S. Treasury Bills | 0.11 | % | 06/18/15 | 65,830,000 | 65,829,994 | |||||||||||
U.S. Treasury Bills | 0.08 | % | 07/09/15 | 118,400,000 | 118,399,984 | |||||||||||
U.S. Treasury Bills | 0.08 | % | 07/16/15 | 215,100,000 | 215,099,968 | |||||||||||
U.S. Treasury Bills | 0.07 | % | 07/23/15 | 270,760,000 | 270,756,835 | |||||||||||
U.S. Treasury Bills | 0.07 | % | 07/30/15 | 233,180,000 | 233,179,960 | |||||||||||
1,256,866,717 | ||||||||||||||||
U.S. Treasury Notes–18.89% | ||||||||||||||||
U.S. Treasury Notes(b) | 0.06 | % | 01/31/16 | 541,980,000 | 541,964,459 | |||||||||||
U.S. Treasury Notes(b)(c) | 0.08 | % | 04/30/16 | 559,766,000 | 559,834,482 | |||||||||||
U.S. Treasury Notes(b) | 0.09 | % | 07/31/16 | 603,420,000 | 603,468,334 | |||||||||||
1,705,267,275 | ||||||||||||||||
Total U.S. Treasury Securities (Cost $2,962,089,190) | 2,962,133,992 | |||||||||||||||
Expiration Date | ||||||||||||||||
Commodity-Linked Securities–2.04% | ||||||||||||||||
Canadian Imperial Bank of Commerce EMTN, U.S. Federal Funds Effective Rate minus 0.04% (linked to the CIBC Custom 2 Agriculture Commodity Index, multiplied by 2)(d) | 09/28/15 | 83,000,000 | 63,598,385 | |||||||||||||
Cargill, Inc. Commodity Linked Notes, one month LIBOR rate minus 0.10% (linked to the Monthly Rebalance Commodity Excess Return Index, multiplied by 2)(d) | 09/17/15 | 71,000,000 | 54,183,145 | |||||||||||||
Cargill, Inc. Commodity Linked Notes, one month LIBOR rate minus 0.10% (linked to the Monthly Rebalance Commodity Excess Return Index, multiplied by 2)(d) | 10/07/15 | 83,800,000 | 66,118,034 | |||||||||||||
Total Commodity-Linked Securities (Cost $237,800,000) | 183,899,564 | |||||||||||||||
Shares | ||||||||||||||||
Money Market Funds–58.44% | ||||||||||||||||
Liquid Assets Portfolio–Institutional Class(e) | 634,329,301 | 634,329,301 | ||||||||||||||
Premier Portfolio–Institutional Class(e) | 634,329,301 | 634,329,301 | ||||||||||||||
STIC (Global Series) PLC–U.S. Dollar Liquidity Portfolio (Ireland)–Institutional Class(e) | 1,008,873,954 | 1,008,873,954 | ||||||||||||||
Treasury Portfolio–Institutional Class(e) | 2,999,504,975 | 2,999,504,975 | ||||||||||||||
Total Money Market Funds (Cost $5,277,037,531) | 5,277,037,531 | |||||||||||||||
TOTAL INVESTMENTS–93.28% (Cost $8,476,926,721) | 8,423,071,087 | |||||||||||||||
OTHER ASSETS LESS LIABILITIES–6.72% | 606,429,413 | |||||||||||||||
NET ASSETS–100.00% | $ | 9,029,500,500 |
Open Futures Contracts at Period-End(f) | ||||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||
Brent Crude | Long | 1,455 | October-2015 | $ | 100,220,400 | $ | 10,928,111 | |||||||||||||||
Gasoline Reformulated Blendstock Oxygenate Blending | Long | 1,715 | June-2015 | 147,308,553 | 8,702,800 | |||||||||||||||||
Silver | Long | 3,110 | July-2015 | 251,179,150 | 3,735,061 | |||||||||||||||||
WTI Crude | Long | 1,040 | October-2015 | 64,698,400 | 7,275,650 | |||||||||||||||||
Subtotal — Commodity Risk | $ | 30,641,622 | ||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
5 Invesco Balanced-Risk Allocation Fund
Open Futures Contracts at Period-End(f) | ||||||||||||||||||||||
Futures Contracts (continued) | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||
Australian 10 Year Bonds | Long | 15,700 | June-2015 | $ | 1,605,440,995 | $ | (6,662,697 | ) | ||||||||||||||
Canada 10 Year Bonds | Long | 12,270 | June-2015 | 1,426,245,109 | (22,019,796 | ) | ||||||||||||||||
Euro Bonds | Long | 2,990 | �� | June-2015 | 526,115,706 | (586,498 | ) | |||||||||||||||
Japan 10 Year Bonds | Long | 1,030 | June-2015 | 1,275,768,007 | 5,675,151 | |||||||||||||||||
Long Gilt | Long | 8,390 | June-2015 | 1,521,325,241 | (5,225,872 | ) | ||||||||||||||||
U.S. Treasury 20 Year Bonds | Long | 5,570 | June-2015 | 888,937,188 | (12,606,860 | ) | ||||||||||||||||
Subtotal — Interest Rate Risk | $ | (41,426,572 | ) | |||||||||||||||||||
Dow Jones EURO STOXX 50 Index | Long | 16,650 | June-2015 | $ | 667,083,449 | $ | (5,652,349 | ) | ||||||||||||||
E-Mini S&P 500 Index | Long | 4,250 | June-2015 | 441,766,250 | 7,220,933 | |||||||||||||||||
FTSE 100 Index | Long | 6,640 | June-2015 | 706,277,405 | 21,027,555 | |||||||||||||||||
Hang Seng Index | Long | 2,910 | May-2015 | 527,614,670 | (1,132,386 | ) | ||||||||||||||||
Russell 2000 Index Mini | Long | 4,030 | June-2015 | 490,209,200 | (3,415,050 | ) | ||||||||||||||||
Tokyo Stock Price Index | Long | 5,030 | June-2015 | 669,192,211 | 27,627,890 | |||||||||||||||||
Subtotal — Equity Risk | $ | 45,676,593 | ||||||||||||||||||||
Total Future Contracts | $ | 34,891,643 | ||||||||||||||||||||
Open Over-The-Counter Total Return Swap Agreements at Period-End | ||||||||||||||||||||||
Long Swap Agreements | Type of Contract | Counterparty | Number of Contracts | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||
Receive a return equal to Barclays Commodity Strategy 1452 Excess Return Index and pay the product of (i) 0.33% of the Notional value multiplied by (ii) days in the period divided by 365 | Long | Barclays Bank PLC | 380,500 | May-2015 | $ | 184,831,147 | $ | 11,831,000 | ||||||||||||||
Receive a return equal to CIBC Dynamic Roll LME Copper Excess Return Index and pay the product of (i) 0.30% of the Notional value multiplied by (ii) days in the period divided by 365 | Long | Canadian Imperial Bank Commerce | 2,435,000 | April-2016 | 185,866,959 | 10,935,585 | ||||||||||||||||
Receive a return equal to Single Commodity Index Excess Return and pay the product of (i) 0.12% of the Notional Value multiplied by (ii) days in the period divided by 365 | Long | Cargill, Inc. | 33,000 | January-2016 | 27,930,018 | 0 | ||||||||||||||||
Receive a return equal to S&P GSCI Gold Index Excess Return and pay the product of (i) 0.09% of the Notional Value multiplied by (ii) days in the period divided by 365 | Long | J.P. Morgan Chase Bank, N.A. | 1,260,000 | April-2016 | 125,368,614 | (475,145 | ) | |||||||||||||||
Receive a return equal to MLCX Dynamic Enhanced Copper Excess Return Index and pay the product of (i) 0.25% of the Notional Value multiplied by (ii) days in the period divided by 365 | Long | Merrill Lynch International | 222,500 | May-2015 | 139,036,979 | 0 | ||||||||||||||||
Receive a return equal to Merrill Lynch Gold Excess Return Index and pay the product of (i) 0.14% of the Notional Value multiplied by (ii) days in the period divided by 365 | Long | Merrill Lynch International | 1,003,000 | June-2015 | 155,811,235 | 0 | ||||||||||||||||
Receive a return equal to S&P GSCI Aluminum Dynamic Roll Index Excess Return and pay the product of (i) 0.38% of the Notional Value multiplied by (ii) days in the period divided by 365 | Long | Morgan Stanley Capital Services LLC | 445,000 | October-2015 | 46,831,133 | 2,736,083 | ||||||||||||||||
Subtotal — Commodity Risk | $ | 25,027,523 | ||||||||||||||||||||
Receive a return equal to the LIFFE Long Gilt Futures multiplied by 0.01% of the Notional Value | Long | Goldman Sachs International | 760 | June-2015 | 137,807,769 | (377,216 | ) | |||||||||||||||
Subtotal — Interest Rate Risk | $ | (377,216 | ) | |||||||||||||||||||
Receive a return equal to Hang Seng Index Futures multiplied by the Notional Value | Long | Goldman Sachs International | 970 | May-2015 | 175,871,557 | $ | (285,745 | ) | ||||||||||||||
Subtotal — Equity Risk | $ | (285,745 | ) | |||||||||||||||||||
Total Swap Agreements | $ | 24,364,562 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
6 Invesco Balanced-Risk Allocation Fund
Investment Abbreviations:
EMTN | – Euro Medium Term Notes | |
LIBOR | – London Interbank Offered Rate | |
LIFFE | – London International Financial Futures and Options Exchange |
Index Information:
CIBC Custom 2 Agriculture Commodity Index | - a commodity index composed of futures contracts on sugar, soybeans, soybean meal and cotton. | |
Monthly Rebalance Commodity Excess Return Index | - a commodity index composed of futures contracts on soybean meal, soybeans, sugar No. 11 and cotton No. 2. | |
Barclays Commodity Strategy 1452 Excess Return Index | – a commodity index that provide exposure to future contracts on copper. | |
Single Commodity Excess Return Index | – a commodity index composed of future contracts on gold. |
Notes to Schedule of Investments:
(a) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(b) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on April 30, 2015. |
(c) | All or a portion of the value was designated as collateral to cover margin requirements for swap agreements. See Note 1L. |
(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 April 30, 2015 was $184,899,564, which represented 2.04% of the Fund’s Net Assets. |
(e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
(f) | Futures collateralized by $609,220,000 cash held with Merrill Lynch, the futures commission merchant. |
Target Risk Allocation and Notional Asset Weights†
By asset class
Asset Class | Risk Allocation* | % of Total Net Assets as of 04/30/15** | ||||||
Equities | 44.1 | % | 39.3 | % | ||||
Fixed Income | 36.7 | 81.0 | ||||||
Commodities | 19.2 | 20.1 |
† | Risk contribution is measured as the standard deviation of each asset class as a percentage of total portfolio standard deviation. The risk contribution of each underlying asset determines the dollar-weighting of the asset. Standard deviation measures a fund’s range of total returns and fluctuations over a defined period of time. |
* | Based on the expected market exposure. |
** | Due to the use of leverage, the percentages may not equal 100%. |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
7 Invesco Balanced-Risk Allocation Fund
Consolidated Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $3,199,889,190) | $ | 3,146,033,556 | ||
Investments in affiliated money market funds, at value and cost | 5,277,037,531 | |||
Total investments, at value (Cost $8,476,926,721) | 8,423,071,087 | |||
Receivable for: | ||||
Deposits with brokers for open futures contracts | 609,220,000 | |||
Fund shares sold | 20,949,682 | |||
Dividends and interest | 140,460 | |||
Swaps receivables | 6,500,493 | |||
Investment for trustee deferred compensation and retirement plans | 574,731 | |||
Unrealized appreciation on swap agreements — OTC | 25,502,668 | |||
Other assets | 192,474 | |||
Total assets | 9,086,151,595 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 13,968,436 | |||
Swaps payable | 250,700 | |||
Variation margin — futures | 35,465,856 | |||
Accrued fees to affiliates | 4,384,695 | |||
Accrued trustees’ and officers’ fees and benefits | 11,304 | |||
Accrued other operating expenses | 759,002 | |||
Trustee deferred compensation and retirement plans | 672,996 | |||
Unrealized depreciation on swap agreements — OTC | 1,138,106 | |||
Total liabilities | 56,651,095 | |||
Net assets applicable to shares outstanding | $ | 9,029,500,500 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 8,585,607,143 | ||
Undistributed net investment income (loss) | (53,215,264 | ) | ||
Undistributed net realized gain | 491,708,050 | |||
Net unrealized appreciation | 5,400,571 | |||
$ | 9,029,500,500 |
Net Assets: |
| |||
Class A | $ | 2,876,247,387 | ||
Class B | $ | 17,240,640 | ||
Class C | $ | 1,865,242,776 | ||
Class R | $ | 29,742,571 | ||
Class Y | $ | 3,587,759,839 | ||
Class R5 | $ | 185,620,822 | ||
Class R6 | $ | 467,646,465 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 241,057,244 | |||
Class B | 1,495,733 | |||
Class C | 161,827,814 | |||
Class R | 2,524,104 | |||
Class Y | 297,475,248 | |||
Class R5 | 15,385,149 | |||
Class R6 | 38,729,803 | |||
Class A: | ||||
Net asset value per share | $ | 11.93 | ||
Maximum offering price per share | ||||
(Net asset value of $11.93 ¸ 94.50%) | $ | 12.62 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 11.53 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 11.53 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 11.78 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 12.06 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 12.06 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 12.07 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
8 Invesco Balanced-Risk Allocation Fund
Consolidated Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends from affiliated money market funds | $ | 638,092 | ||
Interest | 1,099,115 | |||
Total investment income | 1,737,207 | |||
Expenses: | ||||
Advisory fees | 37,833,831 | |||
Administrative services fees | 372,117 | |||
Custodian fees | 165,231 | |||
Distribution fees: | ||||
Class A | 3,543,267 | |||
Class B | 95,638 | |||
Class C | 9,311,312 | |||
Class R | 71,706 | |||
Transfer agent fees — A, B, C, R and Y | 4,863,609 | |||
Transfer agent fees — R5 | 78,744 | |||
Transfer agent fees — R6 | 2,255 | |||
Trustees’ and officers’ fees and benefits | 84,179 | |||
Other | 1,136,179 | |||
Total expenses | 57,558,068 | |||
Less: Fees waived and expense offset arrangement(s) | (2,183,716 | ) | ||
Net expenses | 55,374,352 | |||
Net investment income (loss) | (53,637,145 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (10,349,666 | ) | ||
Foreign currencies | (1,345,874 | ) | ||
Futures contracts | 508,866,447 | |||
Swap agreements | (43,105,698 | ) | ||
454,065,209 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (53,079,501 | ) | ||
Futures contracts | (10,721,609 | ) | ||
Swap agreements | 20,221,935 | |||
(43,579,175 | ) | |||
Net realized and unrealized gain | 410,486,034 | |||
Net increase in net assets resulting from operations | $ | 356,848,889 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
9 Invesco Balanced-Risk Allocation Fund
Consolidated Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (53,637,145 | ) | $ | (121,312,189 | ) | ||
Net realized gain | 454,065,209 | 758,417,753 | ||||||
Change in net unrealized appreciation (depreciation) | (43,579,175 | ) | (337,108,788 | ) | ||||
Net increase in net assets resulting from operations | 356,848,889 | 299,996,776 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (56,654,917 | ) | — | |||||
Class B | (243,139 | ) | — | |||||
Class C | (22,928,504 | ) | — | |||||
Class R | (492,454 | ) | — | |||||
Class Y | (81,503,225 | ) | — | |||||
Class R5 | (4,180,438 | ) | — | |||||
Class R6 | (11,328,824 | ) | — | |||||
Total distributions from net investment income | (177,331,501 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (152,019,025 | ) | (283,367,752 | ) | ||||
Class B | (1,108,269 | ) | (2,208,248 | ) | ||||
Class C | (104,512,062 | ) | (178,493,603 | ) | ||||
Class R | (1,529,651 | ) | (2,094,860 | ) | ||||
Class Y | (191,523,927 | ) | (320,352,034 | ) | ||||
Class R5 | (9,729,719 | ) | (13,942,287 | ) | ||||
Class R6 | (25,148,843 | ) | (37,054,031 | ) | ||||
Total distributions from net realized gains | (485,571,496 | ) | (837,512,815 | ) | ||||
Share transactions–net: | ||||||||
Class A | 31,900,512 | (1,118,220,825 | ) | |||||
Class B | (2,981,612 | ) | (8,976,629 | ) | ||||
Class C | (5,778,954 | ) | (491,595,208 | ) | ||||
Class R | 2,471,368 | (557,151 | ) | |||||
Class Y | 15,900,812 | (938,385,675 | ) | |||||
Class R5 | 4,913,808 | (12,756,282 | ) | |||||
Class R6 | 3,527,675 | (22,311,912 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | 49,953,609 | (2,592,803,682 | ) | |||||
Net increase (decrease) in net assets | (256,100,499 | ) | (3,130,319,721 | ) | ||||
Net assets: | ||||||||
Beginning of period | 9,285,600,999 | 12,415,920,720 | ||||||
End of period (includes undistributed net investment income (loss) of $(53,215,264) and $177,753,382, respectively) | $ | 9,029,500,500 | $ | 9,285,600,999 |
Notes to Consolidated Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Balanced-Risk Allocation Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 consolidated financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
10 Invesco Balanced-Risk Allocation Fund
The Fund will seek to gain exposure to the commodity markets primarily through investments in the Invesco Cayman Commodity Fund I Ltd. (the “Subsidiary”), a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands. The Subsidiary was organized by the Fund to invest in commodity-linked derivatives. The Fund may invest up to 25% of its total assets in the Subsidiary.
The Fund’s investment objective is to provide total return with a low to moderate correlation to traditional financial market indices.
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 consolidated 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 consolidated financial statements may materially differ from the value received upon actual sale of those investments.
11 Invesco Balanced-Risk Allocation Fund
B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (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 Consolidated Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Consolidated Statement of Operations and the Consolidated Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Consolidated Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Consolidated Statement of Operations and Consolidated Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Consolidated Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Consolidated Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues 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 consolidated financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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 financial statements are prepared on a consolidated basis in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. The accompanying financial statements reflect the financial position of the Fund and its Subsidiary and the results of operations on a consolidated basis. All inter-company accounts and transactions have been eliminated in consolidation. |
In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the consolidated financial statements are released to print.
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust, and under the Subsidiary’s organizational documents, the directors and officers of the Subsidiary, are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund and/or the Subsidiary, respectively. 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. | Structured Securities — The Fund may invest in structured securities. Structured securities are a type of derivative security whose value is determined by reference to changes in the value of underlying securities, currencies, interest rates, commodities, indices or other financial indicators (“reference instruments”). Most structured securities are fixed-income securities that have maturities of three years or less. Structured securities may be positively or negatively indexed (i.e., their principal value or interest rates may increase or decrease if the underlying reference instrument appreciates) and may have return characteristics similar to direct investments in the underlying reference instrument. |
12 Invesco Balanced-Risk Allocation Fund
Structured securities may entail a greater degree of market risk than other types of debt securities because the investor bears the risk of the reference instruments. In addition to the credit risk of structured securities and the normal risks of price changes in response to changes in interest rates, the principal amount of structured notes or indexed securities may decrease as a result of changes in the value of the underlying reference instruments. Changes in the daily value of structured securities are recorded as unrealized gains (losses) in the Consolidated Statement of Operations. When the structured securities mature or are sold, the Fund recognizes a realized gain (loss) on the Consolidated Statement of Operations.
J. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Consolidated Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Consolidated Statement of Operations.
K. | Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties (“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 Consolidated 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 Consolidated 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 Consolidated Statement of Assets and Liabilities. |
L. | 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 Counterparties. 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. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Consolidated 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 Consolidated Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Consolidated Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Consolidated 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 Consolidated 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. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
13 Invesco Balanced-Risk Allocation Fund
M. | Other Risks — The Fund will seek to gain exposure to commodity markets primarily through an investment in the Subsidiary and through investments in exchange traded funds and commodity-linked derivatives. The Subsidiary, unlike the Fund, may invest without limitation in commodities, commodity-linked derivatives and other securities, such as exchange traded notes, that may provide leverage and non-leveraged exposure to commodity markets. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. |
The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.
N. | 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. |
O. | 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 less the amount paid by the Subsidiary 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 | .95% | ||||
Next $250 million | 0 | .925% | ||||
Next $500 million | 0 | .90% | ||||
Next $1.5 billion | 0 | .875% | ||||
Next $2.5 billion | 0 | .85% | ||||
Next $2.5 billion | 0 | .825% | ||||
Next $2.5 billion | 0 | .80% | ||||
Over $10 billion | 0 | .775% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.85%.
The Subsidiary has entered into a separate contract with the Adviser whereby the Adviser provides investment advisory and other services to the Subsidiary. In consideration of these services, the Subsidiary pays an advisory fee to the Adviser based on the annual rate of the Subsidiary’s average daily net assets as set forth in the table above.
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, through at least June 30, 2016, 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 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. 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. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $2,178,149.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class 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
14 Invesco Balanced-Risk Allocation Fund
shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2015, expenses incurred under the Plans are shown in the Consolidated Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2015, IDI advised the Fund that IDI retained $492,269 in front-end sales commissions from the sale of Class A shares and $29,508, $4,928 and $64,373 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | |||||||||||||
Money Market Funds | $ | 5,277,037,531 | $ | — | $ | — | $ | 5,277,037,531 | ||||||||
U.S. Treasury Securities | — | 2,962,133,992 | — | 2,962,133,992 | ||||||||||||
Commodity-Linked Securities | — | 183,899,564 | — | 183,899,564 | ||||||||||||
5,277,037,531 | 3,146,033,556 | — | 8,423,071,087 | |||||||||||||
Futures Contracts* | 34,891,643 | — | — | 34,891,643 | ||||||||||||
Swap Agreements* | — | 24,364,562 | — | 24,364,562 | ||||||||||||
Total Investments | $ | 5,311,929,174 | $ | 3,170,398,118 | $ | — | $ | 8,482,327,292 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Commodity risk: | ||||||||
Futures contracts(a) | $ | 30,641,622 | $ | — | ||||
Swap agreements(b) | 25,502,668 | (475,145 | ) | |||||
Interest rate risk: | ) | |||||||
Futures contracts(a) | 5,675,151 | (47,101,723 | ||||||
Swap agreements(b) | — | (377,216 | ) | |||||
Equity risk: | ||||||||
Futures contracts(a) | 55,876,378 | (10,199,785 | ) | |||||
Swap agreements(b) | — | (284,745 | ) | |||||
Total | $ | 117,695,819 | $ | (58,438,614 | ) |
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Consolidated Statement of Assets and Liabilities. |
(b) | Values are disclosed on the Consolidated Statement of Assets and Liabilities under the caption Unrealized appreciation on swap agreements — OTC and Unrealized depreciation on swap agreements — OTC. |
15 Invesco Balanced-Risk Allocation Fund
Effect of Derivative Investments for the six months ended April 30, 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 Consolidated Statement of Operations | ||||||||
Futures Contracts | Swap Agreements | |||||||
Realized Gain (Loss): | ||||||||
Commodity risk | $ | (225,013,678 | ) | $ | (79,008,907 | ) | ||
Interest rate risk | 466,254,159 | 14,866,834 | ||||||
Equity risk | 267,625,966 | 21,036,375 | ||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||
Commodity risk | 97,043,398 | 26,222,933 | ||||||
Interest rate risk | (162,021,739 | ) | (4,311,881 | ) | ||||
Equity risk | 54,256,732 | (1,689,117 | ) | |||||
Total | $ | 498,144,838 | $ | (22,883,763 | ) |
The table below summarizes the average notional value of futures contracts and swap agreements outstanding during the period.
Futures Contracts | Swap Agreements | |||||||
Average notional value | $ | 11,198,538,741 | $ | 1,307,609,381 |
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 Consolidated 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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of assets presented in Consolidated Statement of Assets & Liabilities | Collateral Received | Net Amount(a) | ||||||||||||||||||||
Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Barclays Bank PLC | $ | 11,831,000 | $ | (26,737 | ) | $ | 11,804,263 | $ | (876,009 | ) | $ | — | $ | 10,928,254 | ||||||||||
Canadian Imperial Bank of Commerce | 10,935,585 | (27,498 | ) | 10,908,087 | (859,009 | ) | — | 10,049,078 | ||||||||||||||||
Merrill Lynch International | 6,500,493 | (152,663 | ) | 6,347,830 | (406,524 | ) | — | 5,941,306 | ||||||||||||||||
Morgan Stanley Capital Services, LLC | 2,736,083 | (7,314 | ) | 2,728,769 | (1,503,691 | ) | — | 1,225,078 | ||||||||||||||||
Total | $ | 32,003,161 | $ | (214,212 | ) | $ | 31,788,949 | $ | (3,645,233 | ) | $ | — | $ | 28,143,716 | ||||||||||
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized Liabilities | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of & Liabilities | Collateral Pledged | Net Amount(a) | ||||||||||||||||||||
Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Fund | ||||||||||||||||||||||||
Goldman Sachs International | $ | 662,961 | $ | — | $ | 662,961 | $ | — | $ | — | $ | 662,961 | ||||||||||||
Subsidiary | ||||||||||||||||||||||||
Barclays Bank, PLC | 26,737 | (26,737 | ) | — | — | — | — | |||||||||||||||||
Canadian Imperial Bank of Commerce | 27,498 | (27,498 | ) | — | — | — | — | |||||||||||||||||
Cargill, Inc. | 21,743 | — | 21,743 | — | — | 21,743 | ||||||||||||||||||
Goldman Sachs International | 11,962 | — | 11,962 | — | — | 11,962 | ||||||||||||||||||
J.P. Morgan Securities Inc. | 477,928 | — | 477,928 | (477,928 | ) | — | — | |||||||||||||||||
Merrill Lynch International | 152,663 | (152,663 | ) | — | — | — | — | |||||||||||||||||
Morgan Stanley Capital Services, LLC | 7,314 | (7,314 | ) | — | — | — | — | |||||||||||||||||
Subtotal-Subsidiary | 725,845 | (214,212 | ) | 511,633 | (477,928 | ) | — | 33,705 | ||||||||||||||||
Total | $ | 1,388,806 | $ | (214,212 | ) | $ | 1,174,594 | $ | (477,928 | ) | $ | — | $ | 696,666 |
(a) | The Fund and the Subsidiary are recognized as separate legal entities and as such are subject to separate netting arrangements with the Counterparty. |
16 Invesco Balanced-Risk Allocation 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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $5,567.
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 Consolidated Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. 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 October 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 April 30, 2015 was $0 and $25,144,347, 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 | $ | 207,235 | ||
Aggregate unrealized (depreciation) of investment securities | (54,063,677 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (53,856,442 | ) |
Cost of investments for tax purposes is $8,476,927,529.
17 Invesco Balanced-Risk Allocation Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 30, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 27,409,528 | $ | 325,471,685 | 51,806,417 | $ | 632,415,865 | ||||||||||
Class B | 43,009 | 490,853 | 140,674 | 1,658,625 | ||||||||||||
Class C | 13,019,960 | 149,543,957 | 21,791,794 | 258,168,002 | ||||||||||||
Class R | 358,782 | 4,217,036 | 662,774 | 7,969,161 | ||||||||||||
Class Y | 55,707,194 | 665,855,280 | 121,129,080 | 1,500,251,125 | ||||||||||||
Class R5 | 1,132,957 | 13,502,525 | 2,925,655 | 35,680,316 | ||||||||||||
Class R6 | 2,743,940 | 32,873,537 | 2,635,178 | 32,603,862 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 16,242,453 | 186,300,937 | 21,748,196 | 252,496,557 | ||||||||||||
Class B | 115,320 | 1,281,200 | 185,614 | 2,090,018 | ||||||||||||
Class C | 10,454,377 | 116,148,130 | 14,422,261 | 162,394,677 | ||||||||||||
Class R | 176,446 | 2,000,904 | 181,423 | 2,082,729 | ||||||||||||
Class Y | 15,160,636 | 175,560,162 | 17,088,467 | 200,276,835 | ||||||||||||
Class R5 | 1,161,565 | 13,462,539 | 1,112,677 | 13,040,575 | ||||||||||||
Class R6 | 3,133,557 | 36,317,925 | 3,157,016 | 37,031,793 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 222,845 | 2,657,407 | 443,300 | 5,425,537 | ||||||||||||
Class B | (230,476 | ) | (2,657,407 | ) | (458,284 | ) | (5,425,537 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (40,543,908 | ) | (482,529,517 | ) | (164,742,314 | ) | (2,008,558,784 | ) | ||||||||
Class B | (182,256 | ) | (2,096,258 | ) | (621,650 | ) | (7,299,735 | ) | ||||||||
Class C | (23,661,046 | ) | (271,471,041 | ) | (77,686,916 | ) | (912,157,887 | ) | ||||||||
Class R | (319,668 | ) | (3,746,572 | ) | (885,517 | ) | (10,609,041 | ) | ||||||||
Class Y | (69,210,168 | ) | (825,514,630 | ) | (215,629,161 | ) | (2,638,913,635 | ) | ||||||||
Class R5 | (1,851,338 | ) | (22,051,256 | ) | (5,001,408 | ) | (61,477,173 | ) | ||||||||
Class R6 | (5,506,846 | ) | (65,663,787 | ) | (7,536,409 | ) | (91,947,567 | ) | ||||||||
Net increase (decrease) in share activity | 5,576,863 | $ | 49,953,609 | (213,131,133 | ) | $ | (2,592,803,682 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 30% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
18 Invesco Balanced-Risk Allocation Fund
NOTE 11—Consolidated Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 12.36 | $ | (0.07 | ) | $ | 0.55 | $ | 0.48 | $ | (0.25 | ) | $ | (0.66 | ) | $ | (0.91 | ) | $ | 11.93 | 4.12 | % | $ | 2,876,247 | 1.20 | %(d) | 1.25 | %(d) | (1.17 | )%(d) | 0 | % | ||||||||||||||||||||||||
Year ended 10/31/14 | 12.88 | (0.14 | ) | 0.53 | 0.39 | — | (0.91 | ) | (0.91 | ) | 12.36 | 3.52 | 2,938,957 | 1.20 | 1.24 | (1.16 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.88 | (0.14 | ) | 0.78 | 0.64 | (0.29 | ) | (0.35 | ) | (0.64 | ) | 12.88 | 5.15 | 4,229,859 | 1.14 | 1.21 | (1.07 | ) | 0 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 12.01 | (0.13 | ) | 1.46 | 1.33 | (0.34 | ) | (0.12 | ) | (0.46 | ) | 12.88 | 11.39 | 3,600,577 | 1.10 | 1.22 | (1.00 | ) | 282 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.68 | (0.11 | ) | 1.11 | 1.00 | (0.47 | ) | (0.20 | ) | (0.67 | ) | 12.01 | 9.13 | 1,001,088 | 1.04 | 1.31 | (0.95 | ) | 163 | (e) | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 10.72 | (0.10 | ) | 1.61 | 1.51 | (0.21 | ) | (0.34 | ) | (0.55 | ) | 11.68 | 14.76 | 207,600 | 1.04 | 1.42 | (0.93 | ) | 33 | (e) | ||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 11.92 | (0.11 | ) | 0.52 | 0.41 | (0.14 | ) | (0.66 | ) | (0.80 | ) | 11.53 | 3.72 | 17,241 | 1.95 | (d) | 2.00 | (d) | (1.92 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 12.53 | (0.23 | ) | 0.53 | 0.30 | — | (0.91 | ) | (0.91 | ) | 11.92 | 2.85 | 20,853 | 1.95 | 1.99 | (1.91 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.59 | (0.22 | ) | 0.75 | 0.53 | (0.24 | ) | (0.35 | ) | (0.59 | ) | 12.53 | 4.34 | 31,381 | 1.89 | 1.96 | (1.82 | ) | 0 | �� | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.81 | (0.21 | ) | 1.42 | 1.21 | (0.31 | ) | (0.12 | ) | (0.43 | ) | 12.59 | 10.52 | 32,246 | 1.85 | 1.97 | (1.75 | ) | 282 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.56 | (0.19 | ) | 1.09 | 0.90 | (0.45 | ) | (0.20 | ) | (0.65 | ) | 11.81 | 8.30 | 17,722 | 1.79 | 2.06 | (1.70 | ) | 163 | (e) | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 10.68 | (0.19 | ) | 1.61 | 1.42 | (0.20 | ) | (0.34 | ) | (0.54 | ) | 11.56 | 13.95 | 9,707 | 1.79 | 2.17 | (1.68 | ) | 33 | (e) | ||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 11.91 | (0.11 | ) | 0.53 | 0.42 | (0.14 | ) | (0.66 | ) | (0.80 | ) | 11.53 | 3.80 | 1,865,243 | 1.95 | (d) | 2.00 | (d) | (1.92 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 12.53 | (0.23 | ) | 0.52 | 0.29 | — | (0.91 | ) | (0.91 | ) | 11.91 | 2.77 | 1,930,318 | 1.95 | 1.99 | (1.91 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.59 | (0.22 | ) | 0.75 | 0.53 | (0.24 | ) | (0.35 | ) | (0.59 | ) | 12.53 | 4.34 | 2,550,094 | 1.89 | 1.96 | (1.82 | ) | 0 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.80 | (0.21 | ) | 1.43 | 1.22 | (0.31 | ) | (0.12 | ) | (0.43 | ) | 12.59 | 10.61 | 1,898,066 | 1.85 | 1.97 | (1.75 | ) | 282 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.56 | (0.19 | ) | 1.08 | 0.89 | (0.45 | ) | (0.20 | ) | (0.65 | ) | 11.80 | 8.21 | 383,786 | 1.79 | 2.06 | (1.70 | ) | 163 | (e) | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 10.68 | (0.19 | ) | 1.61 | 1.42 | (0.20 | ) | (0.34 | ) | (0.54 | ) | 11.56 | 13.95 | 58,377 | 1.79 | 2.17 | (1.68 | ) | 33 | (e) | ||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 12.20 | (0.08 | ) | 0.53 | 0.45 | (0.21 | ) | (0.66 | ) | (0.87 | ) | 11.78 | 3.97 | 29,743 | 1.45 | (d) | 1.50 | (d) | (1.42 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 12.75 | (0.17 | ) | 0.53 | 0.36 | — | (0.91 | ) | (0.91 | ) | 12.20 | 3.30 | 28,166 | 1.45 | 1.49 | (1.41 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.77 | (0.17 | ) | 0.77 | 0.60 | (0.27 | ) | (0.35 | ) | (0.62 | ) | 12.75 | 4.89 | 29,964 | 1.39 | 1.46 | (1.32 | ) | 0 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.93 | (0.15 | ) | 1.44 | 1.29 | (0.33 | ) | (0.12 | ) | (0.45 | ) | 12.77 | 11.12 | 15,605 | 1.35 | 1.47 | (1.25 | ) | 282 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.63 | (0.14 | ) | 1.10 | 0.96 | (0.46 | ) | (0.20 | ) | (0.66 | ) | 11.93 | 8.84 | 2,956 | 1.29 | 1.56 | (1.20 | ) | 163 | (e) | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 10.71 | (0.13 | ) | 1.60 | 1.47 | (0.21 | ) | (0.34 | ) | (0.55 | ) | 11.63 | 14.36 | 597 | 1.29 | 1.67 | (1.18 | ) | 33 | (e) | ||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 12.51 | (0.05 | ) | 0.54 | 0.49 | (0.28 | ) | (0.66 | ) | (0.94 | ) | 12.06 | 4.22 | 3,587,760 | 0.95 | (d) | 1.00 | (d) | (0.92 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 12.99 | (0.11 | ) | 0.54 | 0.43 | — | (0.91 | ) | (0.91 | ) | 12.51 | 3.81 | 3,699,738 | 0.95 | 0.99 | (0.91 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.97 | (0.10 | ) | 0.78 | 0.68 | (0.31 | ) | (0.35 | ) | (0.66 | ) | 12.99 | 5.42 | 4,846,950 | 0.89 | 0.96 | (0.82 | ) | 0 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 12.07 | (0.10 | ) | 1.47 | 1.37 | (0.35 | ) | (0.12 | ) | (0.47 | ) | 12.97 | 11.69 | 3,901,165 | 0.85 | 0.97 | (0.75 | ) | 282 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.71 | (0.08 | ) | 1.11 | 1.03 | (0.47 | ) | (0.20 | ) | (0.67 | ) | 12.07 | 9.45 | 553,001 | 0.79 | 1.06 | (0.70 | ) | 163 | (e) | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 10.73 | (0.08 | ) | 1.61 | 1.53 | (0.21 | ) | (0.34 | ) | (0.55 | ) | 11.71 | 14.97 | 64,428 | 0.79 | 1.17 | (0.68 | ) | 33 | (e) | ||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 12.51 | (0.05 | ) | 0.54 | 0.49 | (0.28 | ) | (0.66 | ) | (0.94 | ) | 12.06 | 4.23 | 185,621 | 0.92 | (d) | 0.97 | (d) | (0.89 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 12.99 | (0.11 | ) | 0.54 | 0.43 | — | (0.91 | ) | (0.91 | ) | 12.51 | 3.81 | 186,943 | 0.93 | 0.97 | (0.89 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.97 | (0.10 | ) | 0.78 | 0.68 | (0.31 | ) | (0.35 | ) | (0.66 | ) | 12.99 | 5.45 | 206,573 | 0.86 | 0.93 | (0.79 | ) | 0 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 12.07 | (0.08 | ) | 1.45 | 1.37 | (0.35 | ) | (0.12 | ) | (0.47 | ) | 12.97 | 11.69 | 164,371 | 0.79 | 0.90 | (0.69 | ) | 282 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.72 | (0.08 | ) | 1.11 | 1.03 | (0.48 | ) | (0.20 | ) | (0.68 | ) | 12.07 | 9.36 | 449,380 | 0.79 | 0.97 | (0.70 | ) | 163 | (e) | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 10.73 | (0.08 | ) | 1.62 | 1.54 | (0.21 | ) | (0.34 | ) | (0.55 | ) | 11.72 | 15.06 | 467,441 | 0.79 | 1.04 | (0.68 | ) | 33 | (e) | ||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 12.53 | (0.05 | ) | 0.55 | 0.50 | (0.30 | ) | (0.66 | ) | (0.96 | ) | 12.07 | 4.26 | 467,646 | 0.84 | (d) | 0.89 | (d) | (0.81 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 12.99 | (0.10 | ) | 0.55 | 0.45 | — | (0.91 | ) | (0.91 | ) | 12.53 | 3.97 | 480,626 | 0.83 | 0.87 | (0.79 | ) | 72 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 12.97 | (0.09 | ) | 0.77 | 0.68 | (0.31 | ) | (0.35 | ) | (0.66 | ) | 12.99 | 5.48 | 521,099 | 0.79 | 0.86 | (0.72 | ) | 0 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(f) | 13.13 | (0.01 | ) | (0.15 | ) | (0.16 | ) | — | — | — | 12.97 | (3.14 | ) | 554,557 | 0.76 | (g) | 0.85 | (g) | (0.66 | )(g) | 282 |
(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 $2,858,104, $19,286, $1,877,695, $28,920, $3,567,616, $184,468 and $477,315 for Class A, Class B, Class C, Class R, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Subsequent to issuance of its October 31, 2011 financial statements, the Fund revised the calculation of portfolio turnover as reflected in the financial highlights above. |
(f) | Commencement date of September 24, 2012. |
(g) | Annualized. |
19 Invesco Balanced-Risk Allocation 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 distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014, through April 30, 2015.
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 your Fund invests. The amount of fees and expenses incurred indirectly by your Fund will vary because the underlying funds have varied expenses and fee levels and the Fund may own different proportions of the underlying funds at different times. 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 underlying funds your Fund invests in. The effect of the estimated underlying fund expenses that you bear indirectly are included in your Fund’s total return.
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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by the Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Class | Beginning Account Value (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,041.20 | $ | 6.07 | $ | 1,018.84 | $ | 6.01 | 1.20 | % | ||||||||||||
B | 1,000.00 | 1,037.20 | 9.85 | 1,015.12 | 9.74 | 1.95 | ||||||||||||||||||
C | 1,000.00 | 1,038.00 | 9.85 | 1,015.12 | 9.74 | 1.95 | ||||||||||||||||||
R | 1,000.00 | 1,039.70 | 7.33 | 1,017.60 | 7.25 | 1.45 | ||||||||||||||||||
Y | 1,000.00 | 1,042.20 | 4.81 | 1,020.08 | 4.76 | 0.95 | ||||||||||||||||||
R5 | 1,000.00 | 1,042.30 | 4.66 | 1,020.23 | 4.61 | 0.92 | ||||||||||||||||||
R6 | 1,000.00 | 1,042.60 | 4.25 | 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 November 1, 2014 through April 30, 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 Balanced-Risk Allocation 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: 811-05426 and 033-19338 | IBRA-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Balanced-Risk Commodity Strategy Fund | ||||
Nasdaq: | ||||
A: BRCAX ¡ B: BRCBX ¡ C: BRCCX ¡ R: BRCRX ¡ Y: BRCYX ¡ R5: BRCNX ¡ R6: IBRFX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Consolidated Schedule of Investments | ||||
7 Consolidated Financial Statements | ||||
9 Notes to Consolidated Financial Statements | ||||
18 Consolidated 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, 10/31/14 to 4/30/15, 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 | –8.33 | % | ||
Class B Shares | –8.66 | |||
Class C Shares | –8.67 | |||
Class R Shares | –8.39 | |||
Class Y Shares | –8.12 | |||
Class R5 Shares | –8.12 | |||
Class R6 Shares | –8.00 | |||
Bloomberg Commodity Index▼ (Broad Market/Style-Specific Index) | –11.87 | |||
Source(s): ▼Bloomberg LP
| ||||
The Bloomberg Commodity Index is an unmanaged index designed to be a highly liquid and diversified benchmark for the commodity futures 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. |
|
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (11/30/10) | –7.59 | % | |||||
1 Year | –22.26 | ||||||
Class B Shares | |||||||
Inception (11/30/10) | –7.47 | % | |||||
1 Year | –22.42 | ||||||
Class C Shares | |||||||
Inception (11/30/10) | –7.08 | % | |||||
1 Year | –19.17 | ||||||
Class R Shares | |||||||
Inception (11/30/10) | –6.56 | % | |||||
1 Year | –17.94 | ||||||
Class Y Shares | |||||||
Inception (11/30/10) | –6.08 | % | |||||
1 Year | –17.46 | ||||||
Class R5 Shares | |||||||
Inception (11/30/10) | –6.08 | % | |||||
1 Year | –17.37 | ||||||
Class R6 Shares | |||||||
Inception | –6.21 | % | |||||
1 Year | –17.35 |
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.
The performance data quoted represent past performance and
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end,including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (11/30/10) | –8.31 | % | |||||
1 Year | –23.64 | ||||||
Class B Shares | |||||||
Inception (11/30/10) | –8.18 | % | |||||
1 Year | –23.78 | ||||||
Class C Shares | |||||||
Inception (11/30/10) | –7.79 | % | |||||
1 Year | –20.59 | ||||||
Class R Shares | |||||||
Inception (11/30/10) | –7.28 | % | |||||
1 Year | –19.46 | ||||||
Class Y Shares | |||||||
Inception (11/30/10) | –6.81 | % | |||||
1 Year | –18.97 | ||||||
Class R5 Shares | |||||||
Inception (11/30/10) | –6.78 | % | |||||
1 Year | –18.86 | ||||||
Class R6 Shares | |||||||
Inception | –6.93 | % | |||||
1 Year | –18.86 |
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 1.57%, 2.32%, 2.32%, 1.82%, 1.32%, 1.19% and 1.10%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares was 1.62%, 2.37%, 2.37%, 1.87%, 1.37%, 1.24% and 1.15%, 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
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, 2017. See current prospectus for more information. |
2 Invesco Balanced-Risk Commodity Strategy |
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 Balanced-Risk Commodity Strategy Fund
Consolidated Schedule of Investments
April 30, 2015
(Unaudited)
Interest Rate | Maturity Date | Principal Amount | Value | |||||||||||||
U.S. Treasury Securities–64.05% |
| |||||||||||||||
U.S. Treasury Bills–27.16%(a) | ||||||||||||||||
U.S. Treasury Bills(b) | 0.07 | % | 06/04/15 | $ | 38,390,000 | $ | 38,389,998 | |||||||||
U.S. Treasury Bills(b) | 0.10 | % | 06/11/15 | 10,400,000 | 10,399,999 | |||||||||||
U.S. Treasury Bills(c) | 0.11 | % | 06/18/15 | 18,770,000 | 18,769,998 | |||||||||||
U.S. Treasury Bills(c) | 0.08 | % | 07/09/15 | 16,800,000 | 16,799,998 | |||||||||||
U.S. Treasury Bills(c) | 0.08 | % | 07/16/15 | 33,200,000 | 33,199,995 | |||||||||||
U.S. Treasury Bills(c) | 0.07 | % | 07/23/15 | 23,520,000 | 23,519,725 | |||||||||||
U.S. Treasury Bills(b) | 0.07 | % | 07/30/15 | 53,610,000 | 53,609,991 | |||||||||||
194,689,704 | ||||||||||||||||
U.S. Treasury Notes–36.89% | ||||||||||||||||
U.S. Treasury Notes(b)(c)(d) | 0.07 | % | 01/31/16 | 78,290,000 | 78,287,755 | |||||||||||
U.S. Treasury Notes(c)(d) | 0.09 | % | 04/30/16 | 130,690,000 | 130,705,989 | |||||||||||
U.S. Treasury Notes(d) | 0.10 | % | 07/31/16 | 55,360,000 | 55,364,434 | |||||||||||
264,358,178 | ||||||||||||||||
Total U.S. Treasury Securities (Cost $459,026,044) |
| 459,047,882 | ||||||||||||||
Shares | ||||||||||||||||
Exchange Traded Funds–2.91% | ||||||||||||||||
PowerShares DB Gold Fund (Cost $28,384,102)(e) | 535,000 | 20,859,650 | ||||||||||||||
Expiration Date | Principal Amount | |||||||||||||||
Commodity-Linked Securities–2.24% | ||||||||||||||||
Barclays Bank PLC, Series 2, U.S. Federal Funds (Effective) Rate minus 0.06% (linked to the Barclays Diversified Energy-Metals Total Return Index, multiplied by 3) (Cost $14,738,000)(f) | 01/26/16 | $ | 14,738,000 | 16,007,125 | ||||||||||||
Shares | ||||||||||||||||
Money Market Funds–29.79% | ||||||||||||||||
Liquid Assets Portfolio–Institutional Class(g) | 79,559,562 | 79,559,562 | ||||||||||||||
Premier Portfolio–Institutional Class(g) | 79,559,562 | 79,559,562 | ||||||||||||||
STIC (Global Series) PLC–U.S. Dollar Liquidity Portfolio (Ireland)–Institutional Class(g) | 54,403,617 | 54,403,617 | ||||||||||||||
Total Money Market Funds (Cost $213,522,741) | 213,522,741 | |||||||||||||||
TOTAL INVESTMENTS–98.99% (Cost $715,670,887) | 709,437,398 | |||||||||||||||
OTHER ASSETS LESS LIABILITIES–1.01% | 7,240,584 | |||||||||||||||
NET ASSETS–100.00% | $ | 716,677,982 |
Open Futures Contracts | ||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Coffee C | Long | 148 | December-2015 | $ | 7,994,775 | $ | 19,165 | |||||||||||
Corn | Long | 330 | July-2015 | 6,043,125 | (310,270 | ) | ||||||||||||
Cotton No. 2 | Long | 678 | December-2015 | 22,590,960 | 345,094 | |||||||||||||
LME Nickel | Short | 144 | May-2015 | (12,025,152 | ) | (1,112,198 | ) | |||||||||||
LME Zinc | Short | 167 | May-2015 | (9,827,950 | ) | (836,353 | ) | |||||||||||
Natural Gas | Long | 1,830 | December-2015 | 14,333,475 | 706,655 | |||||||||||||
NYH RBOB Gasoline (Globex) | Long | 450 | June-2015 | 38,652,390 | 2,176,173 | |||||||||||||
Soybean | Long | 884 | July-2015 | 43,139,200 | 368,437 | |||||||||||||
Wheat | Long | 334 | July-2015 | 7,915,800 | (836,116 | ) | ||||||||||||
Total Futures Contracts — Commodity Risk |
| $ | 520,587 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
4 Invesco Balanced-Risk Commodity Strategy Fund
Open Total Return Swap Agreements | ||||||||||||||||||||
Swap Agreements | Type of Contract | Counterparty | Number of Contracts | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Receive a return equal to the Barclays Brent Crude Roll Yield Excess Return Index and pay the product of (i) 0.35% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Barclays Bank PLC | 73,400 | March-2016 | $ | 29,076,911 | $ | 1,211,900 | ||||||||||||
Receive a return equal to the Barclays Silver Nearby Excess Return Index and pay the product of (i) 0.19% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Barclays Bank PLC | 247,300 | June-2015 | 52,739,297 | (549,253 | ) | |||||||||||||
Receive a return equal to the Barclays WTI Crude Roll Yield Excess Return Index and pay the product of (i) 0.35% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Barclays Bank PLC | 72,200 | March-2016 | 23,133,689 | 823,903 | ||||||||||||||
Receive a return equal to the Optimal GSCI Heating Oil Roll Yield 9m Excess Return Index and pay the product of (i) 0.37% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Barclays Bank PLC | 18,700 | February-2016 | 5,781,707 | 271,726 | ||||||||||||||
Receive a return equal to the CIBC Dynamic Roll LME Copper Excess Return Index 2 and pay the product of (i) 0.30% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Canadian Imperial Bank of Commerce | 15,600 | April-2016 | 1,190,770 | 70,060 | ||||||||||||||
Pay/Receive a return equal to the Enhanced Strategy Sugar A141 on the S&P GSCI Sugar Excess Return Index and pay the product of (i) 0.37% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Goldman Sachs International | 148,550 | March-2016 | 29,957,514 | 0 | ||||||||||||||
Pay/Receive a return equal to the S&P GSCI Brent Crude 1 Month Forward Index Excess Return and pay the product of (i) 0.12% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Goldman Sachs International | 5,050 | April-2016 | 3,459,949 | 0 | ||||||||||||||
Pay/Receive a return equal to the S&P GSCI Crude Oil 1 Month Forward Index Excess Return and pay the product of (i) 0.12% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Goldman Sachs International | 5,800 | April-2016 | 1,804,265 | 0 | ||||||||||||||
Pay/Receive a floating rate equal to the S&P GSCI Unleaded Gasoline 1 Month Forward Index Excess Return and pay the product of (i) 0.12% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Short | Goldman Sachs International | 6,350 | April-2016 | (5,314,408 | ) | 0 | |||||||||||||
Pay/Receive a return equal to the S&P GSCI Soybean Meal Excess Return Index and pay the product of (i) 0.30% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Goldman Sachs International | 40,000 | September-2015 | 45,414,120 | 0 | ||||||||||||||
Receive a return equal to the J.P. Morgan Contag Beta Gas Oil Excess Return Index and pay the product of (i) 0.25% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | JPMorgan Chase Bank, N.A. | 15,200 | April-2016 | 4,662,589 | 87,188 | ||||||||||||||
Receive a return equal to the S&P GSCI Gold Index Excess Return and pay the product of (i) 0.09% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | JPMorgan Chase Bank, N.A. | 492,000 | April-2016 | 48,953,459 | (185,533 | ) | |||||||||||||
Receive a return equal to Modified Macquarie Single Commodity Sugar type A Excess Return Index and pay the product of (i) 0.34% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Macquarie Bank Ltd. | 95,050 | March-2016 | 18,258,516 | (341,049 | ) | |||||||||||||
Receive a return equal to the Merrill Lynch Gold Excess Return Index and pay the product of (i) 0.14% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Merrill Lynch International | 115,200 | June-2015 | 17,907,875 | 0 | ||||||||||||||
Receive a return equal to the MLCX Aluminum Annual Excess Return Index and pay the product of (i) 0.28% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Merrill Lynch International | 502,500 | September-2015 | 54,296,733 | 0 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
5 Invesco Balanced-Risk Commodity Strategy Fund
Open Total Return Swap Agreements (continued) | ||||||||||||||||||||||
Swap Agreements | Type of Contract | Counterparty | Number of Contracts | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||
Receive a return equal to the MLCX Dynamic Enhanced Copper Excess Return Index and pay the product of (i) 0.25% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Merrill Lynch International | 109,250 | May-2015 | $ | 65,076,904 | $ | 0 | ||||||||||||||
Receive a return equal to the MS Soybean Oil Dynamic Roll Index and pay the product of (i) 0.30% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Morgan Stanley & Co. International PLC | 49,000 | April-2016 | 7,361,050 | (38,945 | ) | |||||||||||||||
Total Swap Agreements — Commodity Risk |
| $ | 1,349,997 |
Index Information:
Barclays Diversified Energy-Metals Total Return Index | – a basket of indices that provide exposure to various components of the energy and metals markets. The underlying commodities comprising the indices are: gold, silver, copper, Brent Crude oil, WTI Crude oil, gasoil and unleaded gasoline. |
Notes to Consolidated Schedule of Investments:
(a) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(b) | 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. |
(c) | All or a portion of the value was designated as collateral for swap agreements. See Note 1K and Note 4. |
(d) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on April 30, 2015. |
(e) | Affiliated company during the period. The Investment Company Act of 1940 defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the Investment Company Act of 1940) of that issuer. The value of this security as of April 30, 2015 represented 2.91% 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 value of this security at April 30, 2015 represented 2.24% of the Fund’s Net Assets. |
(g) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Target Risk Allocation and Notional Asset Weights*
By asset class, based on Net Assets as of April 30, 2015
Asset Class | Risk Allocation** | % of Net Assets as of 04/30/15*** | ||||||
Agriculture | 23.12 | % | 32.53 | % | ||||
Energy | 29.65 | 26.62 | ||||||
Industrial Metals | 23.03 | 27.66 | ||||||
Precious Metals | 24.20 | 29.22 |
* | Risk contribution is measured as the standard deviation of each asset class as a percentage of total portfolio standard deviation. The risk contribution of each underlying asset determines the dollar-weighting of the asset. Standard deviation measures a fund’s range of total returns and fluctuations over a defined period of time. |
** | Based on the expected market exposure. |
*** | Due to the use of leverage, the percentages may not equal 100%. |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
6 Invesco Balanced-Risk Commodity Strategy Fund
Consolidated Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $473,764,044) | $ | 475,055,007 | ||
Investments in affiliates, at value (Cost $241,906,843) | 234,382,391 | |||
Total investments, at value (Cost $715,670,887) | 709,437,398 | |||
Receivable for: | ||||
Fund shares sold | 592,332 | |||
Dividends and interest | 12,297 | |||
Swaps receivables | 9,849,914 | |||
Investment for trustee deferred compensation and retirement plans | 68,381 | |||
Unrealized appreciation on swap agreements — OTC | 2,464,777 | |||
Other assets | 52,231 | |||
Total assets | 722,477,330 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 165,926 | |||
Swaps payable | 2,435,894 | |||
Variation margin — futures | 1,615,167 | |||
Accrued fees to affiliates | 239,001 | |||
Accrued trustees’ and officers’ fees and benefits | 2,562 | |||
Accrued other operating expenses | 90,804 | |||
Trustee deferred compensation and retirement plans | 135,214 | |||
Unrealized depreciation on swap agreements — OTC | 1,114,780 | |||
Total liabilities | 5,799,348 | |||
Net assets applicable to shares outstanding | $ | 716,677,982 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 814,849,386 | ||
Undistributed net investment income | 6,673,514 | |||
Undistributed net realized gain (loss) | (100,482,013 | ) | ||
Net unrealized appreciation (depreciation) | (4,362,905 | ) | ||
$ | 716,677,982 |
Net Assets: | ||||
Class A | $ | 40,827,571 | ||
Class B | $ | 368,001 | ||
Class C | $ | 3,069,579 | ||
Class R | $ | 391,146 | ||
Class Y | $ | 253,278,242 | ||
Class R5 | $ | 284,205,509 | ||
Class R6 | $ | 134,537,934 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 5,538,509 | |||
Class B | 51,311 | |||
Class C | 428,609 | |||
Class R | 53,435 | |||
Class Y | 33,920,518 | |||
Class R5 | 38,038,651 | |||
Class R6 | 17,989,686 | |||
Class A: | ||||
Net asset value per share | $ | 7.37 | ||
Maximum offering price per share | ||||
(Net asset value of $7.37 ¸ 94.50%) | $ | 7.80 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 7.17 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 7.16 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 7.32 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 7.47 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 7.47 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 7.48 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
7 Invesco Balanced-Risk Commodity Strategy Fund
Consolidated Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends from affiliates | $ | 51,773 | ||
Interest | 175,708 | |||
Total investment income | 227,481 | |||
Expenses: | ||||
Advisory fees | 3,616,501 | |||
Administrative services fees | 95,918 | |||
Custodian fees | 11,159 | |||
Distribution fees: | ||||
Class A | 51,992 | |||
Class B | 2,013 | |||
Class C | 15,726 | |||
Class R | 920 | |||
Transfer agent fees — A, B, C, R and Y | 365,352 | |||
Transfer agent fees — R5 | 136,085 | |||
Trustees’ and officers’ fees and benefits | 17,312 | |||
Other | 109,187 | |||
Total expenses | 4,422,165 | |||
Less: Fees waived and expense offset arrangement(s) | (159,493 | ) | ||
Net expenses | 4,262,672 | |||
Net investment income (loss) | (4,035,191 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (16,439,684 | ) | ||
Futures contracts | 304,632 | |||
Swap agreements | (53,885,738 | ) | ||
(70,020,790 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 8,826,280 | |||
Futures contracts | (6,420,825 | ) | ||
Swap agreements | 10,139,232 | |||
12,544,687 | ||||
Net realized and unrealized gain (loss) | (57,476,103 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (61,511,294 | ) |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
8 Invesco Balanced-Risk Commodity Strategy Fund
Consolidated Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (4,035,191 | ) | $ | (7,753,789 | ) | ||
Net realized gain (loss) | (70,020,790 | ) | (73,181,888 | ) | ||||
Change in net unrealized appreciation (depreciation) | 12,544,687 | (5,977,815 | ) | |||||
Net increase (decrease) in net assets resulting from operations | (61,511,294 | ) | (86,913,492 | ) | ||||
Share transactions–net: | ||||||||
Class A | (2,658,456 | ) | (15,519,112 | ) | ||||
Class B | (105,550 | ) | (497,940 | ) | ||||
Class C | (237,978 | ) | (814,012 | ) | ||||
Class R | 52,574 | (84,233 | ) | |||||
Class Y | 8,785,322 | 49,824,052 | ||||||
Class R5 | 37,488,726 | 36,076,794 | ||||||
Class R6 | 14,358,288 | 21,545,333 | ||||||
Net increase in net assets resulting from share transactions | 57,682,926 | 90,530,882 | ||||||
Net increase (decrease) in net assets | (3,828,368 | ) | 3,617,390 | |||||
Net assets: | ||||||||
Beginning of period | 720,506,350 | 716,888,960 | ||||||
End of period (includes undistributed net investment income of $6,673,514 and $10,708,705, respectively) | $ | 716,677,982 | $ | 720,506,350 |
Notes to Consolidated Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Balanced-Risk Commodity Strategy Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 consolidated 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 will seek to gain exposure to the commodity markets primarily through investments in the Invesco Cayman Commodity Fund III Ltd. (the “Subsidiary”), a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands. The Subsidiary was organized by the Fund to invest in commodity-linked derivatives. The Fund may invest up to 25% of its total assets in the Subsidiary.
The Fund’s investment objective is to provide total return.
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 consolidated 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
9 Invesco Balanced-Risk Commodity Strategy 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.
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 consolidated 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 Consolidated Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Consolidated Statement of Operations and the Consolidated Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Consolidated Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Consolidated Statement of Operations and Consolidated Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Consolidated Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Consolidated Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues 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% |
10 Invesco Balanced-Risk Commodity Strategy Fund
or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions — Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the consolidated financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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 financial statements are prepared on a consolidated basis in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. The accompanying financial statements reflect the financial position of the Fund and its Subsidiary and the results of operations on a consolidated basis. All inter-company accounts and transactions have been eliminated in consolidation. |
In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the consolidated financial statements are released to print.
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust, and under the Subsidiary’s organizational documents, the directors and officers of the Subsidiary, are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund and/or the Subsidiary, respectively. 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. | Structured Securities — The Fund may invest in structured securities. Structured securities are a type of derivative security whose value is determined by reference to changes in the value of underlying securities, currencies, interest rates, commodities, indices or other financial indicators (“reference instruments”). Most structured securities are fixed-income securities that have maturities of three years or less. Structured securities may be positively or negatively indexed (i.e., their principal value or interest rates may increase or decrease if the underlying reference instrument appreciates) and may have return characteristics similar to direct investments in the underlying reference instrument. |
Structured securities may entail a greater degree of market risk than other types of debt securities because the investor bears the risk of the reference instruments. In addition to the credit risk of structured securities and the normal risks of price changes in response to changes in interest rates, the principal amount of structured notes or indexed securities may decrease as a result of changes in the value of the underlying reference instruments. Changes in the daily value of structured securities are recorded as unrealized gains (losses) in the Consolidated Statement of Operations. When the structured securities mature or are sold, the Fund recognizes a realized gain (loss) on the Consolidated Statement of Operations.
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 made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Consolidated 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 Consolidated 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 Consolidated Statement of Assets and Liabilities. |
11 Invesco Balanced-Risk Commodity Strategy Fund
K. | 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 Counterparties. 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. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Consolidated 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 Consolidated Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Consolidated Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Consolidated 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 Consolidated 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. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
L. | Other Risks — The Fund will seek to gain exposure to commodity markets primarily through an investment in the Subsidiary and through investments in exchange traded funds and commodity-linked derivatives. The Subsidiary, unlike the Fund, may invest without limitation in commodities, commodity-linked derivatives and other securities, such as exchange traded notes, that may provide leverage and non-leveraged exposure to commodity markets. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. |
The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.
M. | 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. |
N. | 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 | 1 | .05% | ||||
Next $250 million | 1 | .025% | ||||
Next $500 million | 1 | .00% | ||||
Next $1.5 billion | 0 | .975% | ||||
Next $2.5 billion | 0 | .95% | ||||
Next $2.5 billion | 0 | .925% | ||||
Next $2.5 billion | 0 | .90% | ||||
Over $10 billion | 0 | .875% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.03%.
The Subsidiary has entered into a separate contract with the Adviser whereby the Adviser provides investment advisory and other services to the Subsidiary. In consideration of these services, the Subsidiary pays an advisory fee to the Adviser based on the annual rate of the Subsidiary’s average daily net assets as set forth in the table above.
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).
12 Invesco Balanced-Risk Commodity Strategy Fund
The Adviser has contractually agreed, through at least June 30, 2016, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waivers and/or reimbursements (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. 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. The fee waiver agreement cannot be terminated during its term. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $158,441.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2015, expenses incurred under the Plans are shown in the Consolidated Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2015, IDI advised the Fund that IDI retained $1,246 in front-end sales commissions from the sale of Class A shares and $201, $104 and $314 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. |
13 Invesco Balanced-Risk Commodity Strategy Fund
The following is a summary of the tiered valuation input levels, as of April 30, 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 | |||||||||||||
Commodity-Linked Securities | $ | — | $ | 16,007,125 | $ | — | $ | 16,007,125 | ||||||||
Exchange Traded Funds | 20,859,650 | — | — | 20,859,650 | ||||||||||||
U.S. Treasury Securities | — | 459,047,882 | — | 459,047,882 | ||||||||||||
Money Market Funds | 213,522,741 | — | — | 213,522,741 | ||||||||||||
234,382,391 | 475,055,007 | — | 709,437,398 | |||||||||||||
Futures Contracts* | 520,587 | — | — | 520,587 | ||||||||||||
Swap Agreements* | — | 1,349,997 | — | 1,349,997 | ||||||||||||
Total Investments | $ | 234,902,978 | $ | 476,405,004 | $ | — | $ | 711,307,982 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Commodity risk: | ||||||||
Futures contracts(a) | $ | 3,615,524 | $ | (3,094,937 | ) | |||
Swap agreements(b) | 2,464,777 | (1,114,780 | ) | |||||
Total | $ | 6,080,301 | $ | (4,209,717 | ) |
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Consolidated Statement of Assets and Liabilities. |
(b) | Values are disclosed on the Consolidated Statement of Assets and Liabilities under the captions Unrealized appreciation on swap agreements — OTC and Unrealized depreciation on swap agreements — OTC. |
Effect of Derivative Investments for the six months ended April 30, 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 Consolidated Statement of Operations | ||||||||
Futures Contracts | Swap Agreements | |||||||
Realized Gain (Loss): | ||||||||
Commodity risk | $ | 304,632 | $ | (53,885,738 | ) | |||
Change in Unrealized Appreciation (Depreciation): | ||||||||
Commodity risk | (6,420,825 | ) | 10,139,232 | |||||
Total | $ | (6,116,193 | ) | $ | (43,746,506 | ) |
The table below summarizes the average notional value of futures contracts and swap agreements outstanding during the period.
Futures Contracts | Swap Agreements | |||||||
Average notional value | $ | 129,740,692 | $ | 499,131,886 |
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 Consolidated 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.
14 Invesco Balanced-Risk Commodity Strategy 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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of assets presented in Consolidated Statement of Assets & Liabilities | Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Barclays Bank PLC | $ | 2,307,684 | $ | (562,600 | ) | $ | 1,745,084 | $ | — | $ | — | $ | 1,745,084 | |||||||||||
Canadian Imperial Bank of Commerce | 70,060 | (176 | ) | 69,884 | — | — | 69,884 | |||||||||||||||||
Goldman Sachs International | 2,711,638 | (2,371,152 | ) | 340,486 | — | — | 340,486 | |||||||||||||||||
JPMorgan Chase Bank, N.A. | 87,188 | (87,188 | ) | — | — | — | — | |||||||||||||||||
Merrill Lynch International | 7,138,121 | (48,806 | ) | 7,089,315 | — | — | 7,089,315 | |||||||||||||||||
Total | $ | 12,314,691 | $ | (3,069,922 | ) | $ | 9,244,769 | $ | — | $ | — | $ | 9,244,769 | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized Liabilities | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of liabilities presented in Consolidated Statement of Assets & Liabilities | Collateral Pledged | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Barclays Bank PLC | $ | 562,600 | $ | (562,600 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Canadian Imperial Bank of Commerce | 176 | (176 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International | 2,371,152 | (2,371,152 | ) | — | — | — | — | |||||||||||||||||
JPMorgan Chase Bank, N.A. | 186,843 | (87,188 | ) | 99,655 | (99,655 | ) | — | — | ||||||||||||||||
Macquarie Bank Ltd. | 341,729 | — | 341,729 | (341,729 | ) | — | — | |||||||||||||||||
Merrill Lynch International | 48,806 | (48,806 | ) | — | — | — | — | |||||||||||||||||
Morgan Stanley & Co. International | 39,368 | — | 39,368 | — | — | 39,368 | ||||||||||||||||||
Total | $ | 3,550,674 | $ | (3,069,922 | ) | $ | 480,752 | $ | (441,384 | ) | $ | — | $ | 39,368 |
NOTE 5—Investments in Other Affiliates
The 1940 Act defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the 1940 Act) of that issuer. The following is a summary of the investments in other affiliates for the six months ended April 30, 2015.
Value 10/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain (Loss) | Value 04/30/15 | Dividend Income | ||||||||||||||||||||||
PowerShares DB Gold Fund | $ | 21,024,180 | $ | — | $ | (280,626 | ) | $ | 240,057 | $ | (123,961 | ) | $ | 20,859,650 | $ | — |
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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $1,052.
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.
15 Invesco Balanced-Risk Commodity Strategy 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 Consolidated Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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 October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
October 31, 2015 | $ | 2,394,859 | $ | — | $ | 2,394,859 | ||||||
October 31, 2016 | 276,503 | — | 276,503 | |||||||||
Not subject to expiration | 12,990,329 | 7,204,324 | 20,194,653 | |||||||||
$ | 15,661,691 | $ | 7,204,324 | $ | 22,866,015 |
* | 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 April 30, 2015 was $0 and $0, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $0 and $0, 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 | $ | 1,302,215 | ||
Aggregate unrealized (depreciation) of investment securities | (933,987 | ) | ||
Net unrealized appreciation of investment securities | $ | 368,228 |
Cost of investments for tax purposes is $709,069,170.
16 Invesco Balanced-Risk Commodity Strategy Fund
NOTE 11—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 550,682 | $ | 4,081,601 | 2,976,484 | $ | 26,030,155 | ||||||||||
Class B | — | — | 904 | 7,902 | ||||||||||||
Class C | 40,843 | 294,898 | 95,677 | 824,090 | ||||||||||||
Class R | 7,125 | 53,032 | 15,425 | 135,101 | ||||||||||||
Class Y | 29,389,134 | 224,849,204 | 33,970,673 | 301,075,976 | ||||||||||||
Class R5 | 5,311,644 | 40,563,078 | 6,288,265 | 55,370,590 | ||||||||||||
Class R6 | 2,094,475 | 15,971,526 | 3,104,708 | 27,058,977 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 3,728 | 28,031 | 36,589 | 323,416 | ||||||||||||
Class B | (3,825 | ) | (28,031 | ) | (37,280 | ) | (323,416 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (906,092 | ) | (6,768,088 | ) | (4,784,440 | ) | (41,872,683 | ) | ||||||||
Class B | (10,321 | ) | (77,519 | ) | (21,273 | ) | (182,426 | ) | ||||||||
Class C | (73,050 | ) | (532,876 | ) | (191,231 | ) | (1,638,102 | ) | ||||||||
Class R | (62 | ) | (458 | ) | (24,847 | ) | (219,334 | ) | ||||||||
Class Y | (28,444,459 | ) | (216,063,882 | ) | (28,413,450 | ) | (251,251,924 | ) | ||||||||
Class R5 | (417,769 | ) | (3,074,352 | ) | (2,277,011 | ) | (19,293,796 | ) | ||||||||
Class R6 | (218,439 | ) | (1,613,238 | ) | (622,491 | ) | (5,513,644 | ) | ||||||||
Net increase in share activity | 7,323,614 | $ | 57,682,926 | 10,116,702 | $ | 90,530,882 |
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 37% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by this entity is also owned beneficially. |
In addition, 19% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. |
17 Invesco Balanced-Risk Commodity Strategy Fund
NOTE 12—Consolidated Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of to average | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 8.04 | $ | (0.05 | ) | $ | (0.62 | ) | $ | (0.67 | ) | $ | — | $ | 7.37 | (8.33 | )% | $ | 40,828 | 1.54 | %(d) | 1.58 | %(d) | (1.48 | )%(d) | 0 | % | |||||||||||||||||||||
Year ended 10/31/14 | 9.05 | (0.11 | ) | (0.90 | ) | (1.01 | ) | — | 8.04 | (11.16 | ) | 47,339 | 1.30 | 1.57 | (1.25 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.73 | (0.11 | ) | (1.35 | ) | (1.46 | ) | (0.22 | ) | 9.05 | (13.89 | ) | 69,350 | 1.22 | 1.47 | (1.14 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.42 | (0.12 | ) | 0.43 | 0.31 | — | 10.73 | 2.97 | 99,577 | 1.22 | 1.46 | (1.13 | ) | 152 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | (0.12 | ) | 0.54 | 0.42 | — | 10.42 | 4.20 | 7,659 | 1.22 | (f) | 1.54 | (f) | (1.13 | )(f) | 0 | ||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.85 | (0.08 | ) | (0.60 | ) | (0.68 | ) | — | 7.17 | (8.66 | ) | 368 | 2.29 | (d) | 2.33 | (d) | (2.23 | )(d) | 0 | |||||||||||||||||||||||||||||
Year ended 10/31/14 | 8.91 | (0.17 | ) | (0.89 | ) | (1.06 | ) | — | 7.85 | (11.90 | ) | 514 | 2.05 | 2.32 | (2.00 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.59 | (0.18 | ) | (1.33 | ) | (1.51 | ) | (0.17 | ) | 8.91 | (14.44 | ) | 1,096 | 1.97 | 2.22 | (1.89 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.36 | (0.20 | ) | 0.43 | 0.23 | — | 10.59 | 2.22 | 3,773 | 1.97 | 2.21 | (1.88 | ) | 152 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | (0.19 | ) | 0.55 | 0.36 | — | 10.36 | 3.60 | 277 | 1.97 | (f) | 2.29 | (f) | (1.88 | )(f) | 0 | ||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.84 | (0.08 | ) | (0.60 | ) | (0.68 | ) | — | 7.16 | (8.67 | ) | 3,070 | 2.29 | (d) | 2.33 | (d) | (2.23 | )(d) | 0 | |||||||||||||||||||||||||||||
Year ended 10/31/14 | 8.89 | (0.17 | ) | (0.88 | ) | (1.05 | ) | — | 7.84 | (11.81 | ) | 3,612 | 2.05 | 2.32 | (2.00 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.58 | (0.18 | ) | (1.34 | ) | (1.52 | ) | (0.17 | ) | 8.89 | (14.55 | ) | 4,948 | 1.97 | 2.22 | (1.89 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.35 | (0.20 | ) | 0.43 | 0.23 | — | 10.58 | 2.22 | 8,585 | 1.97 | 2.21 | (1.88 | ) | 152 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | (0.19 | ) | 0.54 | 0.35 | — | 10.35 | 3.50 | 1,822 | 1.97 | (f) | 2.29 | (f) | (1.88 | )(f) | 0 | ||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.99 | (0.06 | ) | (0.61 | ) | (0.67 | ) | — | 7.32 | (8.39 | ) | 391 | 1.79 | (d) | 1.83 | (d) | (1.73 | )(d) | 0 | |||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.02 | (0.13 | ) | (0.90 | ) | (1.03 | ) | — | 7.99 | (11.42 | ) | 371 | 1.55 | 1.82 | (1.50 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.71 | (0.13 | ) | (1.36 | ) | (1.49 | ) | (0.20 | ) | 9.02 | (14.13 | ) | 504 | 1.47 | 1.72 | (1.39 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.42 | (0.15 | ) | 0.44 | 0.29 | — | 10.71 | 2.78 | 386 | 1.47 | 1.71 | (1.38 | ) | 152 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | (0.14 | ) | 0.56 | 0.42 | — | 10.42 | 4.20 | 111 | 1.47 | (f) | 1.79 | (f) | (1.38 | )(f) | 0 | ||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.13 | (0.05 | ) | (0.61 | ) | (0.66 | ) | — | 7.47 | (8.12 | ) | 253,278 | 1.29 | (d) | 1.33 | (d) | (1.23 | )(d) | 0 | |||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.13 | (0.09 | ) | (0.91 | ) | (1.00 | ) | — | 8.13 | (10.95 | ) | 268,106 | 1.05 | 1.32 | (1.00 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.81 | (0.09 | ) | (1.36 | ) | (1.45 | ) | (0.23 | ) | 9.13 | (13.69 | ) | 250,463 | 0.97 | 1.22 | (0.89 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.47 | (0.09 | ) | 0.43 | 0.34 | — | 10.81 | 3.25 | 240,404 | 0.97 | 1.21 | (0.88 | ) | 152 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | (0.09 | ) | 0.56 | 0.47 | — | 10.47 | 4.70 | 59,063 | 0.97 | (f) | 1.29 | (f) | (0.88 | )(f) | 0 | ||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.13 | (0.04 | ) | (0.62 | ) | (0.66 | ) | — | 7.47 | (8.12 | ) | 284,206 | 1.15 | (d) | 1.19 | (d) | (1.09 | )(d) | 0 | |||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.13 | (0.09 | ) | (0.91 | ) | (1.00 | ) | — | 8.13 | (10.95 | ) | 269,490 | 1.02 | 1.19 | (0.97 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.80 | (0.09 | ) | (1.35 | ) | (1.44 | ) | (0.23 | ) | 9.13 | (13.61 | ) | 266,031 | 0.97 | 1.20 | (0.89 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.47 | (0.09 | ) | 0.42 | 0.33 | — | 10.80 | 3.15 | 238,710 | 0.97 | 1.14 | (0.88 | ) | 152 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | (0.09 | ) | 0.56 | 0.47 | — | 10.47 | 4.70 | 102,857 | 0.97 | (f) | 1.21 | (f) | (0.88 | )(f) | 0 | ||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.13 | (0.04 | ) | (0.61 | ) | (0.65 | ) | — | 7.48 | (8.00 | ) | 134,538 | 1.05 | (d) | 1.09 | (d) | (0.99 | )(d) | 0 | |||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.13 | (0.08 | ) | (0.92 | ) | (1.00 | ) | — | 8.13 | (10.95 | ) | 131,076 | 0.99 | 1.10 | (0.94 | ) | 21 | |||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.80 | (0.08 | ) | (1.36 | ) | (1.44 | ) | (0.23 | ) | 9.13 | (13.61 | ) | 124,497 | 0.97 | 1.12 | (0.89 | ) | 47 | ||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 11.15 | (0.01 | ) | (0.34 | ) | (0.35 | ) | — | 10.80 | (3.14 | ) | 101,349 | 0.97 | (f) | 1.15 | (f) | (0.88 | )(f) | 152 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended October 31, 2012, the portfolio turnover calculation excludes the value of securities purchased of $32,276,528 and sold of $14,234,590 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Commodities Strategy Fund into the Fund. |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $41,938, $406, $3,171, $371, $259,996, $274,675 and $129,987 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of November 30, 2010 for Class A, Class B, Class C, Class R, Class Y and Class R5 shares. Commencement date of September 24, 2012 for Class R6 shares. |
(f) | Annualized. |
18 Invesco Balanced-Risk Commodity Strategy 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 distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014, through April 30, 2015.
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 your Fund invests. The amount of fees and expenses incurred indirectly by your Fund will vary because the underlying funds have varied expenses and fee levels and the Fund may own different proportions of the underlying funds at different times. 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 underlying funds your Fund invests in. The effect of the estimated underlying fund expenses that you bear indirectly are included in your Fund’s total return.
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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by the Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Class | Beginning Account Value (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 916.70 | $ | 7.32 | $ | 1,017.16 | $ | 7.70 | 1.54 | % | ||||||||||||
B | 1,000.00 | 913.40 | 10.86 | 1,013.44 | 11.43 | 2.29 | ||||||||||||||||||
C | 1,000.00 | 913.30 | 10.86 | 1,013.44 | 11.43 | 2.29 | ||||||||||||||||||
R | 1,000.00 | 916.10 | 8.50 | 1,015.92 | 8.95 | 1.79 | ||||||||||||||||||
Y | 1,000.00 | 918.80 | 6.14 | 1,018.40 | 6.46 | 1.29 | ||||||||||||||||||
R5 | 1,000.00 | 918.80 | 5.47 | 1,019.09 | 5.76 | 1.15 | ||||||||||||||||||
R6 | 1,000.00 | 920.00 | 5.00 | 1,019.59 | 5.26 | 1.05 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Balanced-Risk Commodity Strategy 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: 811-05426 and 033-19338 | BRCS-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Developing Markets Fund | ||||
Nasdaq: | ||||
A: GTDDX ¡ B: GTDBX ¡ C: GTDCX ¡ Y: GTDYX ¡ R5: GTDIX ¡ R6: GTDFX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
7 Financial Statements | ||||
9 Notes to Financial Statements | ||||
16 Financial Highlights | ||||
17 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||
Fund vs. Indexes | ||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | –5.26 | % | ||
Class B Shares | –5.60 | |||
Class C Shares | –5.61 | |||
Class Y Shares | –5.16 | |||
Class R5 Shares | –5.07 | |||
Class R6 Shares | –5.07 | |||
MSCI Emerging Markets Index‚ (Broad Market/Style-Specific Index) | 3.92 | |||
MSCI EAFE Index‚ (Former Broad Market Index) | 6.81 | |||
Lipper Emerging Market Funds Indexn (Peer Group Index) | 0.71 | |||
Source(s): ‚FactSet Research Systems Inc.; nLipper Inc. | ||||
The MSCI Emerging Markets IndexSM is an unmanaged index considered representative of stocks of developing countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors. | ||||
The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
| |||
The Lipper Emerging Market Funds Index is an unmanaged index considered representative of emerging market funds tracked by Lipper. |
| |||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). |
| |||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
|
2 Invesco Developing Markets Fund
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (1/11/94) | 5.26 | % | |||||
10 Years | 9.81 | ||||||
5 Years | 1.90 | ||||||
1 Year | –8.37 | ||||||
Class B Shares | |||||||
Inception (11/3/97) | 6.55 | % | |||||
10 Years | 9.78 | ||||||
5 Years | 1.92 | ||||||
1 Year | –8.49 | ||||||
Class C Shares | |||||||
Inception (3/1/99) | 9.97 | % | |||||
10 Years | 9.61 | ||||||
5 Years | 2.29 | ||||||
1 Year | –4.73 | ||||||
Class Y Shares | |||||||
10 Years | 10.62 | % | |||||
5 Years | 3.31 | ||||||
1 Year | –2.81 | ||||||
Class R5 Shares | |||||||
10 Years | 10.90 | % | |||||
5 Years | 3.47 | ||||||
1 Year | –2.66 | ||||||
Class R6 Shares | |||||||
10 Years | 10.56 | % | |||||
5 Years | 3.28 | ||||||
1 Year | –2.63 |
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 R5 shares incepted on October 25, 2005. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares.
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.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (1/11/94) | 5.00 | % | |||||
10 Years | 9.02 | ||||||
5 Years | 0.98 | ||||||
1 Year | –12.35 | ||||||
Class B Shares | |||||||
Inception (11/3/97) | 6.24 | % | |||||
10 Years | 8.98 | ||||||
5 Years | 0.99 | ||||||
1 Year | –12.44 | ||||||
Class C Shares | |||||||
Inception (3/1/99) | 9.65 | % | |||||
10 Years | 8.81 | ||||||
5 Years | 1.37 | ||||||
1 Year | –8.84 | ||||||
Class Y Shares | |||||||
10 Years | 9.81 | % | |||||
5 Years | 2.39 | ||||||
1 Year | –7.02 | ||||||
Class R5 Shares | |||||||
10 Years | 10.08 | % | |||||
5 Years | 2.54 | ||||||
1 Year | –6.88 | ||||||
Class R6 Shares | |||||||
10 Years | 9.75 | % | |||||
5 Years | 2.35 | ||||||
1 Year | –6.86 |
deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares was 1.41%, 2.16%, 2.16%, 1.16%, 1.01% and 0.99%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares was 1.43%, 2.18%, 2.18%, 1.18%, 1.03% and 1.01%, 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 reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
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, 2017. See current prospectus for more information. |
3 Invesco Developing Markets 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 Developing Markets Fund |
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–94.99% |
| |||||||
Brazil–20.29% | ||||||||
Arcos Dorados Holdings, Inc.–Class A | 5,088,427 | $ | 30,530,562 | |||||
Banco Bradesco S.A.–ADR | 12,314,112 | 131,637,857 | ||||||
BM&FBOVESPA S.A. | 27,314,120 | 111,969,125 | ||||||
BR Malls Participacoes S.A. | 9,819,500 | 53,518,834 | ||||||
BRF S.A. | 1,293,240 | 27,726,083 | ||||||
CETIP S.A.–Mercados Organizados | 6,768,686 | 77,107,347 | ||||||
Cielo S.A. | 6,517,457 | 89,669,925 | ||||||
Diagnosticos da America S.A. | 3,880,000 | 12,750,025 | ||||||
Duratex S.A. | 16,549,196 | 46,746,658 | ||||||
Fleury S.A.(a) | 8,702,000 | 48,208,046 | ||||||
Totvs S.A. | 3,385,200 | 39,675,843 | ||||||
Wilson Sons Ltd.–BDR | 962,600 | 9,949,668 | ||||||
679,489,973 | ||||||||
China–18.78% | ||||||||
Baidu, Inc.–ADR(b) | 323,223 | 64,735,103 | ||||||
Belle International Holdings Ltd. | 67,257,000 | 86,517,294 | ||||||
China Mobile Ltd. | 5,140,000 | 73,414,360 | ||||||
CNOOC Ltd. | 21,600,000 | 36,818,094 | ||||||
Golden Eagle Retail Group Ltd. | 30,301,000 | 45,429,020 | ||||||
Industrial & Commercial Bank of China Ltd.–Class H | 154,580,000 | 134,426,063 | ||||||
Lee & Man Paper Manufacturing Ltd. | 80,495,000 | 45,801,297 | ||||||
NetEase, Inc.–ADR | 387,185 | 49,633,245 | ||||||
Stella International Holdings Ltd. | 11,189,000 | 30,316,625 | ||||||
Want Want China Holdings Ltd. | 56,132,000 | 61,632,581 | ||||||
628,723,682 | ||||||||
Czech Republic–0.16% | ||||||||
CEZ A.S. | 208,225 | 5,413,054 | ||||||
Egypt–0.31% | ||||||||
Egyptian Financial Group-Hermes Holding Co.(b) | 5,456,990 | 10,234,898 | ||||||
France–0.94% | ||||||||
Bollore S.A. | 5,505,244 | 31,372,482 | ||||||
Hong Kong–0.95% | ||||||||
Galaxy Entertainment Group Ltd. | 6,601,000 | 31,819,931 | ||||||
Hungary–1.71% | ||||||||
Richter Gedeon Nyrt | 3,397,000 | 57,256,899 | ||||||
Indonesia–7.46% | ||||||||
PT Bank Central Asia Tbk | 24,954,000 | 25,876,576 | ||||||
PT Bank Mandiri Persero Tbk | 121,601,000 | 100,686,589 | ||||||
PT Perusahaan Gas Negara Persero Tbk | 169,713,400 | 53,550,769 | ||||||
PT Telekomunikasi Indonesia Persero Tbk | 343,247,400 | 69,641,655 | ||||||
249,755,589 |
Shares | Value | |||||||
Israel–2.67% | ||||||||
Israel Chemicals Ltd. | 5,276,457 | $ | 36,922,271 | |||||
Teva Pharmaceutical Industries Ltd.–ADR | 868,015 | 52,445,466 | ||||||
89,367,737 | ||||||||
Malaysia–1.85% | ||||||||
Public Bank Berhad | 11,351,900 | 62,059,050 | ||||||
Mexico–7.16% | ||||||||
America Movil S.A.B. de C.V.–Series L–ADR | 1,333,676 | 27,860,471 | ||||||
Fomento Economico Mexicano, S.A.B. de C.V.–ADR(b) | 733,847 | 66,405,815 | ||||||
Grupo Televisa S.A.B.–ADR(b) | 2,948,316 | 107,348,186 | ||||||
Kimberly-Clark de Mexico, S.A.B. de C.V.–Class A | 17,356,970 | 38,224,033 | ||||||
239,838,505 | ||||||||
Nigeria–1.41% | ||||||||
Zenith Bank PLC | 445,758,362 | 47,375,826 | ||||||
Peru–2.76% | ||||||||
Credicorp Ltd. | 605,820 | 92,417,841 | ||||||
Philippines–5.63% | ||||||||
Energy Development Corp. | 246,329,900 | 44,664,788 | ||||||
Philippine Long Distance Telephone Co. | 1,303,750 | 80,888,682 | ||||||
SM Investments Corp. | 1,278,910 | 25,827,729 | ||||||
SM Prime Holdings Inc. | 88,714,700 | 37,125,281 | ||||||
188,506,480 | ||||||||
Poland–0.52% | ||||||||
Eurocash S.A. | 1,716,588 | 17,451,088 | ||||||
Russia–5.07% | ||||||||
Gazprom OAO–ADR | 3,779,035 | 22,387,003 | ||||||
Mobile TeleSystems OJSC–ADR | 1,859,782 | 22,466,166 | ||||||
Sberbank of Russia(b) | 37,218,144 | 55,550,760 | ||||||
Sberbank of Russia–Preference | 32,833,306 | 31,863,509 | ||||||
Yandex NV–Class A(b) | 1,946,500 | 37,450,660 | ||||||
169,718,098 | ||||||||
South Africa–0.51% | ||||||||
Sasol Ltd. | 418,828 | 16,928,025 | ||||||
South Korea–3.16% | ||||||||
Hyundai Department Store Co., Ltd. | 272,521 | 36,938,720 | ||||||
Samsung Electronics Co., Ltd. | 52,425 | 68,737,547 | ||||||
105,676,267 | ||||||||
Taiwan–3.03% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 20,978,000 | 101,287,358 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Developing Markets Fund
Shares | Value | |||||||
Thailand–4.82% | ||||||||
Kasikornbank PCL | 18,741,700 | $ | 118,840,312 | |||||
Siam Commercial Bank PCL (The) | 8,852,600 | 42,550,025 | ||||||
161,390,337 | ||||||||
Turkey–4.58% | ||||||||
Anadolu Efes Biracilik ve Malt Sanayii A.S.(b) | 3,688,185 | 30,981,851 | ||||||
Eczacibasi Ilac Sanayi ve Ticaret A.S. | 12,515,924 | 13,234,631 | ||||||
Haci Omer Sabanci Holding A.S. | 23,428,223 | 85,644,593 | ||||||
Tupras-Turkiye Petrol Rafinerileri A.S.(b) | 962,408 | 23,370,605 | ||||||
153,231,680 | ||||||||
Turkmenistan–1.22% | ||||||||
Dragon Oil PLC | 4,298,634 | 40,838,891 | ||||||
Total Common Stocks & Other Equity Interests (Cost $2,938,585,047) |
| 3,180,153,691 |
Shares | Value | |||||||
Money Market Funds–5.28% | ||||||||
Liquid Assets Portfolio–Institutional | 88,390,873 | $ | 88,390,873 | |||||
Premier Portfolio–Institutional Class(c) | 88,390,873 | 88,390,873 | ||||||
Total Money Market Funds | 176,781,746 | |||||||
TOTAL INVESTMENTS–100.27% |
| 3,356,935,437 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.27)% |
| (8,877,735 | ) | |||||
NET ASSETS–100.00% |
| $ | 3,348,057,702 |
Investment Abbreviations:
ADR | – American Depositary Receipt | |
BDR | – Brazilian Depositary Receipt |
Notes to Schedule of Investments:
(a) | Affiliated company during the period. The Investment Company Act of 1940 defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the Investment Company Act of 1940) of that issuer. The value of this security as of April 30, 2015 represented 1.44% of the Fund’s Net Assets. See Note 4. |
(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 April 30, 2015
Financials | 36.4 | % | ||
Information Technology | 13.5 | |||
Consumer Discretionary | 11.0 | |||
Telecommunication Services | 8.2 | |||
Consumer Staples | 7.2 | |||
Health Care | 5.5 | |||
Energy | 4.2 | |||
Materials | 3.9 | |||
Utilities | 3.1 | |||
Industrials | 2.0 | |||
Money Market Funds Plus Other Assets Less Liabilities | 5.0 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Developing Markets Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $2,861,906,419) | $ | 3,131,945,645 | ||
Investments in affiliates, at value (Cost $253,460,374) | 224,989,792 | |||
Total investments, at value (Cost $3,115,366,793) | 3,356,935,437 | |||
Foreign currencies, at value (Cost $70,047,234) | 66,432,251 | |||
Receivable for: | ||||
Investments sold | 20,770,354 | |||
Fund shares sold | 11,383,020 | |||
Dividends | 7,316,569 | |||
Fund expenses absorbed | 7,821 | |||
Investment for trustee deferred compensation and retirement plans | 336,515 | |||
Other assets | 75,480 | |||
Total assets | 3,463,257,447 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 8,809,017 | |||
Fund shares reacquired | 91,123,657 | |||
Accrued foreign taxes | 12,129,022 | |||
Accrued fees to affiliates | 1,811,636 | |||
Accrued trustees’ and officers’ fees and benefits | 5,419 | |||
Accrued other operating expenses | 933,579 | |||
Trustee deferred compensation and retirement plans | 387,415 | |||
Total liabilities | 115,199,745 | |||
Net assets applicable to shares outstanding | $ | 3,348,057,702 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 3,186,035,732 | ||
Undistributed net investment income | 15,687,175 | |||
Undistributed net realized gain (loss) | (91,748,008 | ) | ||
Net unrealized appreciation | 238,082,803 | |||
$ | 3,348,057,702 |
Net Assets: |
| |||
Class A | $ | 1,038,458,883 | ||
Class B | $ | 20,151,009 | ||
Class C | $ | 113,796,940 | ||
Class Y | $ | 1,469,223,394 | ||
Class R5 | $ | 520,467,718 | ||
Class R6 | $ | 185,959,758 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 33,420,131 | |||
Class B | 666,144 | |||
Class C | 3,766,464 | |||
Class Y | 47,205,051 | |||
Class R5 | 16,747,294 | |||
Class R6 | 5,985,595 | |||
Class A: | ||||
Net asset value per share | $ | 31.07 | ||
Maximum offering price per share | ||||
(Net asset value of $31.07 ¸ 94.50%) | $ | 32.88 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 30.25 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 30.21 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 31.12 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 31.08 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 31.07 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Developing Markets Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $4,114,593) | $ | 35,385,614 | ||
Dividends from affiliates | 2,225,678 | |||
Total investment income | 37,611,292 | |||
Expenses: | ||||
Advisory fees | 14,745,090 | |||
Administrative services fees | 286,631 | |||
Custodian fees | 1,546,172 | |||
Distribution fees: | ||||
Class A | 1,314,360 | |||
Class B | 117,317 | |||
Class C | 599,783 | |||
Transfer agent fees — A, B, C and Y | 2,500,862 | |||
Transfer agent fees — R5 | 107,821 | |||
Transfer agent fees — R6 | 2,900 | |||
Trustees’ and officers’ fees and benefits | 41,558 | |||
Other | 407,823 | |||
Total expenses | 21,670,317 | |||
Less: Fees waived and expense offset arrangement(s) | (206,096 | ) | ||
Net expenses | 21,464,221 | |||
Net investment income | 16,147,071 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (15,310,008 | ) | ||
Foreign currencies | (2,747,361 | ) | ||
(18,057,369 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities (net of foreign taxes on holdings of $ 3,145,437) | (193,755,679 | ) | ||
Foreign currencies | (2,655,943 | ) | ||
(196,411,622 | ) | |||
Net realized and unrealized gain (loss) | (214,468,991 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (198,321,920 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Developing Markets Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: | ||||||||
Net investment income | $ | 16,147,071 | $ | 46,413,399 | ||||
Net realized gain (loss) | (18,057,369 | ) | 82,011,550 | |||||
Change in net unrealized appreciation (depreciation) | (196,411,622 | ) | (152,864,896 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (198,321,920 | ) | (24,439,947 | ) | ||||
Distributions to shareholders from net investment income: |
| |||||||
Class A | (11,257,345 | ) | (12,047,271 | ) | ||||
Class B | (46,124 | ) | (2,825 | ) | ||||
Class C | (226,637 | ) | (10,919 | ) | ||||
Class Y | (20,165,446 | ) | (12,316,478 | ) | ||||
Class R5 | (9,883,834 | ) | (7,997,307 | ) | ||||
Class R6 | (2,640,173 | ) | (1,920,886 | ) | ||||
Total distributions from net investment income | (44,219,559 | ) | (34,295,686 | ) | ||||
Distributions to shareholders from net realized gains: |
| |||||||
Class A | (18,963,499 | ) | (4,079,975 | ) | ||||
Class B | (466,766 | ) | (122,369 | ) | ||||
Class C | (2,293,467 | ) | (472,989 | ) | ||||
Class Y | (26,008,861 | ) | (3,205,244 | ) | ||||
Class R5 | (11,459,346 | ) | (1,883,230 | ) | ||||
Class R6 | (3,014,719 | ) | (437,629 | ) | ||||
Total distributions from net realized gains | (62,206,658 | ) | (10,201,436 | ) | ||||
Share transactions–net: |
| |||||||
Class A | (118,451,829 | ) | (216,412,571 | ) | ||||
Class B | (5,978,617 | ) | (14,987,379 | ) | ||||
Class C | (13,536,745 | ) | (26,665,246 | ) | ||||
Class Y | 134,235,662 | 312,954,650 | ||||||
Class R5 | (110,511,642 | ) | 30,137,043 | |||||
Class R6 | 20,618,089 | 27,066,204 | ||||||
Net increase (decrease) in net assets resulting from share transactions | (93,625,082 | ) | 112,092,701 | |||||
Net increase (decrease) in net assets | (398,373,219 | ) | 43,155,632 | |||||
Net assets: |
| |||||||
Beginning of period | 3,746,430,921 | 3,703,275,289 | ||||||
End of period (includes undistributed net investment income of $15,687,175 and $43,759,663, respectively) | $ | 3,348,057,702 | $ | 3,746,430,921 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Developing Markets Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue
9 Invesco Developing Markets Fund
to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and 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
10 Invesco Developing Markets Fund
income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions — Distributions from 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. |
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 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)
11 Invesco Developing Markets Fund
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 | .935% | ||||
Next $250 million | 0 | .91% | ||||
Next $500 million | 0 | .885% | ||||
Next $1.5 billion | 0 | .86% | ||||
Next $2.5 billion | 0 | .835% | ||||
Next $2.5 billion | 0 | .81% | ||||
Next $2.5 billion | 0 | .785% | ||||
Over $10 billion | 0 | .76% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.87%.
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, through at least June 30, 2016, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waivers and/or reimbursements (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares to 2.25%, 3.00%, 3.00%, 2.00%, 2.00% and 2.00% 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 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, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $203,987.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 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 April 30, 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 Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B and Class C shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $15,035 in front-end sales commissions from the sale of Class A shares and $57, $5,814 and $2,205 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
12 Invesco Developing Markets Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 April 30, 2015, there were transfers from Level 1 to Level 2 of $67,904,122 and from Level 2 to Level 1 of $683,674,408, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Brazil | $ | 679,489,973 | $ | — | $ | — | $ | 679,489,973 | ||||||||
China | 591,905,588 | 36,818,094 | — | 628,723,682 | ||||||||||||
Czech Republic | 5,413,054 | — | — | 5,413,054 | ||||||||||||
Egypt | 10,234,898 | — | — | 10,234,898 | ||||||||||||
France | — | 31,372,482 | — | 31,372,482 | ||||||||||||
Hong Kong | — | 31,819,931 | — | 31,819,931 | ||||||||||||
Hungary | 57,256,899 | — | — | 57,256,899 | ||||||||||||
Indonesia | — | 249,755,589 | — | 249,755,589 | ||||||||||||
Israel | 52,445,466 | 36,922,271 | — | 89,367,737 | ||||||||||||
Malaysia | 62,059,050 | — | — | 62,059,050 | ||||||||||||
Mexico | 239,838,505 | — | — | 239,838,505 | ||||||||||||
Nigeria | 47,375,826 | — | — | 47,375,826 | ||||||||||||
Peru | 92,417,841 | — | — | 92,417,841 | ||||||||||||
Philippines | 62,953,010 | 125,553,470 | — | 188,506,480 | ||||||||||||
Poland | 17,451,088 | — | — | 17,451,088 | ||||||||||||
Russia | 82,303,829 | 87,414,269 | — | 169,718,098 | ||||||||||||
South Africa | 16,928,025 | — | — | 16,928,025 | ||||||||||||
South Korea | — | 105,676,267 | — | 105,676,267 | ||||||||||||
Taiwan | — | 101,287,358 | — | 101,287,358 | ||||||||||||
Thailand | — | 161,390,337 | — | 161,390,337 | ||||||||||||
Turkey | 109,015,198 | 44,216,482 | — | 153,231,680 | ||||||||||||
Turkmenistan | — | 40,838,891 | — | 40,838,891 | ||||||||||||
United States | 176,781,746 | — | — | 176,781,746 | ||||||||||||
Total Investments | $ | 2,303,869,996 | $ | 1,053,065,441 | $ | — | $ | 3,356,935,437 |
NOTE 4—Investments in Other Affiliates
The 1940 Act defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the 1940 Act) of that issuer. The following is a summary of the investments in other affiliates for the six months ended April 30, 2015.
Value 10/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain (Loss) | Value 04/30/15 | Dividend Income | ||||||||||||||||||||||
Fleury S.A. | $ | 57,697,280 | $ | — | $ | — | $ | (9,489,234 | ) | $ | — | $ | 48,208,046 | $ | 2,166,518 |
13 Invesco Developing Markets 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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $2,109.
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 October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
October 31, 2017 | $ | 69,160,296 | $ | — | $ | 69,160,296 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 9—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $135,166,516 and $103,662,276, 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 | $ | 621,989,879 | ||
Aggregate unrealized (depreciation) of investment securities | (384,947,141 | ) | ||
Net unrealized appreciation of investment securities | $ | 237,042,738 |
Cost of investments for tax purposes is $3,119,892,699.
14 Invesco Developing Markets Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 2,939,524 | $ | 89,567,487 | 8,257,632 | $ | 273,541,592 | ||||||||||
Class B | 3,481 | 101,673 | 10,861 | 347,856 | ||||||||||||
Class C | 71,471 | 2,127,619 | 226,474 | 7,313,496 | ||||||||||||
Class Y | 15,712,201 | 492,505,493 | 22,344,096 | 748,475,518 | ||||||||||||
Class R5 | 2,911,478 | 88,964,508 | 5,637,496 | 186,296,539 | ||||||||||||
Class R6 | 767,547 | 23,199,259 | 1,385,050 | 46,296,571 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 895,102 | 26,763,550 | 486,238 | 15,549,891 | ||||||||||||
Class B | 15,823 | 462,034 | 3,822 | 119,198 | ||||||||||||
Class C | 78,547 | 2,290,442 | 13,377 | 416,707 | ||||||||||||
Class Y | 935,688 | 28,005,135 | 424,903 | 13,609,646 | ||||||||||||
Class R5 | 510,501 | 15,243,554 | 218,548 | 6,984,793 | ||||||||||||
Class R6 | 189,444 | 5,654,891 | 73,819 | 2,358,515 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 127,687 | 3,940,491 | 236,223 | 7,818,467 | ||||||||||||
Class B | (131,098 | ) | (3,940,491 | ) | (243,026 | ) | (7,818,467 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (7,586,628 | ) | (238,723,357 | ) | (15,350,377 | ) | (513,322,521 | ) | ||||||||
Class B | (87,418 | ) | (2,601,833 | ) | (239,213 | ) | (7,635,966 | ) | ||||||||
Class C | (602,326 | ) | (17,954,806 | ) | (1,079,625 | ) | (34,395,449 | ) | ||||||||
Class Y | (12,622,303 | ) | (386,274,966 | ) | (13,596,039 | ) | (449,130,514 | ) | ||||||||
Class R5 | (6,931,506 | ) | (214,719,704 | ) | (4,914,751 | ) | (163,144,289 | ) | ||||||||
Class R6 | (270,637 | ) | (8,236,061 | ) | (631,854 | ) | (21,588,882 | ) | ||||||||
Net increase (decrease) in share activity | (3,073,422 | ) | $ | (93,625,082 | ) | 3,263,654 | $ | 112,092,701 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 45% 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 Developing Markets 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)(b) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 33.77 | $ | 0.12 | $ | (1.93 | ) | $ | (1.81 | ) | $ | (0.33 | ) | $ | (0.56 | ) | $ | (0.89 | ) | $ | 31.07 | (5.26 | )% | $ | 1,038,459 | 1.43 | %(e) | 1.44 | %(e) | 0.78 | %(e) | 3 | % | |||||||||||||||||||||||
Year ended 10/31/14 | 34.42 | 0.38 | (0.65 | ) | (0.27 | ) | (0.28 | ) | (0.10 | ) | (0.38 | ) | 33.77 | (0.73 | ) | 1,251,018 | 1.39 | 1.41 | 1.13 | 13 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.70 | 0.30 | 1.66 | 1.96 | (0.24 | ) | — | (0.24 | ) | 34.42 | 6.03 | 1,494,412 | 1.38 | 1.40 | 0.89 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 30.38 | 0.29 | 2.86 | 3.15 | (0.23 | ) | (0.60 | ) | (0.83 | ) | 32.70 | 10.72 | 1,371,476 | 1.44 | 1.45 | 0.93 | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 33.15 | 0.36 | (2.87 | ) | (2.51 | ) | (0.23 | ) | (0.03 | ) | (0.26 | ) | 30.38 | (7.62 | ) | 1,388,008 | 1.45 | 1.47 | 1.11 | 17 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 25.61 | 0.33 | 7.54 | 7.87 | (0.33 | ) | — | (0.33 | ) | 33.15 | 31.04 | 1,355,604 | 1.52 | 1.53 | 1.17 | 22 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 32.72 | 0.00 | (1.86 | ) | (1.86 | ) | (0.05 | ) | (0.56 | ) | (0.61 | ) | 30.25 | (5.60 | ) | 20,151 | 2.18 | (e) | 2.19 | (e) | 0.03 | (e) | 3 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 33.31 | 0.12 | (0.61 | ) | (0.49 | ) | (0.00 | ) | (0.10 | ) | (0.10 | ) | 32.72 | (1.46 | ) | 28,314 | 2.14 | 2.16 | 0.38 | 13 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 31.66 | 0.04 | 1.61 | 1.65 | — | — | — | 33.31 | 5.21 | 44,403 | 2.13 | 2.15 | 0.14 | 14 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 29.42 | 0.06 | 2.78 | 2.84 | — | (0.60 | ) | (0.60 | ) | 31.66 | 9.89 | 59,539 | 2.19 | 2.20 | 0.18 | 19 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 32.16 | 0.11 | (2.78 | ) | (2.67 | ) | (0.04 | ) | (0.03 | ) | (0.07 | ) | 29.42 | (8.30 | ) | 71,066 | 2.20 | 2.22 | 0.36 | 17 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 24.92 | 0.12 | 7.33 | 7.45 | (0.21 | ) | — | (0.21 | ) | 32.16 | 30.07 | 60,657 | 2.27 | 2.28 | 0.42 | 22 | ||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 32.68 | 0.00 | (1.86 | ) | (1.86 | ) | (0.05 | ) | (0.56 | ) | (0.61 | ) | 30.21 | (5.61 | ) | 113,797 | 2.18 | (e) | 2.19 | (e) | 0.03 | (e) | 3 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 33.27 | 0.12 | (0.61 | ) | (0.49 | ) | (0.00 | ) | (0.10 | ) | (0.10 | ) | 32.68 | (1.47 | ) | 137,867 | 2.14 | 2.16 | 0.38 | 13 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 31.62 | 0.04 | 1.61 | 1.65 | — | — | — | 33.27 | 5.22 | 168,313 | 2.13 | 2.15 | 0.14 | 14 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 29.38 | 0.06 | 2.78 | 2.84 | — | (0.60 | ) | (0.60 | ) | 31.62 | 9.90 | 189,142 | 2.19 | 2.20 | 0.18 | 19 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 32.12 | 0.11 | (2.78 | ) | (2.67 | ) | (0.04 | ) | (0.03 | ) | (0.07 | ) | 29.38 | (8.31 | ) | 213,879 | 2.20 | 2.22 | 0.36 | 17 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 24.89 | 0.12 | 7.32 | 7.44 | (0.21 | ) | — | (0.21 | ) | 32.12 | 30.07 | 222,634 | 2.27 | 2.28 | 0.42 | 22 | ||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 33.90 | 0.16 | (1.95 | ) | (1.79 | ) | (0.43 | ) | (0.56 | ) | (0.99 | ) | 31.12 | (5.16 | ) | 1,469,223 | 1.18 | (e) | 1.19 | (e) | 1.03 | (e) | 3 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 34.55 | 0.46 | (0.64 | ) | (0.18 | ) | (0.37 | ) | (0.10 | ) | (0.47 | ) | 33.90 | (0.47 | ) | 1,463,586 | 1.14 | 1.16 | 1.38 | 13 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.83 | 0.38 | 1.66 | 2.04 | (0.32 | ) | — | (0.32 | ) | 34.55 | 6.27 | 1,175,003 | 1.13 | 1.15 | 1.14 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 30.50 | 0.37 | 2.87 | 3.24 | (0.31 | ) | (0.60 | ) | (0.91 | ) | 32.83 | 11.01 | 729,007 | 1.19 | 1.20 | 1.18 | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 33.26 | 0.44 | (2.88 | ) | (2.44 | ) | (0.29 | ) | (0.03 | ) | (0.32 | ) | 30.50 | (7.39 | ) | 364,320 | 1.20 | 1.22 | 1.36 | 17 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 25.66 | 0.41 | 7.56 | 7.97 | (0.37 | ) | — | (0.37 | ) | 33.26 | 31.41 | 203,884 | 1.27 | 1.28 | 1.42 | 22 | ||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 33.87 | 0.18 | (1.93 | ) | (1.75 | ) | (0.48 | ) | (0.56 | ) | (1.04 | ) | 31.08 | (5.04 | ) | 520,468 | 1.02 | (e) | 1.03 | (e) | 1.19 | (e) | 3 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 34.52 | 0.51 | (0.66 | ) | (0.15 | ) | (0.40 | ) | (0.10 | ) | (0.50 | ) | 33.87 | (0.35 | ) | 686,180 | 0.99 | 1.01 | 1.53 | 13 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.80 | 0.42 | 1.67 | 2.09 | (0.37 | ) | — | (0.37 | ) | 34.52 | 6.43 | 666,769 | 1.01 | 1.03 | 1.26 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 30.48 | 0.42 | 2.86 | 3.28 | (0.36 | ) | (0.60 | ) | (0.96 | ) | 32.80 | 11.19 | 513,884 | 1.03 | 1.04 | 1.34 | 19 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 33.22 | 0.49 | (2.87 | ) | (2.38 | ) | (0.33 | ) | (0.03 | ) | (0.36 | ) | 30.48 | (7.24 | ) | 472,161 | 1.02 | 1.04 | 1.54 | 17 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 25.63 | 0.48 | 7.52 | 8.00 | (0.41 | ) | — | (0.41 | ) | 33.22 | 31.59 | 309,491 | 1.11 | 1.12 | 1.58 | 22 | ||||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 33.87 | 0.19 | (1.94 | ) | (1.75 | ) | (0.49 | ) | (0.56 | ) | (1.05 | ) | 31.07 | (5.05 | ) | 185,960 | 0.99 | (e) | 1.00 | (e) | 1.22 | (e) | 3 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 34.52 | 0.52 | (0.65 | ) | (0.13 | ) | (0.42 | ) | (0.10 | ) | (0.52 | ) | 33.87 | (0.31 | ) | 179,467 | 0.97 | 0.99 | 1.55 | 13 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.81 | 0.44 | 1.66 | 2.10 | (0.39 | ) | — | (0.39 | ) | 34.52 | 6.46 | 154,375 | 0.97 | 0.99 | 1.30 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(f) | 32.73 | 0.05 | 0.03 | 0.08 | — | — | — | 32.81 | 0.24 | 122,749 | 0.96 | (g) | 0.98 | (g) | 1.41 | (g) | 19 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class Y and Class R5 shares, which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended October 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $179,562,130 and sold of $23,686,059 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen Emerging Markets Fund into the Fund. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $1,060,202, $23,658, $120,951, $1,421,032, $632,502 and $175,437 for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Commencement date of September 24, 2012. |
(g) | Annualized. |
16 Invesco Developing Markets Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 947.40 | $ | 6.90 | $ | 1,017.70 | $ | 7.15 | 1.43 | % | ||||||||||||
B | 1,000.00 | 944.00 | 10.51 | 1,013.98 | 10.89 | 2.18 | ||||||||||||||||||
C | 1,000.00 | 943.90 | 10.51 | 1,013.98 | 10.89 | 2.18 | ||||||||||||||||||
Y | 1,000.00 | 948.40 | 5.70 | 1,018.94 | 5.91 | 1.18 | ||||||||||||||||||
R5 | 1,000.00 | 949.30 | 4.93 | 1,019.74 | 5.11 | 1.02 | ||||||||||||||||||
R6 | 1,000.00 | 949.30 | 4.78 | 1,019.89 | 4.96 | 0.99 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Developing Markets 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: 811-05426 and 033-19338 | DVM-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Emerging Market Local Currency Debt Fund | ||||
Nasdaq: | ||||
A: IAEMX ¡ B: IBEMX ¡ C: ICEMX ¡ R: IREMX ¡ Y: IYEMX ¡ R5: IIEMX ¡ R6: IFEMX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
8 Financial Statements | ||||
10 Notes to Financial Statements | ||||
18 Financial Highlights | ||||
19 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||||||||
Fund vs. Indexes | ||||||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | –7.02% | |||||||||
Class B Shares | –7.26 | |||||||||
Class C Shares | –7.37 | |||||||||
Class R Shares | –7.15 | |||||||||
Class Y Shares | –6.91 | |||||||||
Class R5 Shares | –6.92 | |||||||||
Class R6 Shares | –6.79 | |||||||||
JP Morgan Government Bond Index – Emerging Markets (GBI-EM) Global Diversified Index‚ (Broad Market/Style-Specific Index) | –8.24 | |||||||||
Lipper Emerging Markets Debt Funds Indexn (Peer Group Index) | –1.43 | |||||||||
Source(s): ‚FactSet Research Systems Inc.; nLipper Inc.
| ||||||||||
The JP Morgan Government Bond Index – Emerging Markets (GBI-EM) Global Diversified Index is a comprehensive global local emerging markets index comprising liquid, fixed-rate, domestic-currency government bonds. | ||||||||||
The Lipper Emerging Markets Debt Funds Index is an unmanaged index considered representative of emerging market debt funds tracked by Lipper. | ||||||||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). | ||||||||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
2 Invesco Emerging Market Local Currency Debt Fund
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (6/16/10) | 0.27 | % | |||||
1 Year | –12.29 | ||||||
Class B Shares | |||||||
Inception (6/16/10) | 0.10 | % | |||||
1 Year | –13.37 | ||||||
Class C Shares | |||||||
Inception (6/16/10) | 0.41 | % | |||||
1 Year | –9.96 | ||||||
Class R Shares | |||||||
Inception (6/16/10) | 0.88 | % | |||||
1 Year | –8.64 | ||||||
Class Y Shares | |||||||
Inception (6/16/10) | 1.41 | % | |||||
1 Year | –8.18 | ||||||
Class R5 Shares | |||||||
Inception (6/16/10) | 1.39 | % | |||||
1 Year | –8.18 | ||||||
Class R6 Shares | |||||||
Inception | 1.30 | % | |||||
1 Year | –8.07 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (6/16/10) | –0.30 | % | |||||
1 Year | –13.82 | ||||||
Class B Shares | |||||||
Inception (6/16/10) | –0.49 | % | |||||
1 Year | –14.97 | ||||||
Class C Shares | |||||||
Inception (6/16/10) | –0.15 | % | |||||
1 Year | –11.51 | ||||||
Class R Shares | |||||||
Inception (6/16/10) | 0.32 | % | |||||
1 Year | –10.21 | ||||||
Class Y Shares | |||||||
Inception (6/16/10) | 0.85 | % | |||||
1 Year | –9.75 | ||||||
Class R5 Shares | |||||||
Inception (6/16/10) | 0.83 | % | |||||
1 Year | –9.76 | ||||||
Class R6 Shares | |||||||
Inception | 0.70 | % | |||||
1 Year | –9.76 |
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.
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 1.24%, 1.99%, 1.99%, 1.49%, 0.99%, 0.99% and 0.99%, respectively.1 The total annual
Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B,
Class C, Class R, Class Y,
Class R5 and Class R6 shares was 1.84%, 2.59%, 2.59%, 2.09%, 1.59%, 1.31% and 1.30%, 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.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
3 Invesco Emerging Market Local Currency Debt 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 Emerging Market Local Currency Debt Fund
Schedule of Investments
April 30, 2015
(Unaudited)
Principal Amount | Value | |||||||
Non U.S. Dollar Denominated Bonds & |
| |||||||
Brazil–9.94% | ||||||||
Banco Safra S.A., | BRL | 956,000 | $ | 296,697 | ||||
REGS, Sr. Unsec. Euro Notes, | BRL | 680,000 | 211,040 | |||||
Brazil Letras do Tesouro | BRL | 4,600,000 | 1,315,096 | |||||
Brazil Notas do Tesouro Nacional, | BRL | 3,043,000 | 962,994 | |||||
Unsec. Notes, | ||||||||
10.00%, 01/01/21 | BRL | 4,758,000 | 1,414,244 | |||||
10.00%, 01/01/23 | BRL | 200,000 | 58,056 | |||||
Itau Unibanco Holding S.A., Sr. Unsec. Notes, 10.50%, 11/23/15(b) | BRL | 1,150,000 | 374,465 | |||||
REGS, Sr. Unsec. Euro Notes, 10.50%, 11/23/15(b) | BRL | 1,507,000 | 490,712 | |||||
5,123,304 | ||||||||
China–0.63% | ||||||||
Longfor Properties Co. Ltd., Sr. Unsec. Gtd. Euro Notes, 6.75%, 05/28/18 | CNY | 2,000,000 | 322,398 | |||||
Colombia–6.54% | ||||||||
Colombia Government International Bond, Sr. Unsec. Global Bonds, | ||||||||
4.38%, 03/21/23 | COP | 3,653,000,000 | 1,433,541 | |||||
9.85%, 06/28/27 | COP | 633,000,000 | 349,630 | |||||
Colombian Titulos De Tesoreria, Class B, Sr. Unsec. Bonds, 10.00%, 07/24/24 | COP | 478,200,000 | 245,462 | |||||
Empresas Publicas de Medellin ESP, | COP | 1,000,000,000 | 447,578 | |||||
REGS, Sr. Unsec. Euro Notes, 8.38%, 02/01/21(b) | COP | 2,000,000,000 |
| 895,157 |
| |||
3,371,368 | ||||||||
Germany–2.82% | ||||||||
Deutsche Bank A.G., Sr. Unsec. Medium-Term Euro Notes, 8.38%, 03/17/34(b) | IDR | 18,300,000,000 | 1,455,057 | |||||
Hungary–2.65% | ||||||||
Hungary Government Bond, | HUF | 130,000,000 | 497,132 | |||||
Series 25/B, Unsec. Bonds, 5.50%, 06/24/25 | HUF | 201,500,000 | 870,358 | |||||
1,367,490 |
Principal Amount | Value | |||||||
Malaysia–8.45% | ||||||||
Malaysia Government Bond, | MYR | 5,681,000 | $ | 1,631,922 | ||||
Series 0112, Sr. Unsec. Bonds, 3.42%, 08/15/22 | MYR | 2,000,000 | 546,329 | |||||
Series 0902, Sr. Unsec. Bonds, 4.38%, 11/29/19 | MYR | 7,500,000 | 2,174,293 | |||||
4,352,544 | ||||||||
Mexico–7.73% | ||||||||
America Movil S.A.B. de C.V., Sr. Unsec. Euro Notes, 7.13%, 12/09/24 | MXN | 27,500,000 | 1,784,927 | |||||
Mexican Bonos, | MXN | 100,000 | 7,539 | |||||
8.00%, 12/07/23 | MXN | 13,019,000 | 969,778 | |||||
Series M20, Sr. Unsec. Bonds, 10.00%, 12/05/24 | MXN | 14,451,100 | 1,222,510 | |||||
3,984,754 | ||||||||
Peru–2.77% | ||||||||
Peruvian Governement International Bond, | PEN | 300,000 | 94,703 | |||||
8.20%, 08/12/26(b) | PEN | 1,496,000 | 560,131 | |||||
REGS, Sr. Unsec. Global Notes, 6.95%, 08/12/31(b) | PEN | 2,334,000 | 773,275 | |||||
1,428,109 | ||||||||
Philippines–0.44% | ||||||||
Philippine Government International Bond, Sr. Unsec. Global Bonds, 3.90%, 11/26/22 | PHP | 10,000,000 | 227,471 | |||||
Poland–7.54% | ||||||||
Poland Government Bond, | PLN | 7,560,000 | 2,215,001 | |||||
Series 1020, Unsec. Bonds, 5.25%, 10/25/20 | PLN | 800,000 | 256,222 | |||||
Series 1021, Unsec. Bonds, 5.75%, 10/25/21 | PLN | 1,015,000 | 339,086 | |||||
Series 1023, Unsec. Bonds, 4.00%, 10/25/23 | PLN | 3,482,000 | 1,072,987 | |||||
3,883,296 | ||||||||
Romania–2.90% | ||||||||
Romania Government Bond, | RON | 2,550,000 | 708,936 | |||||
Series 10Y, Unsec. Bonds, 4.75%, 02/24/25 | RON | 2,760,000 | 784,025 | |||||
1,492,961 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Emerging Market Local Currency Debt Fund
Principal Amount | Value | |||||||
Russia–6.77% | ||||||||
Russian Federal Bond — OFZ, | RUB | 11,500,000 | $ | 212,046 | ||||
Series 6206, Unsec. Bonds, 7.40%, 06/14/17 | RUB | 37,000,000 | 680,440 | |||||
Series 6208, Unsec. Bonds, 7.50%, 02/27/19 | RUB | 81,672,000 | 1,430,637 | |||||
Series 6215, Unsec. Bonds, 7.00%, 08/16/23 | RUB | 74,000,000 | 1,164,282 | |||||
3,487,405 | ||||||||
South Africa–4.74% | ||||||||
South Africa Government Bond, | ZAR | 24,892,000 | 2,092,732 | |||||
Series R186, Unsec. Bonds, | ZAR | 3,500,000 | 351,807 | |||||
2,444,539 | ||||||||
Supranational–4.40% | ||||||||
European Bank for Reconstruction & Development, | ZAR | 5,600,000 | 360,346 | |||||
European Investment Bank, REGS, Sr. Unsec. Medium-Term Euro Notes, 7.20%, 07/09/19(b) | IDR | 3,080,000,000 | 231,267 | |||||
International Bank for Reconstruction & Development, | ZAR | 17,000,000 | 1,316,561 | |||||
Series GDIF, Sr. Unsec. Medium-Term Euro Notes, 7.68%, 08/10/16 | ZAR | 4,250,000 | 358,816 | |||||
2,266,990 | ||||||||
Thailand–4.77% | ||||||||
Thailand Government Bond, Sr. Unsec. Bonds, 3.65%, 12/17/21 | THB | 51,600,000 | 1,696,645 | |||||
3.88%, 06/13/19 | THB | 23,290,000 | 760,095 | |||||
2,456,740 | ||||||||
Turkey–8.32% | ||||||||
Turkey Government Bond, Unsec. Bonds, | TRY | 6,270,000 | 2,301,455 | |||||
8.50%, 07/10/19 | TRY | 499,989 | 181,748 | |||||
8.80%, 09/27/23 | TRY | 1,079,000 | 395,047 | |||||
9.00%, 07/24/24 | TRY | 1,250,000 | 466,540 | |||||
Series 5Y, Unsec. Bonds, 6.30%, 02/14/18 | TRY | 1,637,811 | 566,088 | |||||
Series CPI, Unsec. Bonds, 4.00%, 04/01/20 | TRY | 935,804 | (d) | 378,509 | ||||
4,289,387 |
Principal Amount | Value | |||||||
United Kingdom–9.03% | ||||||||
Barclays Bank PLC, | IDR | 13,200,000,000 | $ | 1,237,302 | ||||
Standard Chartered Bank, Sr. Unsec. Medium-Term Euro Notes, | ||||||||
7.80%, 05/05/20 | INR | 33,600,000 | 530,427 | |||||
8.12%, 12/14/20 | INR | 40,000,000 | 640,460 | |||||
8.28%, 09/23/27 | INR | 58,000,000 | 947,762 | |||||
8.38%, 03/17/34 | IDR | 16,304,000,000 | 1,296,365 | |||||
4,652,316 | ||||||||
United States–3.20% | ||||||||
JP Morgan Chase Bank N.A., Unsec. Medium-Term Euro Notes, 8.25%, 06/17/32(b) | IDR | 4,000,000,000 | 312,546 | |||||
Morgan Stanley, Series G, Sr. Unsec. Medium-Term Euro Notes, 8.44%, 12/28/15 | MXN | 20,000,000 | 1,338,849 | |||||
1,651,395 | ||||||||
Total Non U.S. Dollar Denominated Bonds & Notes |
| 48,257,524 | ||||||
U.S. Dollar Denominated Bonds & Notes–2.38% |
| |||||||
Colombia–1.22% | ||||||||
SUAM Finance B.V., REGS, Sr. Unsec. Gtd. Euro Notes, 4.88%, 04/17/24(b) | $ | 600,000 | 630,900 | |||||
Hungary–0.77% | ||||||||
Hungary Government International Bond, Sr. Unsec. Global Notes, 5.38%, 03/25/24 | 350,000 | 394,135 | ||||||
Russia–0.39% | ||||||||
Gazprom OAO Via Gaz Capital S.A., Sr. Unsec. Bonds, 4.30%, 11/12/15(b) | 200,000 | 200,490 | ||||||
Total U.S. Dollar Denominated Bonds & Notes (Cost $1,148,315) |
| 1,225,525 | ||||||
Shares | ||||||||
Money Market Funds–1.17% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 301,884 | 301,884 | ||||||
Premier Portfolio–Institutional Class(e) | 301,884 | 301,884 | ||||||
Total Money Market Funds |
| 603,768 | ||||||
TOTAL INVESTMENTS–97.19% |
| 50,086,817 | ||||||
OTHER ASSETS LESS LIABILITIES–2.81% |
| 1,450,719 | ||||||
NET ASSETS–100.00% |
| $ | 51,537,536 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Emerging Market Local Currency Debt Fund
Investment Abbreviations:
BRL | – Brazilian Real | |
CNY | – Chinese Yuan Renminbi | |
COP | – Colombian Peso | |
CPI | – Consumer Price Index | |
Gtd. | – Guaranteed | |
HUF | – Hungary Forint | |
IDR | – Indonesian Rupiah | |
INR | – Indian Rupee | |
MXN | – Mexican Peso | |
MYR | – Malaysian Ringgit | |
PEN | – Peru Nuevo Sol | |
PHP | – Philippines Peso | |
PLN | – Poland Zloty | |
REGS | – Regulation S | |
REIT | – Real Estate Investment Trust | |
RON | – Romanian Leu | |
RUB | – Russian Rouble | |
Sr. | – Senior | |
THB | – Thailand Baht | |
TRY | – New Turkish Lire | |
Unsec. | – Unsecured | |
ZAR | – South African Rand |
Notes to Schedule of Investments:
(a) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(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 April 30, 2015 was $6,974,018, which represented 13.53% of the Fund’s Net Assets. |
(c) | Zero coupon bond issued at a discount. |
(d) | Principal amount of security and interest payments are adjusted for inflation. |
(e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By industry, based on Net Assets
as of April 30, 2015
Sovereign Debt | 65.6 | % | ||
Diversified Banks | 14.1 | |||
Wireless Telecommunication Services | 3.5 | |||
Diversified Capital Markets | 2.8 | |||
Diversified REIT’s | 2.6 | |||
Investment Banking & Brokerage | 2.6 | |||
Independent Power Producers & Energy Traders | 1.7 | |||
Multi-Sector Holdings | 1.2 | |||
Electric Utilities | 0.9 | |||
Real Estate Development | 0.6 | |||
Integrated Oil & Gas | 0.4 | |||
Money Market Funds Plus Other Assets Less Liabilities | 4.0 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Emerging Market Local Currency Debt Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $57,218,081) | $ | 49,483,049 | ||
Investments in affiliated money market funds, at value and cost | 603,768 | |||
Total investments, at value (Cost $57,821,849) | 50,086,817 | |||
Foreign currencies, at value (Cost $289,625) | 299,042 | |||
Receivable for: | ||||
Fund shares sold | 16,357 | |||
Dividends and interest | 1,117,394 | |||
Fund expenses absorbed | 9,061 | |||
Investment for trustee deferred compensation and retirement plans | 23,868 | |||
Unrealized appreciation on forward foreign currency contracts outstanding | 183,904 | |||
Other assets | 55,554 | |||
Total assets | 51,791,997 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 50,726 | |||
Accrued foreign taxes | 24,613 | |||
Accrued fees to affiliates | 13,366 | |||
Accrued trustees’ and officers’ fees and benefits | 1,949 | |||
Accrued other operating expenses | 75,607 | |||
Trustee deferred compensation and retirement plans | 24,869 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 63,331 | |||
Total liabilities | 254,461 | |||
Net assets applicable to shares outstanding | $ | 51,537,536 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 61,228,134 | ||
Undistributed net investment income | 128,433 | |||
Undistributed net realized gain (loss) | (2,195,316 | ) | ||
Net unrealized appreciation (depreciation) | (7,623,715 | ) | ||
$ | 51,537,536 |
Net Assets: |
| |||
Class A | $ | 7,629,247 | ||
Class B | $ | 406,537 | ||
Class C | $ | 1,696,316 | ||
Class R | $ | 433,230 | ||
Class Y | $ | 403,623 | ||
Class R5 | $ | 21,678 | ||
Class R6 | $ | 40,946,905 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 988,974 | |||
Class B | 52,764 | |||
Class C | 219,919 | |||
Class R | 56,237 | |||
Class Y | 52,337 | |||
Class R5 | 2,814 | |||
Class R6 | 5,313,938 | |||
Class A: | ||||
Net asset value per share | $ | 7.71 | ||
Maximum offering price per share | ||||
(Net asset value of $7.71 ¸ 95.75%) | $ | 8.05 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 7.70 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 7.71 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 7.70 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 7.71 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 7.70 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 7.71 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Emerging Market Local Currency Debt Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Interest (net of foreign withholding taxes of $10,498) | $ | 1,671,252 | ||
Dividends from affiliated money market funds | 474 | |||
Total investment income | 1,671,726 | |||
Expenses: | ||||
Advisory fees | 191,400 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 20,183 | |||
Distribution fees: | ||||
Class A | 10,104 | |||
Class B | 1,630 | |||
Class C | 8,996 | |||
Class R | 1,073 | |||
Transfer agent fees — A, B, C, R and Y | 17,040 | |||
Transfer agent fees — R5 | 9 | |||
Transfer agent fees — R6 | 71 | |||
Trustees’ and officers’ fees and benefits | 10,074 | |||
Registration and filing fees | 43,942 | |||
Professional services fees | 24,160 | |||
Other | 16,696 | |||
Total expenses | 370,173 | |||
Less: Fees waived and expenses reimbursed | (98,062 | ) | ||
Net expenses | 272,111 | |||
Net investment income | 1,399,615 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (1,351,059 | ) | ||
Foreign currencies | (232,055 | ) | ||
Forward foreign currency contracts | 258,022 | |||
(1,325,092 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities (net of foreign taxes on holdings of $11,507) | (3,952,513 | ) | ||
Foreign currencies | 58,324 | |||
Forward foreign currency contracts | 46,166 | |||
(3,848,023 | ) | |||
Net realized and unrealized gain (loss) | (5,173,115 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (3,773,500 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Emerging Market Local Currency Debt Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 1,399,615 | $ | 2,928,911 | ||||
Net realized gain (loss) | (1,325,092 | ) | (3,886,953 | ) | ||||
Change in net unrealized appreciation (depreciation) | (3,848,023 | ) | (647,735 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (3,773,500 | ) | (1,605,777 | ) | ||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (190,516 | ) | (94,246 | ) | ||||
Class B | (6,495 | ) | (2,855 | ) | ||||
Class C | (35,566 | ) | (9,449 | ) | ||||
Class R | (9,632 | ) | (6,808 | ) | ||||
Class Y | (30,520 | ) | (717 | ) | ||||
Class R5 | (1,790 | ) | (3,164 | ) | ||||
Class R6 | (976,939 | ) | (241,187 | ) | ||||
Total distributions from net investment income | (1,251,458 | ) | (358,426 | ) | ||||
Return of capital: | ||||||||
Class A | — | (337,513 | ) | |||||
Class B | — | (12,582 | ) | |||||
Class C | — | (80,754 | ) | |||||
Class R | — | (16,593 | ) | |||||
Class Y | — | (104,758 | ) | |||||
Class R5 | — | (6,694 | ) | |||||
Class R6 | — | (1,427,178 | ) | |||||
Total return of capital | — | (1,986,072 | ) | |||||
Share transactions–net: | ||||||||
Class A | (919,514 | ) | (2,698,730 | ) | ||||
Class B | 89,459 | (182,834 | ) | |||||
Class C | (361,360 | ) | (1,043,278 | ) | ||||
Class R | 15,160 | (268,622 | ) | |||||
Class Y | (2,285,762 | ) | 1,522,783 | |||||
Class R5 | (150,044 | ) | (87,031 | ) | ||||
Class R6 | 5,028,042 | 9,033,125 | ||||||
Net increase in net assets resulting from share transactions | 1,415,981 | 6,275,413 | ||||||
Net increase (decrease) in net assets | (3,608,977 | ) | 2,325,138 | |||||
Net assets: | ||||||||
Beginning of period | 55,146,513 | 52,821,375 | ||||||
End of period (includes undistributed net investment income of $128,433 and $(19,724), respectively) | $ | 51,537,536 | $ | 55,146,513 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Emerging Market Local Currency Debt Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
10 Invesco Emerging Market Local Currency Debt Fund
The Fund’s investment objective is total return through growth of capital and current income.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to 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. 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 Emerging Market Local Currency Debt 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 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. | 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.
12 Invesco Emerging Market Local Currency Debt Fund
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 $500 million | 0 | .75% | ||||
Next $500 million | 0 | .70% | ||||
Next $500 million | 0 | .67% | ||||
Over $1.5 billion | 0 | .65% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.75%.
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, through at least February 29, 2016, 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 1.24%, 1.99%, 1.99%, 1.49%, 0.99%, 0.99% and 0.99% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $80,942 and reimbursed class level expenses of $11,507, $464, $2,561, $611, $1,897, $9 and $71 for 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 April 30, 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 April 30, 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”)
13 Invesco Emerging Market Local Currency Debt Fund
impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $484 in front-end sales commissions from the sale of Class A shares and $337 and $2 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. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | |||||||||||||
Money Market Funds | $ | 603,768 | $ | — | $ | — | $ | 603,768 | ||||||||
Corporate Debt Securities | — | 831,390 | — | 831,390 | ||||||||||||
Foreign Debt Securities | — | 14,776,918 | — | 14,776,918 | ||||||||||||
Foreign Sovereign Debt Securities | — | 33,874,741 | — | 33,874,741 | ||||||||||||
603,768 | 49,483,049 | — | 50,086,817 | |||||||||||||
Forward Foreign Currency Contracts* | — | 120,573 | — | 120,573 | ||||||||||||
Total Investments | $ | 603,768 | $ | 49,603,622 | $ | — | $ | 50,207,390 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | 204,884 | $ | (84,311 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the captions Unrealized appreciation on forward foreign currency contracts outstanding and Unrealized depreciation on forward foreign currency contracts outstanding. |
Effect of Derivative Investments for the six months ended April 30, 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 | ||||
Forward Foreign Currency Contracts | ||||
Realized Gain: | ||||
Currency risk | $ | 258,022 | ||
Change in Unrealized Appreciation: | ||||
Currency risk | 46,166 | |||
Total | $ | 304,188 |
14 �� Invesco Emerging Market Local Currency Debt Fund
The table below summarizes the average notional value of forward foreign currency contracts outstanding during the period.
Forward Foreign Currency Contracts | ||||
Average notional value | $ | 7,838,555 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement
| Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
05/05/2015 | Deutsche Bank Securities Inc. | EUR | 225,000 | USD | 258,839 | $ | 252,667 | $ | 6,172 | |||||||||||||||||
05/05/2015 | Goldman Sachs International | USD | 244,605 | EUR | 225,000 | 252,667 | 8,062 | |||||||||||||||||||
05/08/2015 | Deutsche Bank Securities Inc. | USD | 1,650,000 | INR | 103,083,750 | 1,621,573 | (28,427 | ) | ||||||||||||||||||
05/08/2015 | Goldman Sachs International | USD | 500,000 | IDR | 6,510,000,000 | 500,890 | 890 | |||||||||||||||||||
05/11/2015 | Goldman Sachs International | EUR | 375,000 | USD | 425,348 | 421,141 | 4,207 | |||||||||||||||||||
05/11/2015 | Goldman Sachs International | USD | 428,440 | EUR | 375,000 | 421,141 | (7,299 | ) | ||||||||||||||||||
05/13/2015 | Goldman Sachs International | EUR | 220,000 | USD | 248,884 | 247,075 | 1,809 | |||||||||||||||||||
05/13/2015 | Goldman Sachs International | USD | 242,621 | EUR | 220,000 | 247,075 | 4,454 | |||||||||||||||||||
05/26/2015 | Barclays Bank PLC | EUR | 869,990 | PLN | 3,634,670 | 985,139 | 31,768 | |||||||||||||||||||
05/26/2015 | Barclays Bank PLC | TRY | 1,240,910 | USD | 465,707 | 460,661 | 5,046 | |||||||||||||||||||
05/26/2015 | Deutsche Bank Securities Inc. | USD | 495,829 | TRY | 1,240,910 | 460,661 | (35,168 | ) | ||||||||||||||||||
05/26/2015 | Deutsche Bank Securities Inc. | USD | 542,236 | ZAR | 6,400,000 | 535,832 | (6,404 | ) | ||||||||||||||||||
06/02/2015 | Barclays Bank PLC | RUB | 32,300,000 | USD | 618,537 | 618,811 | (274 | ) | ||||||||||||||||||
06/02/2015 | Barclays Bank PLC | USD | 500,000 | RUB | 32,300,000 | 618,811 | 118,811 | |||||||||||||||||||
06/08/2015 | Barclays Bank PLC | EUR | 454,116 | PLN | 1,903,883 | 510,506 | 18,107 | |||||||||||||||||||
06/08/2015 | Deutsche Bank Securities Inc. | PLN | 1,903,883 | EUR | 470,676 | 522,873 | 496 | |||||||||||||||||||
06/22/2015 | Goldman Sachs International | EUR | 250,000 | USD | 274,172 | 280,911 | (6,739 | ) | ||||||||||||||||||
06/22/2015 | Goldman Sachs International | USD | 275,849 | EUR | 250,000 | 280,911 | 5,062 | |||||||||||||||||||
Total forward foreign currency contracts — Currency Risk | $ | 120,573 |
Currency Abbreviations:
EUR | – Euro | |
RUB | – Russian Ruble | |
IDR | – Indonesian Rupiah | |
TRY | – Turkish Lira | |
INR | – Indian Rupee | |
USD | – U.S. Dollar | |
PLN | – Poland Zloty | |
ZAR | – South African Rand |
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 April 30, 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 | |||||||||||||||||||||
Barclays Bank PLC | $ | 173,732 | $ | (274 | ) | $ | 173,458 | $ | — | $ | — | $ | 173,458 | |||||||||||
Deutsche Bank Securities Inc. | 6,668 | (6,668 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International | 24,484 | (14,038 | ) | 10,446 | — | — | 10,446 | |||||||||||||||||
Total | $ | 204,884 | $ | (20,980 | ) | $ | 183,904 | $ | — | $ | — | $ | 183,904 | |||||||||||
15 Invesco Emerging Market Local Currency Debt 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 | |||||||||||||||||||||
Barclays Bank PLC | $ | 274 | $ | (274 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Deutsche Bank Securities Inc. | 69,999 | (6,668 | ) | 63,331 | — | — | 63,331 | |||||||||||||||||
Goldman Sachs International | 14,038 | (14,038 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 84,311 | $ | (20,980 | ) | $ | 63,331 | $ | — | $ | — | $ | 63,331 |
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 had a capital loss carryforward as of October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
Not subject to expiration | $ | 442,811 | $ | 348,538 | $ | 791,349 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $14,770,577 and $12,607,906, 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 | $ | 512,964 | ||
Aggregate unrealized (depreciation) of investment securities | (8,253,878 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (7,740,914 | ) |
Cost of investments for tax purposes is $57,827,731.
16 Invesco Emerging Market Local Currency Debt Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 124,101 | $ | 987,380 | 321,070 | $ | 2,828,536 | ||||||||||
Class B | 20,625 | 160,955 | 1,439 | 12,454 | ||||||||||||
Class C | 15,553 | 122,776 | 45,525 | 401,566 | ||||||||||||
Class R | 2,200 | 17,117 | 4,893 | 42,740 | ||||||||||||
Class Y | 44,115 | 343,563 | 431,545 | 3,732,173 | ||||||||||||
Class R5 | — | — | 10,888 | 94,010 | ||||||||||||
Class R6 | 627,715 | 4,905,835 | 1,094,766 | 9,395,035 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 18,968 | 148,977 | 37,699 | 329,768 | ||||||||||||
Class B | 786 | 6,148 | 1,571 | 13,739 | ||||||||||||
Class C | 3,258 | 25,583 | 8,028 | 70,247 | ||||||||||||
Class R | 1,206 | 9,453 | 2,638 | 23,048 | ||||||||||||
Class Y | 1,645 | 12,920 | 3,740 | 32,713 | ||||||||||||
Class R5 | 198 | 1,591 | 1,081 | 9,459 | ||||||||||||
Class R6 | 124,774 | 976,939 | 191,001 | 1,668,365 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 4,084 | 31,982 | 5,777 | 50,624 | ||||||||||||
Class B | (4,090 | ) | (31,982 | ) | (5,783 | ) | (50,624 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (262,722 | ) | (2,087,853 | ) | (677,777 | ) | (5,907,658 | ) | ||||||||
Class B | (5,732 | ) | (45,662 | ) | (18,311 | ) | (158,403 | ) | ||||||||
Class C | (63,169 | ) | (509,719 | ) | (174,584 | ) | (1,515,091 | ) | ||||||||
Class R | (1,470 | ) | (11,410 | ) | (37,933 | ) | (334,410 | ) | ||||||||
Class Y | (336,254 | ) | (2,642,245 | ) | (259,214 | ) | (2,242,103 | ) | ||||||||
Class R5 | (19,292 | ) | (151,635 | ) | (21,876 | ) | (190,500 | ) | ||||||||
Class R6 | (109,133 | ) | (854,732 | ) | (231,999 | ) | (2,030,275 | ) | ||||||||
Net increase in share activity | 187,366 | $ | 1,415,981 | 734,184 | $ | 6,275,413 |
(a) | 80% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco. |
17 Invesco Emerging Market Local Currency Debt 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 | Return of capital | Total distributions | Net asset value, end of period(b) | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(d) | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 8.49 | $ | 0.21 | $ | (0.80 | ) | $ | (0.59 | ) | $ | (0.19 | ) | $ | — | $ | — | $ | (0.19 | ) | $ | 7.71 | (7.02 | )% | $ | 7,629 | 1.23 | %(e) | 1.83 | %(e) | 4.97 | %(e) | 26 | % | ||||||||||||||||||||||||||
Year ended 10/31/14 | 9.17 | 0.46 | (0.77 | ) | (0.31 | ) | (0.06 | ) | — | (0.31 | ) | (0.37 | ) | 8.49 | (3.44 | ) | 9,379 | 1.24 | 1.84 | 5.29 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.88 | 0.48 | (0.79 | ) | (0.31 | ) | (0.29 | ) | — | (0.11 | ) | (0.40 | ) | 9.17 | (3.25 | ) | 12,998 | 1.24 | 1.77 | 4.96 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.36 | 0.50 | 0.17 | 0.67 | (0.88 | ) | (0.24 | ) | (0.03 | ) | (1.15 | ) | 9.88 | 7.50 | 14,549 | 1.24 | 1.79 | 5.17 | 30 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.11 | 0.53 | (0.49 | ) | 0.04 | (0.63 | ) | (0.16 | ) | — | (0.79 | ) | 10.36 | 0.34 | 12,886 | 1.23 | 1.86 | 4.97 | 106 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10(f) | 10.00 | 0.21 | 1.07 | 1.28 | (0.17 | ) | — | — | (0.17 | ) | 11.11 | 12.90 | 1,776 | 1.24 | (g) | 1.76 | (g) | 5.06 | (g) | 22 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.48 | 0.18 | (0.80 | ) | (0.62 | ) | (0.16 | ) | — | — | (0.16 | ) | 7.70 | (7.38 | ) | 407 | 1.98 | (e) | 2.58 | (e) | 4.22 | (e) | 26 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.16 | 0.40 | (0.78 | ) | (0.38 | ) | (0.05 | ) | — | (0.25 | ) | (0.30 | ) | 8.48 | (4.17 | ) | 349 | 1.99 | 2.59 | 4.54 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.87 | 0.41 | (0.79 | ) | (0.38 | ) | (0.22 | ) | — | (0.11 | ) | (0.33 | ) | 9.16 | (3.98 | ) | 570 | 1.99 | 2.52 | 4.21 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.35 | 0.43 | 0.17 | 0.60 | (0.81 | ) | (0.24 | ) | (0.03 | ) | (1.08 | ) | 9.87 | 6.70 | 856 | 1.99 | 2.54 | 4.42 | 30 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.10 | 0.45 | (0.49 | ) | (0.04 | ) | (0.55 | ) | (0.16 | ) | — | (0.71 | ) | 10.35 | (0.42 | ) | 843 | 1.98 | 2.61 | 4.22 | 106 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10(f) | 10.00 | 0.18 | 1.07 | 1.25 | (0.15 | ) | — | — | (0.15 | ) | 11.10 | 12.52 | 455 | 1.99 | (g) | 2.51 | (g) | 4.31 | (g) | 22 | ||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.49 | 0.18 | (0.80 | ) | (0.62 | ) | (0.16 | ) | — | — | (0.16 | ) | 7.71 | (7.37 | ) | 1,696 | 1.98 | (e) | 2.58 | (e) | 4.22 | (e) | 26 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.17 | 0.40 | (0.78 | ) | (0.38 | ) | (0.05 | ) | — | (0.25 | ) | (0.30 | ) | 8.49 | (4.16 | ) | 2,244 | 1.99 | 2.59 | 4.54 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.88 | 0.41 | (0.79 | ) | (0.38 | ) | (0.22 | ) | — | (0.11 | ) | (0.33 | ) | 9.17 | (3.97 | ) | 3,532 | 1.99 | 2.52 | 4.21 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.36 | 0.43 | 0.17 | 0.60 | (0.81 | ) | (0.24 | ) | (0.03 | ) | (1.08 | ) | 9.88 | 6.70 | 3,938 | 1.99 | 2.54 | 4.42 | 30 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.10 | 0.45 | (0.48 | ) | (0.03 | ) | (0.55 | ) | (0.16 | ) | — | (0.71 | ) | 10.36 | (0.33 | ) | 3,079 | 1.98 | 2.61 | 4.22 | 106 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10(f) | 10.00 | 0.18 | 1.07 | 1.25 | (0.15 | ) | — | — | (0.15 | ) | 11.10 | 12.52 | 314 | 1.99 | (g) | 2.51 | (g) | 4.31 | (g) | 22 | ||||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.48 | 0.20 | (0.80 | ) | (0.60 | ) | (0.18 | ) | — | — | (0.18 | ) | 7.70 | (7.15 | ) | 433 | 1.48 | (e) | 2.08 | (e) | 4.72 | (e) | 26 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.17 | 0.44 | (0.78 | ) | (0.34 | ) | (0.06 | ) | — | (0.29 | ) | (0.35 | ) | 8.48 | (3.79 | ) | 460 | 1.49 | 2.09 | 5.04 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.87 | 0.46 | (0.78 | ) | (0.32 | ) | (0.27 | ) | — | (0.11 | ) | (0.38 | ) | 9.17 | (3.39 | ) | 776 | 1.49 | 2.02 | 4.71 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.36 | 0.48 | 0.16 | 0.64 | (0.86 | ) | (0.24 | ) | (0.03 | ) | (1.13 | ) | 9.87 | 7.13 | 946 | 1.49 | 2.04 | 4.92 | 30 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.11 | 0.49 | (0.48 | ) | 0.01 | (0.60 | ) | (0.16 | ) | — | (0.76 | ) | 10.36 | 0.09 | 386 | 1.48 | 2.11 | 4.72 | 106 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10(f) | 10.00 | 0.20 | 1.07 | 1.27 | (0.16 | ) | — | — | (0.16 | ) | 11.11 | 12.81 | 44 | 1.49 | (g) | 2.01 | (g) | 4.81 | (g) | 22 | ||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.49 | 0.22 | (0.80 | ) | (0.58 | ) | (0.20 | ) | — | — | (0.20 | ) | 7.71 | (6.91 | ) | 404 | 0.98 | (e) | 1.58 | (e) | 5.22 | (e) | 26 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.17 | 0.49 | (0.78 | ) | (0.29 | ) | (0.06 | ) | — | (0.33 | ) | (0.39 | ) | 8.49 | (3.20 | ) | 2,911 | 0.99 | 1.59 | 5.54 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.88 | 0.51 | (0.79 | ) | (0.28 | ) | (0.32 | ) | — | (0.11 | ) | (0.43 | ) | 9.17 | (3.01 | ) | 1,529 | 0.99 | 1.52 | 5.21 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.37 | 0.52 | 0.17 | 0.69 | (0.91 | ) | (0.24 | ) | (0.03 | ) | (1.18 | ) | 9.88 | 7.67 | 1,867 | 0.99 | 1.54 | 5.42 | 30 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.11 | 0.56 | (0.49 | ) | 0.07 | (0.65 | ) | (0.16 | ) | — | (0.81 | ) | 10.37 | 0.69 | 1,131 | 0.98 | 1.61 | 5.22 | 106 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10(f) | 10.00 | 0.22 | 1.07 | 1.29 | (0.18 | ) | — | — | (0.18 | ) | 11.11 | 13.00 | 432 | 0.99 | (g) | 1.51 | (g) | 5.31 | (g) | 22 | ||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.48 | 0.22 | (0.80 | ) | (0.58 | ) | (0.20 | ) | — | — | (0.20 | ) | 7.70 | (6.92 | ) | 22 | 0.98 | (e) | 1.32 | (e) | 5.22 | (e) | 26 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.16 | 0.49 | (0.78 | ) | (0.29 | ) | (0.06 | ) | — | (0.33 | ) | (0.39 | ) | 8.48 | (3.20 | ) | 186 | 0.99 | 1.31 | 5.54 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.87 | 0.51 | (0.79 | ) | (0.28 | ) | (0.32 | ) | — | (0.11 | ) | (0.43 | ) | 9.16 | (3.01 | ) | 291 | 0.99 | 1.36 | 5.21 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 10.35 | 0.52 | 0.18 | 0.70 | (0.91 | ) | (0.24 | ) | (0.03 | ) | (1.18 | ) | 9.87 | 7.78 | 457 | 0.99 | 1.28 | 5.42 | 30 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 11.11 | 0.56 | (0.51 | ) | 0.05 | (0.65 | ) | (0.16 | ) | — | (0.81 | ) | 10.35 | 0.50 | 28,952 | 0.98 | 1.36 | 5.22 | 106 | |||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10(f) | 10.00 | 0.21 | 1.08 | 1.29 | (0.18 | ) | — | — | (0.18 | ) | 11.11 | 13.00 | 70,233 | 0.99 | (g) | 1.29 | (g) | 5.31 | (g) | 22 | ||||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 8.48 | 0.22 | (0.79 | ) | (0.57 | ) | (0.20 | ) | — | — | (0.20 | ) | 7.71 | (6.79 | ) | 40,947 | 0.98 | (e) | 1.30 | (e) | 5.22 | (e) | 26 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 9.16 | 0.49 | (0.78 | ) | (0.29 | ) | (0.06 | ) | — | (0.33 | ) | (0.39 | ) | 8.48 | (3.21 | ) | 39,617 | 0.99 | 1.30 | 5.54 | 69 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.87 | 0.50 | (0.78 | ) | (0.28 | ) | (0.32 | ) | — | (0.11 | ) | (0.43 | ) | 9.16 | (3.01 | ) | 33,125 | 0.99 | 1.29 | 5.21 | 31 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(f) | 9.83 | 0.06 | 0.01 | 0.07 | (0.00 | ) | — | (0.03 | ) | (0.03 | ) | 9.87 | 0.66 | 30,375 | 0.99 | (g) | 1.26 | (g) | 5.42 | (g) | 30 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class R, Class Y and Class R5 shares, which were less than $0.005 per share, for fiscal years ended October 31, 2012 and prior. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $8,150, $329, $1,814, $433, $1,344, $66 and $39,327 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Commencement date of June 16, 2010 for Class A, Class B, Class C, Class R, Class Y and Class R5 and September 24, 2012 for Class R6 shares, respectively. |
(g) | Annualized. |
18 Invesco Emerging Market Local Currency Debt Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 929.80 | $ | 5.89 | $ | 1,018.70 | $ | 6.16 | 1.23 | % | ||||||||||||
B | 1,000.00 | 927.40 | 9.46 | 1,014.98 | 9.89 | 1.98 | ||||||||||||||||||
C | 1,000.00 | 926.30 | 9.46 | 1,014.98 | 9.89 | 1.98 | ||||||||||||||||||
R | 1,000.00 | 928.50 | 7.08 | 1,017.46 | 7.40 | 1.48 | ||||||||||||||||||
Y | 1,000.00 | 930.90 | 4.69 | 1,019.93 | 4.91 | 0.98 | ||||||||||||||||||
R5 | 1,000.00 | 930.80 | 4.69 | 1,019.93 | 4.91 | 0.98 | ||||||||||||||||||
R6 | 1,000.00 | 932.10 | 4.69 | 1,019.93 | 4.91 | 0.98 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Emerging Market Local Currency Debt 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: 811-05426 and 033-19338 | EMLCD-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Emerging Markets Equity Fund | ||||
Nasdaq: | ||||
A: IEMAX ¡ C: IEMCX ¡ R: IEMRX ¡ Y: IEMYX ¡ R5: IEMIX ¡ R6: EMEFX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
6 Financial Statements | ||||
8 Notes to Financial Statements | ||||
15 Financial Highlights | ||||
16 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||
Fund vs. Indexes | ||
Cumulative total returns, 10/31/14 to 4/30/15, 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
| 1.65%
| |
Class C Shares
| 1.33
| |
Class R Shares
| 1.69
| |
Class Y Shares
| 1.86
| |
Class R5 Shares
| 1.86
| |
Class R6 Shares
| 1.72
| |
MSCI EAFE Indexq (Broad Market Index)
| 6.81 | |
MSCI Emerging Markets Indexq (Style-Specific Index)
| 3.92
| |
Lipper Emerging Market Funds Indexn (Peer Group Index)
| 0.71
| |
Source(s): qFactSet Research Systems Inc.; nLipper Inc. | ||
The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The MSCI Emerging Markets IndexSM is an unmanaged index considered representative of stocks of developing countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The Lipper Emerging Market Funds Index is an unmanaged index considered representative of emerging markets funds tracked by Lipper. The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
| ||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
| ||
Average Annual Total Returns | ||
As of 4/30/15, including maximum applicable sales charges
| ||
Class A Shares | ||
Inception (5/31/11) | –7.00% | |
1 Year | –1.08 | |
Class C Shares | ||
Inception (5/31/11) | –6.34% | |
1 Year | 2.97 | |
Class R Shares | ||
Inception (5/31/11) | –5.88% | |
1 Year | 4.46 | |
Class Y Shares | ||
Inception (5/31/11) | –5.43% | |
1 Year | 5.03 | |
Class R5 Shares | ||
Inception (5/31/11) | –5.43% | |
1 Year | 5.03 | |
Class R6 Shares | ||
Inception | –5.51% | |
1 Year | 4.89 |
| ||
Average Annual Total Returns | ||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
| ||
Class A Shares | ||
Inception (5/31/11) | –8.40% | |
1 Year | –4.39 | |
Class C Shares | ||
Inception (5/31/11) | –7.75% | |
1 Year | –0.72 | |
Class R Shares | ||
Inception (5/31/11) | –7.27% | |
1 Year | 0.79 | |
Class Y Shares | ||
Inception (5/31/11) | –6.85% | |
1 Year | 1.35 | |
Class R5 Shares | ||
Inception (5/31/11) | –6.85% | |
1 Year | 1.35 | |
Class R6 Shares | ||
Inception | –6.90% | |
1 Year | 1.35 |
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. 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 1.87%, 2.62%, 2.12%, 1.62%, 1.62% and 1.62%, 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 2.59%, 3.34%, 2.84%, 2.34%, 2.04% and 2.02%, 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 C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 Invesco Emerging Markets Equity 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 Emerging Markets Equity Fund
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–101.72% |
| |||||||
Brazil–9.27% | ||||||||
BB Seguridade Participacoes S.A. | 55,500 | $ | 639,981 | |||||
Cielo S.A. | 23,400 | 321,947 | ||||||
Grendene S.A. | 93,300 | 557,440 | ||||||
M Dias Branco S.A. | 12,600 | 358,841 | ||||||
Raia Drogasil S.A. | 39,200 | 442,784 | ||||||
Via Varejo S.A. | 65,400 | 406,376 | ||||||
2,727,369 | ||||||||
Chile–1.50% | ||||||||
Banco de Credito e Inversiones (BCI) | 8,838 | 440,528 | ||||||
China–23.83% | ||||||||
Alibaba Group Holding Ltd.–ADR(a) | 7,341 | 596,750 | ||||||
Baidu, Inc.–ADR(a) | 3,416 | 684,156 | ||||||
Bank of China Ltd.–Class H | 1,262,000 | 867,874 | ||||||
China Construction Bank Corp.–Class H | 1,030,000 | 1,003,355 | ||||||
Haitian International Holdings Ltd. | 210,000 | 523,476 | ||||||
Lenovo Group Ltd. | 416,000 | 719,231 | ||||||
Shenzhou International Group Holdings Ltd. | 150,000 | 707,374 | ||||||
Sinopharm Group Co.–Class H | 92,800 | 440,779 | ||||||
Tencent Holdings Ltd. | 71,100 | 1,468,398 | ||||||
7,011,393 | ||||||||
Hong Kong–5.26% | ||||||||
AIA Group Ltd. | 88,000 | 588,143 | ||||||
Standard Chartered PLC | 20,250 | 332,096 | ||||||
Techtronic Industries Co. Ltd. | 176,500 | 627,389 | ||||||
1,547,628 | ||||||||
India–11.04% | ||||||||
Axis Bank Ltd. | 61,994 | 553,925 | ||||||
Emami Ltd. | 14,738 | 215,895 | ||||||
Kaveri Seed Co. Ltd. | 29,785 | 392,389 | ||||||
LIC Housing Finance Ltd. | 59,450 | 402,358 | ||||||
Maruti Suzuki India Ltd. | 8,796 | 515,630 | ||||||
Motherson Sumi Systems Ltd. | 69,214 | 550,187 | ||||||
Tata Consultancy Services Ltd. | 15,978 | 619,779 | ||||||
3,250,163 | ||||||||
Indonesia–3.18% | ||||||||
PT Bank Rakyat Indonesia Persero Tbk | 491,900 | 440,384 | ||||||
PT Matahari Department Store Tbk | 366,100 | 494,234 | ||||||
934,618 | ||||||||
Malaysia–2.99% | ||||||||
Berjaya Auto Berhad | 425,100 | 481,142 | ||||||
Kossan Rubber Industries Berhad | 238,000 | 398,032 | ||||||
879,174 |
Shares | Value | |||||||
Mexico–3.30% | ||||||||
Grupo Financiero Inbursa, SAB de C.V.–Class O | 235,200 | $ | 561,971 | |||||
Kimberly-Clark de Mexico, S.A.B. de C.V.–Class A | 186,100 | 409,835 | ||||||
971,806 | ||||||||
Peru–1.53% | ||||||||
Intercorp Financial Services Inc. | 15,050 | 449,845 | ||||||
Russia–2.81% | ||||||||
Magnit PJSC–REGS–GDR(b) | 7,394 | 407,779 | ||||||
Sberbank of Russia–ADR | 70,559 | 419,013 | ||||||
826,792 | ||||||||
South Africa–6.85% | ||||||||
Life Healthcare Group Holdings Ltd. | 154,038 | 526,892 | ||||||
Mr. Price Group Ltd. | 32,666 | 698,667 | ||||||
MTN Group Ltd. | 39,492 | 791,629 | ||||||
2,017,188 | ||||||||
South Korea–15.28% | ||||||||
CJ CGV Co., Ltd. | 7,032 | 520,699 | ||||||
Coway Co., Ltd. | 6,074 | 511,505 | ||||||
Grand Korea Leisure Co., Ltd. | 15,592 | 560,549 | ||||||
Hanssem Co., Ltd. | 4,826 | 890,995 | ||||||
KEPCO Plant Service & Engineering Co., Ltd. | 4,929 | 447,259 | ||||||
Samsung Electronics Co., Ltd. | 1,193 | 1,564,214 | ||||||
4,495,221 | ||||||||
Taiwan–10.73% | ||||||||
King Slide Works Co., Ltd. | 37,000 | 582,570 | ||||||
President Chain Store Corp. | 88,000 | 651,682 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 278,000 | 1,342,258 | ||||||
Yungtay Engineering Co., Ltd. | 253,000 | 581,651 | ||||||
3,158,161 | ||||||||
Thailand–1.60% | ||||||||
Kasikornbank PCL | 74,500 | 472,401 | ||||||
Turkmenistan–1.65% | ||||||||
Dragon Oil PLC | 51,117 | 485,634 | ||||||
United Kingdom–0.90% | ||||||||
SABMiller PLC | 4,981 | 263,924 | ||||||
Total Common Stocks & Other Equity Interests (Cost $27,314,437) |
| 29,931,845 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Emerging Markets Equity Fund
Shares | Value | |||||||
Money Market Funds–1.14% |
| |||||||
Liquid Assets Portfolio–Institutional | 167,519 | $ | 167,519 | |||||
Premier Portfolio–Institutional Class(c) | 167,520 | 167,520 | ||||||
Total Money Market Funds |
| 335,039 | ||||||
TOTAL INVESTMENTS–102.86% |
| 30,266,884 | ||||||
OTHER ASSETS LESS LIABILITIES–(2.86)% |
| (840,097 | ) | |||||
NET ASSETS–100.00% |
| $ | 29,426,787 |
Investment Abbreviations:
ADR | – American Depositary Receipt | |
GDR | – Global Depositary Receipt | |
REGS | – Regulation S |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at April 30, 2015 represented 1.39% of the Fund’s Net Assets. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Total Investments
as of April 30, 2015
Consumer Discretionary | 24.8 | % | ||
Information Technology | 24.2 | |||
Financials | 23.7 | |||
Consumer Staples | 10.4 | |||
Industrials | 7.1 | |||
Health Care | 4.5 | |||
Telecommunication Services | 2.6 | |||
Energy | 1.6 | |||
Money Market Funds | 1.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Emerging Markets Equity Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $27,314,437) | $ | 29,931,845 | ||
Investments in affiliated money market funds, at value and cost | 335,039 | |||
Total investments, at value (Cost $27,649,476) | 30,266,884 | |||
Foreign currencies, at value (Cost $234,863) | 236,544 | |||
Receivable for: | ||||
Investments sold | 60,717 | |||
Fund shares sold | 47,507 | |||
Dividends | 28,616 | |||
Fund expenses absorbed | 6,110 | |||
Investment for trustee deferred compensation and retirement plans | 16,974 | |||
Other assets | 47,763 | |||
Total assets | 30,711,115 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 313,403 | |||
Fund shares reacquired | 829,821 | |||
Accrued foreign taxes | 27,591 | |||
Accrued fees to affiliates | 17,298 | |||
Accrued trustees’ and officers’ fees and benefits | 1,797 | |||
Accrued other operating expenses | 76,701 | |||
Trustee deferred compensation and retirement plans | 17,717 | |||
Total liabilities | 1,284,328 | |||
Net assets applicable to shares outstanding | $ | 29,426,787 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 31,203,620 | ||
Undistributed net investment income (loss) | (47,024 | ) | ||
Undistributed net realized gain (loss) | (4,348,881 | ) | ||
Net unrealized appreciation | 2,619,072 | |||
$ | 29,426,787 |
Net Assets: |
| |||
Class A | $ | 11,900,002 | ||
Class C | $ | 2,938,248 | ||
Class R | $ | 1,282,843 | ||
Class Y | $ | 3,836,242 | ||
Class R5 | $ | 1,040,227 | ||
Class R6 | $ | 8,429,225 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 1,549,499 | |||
Class C | 386,750 | |||
Class R | 167,597 | |||
Class Y | 499,870 | |||
Class R5 | 135,481 | |||
Class R6 | 1,097,158 | |||
Class A: | ||||
Net asset value per share | $ | 7.68 | ||
Maximum offering price per share | ||||
(Net asset value of $7.68 ¸ 94.50%) | $ | 8.13 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 7.60 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 7.65 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 7.67 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 7.68 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 7.68 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Emerging Markets Equity Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $29,244) | $ | 219,714 | ||
Dividends from affiliated money market funds | 200 | |||
Total investment income | 219,914 | |||
Expenses: | ||||
Advisory fees | 129,790 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 28,004 | |||
Distribution fees: | ||||
Class A | 14,700 | |||
Class C | 13,582 | |||
Class R | 3,028 | |||
Transfer agent fees — A, C, R and Y | 33,279 | |||
Transfer agent fees — R5 | 23 | |||
Transfer agent fees — R6 | 28 | |||
Trustees’ and officers’ fees and benefits | 9,640 | |||
Registration and filing fees | 38,057 | |||
Professional services fees | 24,349 | |||
Other | 16,814 | |||
Total expenses | 336,088 | |||
Less: Fees waived and expenses reimbursed | (83,384 | ) | ||
Net expenses | 252,704 | |||
Net investment income (loss) | (32,790 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (1,662,520 | ) | ||
Foreign currencies | (30,535 | ) | ||
(1,693,055 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 2,483,471 | |||
Foreign currencies | 2,932 | |||
2,486,403 | ||||
Net realized and unrealized gain | 793,348 | |||
Net increase in net assets resulting from operations | $ | 760,558 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Emerging Markets Equity Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (32,790 | ) | $ | 202,600 | |||
Net realized gain (loss) | (1,693,055 | ) | (270,741 | ) | ||||
Change in net unrealized appreciation | 2,486,403 | 122,931 | ||||||
Net increase in net assets resulting from operations | 760,558 | 54,790 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (44,461 | ) | (121,978 | ) | ||||
Class C | — | (8,695 | ) | |||||
Class R | (2,660 | ) | (5,311 | ) | ||||
Class Y | (24,019 | ) | (4,449 | ) | ||||
Class R5 | (6,406 | ) | (3,472 | ) | ||||
Class R6 | (59,556 | ) | (81,720 | ) | ||||
Total distributions from net investment income | (137,102 | ) | (225,625 | ) | ||||
Share transactions–net: | ||||||||
Class A | 866,487 | (4,506,049 | ) | |||||
Class C | 69,346 | 640,555 | ||||||
Class R | (69,597 | ) | 588,496 | |||||
Class Y | 483,459 | 2,890,104 | ||||||
Class R5 | 141,935 | 516,559 | ||||||
Class R6 | 183,789 | (472,445 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | 1,675,419 | (342,780 | ) | |||||
Net increase (decrease) in net assets | 2,298,875 | (513,615 | ) | |||||
Net assets: | ||||||||
Beginning of period | 27,127,912 | 27,641,527 | ||||||
End of period (includes undistributed net investment income (loss) of $(47,024) and $122,868, respectively) | $ | 29,426,787 | $ | 27,127,912 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Emerging Markets Equity Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value.
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
8 Invesco Emerging Markets Equity 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. |
9 Invesco Emerging Markets Equity 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. | 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 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.
10 Invesco Emerging Markets Equity Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $250 million | 0 | .935% | ||||
Next $250 million | 0 | .91% | ||||
Next $500 million | 0 | .885% | ||||
Next $1.5 billion | 0 | .86% | ||||
Next $2.5 billion | 0 | .835% | ||||
Next $2.5 billion | 0 | .81% | ||||
Next $2.5 billion | 0 | .785 | ||||
Over $10 billion | 0 | .76% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.94%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.85%, 2.60%, 2.10%, 1.60%, 1.60% and 1.60% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $50,055 and reimbursed class level expenses of $20,594, $4,757, $2,121, $5,806, $23 and $28 for 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 April 30, 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $4,265 in front-end sales commissions from the sale of Class A shares and $3 and $334 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.
11 Invesco Emerging Markets Equity Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 April 30, 2015, there were transfers from Level 1 to Level 2 of $1,202,349 and from Level 2 to Level 1 of $8,061,231, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Brazil | $ | 2,727,369 | $ | — | $ | — | $ | 2,727,369 | ||||||||
Chile | 440,528 | — | — | 440,528 | ||||||||||||
China | 5,102,216 | 1,909,177 | — | 7,011,393 | ||||||||||||
Hong Kong | 1,215,532 | 332,096 | — | 1,547,628 | ||||||||||||
India | 550,187 | 2,699,976 | — | 3,250,163 | ||||||||||||
Indonesia | 494,234 | 440,384 | — | 934,618 | ||||||||||||
Malaysia | — | 879,174 | — | 879,174 | ||||||||||||
Mexico | 971,806 | — | — | 971,806 | ||||||||||||
Peru | 449,845 | — | — | 449,845 | ||||||||||||
Russia | 407,779 | 419,013 | — | 826,792 | ||||||||||||
South Africa | 698,667 | 1,318,521 | — | 2,017,188 | ||||||||||||
South Korea | 2,040,013 | 2,455,208 | — | 4,495,221 | ||||||||||||
Taiwan | — | 3,158,161 | — | 3,158,161 | ||||||||||||
Thailand | — | 472,401 | — | 472,401 | ||||||||||||
Turkmenistan | — | 485,634 | — | 485,634 | ||||||||||||
United Kingdom | — | 263,924 | — | 263,924 | ||||||||||||
United States | 335,039 | — | — | 335,039 | ||||||||||||
Total Investments | $ | 15,433,215 | $ | 14,833,669 | $ | — | $ | 30,266,884 |
NOTE 4—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
12 Invesco Emerging Markets Equity Fund
NOTE 6—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 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 October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
Not subject to expiration | $ | 851,527 | $ | 1,747,143 | $ | 2,598,670 |
* | 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 April 30, 2015 was $18,555,003 and $15,728,801, 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 | $ | 3,615,272 | ||
Aggregate unrealized (depreciation) of investment securities | (1,055,015 | ) | ||
Net unrealized appreciation of investment securities | $ | 2,560,257 |
Cost of investments for tax purposes is $27,706,627.
13 Invesco Emerging Markets Equity Fund
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 776,760 | $ | 5,562,819 | 826,496 | $ | 6,210,865 | ||||||||||
Class C | 71,166 | 509,556 | 179,248 | 1,317,911 | ||||||||||||
Class R | 32,373 | 233,665 | 97,020 | 714,181 | ||||||||||||
Class Y | 73,926 | 541,671 | 391,758 | 3,010,217 | ||||||||||||
Class R5 | 27,217 | 210,117 | 69,420 | 513,251 | ||||||||||||
Class R6 | 115,002 | 814,045 | 51,867 | 386,284 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 6,447 | 44,096 | 13,876 | 100,046 | ||||||||||||
Class C | — | — | 1,162 | 8,339 | ||||||||||||
Class R | 387 | 2,644 | 730 | 5,260 | ||||||||||||
Class Y | 3,509 | 23,965 | 607 | 4,377 | ||||||||||||
Class R5 | 918 | 6,282 | 459 | 3,308 | ||||||||||||
Class R6 | 8,707 | 59,556 | 11,319 | 81,720 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (638,748 | ) | (4,740,428 | ) | (1,443,468 | ) | (10,816,960 | ) | ||||||||
Class C | (61,402 | ) | (440,210 | ) | (93,773 | ) | (685,695 | ) | ||||||||
Class R | (42,796 | ) | (305,906 | ) | (17,429 | ) | (130,945 | ) | ||||||||
Class Y | (11,556 | ) | (82,177 | ) | (16,439 | ) | (124,490 | ) | ||||||||
Class R5 | (10,622 | ) | (74,464 | ) | — | — | ||||||||||
Class R6 | (94,195 | ) | (689,812 | ) | (125,987 | ) | (940,449 | ) | ||||||||
Net increase (decrease) in share activity | 257,093 | $ | 1,675,419 | (53,134 | ) | $ | (342,780 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 24% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
In addition, 29% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco. |
14 Invesco Emerging Markets Equity Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 7.58 | $ | (0.01 | ) | $ | 0.14 | $ | 0.13 | $ | (0.03 | ) | $ | — | $ | (0.03 | ) | $ | 7.68 | 1.79 | % | $ | 11,900 | 1.85 | %(d) | 2.56 | %(d) | (0.27 | )%(d) | 57 | % | |||||||||||||||||||||||||
Year ended 10/31/14 | 7.61 | 0.06 | (0.03 | ) | 0.03 | (0.06 | ) | — | (0.06 | ) | 7.58 | 0.44 | 10,654 | 1.85 | 2.57 | 0.74 | 94 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 7.61 | 0.05 | 0.03 | 0.08 | (0.08 | ) | — | (0.08 | ) | 7.61 | 1.06 | 15,284 | 1.85 | 2.75 | 0.68 | 41 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 8.07 | 0.11 | (0.47 | ) | (0.36 | ) | (0.07 | ) | (0.03 | ) | (0.10 | ) | 7.61 | (4.51 | ) | 10,187 | 1.85 | 3.44 | 1.36 | 34 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | 0.03 | (1.96 | ) | (1.93 | ) | — | — | — | 8.07 | (19.30 | ) | 4,019 | 1.84 | (f) | 5.28 | (f) | 0.87 | (f) | 16 | ||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.49 | (0.04 | ) | 0.15 | 0.11 | — | — | — | 7.60 | 1.47 | 2,938 | 2.60 | (d) | 3.31 | (d) | (1.02 | )(d) | 57 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 7.55 | — | (0.03 | ) | (0.03 | ) | (0.03 | ) | — | (0.03 | ) | 7.49 | (0.40 | ) | 2,825 | 2.60 | 3.32 | (0.01 | ) | 94 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 7.55 | (0.01 | ) | 0.04 | 0.03 | (0.03 | ) | — | (0.03 | ) | 7.55 | 0.40 | 2,191 | 2.60 | 3.50 | (0.07 | ) | 41 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 8.05 | 0.04 | (0.47 | ) | (0.43 | ) | (0.04 | ) | (0.03 | ) | (0.07 | ) | 7.55 | (5.28 | ) | 1,150 | 2.60 | 4.19 | 0.61 | 34 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | 0.00 | (1.95 | ) | (1.95 | ) | — | — | — | 8.05 | (19.50 | ) | 236 | 2.59 | (f) | 6.03 | (f) | 0.12 | (f) | 16 | ||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.55 | (0.02 | ) | 0.14 | 0.12 | (0.02 | ) | — | (0.02 | ) | 7.65 | 1.56 | 1,283 | 2.10 | (d) | 2.81 | (d) | (0.52 | )(d) | 57 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 7.59 | 0.04 | (0.03 | ) | 0.01 | (0.05 | ) | — | (0.05 | ) | 7.55 | 0.17 | 1,341 | 2.10 | 2.82 | 0.49 | 94 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 7.58 | 0.03 | 0.04 | 0.07 | (0.06 | ) | — | (0.06 | ) | 7.59 | 0.97 | 739 | 2.10 | 3.00 | 0.43 | 41 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 8.06 | 0.08 | (0.47 | ) | (0.39 | ) | (0.06 | ) | (0.03 | ) | (0.09 | ) | 7.58 | (4.86 | ) | 76 | 2.10 | 3.69 | 1.11 | 34 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | 0.02 | (1.96 | ) | (1.94 | ) | — | — | — | 8.06 | (19.40 | ) | 9 | 2.09 | (f) | 5.53 | (f) | 0.62 | (f) | 16 | ||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.59 | 0.00 | 0.13 | 0.13 | (0.05 | ) | — | (0.05 | ) | 7.67 | 1.86 | 3,836 | 1.60 | (d) | 2.31 | (d) | (0.02 | )(d) | 57 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 7.62 | 0.08 | (0.04 | ) | 0.04 | (0.07 | ) | — | (0.07 | ) | 7.59 | 0.60 | 3,295 | 1.60 | 2.32 | 0.99 | 94 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 7.61 | 0.07 | 0.04 | 0.11 | (0.10 | ) | — | (0.10 | ) | 7.62 | 1.42 | 442 | 1.60 | 2.50 | 0.93 | 41 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 8.07 | 0.12 | (0.47 | ) | (0.35 | ) | (0.08 | ) | (0.03 | ) | (0.11 | ) | 7.61 | (4.31 | ) | 281 | 1.60 | 3.19 | 1.61 | 34 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | 0.04 | (1.97 | ) | (1.93 | ) | — | — | — | 8.07 | (19.30 | ) | 38 | 1.59 | (f) | 5.03 | (f) | 1.12 | (f) | 16 | ||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.60 | 0.00 | 0.13 | 0.13 | (0.05 | ) | — | (0.05 | ) | 7.68 | 1.86 | 1,040 | 1.60 | (d) | 1.97 | (d) | (0.02 | )(d) | 57 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 7.62 | 0.07 | (0.02 | ) | 0.05 | (0.07 | ) | — | (0.07 | ) | 7.60 | 0.74 | 896 | 1.60 | 2.02 | 0.99 | 94 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 7.61 | 0.07 | 0.04 | 0.11 | (0.10 | ) | — | (0.10 | ) | 7.62 | 1.42 | 366 | 1.60 | 2.26 | 0.93 | 41 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 8.07 | 0.12 | (0.47 | ) | (0.35 | ) | (0.08 | ) | (0.03 | ) | (0.11 | ) | 7.61 | (4.31 | ) | 118 | 1.60 | 2.90 | 1.61 | 34 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/11(e) | 10.00 | 0.04 | (1.97 | ) | (1.93 | ) | — | — | — | 8.07 | (19.30 | ) | 7,720 | 1.59 | (f) | 4.86 | (f) | 1.12 | (f) | 16 | ||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 7.60 | 0.00 | 0.13 | 0.13 | (0.05 | ) | — | (0.05 | ) | 7.68 | 1.86 | 8,429 | 1.60 | (d) | 1.96 | (d) | (0.02 | )(d) | 57 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 7.62 | 0.07 | (0.02 | ) | 0.05 | (0.07 | ) | — | (0.07 | ) | 7.60 | 0.73 | 8,116 | 1.60 | 2.00 | 0.99 | 94 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 7.62 | 0.07 | 0.03 | 0.10 | (0.10 | ) | — | (0.10 | ) | 7.62 | 1.28 | 8,619 | 1.60 | 2.21 | 0.93 | 41 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 7.85 | 0.01 | (0.24 | ) | (0.23 | ) | — | — | — | 7.62 | (2.93 | ) | 7,488 | 1.60 | (f) | 1.79 | (f) | 1.61 | (f) | 34 |
(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 $11,857, $2,739, $1,221, $3,343, $818 and $8,015 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of May 31, 2011 for Class A, Class C, Class R, Class Y and Class R5 shares and September 24, 2012 for Class R6 shares. |
(f) | Annualized. |
15 Invesco Emerging Markets Equity Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,016.50 | $ | 9.25 | $ | 1,015.62 | $ | 9.25 | 1.85 | % | ||||||||||||
C | 1,000.00 | 1,013.30 | 12.98 | 1,011.90 | 12.97 | 2.60 | ||||||||||||||||||
R | 1,000.00 | 1,016.90 | 10.50 | 1,014.38 | 10.49 | 2.10 | ||||||||||||||||||
Y | 1,000.00 | 1,018.60 | 8.01 | 1,016.86 | 8.00 | 1.60 | ||||||||||||||||||
R5 | 1,000.00 | 1,018.60 | 8.01 | 1,016.86 | 8.00 | 1.60 | ||||||||||||||||||
R6 | 1,000.00 | 1,017.20 | 8.00 | 1,016.86 | 8.00 | 1.60 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
16 Invesco Emerging Markets Equity Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov.
The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. | ||
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-05426 and 033-19338 | EME-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Endeavor Fund | ||||
Nasdaq: | ||||
A: ATDAX ¡ B: ATDBX ¡ C: ATDCX ¡ R: ATDRX ¡ Y: ATDYX ¡ R5: ATDIX ¡ R6: ATDFX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
7 Financial Statements | ||||
9 Notes to Financial Statements | ||||
16 Financial Highlights | ||||
17 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||||
Fund vs. Indexes | ||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | 2.98 | % | ||||
Class B Shares | 2.63 | |||||
Class C Shares | 2.63 | |||||
Class R Shares | 2.86 | |||||
Class Y Shares | 3.13 | |||||
Class R5 Shares | 3.20 | |||||
Class R6 Shares | 3.24 | |||||
S&P 500 Index‚ (Broad Market Index) | 4.40 | |||||
Russell Midcap Index‚ (Style-Specific Index) | 5.87 | |||||
Lipper Mid-Cap Core Funds Indexn (Peer Group Index) | 5.79 | |||||
Source(s): ‚FactSet Research Systems Inc.; nLipper Inc. | ||||||
The S&P 500® Index is an unmanaged index considered representative of the US stock market. | ||||||
The Russell Midcap® Index is an unmanaged index considered representative of mid-cap stocks. The Russell Midcap Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co. | ||||||
The Lipper Mid-Cap Core Funds Index is an unmanaged index considered representative of mid-cap core funds tracked by Lipper. | ||||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). | ||||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
2 | Invesco Endeavor Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (11/4/03) | 9.92 | % | |||||
10 Years | 9.55 | ||||||
5 Years | 10.67 | ||||||
1 Year | 0.88 | ||||||
Class B Shares | |||||||
Inception (11/4/03) | 9.90 | % | |||||
10 Years | 9.51 | ||||||
5 Years | 10.83 | ||||||
1 Year | 1.22 | ||||||
Class C Shares | |||||||
Inception (11/4/03) | 9.67 | % | |||||
10 Years | 9.35 | ||||||
5 Years | 11.09 | ||||||
1 Year | 5.03 | ||||||
Class R Shares | |||||||
Inception (4/30/04) | 9.84 | % | |||||
10 Years | 9.91 | ||||||
5 Years | 11.65 | ||||||
1 Year | 6.53 | ||||||
Class Y Shares | |||||||
10 Years | 10.36 | % | |||||
5 Years | 12.21 | ||||||
1 Year | 7.05 | ||||||
Class R5 Shares | |||||||
Inception (4/30/04) | 10.63 | % | |||||
10 Years | 10.71 | ||||||
5 Years | 12.40 | ||||||
1 Year | 7.15 | ||||||
Class R6 Shares | |||||||
10 Years | 10.30 | % | |||||
5 Years | 12.20 | ||||||
1 Year | 7.24 |
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 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.
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
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (11/4/03) | 9.84 | % | |||||
10 Years | 8.90 | ||||||
5 Years | 11.09 | ||||||
1 Year | –1.51 | ||||||
Class B Shares | |||||||
Inception (11/4/03) | 9.82 | % | |||||
10 Years | 8.86 | ||||||
5 Years | 11.27 | ||||||
1 Year | –1.19 | ||||||
Class C Shares | |||||||
Inception (11/4/03) | 9.59 | % | |||||
10 Years | 8.70 | ||||||
5 Years | 11.50 | ||||||
1 Year | 2.53 | ||||||
Class R Shares | |||||||
Inception (4/30/04) | 9.76 | % | |||||
10 Years | 9.25 | ||||||
5 Years | 12.09 | ||||||
1 Year | 3.99 | ||||||
Class Y Shares | |||||||
10 Years | 9.70 | % | |||||
5 Years | 12.64 | ||||||
1 Year | 4.50 | ||||||
Class R5 Shares | |||||||
Inception (4/30/04) | 10.55 | % | |||||
10 Years | 10.05 | ||||||
5 Years | 12.84 | ||||||
1 Year | 4.65 | ||||||
Class R6 Shares | |||||||
10 Years | 9.64 | % | |||||
5 Years | 12.62 | ||||||
1 Year | 4.74 |
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 1.30%, 2.05%, 2.05%, 1.55%, 1.05%, 0.94% and 0.85%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares was
1.33%, 2.08%, 2.08%, 1.58%, 1.08%, 0.97% 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 R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
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, 2017. See current prospectus for more information. |
3 | Invesco Endeavor 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 Endeavor Fund |
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–79.50% |
| |||||||
Agricultural & Farm Machinery–2.27% | ||||||||
Deere & Co. | 121,873 | $ | 11,031,944 | |||||
Air Freight & Logistics–1.82% | ||||||||
Echo Global Logistics, Inc. | 306,717 | 8,864,121 | ||||||
Airlines–1.99% | ||||||||
Ryanair Holdings PLC–ADR (Ireland)(b) | 148,800 | 9,649,680 | ||||||
Apparel Retail–4.87% | ||||||||
Francesca’s Holdings Corp.(b) | 601,006 | 10,175,031 | ||||||
Ross Stores, Inc. | 136,286 | 13,475,960 | ||||||
23,650,991 | ||||||||
Brewers–2.10% | ||||||||
Molson Coors Brewing Co.–Class B | 138,455 | 10,177,827 | ||||||
Communications Equipment–3.34% | ||||||||
Plantronics, Inc. | 304,828 | 16,238,188 | ||||||
Construction & Engineering–3.67% | ||||||||
Orion Marine Group, Inc.(b)(c) | 2,116,559 | 17,821,427 | ||||||
Consumer Finance–3.01% | ||||||||
Encore Capital Group, Inc.(b) | 361,613 | 14,623,630 | ||||||
Environmental & Facilities Services–3.63% | ||||||||
Newalta Corp. (Canada) | 1,294,156 | 17,625,152 | ||||||
Health Care Distributors–1.69% | ||||||||
Patterson Cos. Inc. | 174,647 | 8,200,550 | ||||||
Health Care Equipment–3.15% | ||||||||
Zimmer Holdings, Inc. | 139,130 | 15,282,039 | ||||||
Home Entertainment Software–2.79% | ||||||||
Activision Blizzard, Inc. | 593,290 | 13,535,911 | ||||||
Industrial Conglomerates–3.34% | ||||||||
DCC PLC (Ireland) | 254,531 | 16,225,652 | ||||||
Integrated Oil & Gas–2.95% | ||||||||
Cenovus Energy Inc. (Canada) | 760,723 | 14,332,919 | ||||||
IT Consulting & Other Services–3.04% | ||||||||
Cognizant Technology Solutions Corp.–Class A(b) | 252,323 | 14,770,989 | ||||||
Life & Health Insurance–2.78% | ||||||||
Unum Group | 394,920 | 13,490,467 | ||||||
Managed Health Care–2.56% | ||||||||
UnitedHealth Group Inc. | 111,739 | 12,447,725 |
Shares | Value | |||||||
Multi-Line Insurance–2.12% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe (Austria) | 258,042 | $ | 10,281,213 | |||||
Oil & Gas Drilling–1.78% | ||||||||
Patterson-UTI Energy, Inc. | 387,284 | 8,655,797 | ||||||
Oil & Gas Exploration & Production–6.50% | ||||||||
Devon Energy Corp. | 170,289 | 11,615,413 | ||||||
Ultra Petroleum Corp.(b) | 1,170,339 | 19,930,873 | ||||||
31,546,286 | ||||||||
Paper Products–0.22% | ||||||||
Fortress Paper Ltd.–Class A (Canada)(b) | 575,700 | 1,092,799 | ||||||
Real Estate Operating Companies–3.80% | ||||||||
Brookfield Property Partners L.P. | 795,544 | 18,432,755 | ||||||
Research & Consulting Services–2.76% | ||||||||
FTI Consulting, Inc.(b) | 325,661 | 13,387,924 | ||||||
Semiconductor Equipment–2.15% | ||||||||
Ultratech, Inc.(b) | 523,867 | 10,456,385 | ||||||
Technology Distributors–3.90% | ||||||||
CDW Corp. | 493,803 | 18,922,531 | ||||||
Trading Companies & Distributors–5.28% | ||||||||
Grafton Group PLC (Ireland)(d) | 954,395 | 12,072,356 | ||||||
Titan Machinery, Inc.(b) | 925,357 | 13,556,480 | ||||||
25,628,836 | ||||||||
Trucking–1.99% | ||||||||
Con-way Inc. | 234,804 | 9,650,444 | ||||||
Total Common Stocks & Other Equity Interests |
| 386,024,182 | ||||||
Money Market Funds–20.64% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 50,116,684 | 50,116,684 | ||||||
Premier Portfolio–Institutional Class(e) | 50,116,685 | 50,116,685 | ||||||
Total Money Market Funds |
| 100,233,369 | ||||||
TOTAL INVESTMENTS–100.14% |
| 486,257,551 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.14)% |
| (677,051 | ) | |||||
NET ASSETS–100.00% |
| $ | 485,580,500 |
Investment Abbreviations:
ADR | – American Depositary Receipt |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Endeavor Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
(b) | Non-income producing security. |
(c) | Affiliated company during the period. The Investment Company Act of 1940 defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the Investment Company Act of 1940) of that issuer. The value of this security as of April 30, 2015 represented 3.67% of the Fund’s Net Assets. See Note 4. |
(d) | Each unit represents one ordinary share, seventeen Class A shares and one Class C share. |
(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 April 30, 2015
Industrials | 26.8 | % | ||
Information Technology | 15.2 | |||
Financials | 11.7 | |||
Energy | 11.2 | |||
Health Care | 7.4 | |||
Consumer Discretionary | 4.9 | |||
Consumer Staples | 2.1 | |||
Materials | 0.2 | |||
Money Market Funds Plus Other Assets Less Liabilities | 20.5 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Endeavor Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $289,978,259) | $ | 368,202,755 | ||
Investments in affiliates, at value (Cost $119,558,109) | 118,054,796 | |||
Total investments, at value (Cost $409,536,368) | 486,257,551 | |||
Foreign currencies, at value (Cost $187) | 186 | |||
Receivable for: | ||||
Investments sold | 261,893 | |||
Fund shares sold | 397,140 | |||
Dividends | 371,380 | |||
Investment for trustee deferred compensation and retirement plans | 65,368 | |||
Other assets | 44,066 | |||
Total assets | 487,397,584 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 1,350,657 | |||
Accrued fees to affiliates | 300,920 | |||
Accrued trustees’ and officers’ fees and benefits | 2,305 | |||
Accrued other operating expenses | 90,122 | |||
Trustee deferred compensation and retirement plans | 73,080 | |||
Total liabilities | 1,817,084 | |||
Net assets applicable to shares outstanding | $ | 485,580,500 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 383,787,548 | ||
Undistributed net investment income (loss) | (284,854 | ) | ||
Undistributed net realized gain | 25,373,671 | |||
Net unrealized appreciation | 76,704,135 | |||
$ | 485,580,500 |
Net Assets: |
| |||
Class A | $ | 184,264,211 | ||
Class B | $ | 3,688,205 | ||
Class C | $ | 52,294,086 | ||
Class R | $ | 32,135,266 | ||
Class Y | $ | 65,678,926 | ||
Class R5 | $ | 44,429,918 | ||
Class R6 | $ | 103,089,888 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 8,732,061 | |||
Class B | 191,825 | |||
Class C | 2,718,287 | |||
Class R | 1,562,396 | |||
Class Y | 3,058,101 | |||
Class R5 | 2,027,117 | |||
Class R6 | 4,694,273 | |||
Class A: | ||||
Net asset value per share | $ | 21.10 | ||
Maximum offering price per share | ||||
(Net asset value of $21.10 ¸ 94.50%) | $ | 22.33 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 19.23 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 19.24 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 20.57 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 21.48 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 21.92 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 21.96 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Endeavor Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $85,659) | $ | 2,672,480 | ||
Dividends from affiliates | 25,406 | |||
Total investment income | 2,697,886 | |||
Expenses: | ||||
Advisory fees | 1,819,068 | |||
Administrative services fees | 71,604 | |||
Custodian fees | 13,932 | |||
Distribution fees: | ||||
Class A | 232,676 | |||
Class B | 22,236 | |||
Class C | 263,769 | |||
Class R | 82,737 | |||
Transfer agent fees — A, B, C, R and Y | 383,165 | |||
Transfer agent fees — R5 | 23,044 | |||
Transfer agent fees — R6 | 2,842 | |||
Trustees’ and officers’ fees and benefits | 13,748 | |||
Other | 105,399 | |||
Total expenses | 3,034,220 | |||
Less: Fees waived and expense offset arrangement(s) | (76,576 | ) | ||
Net expenses | 2,957,644 | |||
Net investment income (loss) | (259,758 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 25,773,034 | |||
Foreign currencies | (55,995 | ) | ||
25,717,039 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (10,643,884 | ) | ||
Foreign currencies | (10,575 | ) | ||
(10,654,459 | ) | |||
Net realized and unrealized gain | 15,062,580 | |||
Net increase in net assets resulting from operations | $ | 14,802,822 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Endeavor Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (259,758 | ) | $ | (1,867,193 | ) | ||
Net realized gain | 25,717,039 | 48,486,410 | ||||||
Change in net unrealized appreciation (depreciation) | (10,654,459 | ) | 5,744,705 | |||||
Net increase in net assets resulting from operations | 14,802,822 | 52,363,922 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | — | (102,781 | ) | |||||
Class Y | — | (236,467 | ) | |||||
Class R5 | — | (102,797 | ) | |||||
Class R6 | — | (360,531 | ) | |||||
Total distributions from net investment income | — | (802,576 | ) | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (16,971,372 | ) | (7,305,132 | ) | ||||
Class B | (453,713 | ) | (250,992 | ) | ||||
Class C | (5,169,171 | ) | (2,092,673 | ) | ||||
Class R | (3,063,577 | ) | (1,486,839 | ) | ||||
Class Y | (6,396,326 | ) | (3,765,978 | ) | ||||
Class R5 | (4,210,075 | ) | (1,275,689 | ) | ||||
Class R6 | (8,572,104 | ) | (3,726,638 | ) | ||||
Total distributions from net realized gains | (44,836,338 | ) | (19,903,941 | ) | ||||
Share transactions–net: | ||||||||
Class A | 3,467,494 | (772,225 | ) | |||||
Class B | (825,313 | ) | (1,354,164 | ) | ||||
Class C | 2,565,247 | 1,283,102 | ||||||
Class R | (367,191 | ) | (2,178,156 | ) | ||||
Class Y | (2,015,920 | ) | (24,722,768 | ) | ||||
Class R5 | (2,093,835 | ) | 15,279,456 | |||||
Class R6 | 7,862,594 | 3,074,206 | ||||||
Net increase (decrease) in net assets resulting from share transactions | 8,593,076 | (9,390,549 | ) | |||||
Net increase (decrease) in net assets | (21,440,440 | ) | 22,266,856 | |||||
Net assets: | ||||||||
Beginning of period | 507,020,940 | 484,754,084 | ||||||
End of period (includes undistributed net investment income (loss) of $(284,854) and $(25,096), respectively) | $ | 485,580,500 | $ | 507,020,940 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Endeavor Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to
9 Invesco Endeavor Fund
contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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
10 Invesco Endeavor Fund
Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions — Distributions from 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. |
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 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.
11 Invesco Endeavor Fund
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 | .745% | ||||
Next $250 million | 0 | .73% | ||||
Next $500 million | 0 | .715% | ||||
Next $1.5 billion | 0 | .70% | ||||
Next $2.5 billion | 0 | .685% | ||||
Next $2.5 billion | 0 | .67% | ||||
Next $2.5 billion | 0 | .655% | ||||
Over $10 billion | 0 | .64% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.74%.
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, through at least June 30, 2016, 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, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $75,980.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 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 April 30, 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 April 30, 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
12 Invesco Endeavor Fund
proceeds prior to remittance to the shareholder. During the six months ended April 30, 2015, IDI advised the Fund that IDI retained $30,504 in front-end sales commissions from the sale of Class A shares and $1,233, $1,476 and $1,535 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | $ | 459,750,686 | $ | 26,506,865 | $ | — | $ | 486,257,551 |
NOTE 4—Investments in Other Affiliates
The 1940 Act defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the 1940 Act) of that issuer. The following is a summary of the investments in other affiliates for the six months ended April 30, 2015.
Value 10/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain | Value 04/30/15 | Interest/ Dividend Income | ||||||||||||||||||||||
Orion Marine Group, Inc. | $ | 20,653,835 | $ | 2,045,386 | $ | — | $ | (4,877,794 | ) | $ | — | $ | 17,821,427 | $ | — | |||||||||||||
Pike Corp. | 21,536,680 | — | (21,644,904 | ) | (5,149,332 | ) | 5,257,556 | — | — | |||||||||||||||||||
Total | $ | 42,190,515 | $ | 2,045,386 | $ | (21,644,904 | ) | $ | (10,027,126 | ) | $ | 5,257,556 | $ | 17,821,427 | $ | — |
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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $596.
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.
13 Invesco Endeavor Fund
NOTE 8—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 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 October 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 April 30, 2015 was $39,096,425 and $78,878,508, 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 | $ | 110,483,558 | ||
Aggregate unrealized (depreciation) of investment securities | (34,048,064 | ) | ||
Net unrealized appreciation of investment securities | $ | 76,435,494 |
Cost of investments for tax purposes is $409,822,057.
14 Invesco Endeavor Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 816,973 | $ | 17,194,474 | 2,202,819 | $ | 47,616,201 | ||||||||||
Class B | 7,306 | 145,513 | 16,309 | 322,237 | ||||||||||||
Class C | 193,223 | 3,711,081 | 625,657 | 12,500,340 | ||||||||||||
Class R | 228,762 | 4,642,874 | 563,317 | 11,918,520 | ||||||||||||
Class Y | 639,044 | 13,516,217 | 1,372,425 | 30,187,144 | ||||||||||||
Class R5 | 328,576 | 7,195,132 | 1,479,829 | 33,518,859 | ||||||||||||
Class R6 | 291,683 | 6,151,066 | 612,303 | 13,557,403 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 804,187 | 15,947,033 | 337,777 | 6,877,134 | ||||||||||||
Class B | 23,396 | 423,933 | 12,504 | 236,332 | ||||||||||||
Class C | 269,529 | 4,886,566 | 105,401 | 1,993,123 | ||||||||||||
Class R | 158,224 | 3,061,643 | 74,491 | 1,486,839 | ||||||||||||
Class Y | 248,068 | 5,001,049 | 106,184 | 2,189,519 | ||||||||||||
Class R5 | 177,190 | 3,644,799 | 54,806 | 1,149,279 | ||||||||||||
Class R6 | 416,122 | 8,572,104 | 194,812 | 4,087,168 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 45,946 | 971,893 | 45,124 | 978,925 | ||||||||||||
Class B | (50,318 | ) | (971,893 | ) | (48,729 | ) | (978,925 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (1,456,429 | ) | (30,645,906 | ) | (2,589,180 | ) | (56,244,485 | ) | ||||||||
Class B | (21,736 | ) | (422,866 | ) | (46,881 | ) | (933,808 | ) | ||||||||
Class C | (314,796 | ) | (6,032,400 | ) | (659,583 | ) | (13,210,361 | ) | ||||||||
Class R | (393,446 | ) | (8,071,708 | ) | (732,292 | ) | (15,583,515 | ) | ||||||||
Class Y | (967,577 | ) | (20,533,186 | ) | (2,646,470 | ) | (57,099,431 | ) | ||||||||
Class R5 | (595,030 | ) | (12,933,766 | ) | (864,925 | ) | (19,388,682 | ) | ||||||||
Class R6 | (313,162 | ) | (6,860,576 | ) | (637,396 | ) | (14,570,365 | ) | ||||||||
Net increase (decrease) in share activity | 535,735 | $ | 8,593,076 | (421,698 | ) | $ | (9,390,549 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 13% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The 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, 19% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco. |
15 Invesco Endeavor Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 22.57 | $ | (0.02 | ) | $ | 0.56 | $ | 0.54 | $ | — | $ | (2.01 | ) | $ | (2.01 | ) | $ | 21.10 | 2.98 | % | $ | 184,264 | 1.26 | %(d) | 1.29 | %(d) | (0.17 | )%(d) | 10 | % | |||||||||||||||||||||||||
Year ended 10/31/14 | 21.18 | (0.09 | ) | 2.35 | 2.26 | (0.01 | ) | (0.86 | ) | (0.87 | ) | 22.57 | 11.13 | 192,326 | 1.26 | 1.29 | (0.43 | ) | 27 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 18.19 | (0.00 | ) | 4.78 | 4.78 | (0.06 | ) | (1.73 | ) | (1.79 | ) | 21.18 | 28.78 | 180,568 | 1.26 | 1.30 | (0.02 | ) | 20 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 16.36 | (0.08 | ) | 1.98 | 1.90 | — | (0.07 | ) | (0.07 | ) | 18.19 | 11.70 | 102,508 | 1.34 | 1.37 | (0.41 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.78 | (0.08 | ) | 1.66 | 1.58 | — | — | — | 16.36 | 10.69 | �� | 91,975 | 1.34 | 1.37 | (0.49 | ) | 30 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.51 | (0.05 | ) | 2.32 | 2.27 | — | — | — | 14.78 | 18.15 | 81,536 | 1.45 | 1.47 | (0.36 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 20.82 | (0.09 | ) | 0.51 | 0.42 | — | (2.01 | ) | (2.01 | ) | 19.23 | 2.63 | 3,688 | 2.01 | (d) | 2.04 | (d) | (0.92 | )(d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 19.74 | (0.24 | ) | 2.18 | 1.94 | — | (0.86 | ) | (0.86 | ) | 20.82 | 10.27 | 4,855 | 2.01 | 2.04 | (1.18 | ) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.16 | (0.14 | ) | 4.49 | 4.35 | (0.04 | ) | (1.73 | ) | (1.77 | ) | 19.74 | 27.89 | 5,921 | 2.01 | 2.05 | (0.77 | ) | 20 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 15.55 | (0.19 | ) | 1.87 | 1.68 | — | (0.07 | ) | (0.07 | ) | 17.16 | 10.89 | 6,195 | 2.09 | 2.12 | (1.16 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.16 | (0.20 | ) | 1.59 | 1.39 | — | — | — | 15.55 | 9.82 | 7,542 | 2.09 | 2.12 | (1.24 | ) | 30 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.07 | (0.15 | ) | 2.24 | 2.09 | — | — | — | 14.16 | 17.32 | 9,025 | 2.20 | 2.22 | (1.11 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 20.83 | (0.09 | ) | 0.51 | 0.42 | — | (2.01 | ) | (2.01 | ) | 19.24 | 2.63 | 52,294 | 2.01 | (d) | 2.04 | (d) | (0.92 | )(d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 19.75 | (0.24 | ) | 2.18 | 1.94 | — | (0.86 | ) | (0.86 | ) | 20.83 | 10.27 | 53,542 | 2.01 | 2.04 | (1.18 | ) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.17 | (0.14 | ) | 4.49 | 4.35 | (0.04 | ) | (1.73 | ) | (1.77 | ) | 19.75 | 27.87 | 49,344 | 2.01 | 2.05 | (0.77 | ) | 20 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 15.56 | (0.19 | ) | 1.87 | 1.68 | — | (0.07 | ) | (0.07 | ) | 17.17 | 10.88 | 26,513 | 2.09 | 2.12 | (1.16 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.17 | (0.20 | ) | 1.59 | 1.39 | — | — | — | 15.56 | 9.81 | 20,710 | 2.09 | 2.12 | (1.24 | ) | 30 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.08 | (0.15 | ) | 2.24 | 2.09 | — | — | — | 14.17 | 17.30 | 19,436 | 2.20 | 2.22 | (1.11 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 22.08 | (0.04 | ) | 0.54 | 0.50 | — | (2.01 | ) | (2.01 | ) | 20.57 | 2.86 | 32,135 | 1.51 | (d) | 1.54 | (d) | (0.42 | )(d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 20.77 | (0.14 | ) | 2.31 | 2.17 | — | (0.86 | ) | (0.86 | ) | 22.08 | 10.89 | 34,634 | 1.51 | 1.54 | (0.68 | ) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.91 | (0.05 | ) | 4.69 | 4.64 | (0.05 | ) | (1.73 | ) | (1.78 | ) | 20.77 | 28.43 | 34,556 | 1.51 | 1.55 | (0.27 | ) | 20 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 16.14 | (0.11 | ) | 1.95 | 1.84 | — | (0.07 | ) | (0.07 | ) | 17.91 | 11.49 | 23,412 | 1.59 | 1.62 | (0.66 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.63 | (0.12 | ) | 1.63 | 1.51 | — | — | — | 16.14 | 10.32 | 14,721 | 1.59 | 1.62 | (0.74 | ) | 30 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.40 | (0.08 | ) | 2.31 | 2.23 | — | — | — | 14.63 | 17.98 | 12,850 | 1.70 | 1.72 | (0.61 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 22.91 | 0.01 | 0.57 | 0.58 | — | (2.01 | ) | (2.01 | ) | 21.48 | 3.13 | 65,679 | 1.01 | (d) | 1.04 | (d) | 0.08 | (d) | 10 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 21.48 | (0.04 | ) | 2.38 | 2.34 | (0.05 | ) | (0.86 | ) | (0.91 | ) | 22.91 | 11.39 | 71,898 | 1.01 | 1.04 | (0.18 | ) | 27 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 18.38 | 0.05 | 4.84 | 4.89 | (0.06 | ) | (1.73 | ) | (1.79 | ) | 21.48 | 29.15 | 92,483 | 1.01 | 1.05 | 0.23 | 20 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 16.49 | (0.03 | ) | 1.99 | 1.96 | — | (0.07 | ) | (0.07 | ) | 18.38 | 11.97 | 22,529 | 1.09 | 1.12 | (0.16 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.86 | (0.04 | ) | 1.67 | 1.63 | — | — | — | 16.49 | 10.97 | 5,802 | 1.09 | 1.12 | (0.24 | ) | 30 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.55 | (0.01 | ) | 2.32 | 2.31 | — | — | — | 14.86 | 18.41 | 4,150 | 1.20 | 1.22 | (0.11 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 23.32 | 0.02 | 0.59 | 0.61 | — | (2.01 | ) | (2.01 | ) | 21.92 | 3.20 | 44,430 | 0.89 | (d) | 0.92 | (d) | 0.20 | (d) | 10 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 21.84 | (0.02 | ) | 2.43 | 2.41 | (0.07 | ) | (0.86 | ) | (0.93 | ) | 23.32 | 11.51 | 49,356 | 0.90 | 0.93 | (0.07 | ) | 27 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 18.65 | 0.07 | 4.92 | 4.99 | (0.07 | ) | (1.73 | ) | (1.80 | ) | 21.84 | 29.24 | 31,593 | 0.91 | 0.95 | 0.33 | 20 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 16.69 | 0.01 | 2.02 | 2.03 | — | (0.07 | ) | (0.07 | ) | 18.65 | 12.25 | 16,677 | 0.87 | 0.90 | 0.06 | 37 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 15.01 | 0.00 | 1.68 | 1.68 | — | — | — | 16.69 | 11.19 | 87,733 | 0.85 | 0.88 | 0.00 | 30 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.62 | 0.02 | 2.37 | 2.39 | — | — | — | 15.01 | 18.94 | 75,795 | 0.94 | 0.96 | 0.16 | 38 | ||||||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 23.35 | 0.03 | 0.59 | 0.62 | — | (2.01 | ) | (2.01 | ) | 21.96 | 3.24 | 103,090 | 0.80 | (d) | 0.83 | (d) | 0.29 | (d) | 10 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 21.86 | 0.01 | 2.42 | 2.43 | (0.08 | ) | (0.86 | ) | (0.94 | ) | 23.35 | 11.62 | 100,410 | 0.81 | 0.84 | 0.02 | 27 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 18.65 | 0.08 | 4.93 | 5.01 | (0.07 | ) | (1.73 | ) | (1.80 | ) | 21.86 | 29.37 | 90,291 | 0.82 | 0.86 | 0.42 | 20 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 18.97 | 0.00 | (0.32 | ) | (0.32 | ) | — | — | — | 18.65 | (1.69 | ) | 74,513 | 0.83 | (f) | 0.86 | (f) | 0.10 | (f) | 37 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | 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 $187,683, $4,484, $53,191, $33,369, $70,354, $46,610 and $101,677 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. |
(f) | Annualized. |
16 Invesco Endeavor Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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.
ACTUAL | HYPOTHETICAL expenses) | |||||||||||||||||||||||
Class | Beginning Account Value (11/01/14) | Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | Annualized Expense Ratio | ||||||||||||||||||
A | $ | 1,000.00 | $ | 1,029.80 | $ | 6.34 | $ | 1,018.55 | $ | 6.31 | 1.26 | % | ||||||||||||
B | 1,000.00 | 1,026.30 | 10.10 | 1,014.83 | 10.04 | 2.01 | ||||||||||||||||||
C | 1,000.00 | 1,026.30 | 10.10 | 1,014.83 | 10.04 | 2.01 | ||||||||||||||||||
R | 1,000.00 | 1,028.60 | 7.60 | 1,017.31 | 7.55 | 1.51 | ||||||||||||||||||
Y | 1,000.00 | 1,031.30 | 5.09 | 1,019.79 | 5.06 | 1.01 | ||||||||||||||||||
R5 | 1,000.00 | 1,032.00 | 4.48 | 1,020.38 | 4.46 | 0.89 | ||||||||||||||||||
R6 | 1,000.00 | 1,032.40 | 4.03 | 1,020.83 | 4.01 | 0.80 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Endeavor 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: 811-05426 and 033-19338 | END-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Global Health Care Fund | ||||
Nasdaq: | ||||
A: GGHCX ¡ B: GTHBX ¡ C: GTHCX ¡ Y: GGHYX ¡ Investor: GTHIX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
7 Financial Statements | ||||
9 �� Notes to Financial Statements | ||||
16 Financial Highlights | ||||
17 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||||
Fund vs. Indexes | ||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | 8.97 | % | ||||
Class B Shares | 8.56 | |||||
Class C Shares | 8.54 | |||||
Class Y Shares | 9.07 | |||||
Investor Class Shares | 8.97 | |||||
MSCI World Index‚ (Broad Market Index) | 5.09 | |||||
MSCI World Health Care Index‚ (Style-Specific Index) | 8.78 | |||||
Lipper Global Health/Biotechnology Funds Indexn (Peer Group Index) | 11.61 | |||||
Source(s): ‚FactSet Research Systems Inc.; nLipper 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 MSCI World Health Care Index is an unmanaged index considered representative of health care stocks of developed countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors. | ||||||
The Lipper Global Health/Biotechnology Funds Index is an unmanaged index considered representative of global health/biotechnology funds tracked by Lipper. | ||||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). | ||||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
2 | Invesco Global Health Care Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (8/7/89) | 11.66 | % | |||||
10 Years | 10.74 | ||||||
5 Years | 17.46 | ||||||
1 Year | 18.98 | ||||||
Class B Shares | |||||||
Inception (4/1/93) | 12.03 | % | |||||
10 Years | 10.70 | ||||||
5 Years | 17.70 | ||||||
1 Year | 19.92 | ||||||
Class C Shares | |||||||
Inception (3/1/99) | 9.52 | % | |||||
10 Years | 10.54 | ||||||
5 Years | 17.91 | ||||||
1 Year | 23.95 | ||||||
Class Y Shares | |||||||
10 Years | 11.55 | % | |||||
5 Years | 19.09 | ||||||
1 Year | 26.18 | ||||||
Investor Class Shares | |||||||
10 Years | 11.37 | % | |||||
5 Years | 18.80 | ||||||
1 Year | 25.89 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (8/7/89) | 11.75 | % | |||||
10 Years | 11.05 | ||||||
5 Years | 17.17 | ||||||
1 Year | 18.66 | ||||||
Class B Shares | |||||||
Inception (4/1/93) | 12.14 | % | |||||
10 Years | 11.02 | ||||||
5 Years | 17.40 | ||||||
1 Year | 19.62 | ||||||
Class C Shares | |||||||
Inception (3/1/99) | 9.66 | % | |||||
10 Years | 10.85 | ||||||
5 Years | 17.62 | ||||||
1 Year | 23.62 | ||||||
Class Y Shares | |||||||
10 Years | 11.86 | % | |||||
5 Years | 18.79 | ||||||
1 Year | 25.86 | ||||||
Investor Class Shares | |||||||
10 Years | 11.68 | % | |||||
5 Years | 18.50 | ||||||
1 Year | 25.57 |
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
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, 2017. See current prospectus for more information. |
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.
Investor Class shares incepted on July 15, 2005. Performance shown prior to that date is that of Class A shares and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date
of this report for Class A, Class B, Class C, Class Y and Investor Class shares was 1.08%, 1.83%, 1.83%, 0.83% and 1.08%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y and Investor Class shares was 1.09%, 1.84%, 1.84%, 0.84% and 1.09%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares and Investor Class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
3 | Invesco Global Health Care 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 Health Care Fund |
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.61% |
| |||||||
Biotechnology–25.37% | ||||||||
ACADIA Pharmaceuticals Inc.(b) | 322,242 | $ | 11,011,009 | |||||
Alder Biopharmaceuticals, Inc.(b) | 378,389 | 9,648,919 | ||||||
Alexion Pharmaceuticals, Inc.(b) | 167,191 | 28,293,733 | ||||||
AMAG Pharmaceuticals, Inc.(b) | 206,470 | 10,523,776 | ||||||
Amgen Inc. | 183,055 | 28,906,215 | ||||||
ARIAD Pharmaceuticals, Inc.(b) | 1,138,155 | 9,867,804 | ||||||
Avalanche Biotechnologies, Inc.(b) | 265,185 | 8,448,794 | ||||||
Biogen Inc.(b) | 107,507 | 40,200,093 | ||||||
BioMarin Pharmaceutical Inc.(b) | 393,968 | 44,144,114 | ||||||
Bluebird Bio, Inc.(b) | 149,755 | 19,945,868 | ||||||
Celgene Corp.(b) | 401,889 | 43,428,125 | ||||||
Celldex Therapeutics Inc.(b) | 398,967 | 9,575,208 | ||||||
Dyax Corp.(b) | 289,536 | 6,922,806 | ||||||
Evolutionary Genomics, Inc. (Acquired 09/15/97-05/25/12; Cost $408,490)(b)(c)(d) | 9,944 | 29,832 | ||||||
Gilead Sciences, Inc.(b) | 465,721 | 46,809,618 | ||||||
;Incyte Corp.(b) | 487,201 | 47,336,449 | ||||||
Keryx Biopharmaceuticals, Inc.(b) | 671,551 | 7,158,734 | ||||||
Medivation Inc.(b) | 228,693 | 27,612,393 | ||||||
Neurocrine Biosciences, Inc.(b) | 246,537 | 8,404,446 | ||||||
Prothena Corp. PLC (Ireland)(b) | 174,016 | 5,639,859 | ||||||
Puma Biotechnology, Inc.(b) | 56,058 | 10,122,954 | ||||||
Receptos, Inc.(b) | 69,144 | 10,187,677 | ||||||
Synergy Pharmaceuticals, Inc.(b) | 1,341,293 | 4,694,525 | ||||||
Tekmira Pharmaceuticals Corp. | 289,619 | 4,480,406 | ||||||
Vanda Pharmaceuticals Inc.(b) | 703,576 | 6,437,720 | ||||||
Vertex Pharmaceuticals Inc.(b) | 389,828 | 48,057,996 | ||||||
497,889,073 | ||||||||
Drug Retail–1.43% | ||||||||
Raia Drogasil S.A. (Brazil) | 945,978 | 10,685,309 | ||||||
Rite Aid Corp.(b) | 2,259,807 | 17,423,112 | ||||||
28,108,421 | ||||||||
Health Care Distributors–2.44% | ||||||||
Cardinal Health, Inc. | 226,456 | 19,099,299 | ||||||
McKesson Corp. | 128,968 | 28,811,451 | ||||||
47,910,750 | ||||||||
Health Care Equipment–4.80% | ||||||||
DBV Technologies S.A.–ADR (France)(b) | 540,257 | 13,538,841 | ||||||
Olympus Corp. (Japan)(b) | 717,200 | 25,861,673 | ||||||
ResMed Inc. | 418,830 | 26,779,990 | ||||||
Wright Medical Group, Inc.(b) | 1,106,546 | 28,073,072 | ||||||
94,253,576 | ||||||||
Health Care Facilities–4.12% | ||||||||
Community Health Systems Inc.(b) | 509,260 | 27,337,077 | ||||||
HCA Holdings, Inc.(b) | 297,891 | 22,046,913 |
Shares | Value | |||||||
Health Care Facilities–(continued) | ||||||||
Tenet Healthcare Corp.(b) | 247,279 | $ | 11,834,773 | |||||
Universal Health Services, Inc.–Class B | 167,720 | 19,614,854 | ||||||
80,833,617 | ||||||||
Health Care Services–2.41% | ||||||||
Air Methods Corp.(b) | 309,568 | 14,147,258 | ||||||
Express Scripts Holding Co.(b) | 364,270 | 31,472,928 | ||||||
InnovaCare Inc. (Puerto Rico)(b)(c) | 805,748 | 1,611,496 | ||||||
47,231,682 | ||||||||
Health Care Technology–0.97% | ||||||||
Allscripts Healthcare Solutions, Inc.(b) | 1,431,300 | 19,036,290 | ||||||
Life Sciences Tools & Services–1.95% | ||||||||
Agilent Technologies, Inc. | 292,823 | 12,114,088 | ||||||
Thermo Fisher Scientific, Inc. | 208,222 | 26,169,341 | ||||||
38,283,429 | ||||||||
Managed Health Care–3.77% | ||||||||
Aetna Inc. | 319,666 | 34,162,705 | ||||||
Qualicorp S.A. (Brazil)(b) | 674,900 | 5,445,885 | ||||||
UnitedHealth Group Inc. | 308,879 | 34,409,121 | ||||||
74,017,711 | ||||||||
Pharmaceuticals–50.35% | ||||||||
AbbVie Inc. | 1,009,073 | 65,246,660 | ||||||
Actavis PLC(b) | 321,475 | 90,932,418 | ||||||
Agile Therapeutics, Inc.(b) | 428,666 | 4,981,099 | ||||||
Akorn, Inc.(b) | 223,774 | 9,317,949 | ||||||
AstraZeneca PLC–ADR (United Kingdom) | 710,717 | 48,669,900 | ||||||
Bayer AG (Germany) | 312,053 | 45,461,306 | ||||||
Bristol-Myers Squibb Co. | 755,180 | 48,127,621 | ||||||
Cempra Inc.(b) | 170,836 | 5,379,626 | ||||||
DepoMed, Inc.(b) | 401,430 | 9,337,262 | ||||||
Endo International PLC(b) | 384,441 | 32,318,033 | ||||||
GlaxoSmithKline PLC–ADR (United Kingdom) | 1,550,411 | 71,551,468 | ||||||
Hikma Pharmaceuticals PLC (Jordan) | 556,147 | 17,433,704 | ||||||
Jazz Pharmaceuticals PLC(b) | 109,646 | 19,593,740 | ||||||
Johnson & Johnson | 199,887 | 19,828,790 | ||||||
Lipocine Inc.(b) | 722,936 | 4,800,295 | ||||||
Locus Pharmaceuticals, Inc. (Acquired 11/21/00-05/09/07; Cost $6,852,940)(b)(c)(d) | 258,824 | 0 | ||||||
Medicines Co. (The)(b) | 362,503 | 9,283,702 | ||||||
Merck & Co., Inc. | 882,690 | 52,573,016 | ||||||
Mylan N.V.(b) | 447,005 | 32,300,581 | ||||||
Nippon Shinyaku Co., Ltd. (Japan) | 568,000 | 18,877,554 | ||||||
Novartis AG–ADR (Switzerland) | 762,457 | 77,618,123 | ||||||
Perrigo Co. PLC | 51,486 | 9,436,354 | ||||||
Pfizer Inc. | 1,485,174 | 50,391,954 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Health Care Fund
Shares | Value | |||||||
Pharmaceuticals–(continued) | ||||||||
Roche Holding AG (Switzerland) | 232,970 | $ | 67,115,365 | |||||
Sanofi–ADR (France) | 921,663 | 46,590,065 | ||||||
Shire PLC–ADR (Ireland) | 324,311 | 78,972,972 | ||||||
Supernus Pharmaceuticals Inc.(b) | 795,389 | 10,180,979 | ||||||
Teva Pharmaceutical Industries Ltd.– ADR (Israel) | 646,073 | 39,035,731 | ||||||
XenoPort Inc.(b) | 440,586 | 2,612,675 | ||||||
Zogenix, Inc.(b) | 272,440 | 378,692 | ||||||
988,347,634 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $1,230,585,108) |
| 1,915,912,183 | ||||||
Preferred Stock–0.00% |
| |||||||
Health Care Equipment–0.00% | ||||||||
Intact Medical Corp.,–Series C, Pfd. (Acquired 03/26/01; Cost $2,000,000)(c)(d) | 2,439,026 | 0 |
Shares | Value | |||||||
Money Market Funds–0.76% |
| |||||||
Liquid Assets Portfolio–Institutional | 7,493,441 | $ | 7,493,441 | |||||
Premier Portfolio–Institutional Class(e) | 7,493,441 | 7,493,441 | ||||||
Total Money Market Funds (Cost $14,986,882) | 14,986,882 | |||||||
TOTAL INVESTMENTS–98.37% (Cost $1,247,571,990) | 1,930,899,065 | |||||||
OTHER ASSETS LESS | 32,012,741 | |||||||
NET ASSETS–100.00% | $ | 1,962,911,806 |
Investment Abbreviations:
ADR | – American Depositary Receipt | |
Pfd. | – Preferred |
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 April 30, 2015 was $1,641,328, which represented less than 1% of the Fund’s Net Assets. |
(d) | Security is considered venture capital. See Note 1K. |
(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 April 30, 2015
Health Care | 95.9 | % | ||
Consumer Staples | 1.4 | |||
Industrials | 0.3 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.4 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Health Care Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $1,232,585,108) | $ | 1,915,912,183 | ||
Investments in affiliated money market funds, at value and cost | 14,986,882 | |||
Total investments, at value (Cost $1,247,571,990) | 1,930,899,065 | |||
Foreign currencies, at value (Cost $2,424) | 2,473 | |||
Receivable for: | ||||
Investments sold | 33,518,322 | |||
Fund shares sold | 2,374,498 | |||
Dividends | 2,298,465 | |||
Investment for trustee deferred compensation and retirement plans | 272,106 | |||
Other assets | 545,009 | |||
Total assets | 1,969,909,938 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 1,332,128 | |||
Fund shares reacquired | 1,215,920 | |||
Accrued fees to affiliates | 1,008,536 | |||
Accrued trustees’ and officers’ fees and benefits | 3,690 | |||
Accrued other operating expenses | 150,189 | |||
Trustee deferred compensation and retirement plans | 366,355 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 2,921,314 | |||
Total liabilities | 6,998,132 | |||
Net assets applicable to shares outstanding | $ | 1,962,911,806 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 1,093,500,262 | ||
Undistributed net investment income | 494,457 | |||
Undistributed net realized gain | 188,544,399 | |||
Net unrealized appreciation | 680,372,688 | |||
$ | 1,962,911,806 |
Net Assets: |
| |||
Class A | $ | 1,036,059,772 | ||
Class B | $ | 13,768,578 | ||
Class C | $ | 101,944,296 | ||
Class Y | $ | 39,156,662 | ||
Investor Class | $ | 771,982,498 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 22,534,026 | |||
Class B | 389,006 | |||
Class C | 2,876,441 | |||
Class Y | 842,355 | |||
Investor Class | 16,786,040 | |||
Class A: | ||||
Net asset value per share | $ | 45.98 | ||
Maximum offering price per share | ||||
(Net asset value of $45.98 ¸ 94.50%) | $ | 48.66 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 35.39 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 35.44 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 46.48 | ||
Investor Class: | ||||
Net asset value and offering price per share | $ | 45.99 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Health Care Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $654,706) | $ | 10,845,469 | ||
Dividends from affiliated money market funds | 20,319 | |||
Total investment income | 10,865,788 | |||
Expenses: | ||||
Advisory fees | 5,645,676 | |||
Administrative services fees | 205,437 | |||
Custodian fees | 48,854 | |||
Distribution fees: | ||||
Class A | 1,210,905 | |||
Class B | 71,636 | |||
Class C | 459,046 | |||
Investor Class | 941,155 | |||
Transfer agent fees | 1,337,861 | |||
Trustees’ and officers’ fees and benefits | 30,387 | |||
Other | 159,338 | |||
Total expenses | 10,110,295 | |||
Less: Fees waived and expense offset arrangement(s) | (79,725 | ) | ||
Net expenses | 10,030,570 | |||
Net investment income | 835,218 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 184,509,629 | |||
Foreign currencies | (69,987 | ) | ||
Forward foreign currency contracts | 5,418,166 | |||
189,857,808 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (29,741,307 | ) | ||
Foreign currencies | 20,598 | |||
Forward foreign currency contracts | (3,297,159 | ) | ||
(33,017,868 | ) | |||
Net realized and unrealized gain | 156,839,940 | |||
Net increase in net assets resulting from operations | $ | 157,675,158 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Global Health Care Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 835,218 | $ | 58,178 | ||||
Net realized gain | 189,857,808 | 188,397,887 | ||||||
Change in net unrealized appreciation (depreciation) | (33,017,868 | ) | 192,207,160 | |||||
Net increase in net assets resulting from operations | 157,675,158 | 380,663,225 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | — | (230,447 | ) | |||||
Class Y | (10,151 | ) | (38,777 | ) | ||||
Investor Class | — | (188,300 | ) | |||||
Total distributions from net investment income | (10,151 | ) | (457,524 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (96,831,068 | ) | (63,185,146 | ) | ||||
Class B | (1,886,195 | ) | (1,740,995 | ) | ||||
Class C | (11,181,210 | ) | (6,192,771 | ) | ||||
Class Y | (3,429,565 | ) | (1,299,385 | ) | ||||
Investor Class | (76,198,283 | ) | (51,630,115 | ) | ||||
Total distributions from net realized gains | (189,526,321 | ) | (124,048,412 | ) | ||||
Share transactions–net: | ||||||||
Class A | 144,624,964 | 37,141,167 | ||||||
Class B | 219,958 | (4,813,537 | ) | |||||
Class C | 24,329,746 | 14,047,592 | ||||||
Class Y | 8,502,955 | 11,863,196 | ||||||
Investor Class | 53,262,760 | 14,818,302 | ||||||
Net increase in net assets resulting from share transactions | 230,940,383 | 73,056,720 | ||||||
Net increase in net assets | 199,079,069 | 329,214,009 | ||||||
Net assets: | ||||||||
Beginning of period | 1,763,832,737 | 1,434,618,728 | ||||||
End of period (includes undistributed net investment income of $494,457 and $(330,610), respectively) | $ | 1,962,911,806 | $ | 1,763,832,737 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Health Care Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Investor Class. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y and Investor Class shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
9 Invesco Global Health Care Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and 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.
10 Invesco Global Health Care 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 and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. 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 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.
11 Invesco Global Health Care Fund
K. | Other Risks — The Fund’s performance is vulnerable to factors affecting the health care industry, including government regulation, obsolescence caused by scientific advances and technological innovations. |
The Fund has invested in non-publicly traded companies, some of which are in the startup or development stages. These investments are inherently risky, as the market for the technologies or products these companies are developing are typically in the early stages and may never materialize. The Fund could lose its entire investment in these companies. These investments are valued at fair value as determined in good faith in accordance with procedures approved by the Board of Trustees. Investments in privately held venture capital securities are illiquid.
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 $350 million | 0 | .75% | ||||
Next $350 million | 0 | .65% | ||||
Next $1.3 billion | 0 | .55% | ||||
Next $2 billion | 0 | .45% | ||||
Next $2 billion | 0 | .40% | ||||
Next $2 billion | 0 | .375% | ||||
Over $8 billion | 0 | .35% |
For the six months ended April 30, 2016, 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., 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, through at least June 30, 2016, 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 and Investor Class shares to 2.00%, 2.75%, 2.75%, 1.75% and 2.00% 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, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $76,925.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 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 April 30, 2015, the expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class Y and Investor Class shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B, Class C and Investor Class shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $158,773 in front-end sales commissions from the sale of Class A shares and $6,331, $1,484 and $5,241 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
12 Invesco Global Health Care Fund
For the six months ended April 30, 2015, the Fund incurred $84 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 April 30, 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 | $ | 1,754,508,135 | $ | 174,749,602 | $ | 1,641,328 | $ | 1,930,899,065 | ||||||||
Forward Foreign Currency Contracts* | — | (2,921,314 | ) | — | (2,921,314 | ) | ||||||||||
Total Investments | $ | 1,754,508,135 | $ | 171,828,288 | $ | 1,641,328 | $ | 1,927,977,751 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | — | $ | (2,921,314 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized depreciation on forward foreign currency contracts outstanding. |
Effect of Derivative Investments for the year ended April 30, 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 | ||||
Realized Gain (Loss): | ||||
Currency risk | $ | 5,418,166 | ||
Change in Unrealized Appreciation (Depreciation): | ||||
Currency risk | (3,297,159 | ) | ||
Total | $ | 2,121,007 |
The table below summarizes the average notional value of forward foreign currency contracts outstanding during the period.
Forward Foreign Currency Contracts | ||||
Average notional value | $ | 87,118,906 |
13 Invesco Global Health Care Fund
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement Date | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
5/22/15 | Citigroup Global Markets Inc. | CHF | 48,853,000 | USD | 51,213,963 | $ | 52,413,550 | $ | (1,199,587 | ) | ||||||||||||||||
5/22/15 | Citigroup Global Markets Inc. | EUR | 35,035,000 | USD | 37,628,992 | 39,350,719 | (1,721,727 | ) | ||||||||||||||||||
Total Open Forward Foreign Currency Contracts — Currency Risk | $ | (2,921,314 | ) |
Currency Abbreviations:
CHF | – Swiss Franc | |
EUR | – Euro | |
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 April 30, 2015.
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 | |||||||||||||||||||||
Citigroup Global Markets Inc. | $ | 2,921,314 | $ | — | $ | 2,921,314 | $ | — | $ | — | $ | 2,921,314 |
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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $2,800.
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
14 Invesco Global Health Care Fund
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 October 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 April 30, 2015 was $569,699,835 and $445,736,160, 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 | $ | 714,832,904 | ||
Aggregate unrealized (depreciation) of investment securities | (32,421,288 | ) | ||
Net unrealized appreciation of investment securities | $ | 682,411,616 |
Cost of investments for tax purposes is $1,248,487,449.
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 2,682,935 | $ | 123,832,149 | 2,715,150 | $ | 115,916,700 | ||||||||||
Class B | 44,311 | 1,604,811 | 35,192 | 1,190,462 | ||||||||||||
Class C | 566,315 | 20,237,567 | 603,693 | 20,492,015 | ||||||||||||
Class Y | 199,196 | 9,203,725 | 450,295 | 19,762,485 | ||||||||||||
Investor Class | 387,332 | 17,868,502 | 552,996 | 23,531,976 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 2,356,009 | 100,342,467 | 1,509,701 | 57,549,788 | ||||||||||||
Class B | 57,678 | 1,896,452 | 54,553 | 1,667,133 | ||||||||||||
Class C | 348,383 | 11,472,253 | 191,750 | 5,865,634 | ||||||||||||
Class Y | 79,354 | 3,413,789 | 29,989 | 1,150,983 | ||||||||||||
Investor Class | 1,757,199 | 74,856,681 | 1,304,978 | 49,758,810 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 51,256 | 2,351,641 | 120,598 | 5,084,757 | ||||||||||||
Class B | (66,275 | ) | (2,351,641 | ) | (150,679 | ) | (5,084,757 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (1,816,913 | ) | (81,901,293 | ) | (3,336,720 | ) | (141,410,078 | ) | ||||||||
Class B | (26,443 | ) | (929,664 | ) | (76,661 | ) | (2,586,375 | ) | ||||||||
Class C | (207,747 | ) | (7,380,074 | ) | (364,711 | ) | (12,310,057 | ) | ||||||||
Class Y | (89,051 | ) | (4,114,559 | ) | (208,192 | ) | (9,050,272 | ) | ||||||||
Investor Class | (865,125 | ) | (39,462,423 | ) | (1,389,131 | ) | (58,472,484 | ) | ||||||||
Net increase in share activity | 5,458,414 | $ | 230,940,383 | 2,042,801 | $ | 73,056,720 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 20% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
15 Invesco Global Health Care Fund
NOTE 11—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period(b) | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 47.08 | $ | 0.03 | $ | 3.80 | $ | 3.83 | $ | — | $ | (4.93 | ) | $ | (4.93 | ) | $ | 45.98 | 8.97 | % | $ | 1,036,060 | 1.04 | %(e) | 1.05 | %(e) | 0.13 | %(e) | 25 | % | ||||||||||||||||||||||||||
Year ended 10/31/14 | 40.38 | 0.01 | 10.15 | 10.16 | (0.01 | ) | (3.45 | ) | (3.46 | ) | 47.08 | 27.20 | 906,858 | 1.07 | 1.08 | 0.04 | 24 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.09 | 0.07 | 10.63 | 10.70 | (0.17 | ) | (2.24 | ) | (2.41 | ) | 40.38 | 35.79 | 737,071 | 1.10 | 1.11 | 0.21 | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 27.75 | 0.12 | 4.84 | 4.96 | (0.14 | ) | (0.48 | ) | (0.62 | ) | 32.09 | 18.34 | 563,802 | 1.17 | 1.18 | 0.40 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 26.15 | (0.03 | ) | 1.63 | (f) | 1.60 | — | — | — | 27.75 | 6.12 | (f) | 540,451 | 1.20 | 1.21 | (0.09 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 23.20 | (0.07 | ) | 3.02 | (f) | 2.95 | — | — | — | 26.15 | 12.71 | (f) | 439,402 | 1.23 | 1.23 | (0.29 | ) | 16 | ||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 37.50 | (0.11 | ) | 2.93 | 2.82 | — | (4.93 | ) | (4.93 | ) | 35.39 | 8.53 | 13,769 | 1.79 | (e) | 1.80 | (e) | (0.62 | )(e) | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 33.06 | (0.24 | ) | 8.13 | 7.89 | — | (3.45 | ) | (3.45 | ) | 37.50 | 26.26 | 14,239 | 1.82 | 1.83 | (0.71 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 26.72 | (0.16 | ) | 8.74 | 8.58 | — | (2.24 | ) | (2.24 | ) | 33.06 | 34.81 | 17,101 | 1.85 | 1.86 | (0.54 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 23.24 | (0.09 | ) | 4.05 | 3.96 | — | (0.48 | ) | (0.48 | ) | 26.72 | 17.45 | 19,765 | 1.92 | 1.93 | (0.35 | ) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.07 | (0.20 | ) | 1.37 | (f) | 1.17 | — | — | — | 23.24 | 5.30 | (f) | 29,064 | 1.95 | 1.96 | (0.84 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 19.72 | (0.22 | ) | 2.57 | (f) | 2.35 | — | — | — | 22.07 | 11.92 | (f) | 30,872 | 1.98 | 1.98 | (1.04 | ) | 16 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 37.54 | (0.11 | ) | 2.94 | 2.83 | — | (4.93 | ) | (4.93 | ) | 35.44 | 8.54 | 101,944 | 1.79 | (e) | 1.80 | (e) | (0.62 | )(e) | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 33.09 | (0.24 | ) | 8.14 | 7.90 | — | (3.45 | ) | (3.45 | ) | 37.54 | 26.26 | 81,439 | 1.82 | 1.83 | (0.71 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 26.75 | (0.16 | ) | 8.74 | 8.58 | — | (2.24 | ) | (2.24 | ) | 33.09 | 34.76 | 57,536 | 1.85 | 1.86 | (0.54 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 23.26 | (0.09 | ) | 4.06 | 3.97 | — | (0.48 | ) | (0.48 | ) | 26.75 | 17.48 | 35,388 | 1.92 | 1.93 | (0.35 | ) | 39 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.09 | (0.20 | ) | 1.37 | (f) | 1.17 | — | — | — | 23.26 | 5.30 | (f) | 32,702 | 1.95 | 1.96 | (0.84 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 19.74 | (0.22 | ) | 2.57 | (f) | 2.35 | — | — | — | 22.09 | 11.91 | (f) | 24,390 | 1.98 | 1.98 | (1.04 | ) | 16 | ||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 47.51 | 0.09 | 3.82 | 3.91 | (0.01 | ) | (4.93 | ) | (4.94 | ) | 46.48 | 9.07 | 39,157 | 0.79 | (e) | 0.80 | (e) | 0.38 | (e) | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 40.71 | 0.13 | 10.22 | 10.35 | (0.10 | ) | (3.45 | ) | (3.55 | ) | 47.51 | 27.52 | 31,016 | 0.82 | 0.83 | 0.29 | 24 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.34 | 0.16 | 10.70 | 10.86 | (0.25 | ) | (2.24 | ) | (2.49 | ) | 40.71 | 36.10 | 15,502 | 0.85 | 0.86 | 0.46 | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 27.96 | 0.20 | 4.87 | 5.07 | (0.21 | ) | (0.48 | ) | (0.69 | ) | 32.34 | 18.66 | 6,769 | 0.92 | 0.93 | 0.65 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 26.28 | 0.05 | 1.63 | (f) | 1.68 | — | — | — | 27.96 | 6.39 | (f) | 5,628 | 0.95 | 0.96 | 0.16 | 37 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 23.26 | (0.01 | ) | 3.03 | (f) | 3.02 | — | — | — | 26.28 | 12.98 | (f) | 4,635 | 0.98 | 0.98 | (0.04 | ) | 16 | ||||||||||||||||||||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 47.09 | 0.03 | 3.80 | 3.83 | — | (4.93 | ) | (4.93 | ) | 45.99 | 8.97 | 771,982 | 1.04 | (e) | 1.05 | (e) | 0.13 | (e) | 25 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 40.39 | 0.01 | 10.15 | 10.16 | (0.01 | ) | (3.45 | ) | (3.46 | ) | 47.09 | 27.19 | 730,280 | 1.07 | 1.08 | 0.04 | 24 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 32.10 | 0.07 | 10.63 | 10.70 | (0.17 | ) | (2.24 | ) | (2.41 | ) | 40.39 | 35.78 | 607,408 | 1.10 | 1.11 | 0.21 | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 27.76 | 0.12 | 4.84 | 4.96 | (0.14 | ) | (0.48 | ) | (0.62 | ) | 32.10 | 18.34 | 481,385 | 1.17 | 1.18 | 0.40 | 39 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 26.16 | (0.03 | ) | 1.63 | (f) | 1.60 | — | — | — | 27.76 | 6.12 | (f) | 446,149 | 1.20 | 1.21 | (0.09 | ) | 37 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 23.20 | (0.07 | ) | 3.03 | (f) | 2.96 | — | — | — | 26.16 | 12.76 | (f) | 466,842 | 1.23 | 1.23 | (0.29 | ) | 16 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class Y and Investor Class shares which were less than $0.005 per share, for fiscal years ended October 31, 2012 and prior. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended October 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $121,012,126 and sold of $51,261,834 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Health Sciences Fund into the Fund. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $976,752, $14,446, $92,570, $36,146 and $759,163 for Class A, Class B, Class C, Class Y and Investor Class shares, respectively. |
(f) | Includes litigation proceeds received during the period. Had the litigation proceeds not been received net gains on securities (both realized and unrealized) per share for the year ended October 31, 2011 would have been $1.44, $1.18, $1.18, $1.44 and $1.44 for Class A, Class B, Class C, Class Y and Investor Class shares, respectively, and total returns would have been lower; net gains on securities (both realized and unrealized) per share for the year ended October 31, 2010 would have been $2.90, $2.45, $2.45, $2.91 and $2.91 for Class A, Class B, Class C, Class Y and Investor Class shares, respectively, and total returns would have been lower. |
16 Invesco Global Health Care Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period 2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,089.70 | $ | 5.39 | $ | 1,019.64 | $ | 5.21 | 1.04 | % | ||||||||||||
B | 1,000.00 | 1,085.60 | 9.26 | 1,015.92 | 8.95 | 1.79 | ||||||||||||||||||
C | 1,000.00 | 1,085.40 | 9.26 | 1,015.92 | 8.95 | 1.79 | ||||||||||||||||||
Y | 1,000.00 | 1,090.70 | 4.10 | 1,020.88 | 3.96 | 0.79 | ||||||||||||||||||
Investor | 1,000.00 | 1,089.70 | 5.39 | 1,019.64 | 5.21 | 1.04 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Global Health Care 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: 811-05426 and 033-19338 | GHC-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Global Infrastructure Fund | ||||
Nasdaq: | ||||
A: GIZAX ¡ C: GIZCX ¡ R: GIZRX ¡ Y: GIZYX ¡ R5: GIZFX ¡ R6: GIZSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
6 Financial Statements | ||||
8 Notes to Financial Statements | ||||
15 Financial Highlights | ||||
16 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| |||||||
Fund vs. Indexes | |||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | 1.55 | % | |||||
Class C Shares | 1.17 | ||||||
Class R Shares | 1.33 | ||||||
Class Y Shares | 1.68 | ||||||
Class R5 Shares | 1.68 | ||||||
Class R6 Shares | 1.59 | ||||||
MSCI World Index▼ (Broad Market Index) | 5.09 | ||||||
Dow Jones Brookfield Global Infrastructure Index▼ (Style-Specific Index) | 1.83 | ||||||
Lipper Global Infrastructure Funds Classification Averagen (Peer Group) | 2.42 | ||||||
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc.
| |||||||
The MSCI World Index is an unmanaged index considered representative of stocks of developed countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The Dow Jones Brookfield Global Infrastructure Index intends to measure all sectors of the infrastructure market and includes companies domiciled globally that qualify as “pure-play” infrastructure companies – companies whose primary business is the ownership and operation of infrastructure assets, activities that generally generate long-term stable cash flows. The Lipper Global Infrastructure Funds Classification Average represents an average of all of the funds in the Lipper Global Infrastructure Funds Category classification. 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.
|
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (5/2/14) | 2.82 | % | |||||
Class C Shares | |||||||
Inception (5/2/14) | 6.96 | % | |||||
Class R Shares | |||||||
Inception (5/2/14) | 8.47 | % | |||||
Class Y Shares | |||||||
Inception (5/2/14) | 9.09 | % | |||||
Class R5 Shares | |||||||
Inception (5/2/14) | 9.09 | % | |||||
Class R6 Shares | |||||||
Inception (5/2/14) | 8.99 | % |
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
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (5/2/14) | –0.65 | % | |||||
Class C Shares | |||||||
Inception (5/2/14) | 3.40 | % | |||||
Class R Shares | |||||||
Inception (5/2/14) | 4.91 | % | |||||
Class Y Shares | |||||||
Inception (5/2/14) | 5.41 | % | |||||
Class R5 Shares | |||||||
Inception (5/2/14) | 5.41 | % | |||||
Class R6 Shares | |||||||
Inception (5/2/14) | 5.41 | % |
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 1.40%, 2.15%, 1.65%, 1.15%, 1.15% and 1.15%, 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 8.61%, 9.36%, 8.86%, 8.36%, 8.35% and 8.35%, 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.
Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Global Infrastructure 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 Global Infrastructure Fund
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–89.57% |
| |||||||
Australia–3.73% | ||||||||
APA Group | 9,133 | $ | 69,050 | |||||
Spark Infrastructure Group | 10,823 | 16,661 | ||||||
Sydney Airport | 6,338 | 26,957 | ||||||
Transurban Group | 19,290 | 151,044 | ||||||
263,712 | ||||||||
Canada–12.63% | ||||||||
Enbridge Inc. | 9,184 | 480,059 | ||||||
Fortis, Inc. | 2,819 | 91,762 | ||||||
Keyera Corp. | 1,392 | 49,004 | ||||||
Pembina Pipeline Corp. | 1,626 | 56,595 | ||||||
TransCanada Corp. | 4,655 | 216,081 | ||||||
893,501 | ||||||||
China–4.11% | ||||||||
Beijing Capital International Airport Co. Ltd.–Class H | 36,000 | 38,261 | ||||||
Beijing Enterprises Holdings Ltd. | 3,500 | 32,014 | ||||||
Beijing Enterprises Water Group Ltd. | 30,000 | 25,972 | ||||||
China Merchants Holdings International Co. Ltd. | 18,000 | 81,866 | ||||||
China Resources Gas Group Ltd. | 7,335 | 25,552 | ||||||
ENN Energy Holdings Ltd. | 9,000 | 64,830 | ||||||
Jiangsu Expressway Co. Ltd.–Class H | 16,000 | 22,048 | ||||||
290,543 | ||||||||
France–2.29% | ||||||||
Aeroports de Paris | 129 | 15,895 | ||||||
Eutelsat Communications S.A. | 1,662 | 57,927 | ||||||
Groupe Eurotunnel SE–REGS(a) | 5,496 | 88,148 | ||||||
161,970 | ||||||||
Hong Kong–1.84% | ||||||||
China Gas Holdings Ltd. | 18,000 | 31,910 | ||||||
Hong Kong & China Gas Co. Ltd. | 38,000 | 90,704 | ||||||
Towngas China Co. Ltd. | 7,000 | 7,523 | ||||||
130,137 | ||||||||
Italy–2.24% | ||||||||
Atlantia S.p.A. | 5,616 | 158,096 | ||||||
Japan–2.19% | ||||||||
Japan Airport Terminal Co., Ltd. | 600 | 33,865 | ||||||
Tokyo Gas Co., Ltd. | 21,000 | 120,652 | ||||||
154,517 | ||||||||
Luxembourg–2.16% | ||||||||
SES | 4,374 | 153,037 | ||||||
Mexico–0.51% | ||||||||
Grupo Aeroportuario del Sureste S.A.B. de C.V.–ADR(b) | 251 | 36,287 | ||||||
Netherlands–0.61% | ||||||||
Koninklijke Vopak NV | 820 | 42,959 |
Shares | Value | |||||||
New Zealand–0.66% | ||||||||
Auckland International Airport Ltd. | 13,363 | $ | 46,960 | |||||
Spain–4.76% | ||||||||
Enagas S.A. | 2,350 | 72,409 | ||||||
Ferrovial S.A. | 4,895 | 111,287 | ||||||
Red Electrica Corp. S.A. | 1,822 | 152,909 | ||||||
336,605 | ||||||||
Switzerland–0.35% | ||||||||
Flughafen Zuerich AG | 32 | 24,959 | ||||||
United Arab Emirates–0.91% | ||||||||
DP World Ltd. | 2,800 | 64,624 | ||||||
United Kingdom–8.68% | ||||||||
National Grid PLC | 31,391 | 422,079 | ||||||
Pennon Group PLC | 3,304 | 43,444 | ||||||
Severn Trent PLC | 1,292 | 42,070 | ||||||
United Utilities Group PLC | 7,141 | 106,296 | ||||||
613,889 | ||||||||
United States–41.90% | ||||||||
American Tower Corp. | 3,329 | 314,690 | ||||||
American Water Works Co., Inc. | 2,641 | 143,987 | ||||||
Atmos Energy Corp. | 1,098 | 59,292 | ||||||
CenterPoint Energy, Inc. | 1,579 | 33,112 | ||||||
Crown Castle International Corp. | 2,631 | 219,767 | ||||||
Dominion Resources, Inc. | 952 | 68,239 | ||||||
Edison International | 1,848 | 112,617 | ||||||
Eversource Energy | 2,219 | 108,198 | ||||||
ITC Holdings Corp. | 2,952 | 106,272 | ||||||
Kinder Morgan Inc. | 14,847 | 637,679 | ||||||
NiSource Inc. | 2,886 | 125,310 | ||||||
PG&E Corp. | 2,530 | 133,888 | ||||||
SBA Communications Corp.–Class A(b) | 1,101 | 127,518 | ||||||
SemGroup Corp.–Class A | 834 | 70,215 | ||||||
Sempra Energy | 2,373 | 251,941 | ||||||
Southwest Gas Corp. | 849 | 46,695 | ||||||
Spectra Energy Corp. | 1,190 | 44,328 | ||||||
Targa Resources Corp. | 567 | 59,518 | ||||||
Williams Cos., Inc. (The) | 5,877 | 300,844 | ||||||
2,964,110 | ||||||||
Total Common Stocks & Other Equity Interests |
| 6,335,906 | ||||||
Master Limited Partnerships–4.94% |
| |||||||
United States–4.94% | ||||||||
Energy Transfer Equity, L.P. | 2,807 | 187,115 | ||||||
EQT Midstream Partners L.P. | 908 | 80,085 | ||||||
Sunoco Logistics Partners L.P. | 1,850 | 82,066 | ||||||
Total Master Limited Partnerships |
| 349,266 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Global Infrastructure Fund
Shares | Value | |||||||
Money Market Funds–2.95% | ||||||||
Liquid Assets Portfolio–Institutional Class(c) | 104,275 | $ | 104,275 | |||||
Premier Portfolio–Institutional Class(c) | 104,275 | 104,275 | ||||||
Total Money Market Funds |
| 208,550 | ||||||
TOTAL INVESTMENTS–97.46% |
| 6,893,722 | ||||||
OTHER ASSETS LESS LIABILITIES–2.54% |
| 180,001 | ||||||
NET ASSETS–100.00% |
| $ | 7,073,723 |
Investment Abbreviations:
ADR | – American Depositary Receipt | |
REGS | – Regulation S |
Notes to Schedule of Investments:
(a) | Security purchased or received in transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at April 30, 2015 represented 1.25% of the Fund’s Net Assets. |
(b) | Non-income producing security. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By infrastructure sectors, based on Net Assets
as of April 30, 2015
Midstream Services | 32.3 | % | ||
Gas Distribution | 22.7 | |||
Telecom | 12.3 | |||
Electric Utilities | 8.7 | |||
Water | 5.1 | |||
Tolls | 4.7 | |||
Ports and Rail | 3.9 | |||
Airports | 3.2 | |||
Diversified | 1.6 | |||
Money Market Funds Plus Other Assets Less Liabilities | 5.5 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Infrastructure Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $6,274,333) | $ | 6,685,172 | ||
Investments in affiliated money market funds, at value and cost | 208,550 | |||
Total investments, at value (Cost $6,482,883) | 6,893,722 | |||
Foreign currencies, at value (Cost $35,315) | 35,669 | |||
Receivable for: | ||||
Investments sold | 6,561 | |||
Fund shares sold | 272,345 | |||
Dividends | 9,832 | |||
Fund expenses absorbed | 33,783 | |||
Investment for trustee deferred compensation and retirement plans | 2,569 | |||
Other assets | 48,083 | |||
Total assets | 7,302,564 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 137,477 | |||
Fund shares reacquired | 150 | |||
Accrued fees to affiliates | 2,145 | |||
Accrued trustees’ and officers’ fees and benefits | 1,781 | |||
Accrued other operating expenses | 84,719 | |||
Trustee deferred compensation and retirement plans | 2,569 | |||
Total liabilities | 228,841 | |||
Net assets applicable to shares outstanding | $ | 7,073,723 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 6,774,904 | ||
Undistributed net investment income | 967 | |||
Undistributed net realized gain (loss) | (113,192 | ) | ||
Net unrealized appreciation | 411,044 | |||
$ | 7,073,723 |
Net Assets: |
| |||
Class A | $ | 3,228,143 | ||
Class C | $ | 348,536 | ||
Class R | $ | 18,685 | ||
Class Y | $ | 3,411,219 | ||
Class R5 | $ | 10,677 | ||
Class R6 | $ | 56,463 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 302,771 | |||
Class C | 32,760 | |||
Class R | 1,754 | |||
Class Y | 319,847 | |||
Class R5 | 1,001 | |||
Class R6 | 5,294.3 | |||
Class A: | ||||
Net asset value per share | $ | 10.66 | ||
Maximum offering price per share | ||||
(Net asset value of $10.66 ¸ 94.50%) | $ | 11.28 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.64 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.65 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.67 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.67 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.66 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Infrastructure Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $3,770 and return of capital distributions of $3,086) | $ | 76,246 | ||
Dividends from affiliated money market funds | 42 | |||
Total investment income | 76,288 | |||
Expenses: | ||||
Advisory fees | 23,509 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 25,547 | |||
Distribution fees: | ||||
Class A | 3,512 | |||
Class C | 1,455 | |||
Class R | 41 | |||
Transfer agent fees — A, C, R and Y | 4,478 | |||
Transfer agent fees — R5 | 5 | |||
Transfer agent fees — R6 | 13 | |||
Trustees’ and officers’ fees and benefits | 9,501 | |||
Registration and filing fees | 64,374 | |||
Reports to shareholder fees | 13,042 | |||
Professional services fees | 27,029 | |||
Other | 7,537 | |||
Total expenses | 204,837 | |||
Less: Fees waived and expenses reimbursed | (167,726 | ) | ||
Net expenses | 37,111 | |||
Net investment income | 39,177 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (103,131 | ) | ||
Foreign currencies | (1,886 | ) | ||
(105,017 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 178,379 | |||
Foreign currencies | 476 | |||
178,855 | ||||
Net realized and unrealized gain | 73,838 | |||
Net increase in net assets resulting from operations | $ | 113,015 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Infrastructure Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period May 2, 2014 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 39,177 | $ | 35,336 | ||||
Net realized gain (loss) | (105,017 | ) | (3,004 | ) | ||||
Change in net unrealized appreciation | 178,855 | 232,189 | ||||||
Net increase in net assets resulting from operations | 113,015 | 264,521 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (38,036 | ) | (12,024 | ) | ||||
Class C | (2,569 | ) | (540 | ) | ||||
Class R | (203 | ) | (55 | ) | ||||
Class Y | (35,835 | ) | (12,343 | ) | ||||
Class R5 | (158 | ) | (59 | ) | ||||
Class R6 | (732 | ) | (59 | ) | ||||
Total distributions from net investment income | (77,533 | ) | (25,080 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (2,842 | ) | — | |||||
Class C | (250 | ) | — | |||||
Class R | (17 | ) | — | |||||
Class Y | (2,396 | ) | — | |||||
Class R5 | (11 | ) | — | |||||
Class R6 | (50 | ) | — | |||||
Total distributions from net realized gains | (5,566 | ) | — | |||||
Share transactions-net: | ||||||||
Class A | 721,265 | 2,397,806 | ||||||
Class C | 164,638 | 184,137 | ||||||
Class R | 5,472 | 12,460 | ||||||
Class Y | 1,106,730 | 2,148,433 | ||||||
Class R5 | — | 10,010 | ||||||
Class R6 | 17,928 | 35,487 | ||||||
Net increase in net assets resulting from share transactions | 2,016,033 | 4,788,333 | ||||||
Net increase in net assets | 2,045,949 | 5,027,774 | ||||||
Net assets: | ||||||||
Beginning of period | 5,027,774 | — | ||||||
End of period (includes undistributed net investment income of $967 and $39,323, respectively) | $ | 7,073,723 | $ | 5,027,774 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Infrastructure Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value.
8 Invesco Global Infrastructure Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and 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 |
9 Invesco Global Infrastructure Fund
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. | Master Limited Partnerships — The Fund invests in Master Limited Partnerships (MLPs). MLPs are publicly traded partnerships and limited liability companies taxed as partnerships under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The Fund principally invests in MLPs that derive their revenue primarily from businesses involved in the gathering, transporting, processing, treating, storing, refining, distributing, mining or marketing of natural gas, natural gas liquids, crude oil, refined products or coal (energy infrastructure MLPs). The Fund is a partner in each MLP; accordingly, the Fund is required to take into account the Fund’s allocable share of income, gains, losses, deductions, expenses, and tax credits recognized by each MLP. |
The Fund is non-diversified and will concentrate its investments in the energy sector. Energy infrastructure MLPs are subject to a variety of industry specific risk factors that may adversely affect their business or operations, including a decrease in production or reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing; changes in energy commodity prices; a sustained reduced demand for crude oil, natural gas and refined petroleum products; depletion of natural gas reserves or other commodities if not replaced; natural disasters, extreme weather and environmental hazards; rising interest rates, how facilities are constructed, maintained and operated, environmental and safety controls, and the prices they may charge for products and services. In addition, taxes, government regulation, international politics, price, and supply fluctuations, volatile interest rates and energy conservation may cause difficulties for energy infrastructure MLPs.
MLP’s may be less liquid and subject to more abrupt or erratic price movements than conventional publicly traded securities.
F. | Return of Capital — Distributions received from the Fund’s investments in MLPs generally are comprised of income and return of capital. The Fund records investment income and return of capital based on estimates made at the time such distributions are received. The return of capital portion of the distribution is a reduction to investment income that results in an equivalent reduction in the cost basis of the associated investments and increases net realized gains (losses) and change in unrealized appreciation (depreciation). Such estimates are based on historical information available from each MLP and other industry sources. These estimates will subsequently be revised and may materially differ primarily based on information received from the MLPs after their tax reporting periods are concluded. |
G. | 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.
H. | 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. |
I. | 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. |
J. | 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. |
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 |
10 Invesco Global Infrastructure Fund
unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the 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 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 $2.5 billion | 0 | .84% | ||||
Next $2 billion | 0 | .80% | ||||
Next $3.5 billion | 0 | .785% | ||||
Over $8 billion | 0 | .77% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.84%.
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, through at least February 29, 2016, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.40%, 2.15%, 1.65%, 1.15%, 1.15% and 1.15%, respectively, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $163,230 and reimbursed class level expenses of $2,271, $235, $13, $1,959, $5 and $13 of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to
11 Invesco Global Infrastructure Fund
the Fund’s Class A, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $1,621 in front-end sales commissions from the sale of Class A shares and $12 and $9 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 April 30, 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 April 30, 2015, there were transfers from Level 1 to Level 2 of $495,279 and from Level 2 to Level 1 of $237,555, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | $ | — | $ | 263,712 | $ | — | $ | 263,712 | ||||||||
Canada | 893,501 | — | — | 893,501 | ||||||||||||
China | 155,438 | 135,105 | — | 290,543 | ||||||||||||
France | — | 161,970 | — | 161,970 | ||||||||||||
Hong Kong | 130,137 | — | — | 130,137 | ||||||||||||
Italy | — | 158,096 | — | 158,096 | ||||||||||||
Japan | — | 154,517 | — | 154,517 | ||||||||||||
Luxembourg | — | 153,037 | — | 153,037 | ||||||||||||
Mexico | 36,287 | — | — | 36,287 | ||||||||||||
Netherlands | — | 42,959 | — | 42,959 | ||||||||||||
New Zealand | — | 46,960 | — | 46,960 | ||||||||||||
Spain | — | 336,605 | — | 336,605 | ||||||||||||
Switzerland | — | 24,959 | — | 24,959 | ||||||||||||
United Arab Emirates | 64,624 | — | — | 64,624 | ||||||||||||
United Kingdom | — | 613,889 | — | 613,889 | ||||||||||||
United States | 3,521,926 | — | — | 3,521,926 | ||||||||||||
Total Investments | $ | 4,801,913 | $ | 2,091,809 | $ | — | $ | 6,893,722 |
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. Obligations under the deferred compensation plan represent unsecured claims against the general assets of the Fund.
12 Invesco Global Infrastructure Fund
NOTE 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
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. 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 October 31, 2014.
NOTE 7—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $2,902,029 and $1,190,126, 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 | $ | 452,008 | ||
Aggregate unrealized (depreciation) of investment securities | (48,828 | ) | ||
Net unrealized appreciation of investment securities | $ | 403,180 |
Cost of investments for tax purposes is $6,490,542.
13 Invesco Global Infrastructure Fund
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | May 2, 2014 (Commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 81,590 | $ | 854,256 | 314,147 | $ | 3,210,131 | ||||||||||
Class C | 21,080 | 220,000 | 21,242 | 226,573 | ||||||||||||
Class R | 515 | 5,410 | 1,231 | 12,450 | ||||||||||||
Class Y | 105,801 | 1,110,922 | 214,947 | 2,154,251 | ||||||||||||
Class R5 | — | — | 1,001 | 10,010 | ||||||||||||
Class R6 | 2,287 | 23,686 | 3,567 | 35,487 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,685 | 16,971 | 397 | 4,258 | ||||||||||||
Class C | 252 | 2,532 | 47 | 508 | ||||||||||||
Class R | 8 | 77 | 1 | 10 | ||||||||||||
Class Y | 1,181 | 11,913 | 297 | 3,184 | ||||||||||||
Class R6 | 61 | 613 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (14,718 | ) | (149,962 | ) | (80,330 | ) | (816,583 | ) | ||||||||
Class C | (5,597 | ) | (57,894 | ) | (4,264 | ) | (42,944 | ) | ||||||||
Class R | (1 | ) | (15 | ) | — | — | ||||||||||
Class Y | (1,538 | ) | (16,105 | ) | (841 | ) | (9,002 | ) | ||||||||
Class R6 | (621 | ) | (6,371 | ) | — | — | ||||||||||
Net increase in share activity | 191,985 | $ | 2,016,033 | 471,442 | $ | 4,788,333 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 20% 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, 45% of the outstanding shares of the Fund are owned by the Adviser. |
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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 on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.66 | $ | 0.07 | $ | 0.09 | $ | 0.16 | $ | (0.15 | ) | $ | (0.01 | ) | $ | (0.16 | ) | $ | 10.66 | 1.55 | % | $ | 3,228 | 1.40 | %(e) | 7.39 | %(e) | 1.33 | %(e) | 21 | % | |||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.08 | 0.63 | 0.71 | (0.05 | ) | — | (0.05 | ) | 10.66 | 7.12 | 2,497 | 1.39 | (f) | 8.60 | (f) | 1.51 | (f) | 19 | |||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.64 | 0.03 | 0.09 | 0.12 | (0.11 | ) | (0.01 | ) | (0.12 | ) | 10.64 | 1.17 | 349 | 2.15 | (e) | 8.14 | (e) | 0.58 | (e) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.04 | 0.63 | 0.67 | (0.03 | ) | — | (0.03 | ) | 10.64 | 6.71 | 181 | 2.14 | (f) | 9.35 | (f) | 0.76 | (f) | 19 | |||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.66 | 0.05 | 0.08 | 0.13 | (0.13 | ) | (0.01 | ) | (0.14 | ) | 10.65 | 1.33 | 19 | 1.65 | (e) | 7.64 | (e) | 1.08 | (e) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.07 | 0.64 | 0.71 | (0.05 | ) | — | (0.05 | ) | 10.66 | 7.05 | 13 | 1.64 | (f) | 8.85 | (f) | 1.26 | (f) | 19 | |||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.67 | 0.08 | 0.09 | 0.17 | (0.16 | ) | (0.01 | ) | (0.17 | ) | 10.67 | 1.68 | 3,411 | 1.15 | (e) | 7.14 | (e) | 1.58 | (e) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.09 | 0.64 | 0.73 | (0.06 | ) | — | (0.06 | ) | 10.67 | 7.29 | 2,287 | 1.14 | (f) | 8.35 | (f) | 1.76 | (f) | 19 | |||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.67 | 0.08 | 0.09 | 0.17 | (0.16 | ) | (0.01 | ) | (0.17 | ) | 10.67 | 1.68 | 11 | 1.15 | (e) | 7.08 | (e) | 1.58 | (e) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.09 | 0.64 | 0.73 | (0.06 | ) | — | (0.06 | ) | 10.67 | 7.29 | 11 | 1.14 | (f) | 8.34 | (f) | 1.76 | (f) | 19 | |||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.67 | 0.08 | 0.08 | 0.16 | (0.16 | ) | (0.01 | ) | (0.17 | ) | 10.66 | 1.59 | 56 | 1.15 | (e) | 7.04 | (e) | 1.58 | (e) | 21 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.09 | 0.64 | 0.73 | (0.06 | ) | — | (0.06 | ) | 10.67 | 7.29 | 38 | 1.14 | (f) | 8.34 | (f) | 1.76 | (f) | 19 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(d) | Commencement date of May 2, 2014. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $2,833, $293, $16, $2,444, $10, $47 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Annualized. |
15 Invesco Global Infrastructure Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,015.50 | $ | 7.00 | $ | 1,017.85 | $ | 7.00 | 1.40 | % | ||||||||||||
C | 1,000.00 | 1,011.70 | 10.72 | 1,014.13 | 10.74 | 2.15 | ||||||||||||||||||
R | 1,000.00 | 1,013.30 | 8.24 | 1,016.61 | 8.25 | 1.65 | ||||||||||||||||||
Y | 1,000.00 | 1,016.80 | 5.75 | 1,019.09 | 5.76 | 1.15 | ||||||||||||||||||
R5 | 1,000.00 | 1,016.80 | 5.75 | 1,019.09 | 5.76 | 1.15 | ||||||||||||||||||
R6 | 1,000.00 | 1,015.90 | 5.75 | 1,019.09 | 5.76 | 1.15 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
16 Invesco Global Infrastructure 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: 811-05426 and 033-19338 | GBLI-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Global Market Neutral Fund | ||||
Nasdaq: | ||||
A: MKNAX ¡ C: MKNCX ¡ R: MKNRX ¡ Y: MKNYX ¡ R5: MKNFX ¡ R6: MKNSX |
| ||
2 Fund Performance
| ||
3 Letters to Shareholders
| ||
4 Schedule of Investments
| ||
9 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, 10/31/14 to 4/30/15, 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 | –1.98 | % | |||||
Class C Shares | –2.10 | ||||||
Class R Shares | –1.96 | ||||||
Class Y Shares | –1.86 | ||||||
Class R5 Shares | –1.76 | ||||||
Class R6 Shares | –1.76 | ||||||
Citi US T-Bill 3 Month Index▼ (Broad Market/Style-Specific Index) | 0.01 | ||||||
Lipper Alternative Equity Market Neutral Index n (Peer Group Index) | 0.24 | ||||||
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc. | |||||||
The Citi US T-Bill 3 Month Index is an unmanaged index representative of three-month Treasury bills. | |||||||
The Lipper Alternative Equity Market Neutral Index is an unmanaged index considered representative of funds that employ portfolio strategies generating consistent returns in both up and down markets by selecting positions with a total net market exposure of zero. | |||||||
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. |
Average Annual Total Returns | ||||
As of 4/30/15, including maximum applicable sales charges |
| |||
Class A Shares | ||||
Inception (12/19/13) | –2.07 | % | ||
1 Year | –6.69 | |||
Class C Shares | ||||
Inception (12/19/13) | 1.40 | % | ||
1 Year | –2.69 | |||
Class R Shares | ||||
Inception (12/19/13) | 1.87 | % | ||
1 Year | –1.39 | |||
Class Y Shares | ||||
Inception (12/19/13) | 2.30 | % | ||
1 Year | –0.92 | |||
Class R5 Shares | ||||
Inception (12/19/13) | 2.38 | % | ||
1 Year | –0.82 | |||
Class R6 Shares | ||||
Inception (12/19/13) | 2.38 | % | ||
1 Year | –0.82 |
Average Annual Total Returns | ||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (12/19/13) | –2.43 | % | ||
1 Year | –5.07 | |||
Class C Shares | ||||
Inception (12/19/13) | 1.33 | % | ||
1 Year | –1.17 | |||
Class R Shares | ||||
Inception (12/19/13) | 1.67 | % | ||
1 Year | 0.14 | |||
Class Y Shares | ||||
Inception (12/19/13) | 2.21 | % | ||
1 Year | 0.63 | |||
Class R5 Shares | ||||
Inception (12/19/13) | 2.21 | % | ||
1 Year | 0.63 | |||
Class R6 Shares | ||||
Inception (12/19/13) | 2.21 | % | ||
1 Year | 0.63 |
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 1.62%, 2.37%, 1.87%, 1.37%, 1.37% and 1.37%, 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 4.62%, 5.37%, 4.87%, 4.37%, 4.34% and 4.34%, 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 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Global Market Neutral 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 Global Market Neutral Fund |
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–90.97% |
| |||||||
Australia–2.88% | ||||||||
Caltex Australia Ltd. | 7,951 | $ | 221,811 | |||||
Echo Entertainment Group Ltd. | 56,286 | 201,109 | ||||||
Ramsay Health Care Ltd. | 1,775 | 87,415 | ||||||
510,335 | ||||||||
Belgium–1.14% | ||||||||
Delhaize Group S.A. | 2,508 | 202,021 | ||||||
Canada–5.39% | ||||||||
Barrick Gold Corp. | 7,000 | 90,981 | ||||||
Baytex Energy Corp. | 2,400 | 46,890 | ||||||
Canadian Tire Corp., Ltd.–Class A | 1,000 | 105,927 | ||||||
Dominion Diamond Corp. | 10,200 | 201,058 | ||||||
Enerplus Corp. | 13,100 | 165,705 | ||||||
Kinross Gold Corp.(a) | 7,200 | 17,487 | ||||||
Metro Inc. | 1,800 | 52,042 | ||||||
Penn West Petroleum Ltd. | 30,300 | 75,348 | ||||||
Stantec Inc. | 3,600 | 97,251 | ||||||
Suncor Energy, Inc. | 1,500 | 48,852 | ||||||
Teck Resources Ltd.–Class B | 3,600 | 54,579 | ||||||
956,120 | ||||||||
Denmark–3.59% | ||||||||
Pandora AS | 2,943 | 305,193 | ||||||
Vestas Wind Systems AS | 7,310 | 332,027 | ||||||
637,220 | ||||||||
Finland–0.95% | ||||||||
Neste Oil OYJ | 6,210 | 169,170 | ||||||
France–1.78% | ||||||||
Technicolor S.A.(a) | 7,992 | 54,206 | ||||||
Valeo S.A. | 1,637 | 261,647 | ||||||
315,853 | ||||||||
Germany–2.79% | ||||||||
Continental AG | 320 | 75,604 | ||||||
Duerr AG | 350 | 36,094 | ||||||
KUKA AG | 1,237 | 88,184 | ||||||
ProSiebenSat.1 Media AG | 5,723 | 294,522 | ||||||
494,404 | ||||||||
Israel–0.50% | ||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 27,543 | 52,233 | ||||||
Delek Group Ltd. | 133 | 37,099 | ||||||
89,332 | ||||||||
Japan–20.17% | ||||||||
Asahi Glass Co., Ltd. | 5,000 | 33,407 | ||||||
Brother Industries, Ltd. | 5,600 | 89,171 | ||||||
Dai Nippon Printing Co., Ltd. | 33,000 | 341,478 |
Shares | Value | |||||||
Japan–(continued) | ||||||||
Daihatsu Motor Co., Ltd. | 8,400 | $ | 121,462 | |||||
Daito Trust Construction Co., Ltd. | 1,000 | 116,163 | ||||||
DeNA Co., Ltd. | 9,700 | 193,933 | ||||||
Denki Kagaku Kogyo Kabushiki Kaisha | 44,000 | 179,494 | ||||||
FamilyMart Co., Ltd. | 1,900 | 81,680 | ||||||
JGC Corp. | 14,000 | 291,828 | ||||||
Konica Minolta Inc. | 11,000 | 120,906 | ||||||
Marubeni Corp. | 17,400 | 107,952 | ||||||
Miraca Holdings Inc. | 2,000 | 99,579 | ||||||
Nippon Electric Glass Co., Ltd. | 14,000 | 79,978 | ||||||
Nippon Paper Industries Co. Ltd. | 2,500 | 43,675 | ||||||
Nippon Telegraph & Telephone Corp. | 4,900 | 330,253 | ||||||
Nomura Real Estate Holdings, Inc. | 3,900 | 79,263 | ||||||
Osaka Gas Co., Ltd. | 23,000 | 97,584 | ||||||
Seiko Epson Corp. | 3,800 | 66,251 | ||||||
Sekisui Chemical Co., Ltd. | 3,000 | 40,119 | ||||||
Showa Shell Sekiyu K.K. | 10,900 | 105,450 | ||||||
Sumitomo Forestry Co., Ltd. | 9,000 | 104,369 | ||||||
TDK Corp. | 1,800 | 129,219 | ||||||
Tokyo Gas Co., Ltd. | 51,000 | 293,012 | ||||||
Toppan Printing Co. Ltd. | 21,000 | 176,066 | ||||||
West Japan Railway Co. | 4,600 | 254,713 | ||||||
3,577,005 | ||||||||
Jordan–1.04% | ||||||||
Hikma Pharmaceuticals PLC | 5,894 | 184,761 | ||||||
Macau–0.47% | ||||||||
MGM China Holdings Ltd. | 43,600 | 82,425 | ||||||
Netherlands–1.19% | ||||||||
Heineken N.V. | 718 | 56,312 | ||||||
NXP Semiconductors N.V.(a) | 1,600 | 153,792 | ||||||
210,104 | ||||||||
New Zealand–0.69% | ||||||||
SKYCITY Entertainment Group Ltd. | 29,153 | 93,473 | ||||||
Spark New Zealand Ltd. | 13,027 | 29,505 | ||||||
122,978 | ||||||||
Norway–1.02% | ||||||||
DNB ASA | 3,810 | 67,690 | ||||||
Yara International ASA | 2,206 | 112,960 | ||||||
180,650 | ||||||||
Sweden–1.85% | ||||||||
Hennes & Mauritz AB–Class B | 1,659 | 65,925 | ||||||
Intrum Justitia AB | 3,627 | 114,432 | ||||||
Loomis AB–Class B | 3,027 | 96,991 | ||||||
Tele2 AB–Class B | 3,743 | 49,980 | ||||||
327,328 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Global Market Neutral Fund
Shares | Value | |||||||
Switzerland–1.90% | ||||||||
Forbo Holding AG | 78 | $ | 94,601 | |||||
Georg Fischer AG | 232 | 164,549 | ||||||
Lonza Group AG | 545 | 77,415 | ||||||
336,565 | ||||||||
United Kingdom–4.28% | ||||||||
AstraZeneca PLC | 673 | 46,382 | ||||||
Fiat Chrysler Automobiles N.V.(a) | 10,270 | 152,706 | ||||||
ITV PLC | 62,584 | 242,983 | ||||||
Next PLC | 650 | 73,223 | ||||||
Pace PLC | 14,352 | 91,296 | ||||||
Royal Dutch Shell PLC–Class B | 1,828 | 58,858 | ||||||
WH Smith PLC | 4,232 | 93,108 | ||||||
758,556 | ||||||||
United States–39.34% | ||||||||
AbbVie Inc. | 2,200 | 142,252 | ||||||
AECOM(a) | 2,000 | 63,120 | ||||||
Amgen Inc. | 2,100 | 331,611 | ||||||
AOL Inc.(a) | 1,000 | 39,900 | ||||||
Apple Inc. | 700 | 87,605 | ||||||
Archer-Daniels-Midland Co. | 6,000 | 293,280 | ||||||
Best Buy Co., Inc. | 4,500 | 155,925 | ||||||
Brocade Communications Systems, Inc. | 9,800 | 110,740 | ||||||
Cardinal Health, Inc. | 800 | 67,472 | ||||||
Celgene Corp.(a) | 400 | 43,224 | ||||||
Chesapeake Energy Corp. | 20,100 | 316,977 | ||||||
Cisco Systems, Inc. | 5,500 | 158,565 | ||||||
Citigroup Inc. | 5,400 | 287,928 | ||||||
Computer Sciences Corp. | 1,200 | 77,340 | ||||||
Devon Energy Corp. | 800 | 54,568 | ||||||
Everest Re Group, Ltd. | 200 | 35,782 | ||||||
FMC Technologies, Inc.(a) | 700 | 30,870 | ||||||
Frontier Communications Corp. | 15,800 | 108,388 | ||||||
GameStop Corp.–Class A | 2,700 | 104,058 | ||||||
Garmin Ltd. | 1,400 | 63,266 | ||||||
General Dynamics Corp. | 2,200 | 302,104 | ||||||
Goldman Sachs Group, Inc. (The) | 200 | 39,284 | ||||||
Hess Corp. | 4,100 | 315,290 | ||||||
Hewlett-Packard Co. | 7,700 | 253,869 | ||||||
HollyFrontier Corp. | 600 | 23,268 | ||||||
Huntington Ingalls Industries Inc. | 1,000 | 131,590 |
Shares | Value | |||||||
United States–(continued) | ||||||||
Intel Corp. | 3,000 | $ | 97,650 | |||||
InterDigital, Inc. | 3,000 | 164,160 | ||||||
Leidos Holdings, Inc. | 3,200 | 133,248 | ||||||
Lexmark International, Inc.–Class A | 5,100 | 226,389 | ||||||
Lincoln National Corp. | 1,600 | 90,384 | ||||||
LyondellBasell Industries N.V.–Class A | 400 | 41,408 | ||||||
ManpowerGroup Inc. | 300 | 25,599 | ||||||
Marathon Petroleum Corp. | 600 | 59,142 | ||||||
Marriott International Inc.–Class A | 400 | 32,020 | ||||||
Marvell Technology Group Ltd. | 14,700 | 205,947 | ||||||
Murphy Oil Corp. | 1,200 | 57,132 | ||||||
NetApp, Inc. | 2,700 | 97,875 | ||||||
Northrop Grumman Corp. | 1,900 | 292,676 | ||||||
NVIDIA Corp. | 6,300 | 139,829 | ||||||
Oracle Corp. | 1,800 | 78,516 | ||||||
Pilgrim’s Pride Corp. | 9,600 | 237,120 | ||||||
Pitney Bowes Inc. | 3,700 | 82,769 | ||||||
Polycom, Inc.(a) | 3,100 | 40,455 | ||||||
Raytheon Co. | 1,200 | 124,800 | ||||||
Superior Energy Services, Inc. | 5,400 | 137,700 | ||||||
Target Corp. | 700 | 55,181 | ||||||
Tesoro Corp. | 800 | 68,664 | ||||||
Trinity Industries, Inc. | 3,400 | 92,106 | ||||||
United States Steel Corp. | 12,700 | 305,054 | ||||||
United Therapeutics Corp.(a) | 500 | 79,845 | ||||||
Valero Energy Corp. | 1,300 | 73,970 | ||||||
VeriSign, Inc.(a) | 1,900 | 120,669 | ||||||
Voya Financial, Inc. | 1,000 | 42,340 | ||||||
Western Union Co. (The) | 6,700 | 135,876 | ||||||
6,976,800 | ||||||||
Total Common Stocks & Other Equity Interests |
| 16,131,627 | ||||||
Money Market Funds–9.40% | ||||||||
Liquid Assets Portfolio–Institutional | 833,710 | 833,710 | ||||||
Premier Portfolio–Institutional Class(b) | 833,709 | 833,709 | ||||||
Total Money Market Funds | 1,667,419 | |||||||
TOTAL INVESTMENTS–100.37% |
| 17,799,046 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.37)% |
| (65,384 | ) | |||||
NET ASSETS–100.00% | $ | 17,733,662 |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Market Neutral Fund
Open Total Return Swap Agreements | ||||||||||||||||||||
Reference Entity | Counterparty | Expiration Date | Floating Rate(1) | Notional Value | Unrealized Appreciation | Net Value of Reference Entities | ||||||||||||||
Australia Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | $ | (308,261 | ) | $ | (4,718 | ) | $ | (312,642 | ) | ||||||||
Canada Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (990,730 | ) | (18,922 | ) | (1,008,970 | ) | |||||||||||
Denmark Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (423,144 | ) | (7,115 | ) | (429,783 | ) | |||||||||||
Germany Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (1,251,842 | ) | (20,219 | ) | (1,267,916 | ) | |||||||||||
Hong Kong Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (193,584 | ) | 1,770 | (191,643 | ) | ||||||||||||
Japan Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (3,646,723 | ) | 30,846 | (3,600,076 | ) | ||||||||||||
New Zealand Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (65,845 | ) | 337 | (65,448 | ) | ||||||||||||
Norway Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (283,885 | ) | (1,121 | ) | (284,719 | ) | |||||||||||
Singapore Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (95,359 | ) | 151 | (95,074 | ) | ||||||||||||
Spain Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (151,923 | ) | (14,779 | ) | (166,525 | ) | |||||||||||
Sweden Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (236,682 | ) | (6,628 | ) | (241,763 | ) | |||||||||||
Switzerland Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (386,543 | ) | (10,245 | ) | (391,079 | ) | |||||||||||
United Kingdom Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (893,124 | ) | (9,197 | ) | (889,999 | ) | |||||||||||
United States Equity Securities — Short | Morgan Stanley & Co. LLC | 01/23/17 | Federal Funds Floating Rate | (7,318,080 | ) | 115,713 | (7,196,920 | ) | ||||||||||||
Total Return Swap Agreements — Equity Risk |
| $ | 55,873 | (2)(3) | $ | (16,142,557 | ) |
(1) | The Fund receives or pays the total return on a portfolio of short positions underlying the total return swap, and pays or receives a specific rate which is denominated in various currencies based on the currencies of the securities underlying the total return swap. |
(2) | Amount includes $(25,798) of dividends and financing fees payable from the Fund to the Counterparty. |
(3) | Swaps are collateralized by $50,000 cash held with Morgan Stanley & Co. LLC the Counterparty. |
The following table represents the individual short positions and related values of equity securities underlying the total return swaps with Morgan Stanley & Co. LLC, as of April 30, 2015
Shares | Value | |||||||
Equity Securities — Short |
| |||||||
Australia | ||||||||
ALS Ltd. | (14,295 | ) | $ | (59,598 | ) | |||
Crown Resorts Ltd. | (24,586 | ) | (253,044 | ) | ||||
(312,642 | ) | |||||||
Canada | ||||||||
AltaGas Ltd. | (4,300 | ) | (146,137 | ) | ||||
Enbridge Inc. | (3,100 | ) | (162,041 | ) | ||||
Gildan Activewear Inc. | (2,600 | ) | (82,414 | ) | ||||
MEG Energy Corp. | (3,900 | ) | (75,226 | ) | ||||
Methanex Corp. | (1,200 | ) | (72,225 | ) | ||||
Northland Power Inc. | (3,500 | ) | (50,046 | ) | ||||
Paramount Resources Ltd.–Class A | (4,000 | ) | (118,336 | ) | ||||
Rogers Communications, Inc.–Class B | (2,200 | ) | (78,597 | ) | ||||
Tahoe Resources Inc. | (5,100 | ) | (72,078 | ) | ||||
Tourmaline Oil Corp. | (4,400 | ) | (151,870 | ) | ||||
(1,008,970 | ) | |||||||
Denmark | ||||||||
Carlsberg A/S–Class B | (605 | ) | (55,232 | ) | ||||
Genmab A/S | (4,263 | ) | (329,556 | ) | ||||
Jyske Bank A/S | (916 | ) | (44,995 | ) | ||||
(429,783 | ) | |||||||
Germany | ||||||||
adidas AG | (1,258 | ) | (103,714 | ) | ||||
Alstom S.A. | (2,684 | ) | (84,494 | ) |
Shares | Value | |||||||
Germany–(continued) | ||||||||
Andritz AG | (824 | ) | $ | (48,299 | ) | |||
ASML Holding N.V. | (1,498 | ) | (162,676 | ) | ||||
CNH Industrial N.V. | (8,000 | ) | (70,653 | ) | ||||
Deutsche Wohnen AG | (3,306 | ) | (87,053 | ) | ||||
Enel Green Power SpA | (31,280 | ) | (61,081 | ) | ||||
Galp Energia, SGPS, S.A. | (8,754 | ) | (119,826 | ) | ||||
MorphoSys AG | (3,142 | ) | (227,319 | ) | ||||
Remy Cointreau SA | (2,269 | ) | (171,191 | ) | ||||
ThyssenKrupp AG | (1,555 | ) | (41,662 | ) | ||||
UCB S.A. | (756 | ) | (54,602 | ) | ||||
Volkswagen AG–Preference Shares | (136 | ) | (35,346 | ) | ||||
(1,267,916 | ) | |||||||
Hong Kong | ||||||||
Esprit Holdings Ltd. | (88,700 | ) | (84,231 | ) | ||||
Hong Kong & China Gas Co. Ltd. | (45,000 | ) | (107,412 | ) | ||||
(191,643 | ) | |||||||
Japan | ||||||||
ASICS Corp. | (6,800 | ) | (174,841 | ) | ||||
Chiyoda Corp. | (3,000 | ) | (27,311 | ) | ||||
Dentsu Inc. | (1,100 | ) | (51,407 | ) | ||||
Fast Retailing Co. Ltd. | (300 | ) | (118,832 | ) | ||||
Hamamatsu Photonics K.K. | (1,400 | ) | (41,038 | ) | ||||
Hulic Co. Ltd. | (18,000 | ) | (194,322 | ) | ||||
Iida Group Holdings Co Ltd. | (6,400 | ) | (86,941 | ) | ||||
Isetan Mitsukoshi Holdings Ltd. | (11,300 | ) | (183,980 | ) | ||||
Keyence Corp. | (500 | ) | (269,179 | ) | ||||
Kikkoman Corp. | (2,000 | ) | (57,538 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Market Neutral Fund
Shares | Value | |||||||
Japan–(continued) | ||||||||
Kintetsu Corp. | (8,000 | ) | $ | (28,476 | ) | |||
Kyushu Electric Power Co. Inc. | (11,100 | ) | (118,716 | ) | ||||
M3 Inc. | (4,200 | ) | (79,708 | ) | ||||
Mazda Motor Corp. | (7,400 | ) | (145,862 | ) | ||||
Mitsui Chemicals Inc. | (58,000 | ) | (192,848 | ) | ||||
NGK Spark Plug Co., Ltd. | (2,000 | ) | (56,449 | ) | ||||
Nintendo Co., Ltd. | (1,900 | ) | (323,350 | ) | ||||
Nippon Paint Holdings Co., Ltd. | (2,000 | ) | (67,504 | ) | ||||
Ono Pharmaceutical Co. Ltd. | (1,200 | ) | (130,352 | ) | ||||
Shimadzu Corp. | (5,000 | ) | (58,961 | ) | ||||
SoftBank Corp. | (600 | ) | (37,714 | ) | ||||
Sugi Holdings Co. Ltd. | (4,800 | ) | (234,774 | ) | ||||
Sumitomo Realty & Development Co., Ltd. | (1,000 | ) | (38,878 | ) | ||||
Suzuken Co., Ltd./Aichi Japan | (1,760 | ) | (55,350 | ) | ||||
Temp Holdings Co. Ltd. | (1,800 | ) | (57,663 | ) | ||||
Topcon Corp. | (12,600 | ) | (328,191 | ) | ||||
Tsuruha Holdings Inc. | (4,400 | ) | (321,340 | ) | ||||
Yamaha Motor Co. Ltd. | (5,000 | ) | (118,551 | ) | ||||
(3,600,076 | ) | |||||||
New Zealand | ||||||||
Auckland International Airport Ltd. | (18,597 | ) | (65,448 | ) | ||||
Norway | ||||||||
Schibsted ASA | (4,568 | ) | (284,719 | ) | ||||
Singapore | ||||||||
Ezion Holdings Ltd. | (104,400 | ) | (95,074 | ) | ||||
Spain | ||||||||
Banco Popular Espanol S.A. | (31,654 | ) | (165,921 | ) | ||||
Banco Popular Espanol S.A.–Rights | (31,654 | ) | (604 | ) | ||||
(166,525 | ) | |||||||
Sweden | ||||||||
Saab AB–Class B | (1,714 | ) | (44,450 | ) | ||||
Volvo AB–Class B | (14,322 | ) | (197,313 | ) | ||||
(241,763 | ) | |||||||
Switzerland | ||||||||
Barry Callebaut AG | (49 | ) | (59,621 | ) | ||||
Panalpina Welttransport Holding AG | (249 | ) | (34,889 | ) | ||||
Swiss Prime Site AG | (1,541 | ) | (135,796 | ) | ||||
Syngenta AG | (477 | ) | (160,773 | ) | ||||
(391,079 | ) | |||||||
United Kingdom | ||||||||
Diageo PLC | (3,142 | ) | (87,374 | ) | ||||
Fresnillo PLC | (8,996 | ) | (99,361 | ) | ||||
Glencore PLC | (26,782 | ) | (127,553 | ) | ||||
Intertek Group PLC | (2,233 | ) | (89,536 | ) | ||||
Melrose Industries PLC | (17,150 | ) | (69,901 | ) | ||||
Ophir Energy PLC | (58,311 | ) | (127,109 | ) | ||||
Petrofac Ltd. | (8,324 | ) | (111,681 | ) | ||||
Telecom Plus PLC | (5,735 | ) | (67,525 | ) |
Shares | Value | |||||||
United Kingdom–(continued) | ||||||||
UBM PLC | (12,689 | ) | $ | (109,959 | ) | |||
(889,999 | ) | |||||||
United States | ||||||||
ACI Worldwide Inc. | (2,100 | ) | (48,363 | ) | ||||
Alexander & Baldwin Inc. | (3,900 | ) | (157,872 | ) | ||||
Amazon.com Inc. | (400 | ) | (168,712 | ) | ||||
Anixter International Inc. | (1,200 | ) | (84,720 | ) | ||||
Armstrong World Industries Inc. | (1,300 | ) | (71,162 | ) | ||||
Arthur J Gallagher & Co. | (1,.300 | ) | (62,179 | ) | ||||
Ascena Retail Group, Inc. | (3,400 | ) | (50,966 | ) | ||||
Atwood Oceanics Inc. | (600 | ) | (20,028 | ) | ||||
B/E Aerospace Inc. | (4,400 | ) | (263,076 | ) | ||||
BioMarin Pharmaceutical Inc. | (300 | ) | (33,615 | ) | ||||
Carpenter Technology Corp. | (2,300 | ) | (99,475 | ) | ||||
Chevron Corp. | (2,700 | ) | (299,862 | ) | ||||
Chicago Bridge & Iron Co NV | (2,100 | ) | (100,065 | ) | ||||
Colfax Corp. | (4,200 | ) | (208,278 | ) | ||||
Cooper Cos Inc. (The) | (500 | ) | (89,035 | ) | ||||
Cree Inc. | (2,400 | ) | (76,032 | ) | ||||
Cypress Semiconductor Corp. | (11,700 | ) | (155,844 | ) | ||||
Darling Ingredients Inc. | (8,500 | ) | (116,110 | ) | ||||
Diamondback Energy Inc. | (500 | ) | (41,285 | ) | ||||
DigitalGlobe Inc. | (1,200 | ) | (38,604 | ) | ||||
Duke Energy Corp. | (700 | ) | (54,299 | ) | ||||
Eversource Energy | (2,700 | ) | (131,652 | ) | ||||
F5 Networks Inc. | (300 | ) | (36,606 | ) | ||||
Fastenal Co. | (5,300 | ) | (225,886 | ) | ||||
Financial Engines Inc. | (2,000 | ) | (84,340 | ) | ||||
Finisar Corp. | (4,000 | ) | (81,320 | ) | ||||
Five Below Inc. | (800 | ) | (26,976 | ) | ||||
Fortune Brands Home & Security Inc. | (5,500 | ) | (245,300 | ) | ||||
Genesee & Wyoming Inc.–Class A | (1,100 | ) | (102,245 | ) | ||||
Golar LNG Ltd. | (3,500 | ) | (125,983 | ) | ||||
Google Inc.–Class C | (401 | ) | (215,526 | ) | ||||
Gulfport Energy Corp. | (2,200 | ) | (107,668 | ) | ||||
Haemonetics Corp. | (3,600 | ) | (145,908 | ) | ||||
Hexcel Corp. | (2,100 | ) | (105,315 | ) | ||||
Howard Hughes Corp. (The) | (1,100 | ) | (163,317 | ) | ||||
Kennedy-Wilson Holdings Inc. | (12,500 | ) | (309,750 | ) | ||||
Liberty Global PLC–Class A | (1,000 | ) | (52,140 | ) | ||||
Madison Square Garden Co. (The)–Class A | (400 | ) | (32,120 | ) | ||||
Markel Corp. | (300 | ) | (222,192 | ) | ||||
Men’s Wearhouse Inc. (The) | (2,000 | ) | (113,180 | ) | ||||
MRC Global Inc. | (10,500 | ) | (153,300 | ) | ||||
National Instruments Corp. | (5,900 | ) | (168,740 | ) | ||||
NCR Corp. | (5,300 | ) | (145,432 | ) | ||||
NetSuite Inc. | (700 | ) | (66,899 | ) | ||||
Panera Bread Co.–Class A | (200 | ) | (36,496 | ) | ||||
Pentair PLC | (600 | ) | (37,290 | ) | ||||
salesforce.com. inc. | (400 | ) | (29,128 | ) | ||||
SBA Communications Corp.–Class A | (1,500 | ) | (173,730 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Market Neutral Fund
Shares | Value | |||||||
United States–(continued) | ||||||||
SemGroup Corp.–Class A | (1,300 | ) | $ | (109,447 | ) | |||
Semtech Corp. | (1,700 | ) | (39,593 | ) | ||||
Spirit Realty Capital Inc. | (8,100 | ) | (91,449 | ) | ||||
Sprint Corp. | (9,400 | ) | (48,222 | ) | ||||
SunEdison Inc. | (2,000 | ) | (50,640 | ) | ||||
SYNNEX Corp. | (1,100 | ) | (84,150 | ) | ||||
T-Mobile US, Inc. | (1,000 | ) | (34,040 | ) | ||||
Tesla Motors Inc. | (1,400 | ) | (316,470 | ) | ||||
Tractor Supply Co. | (600 | ) | (51,636 | ) |
Shares | Value | |||||||
United States–(continued) | ||||||||
Trimble Navigation Ltd | (6,200 | ) | $ | (157,666 | ) | |||
Ulta Salon Cosmetics & Fragrance, Inc. | (200 | ) | (30,218 | ) | ||||
Ultimate Software Group, Inc. (The) | (700 | ) | (116,354 | ) | ||||
Verizon Communications Inc. | (1,000 | ) | (50,440 | ) | ||||
ViaSat, Inc. | (4,400 | ) | (264,528 | ) | ||||
Williams Cos Inc. (The) | (3,400 | ) | (174,046 | ) | ||||
(7,196,920 | ) | |||||||
Total Equity Securities — Short | $ | (16,142,557 | ) |
Portfolio Composition
By sector, based on total investments
as of April 30, 2015
Long Portfolio Holdings | Equity Securities — Short* | Total Investments | ||||||||||
Industrials | 9.6 | % | 7.1 | % | 16.7 | % | ||||||
Information Technology | 9.1 | 8.9 | 18.0 | |||||||||
Consumer Discretionary | 8.5 | 8.1 | 16.6 | |||||||||
Energy | 6.1 | 5.9 | 12.0 | |||||||||
Health Care | 3.4 | 3.4 | 6.8 | |||||||||
Materials | 3.1 | 2.7 | 5.8 | |||||||||
Consumer Staples | 2.7 | 3.3 | 6.0 | |||||||||
Financials | 2.2 | 5.2 | 7.4 | |||||||||
Telecommunication Services | 1.7 | 1.2 | 2.9 | |||||||||
Utilities | 1.2 | 1.7 | 2.9 | |||||||||
Money Market Funds Plus Other Assets Less Liabilities | 4.9 | — | 4.9 | |||||||||
Total | 52.5 | 47.5 | 100.0 |
* | Represents the value of the equity securities underlying the equity short portfolio swap with Morgan Stanley. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Global Market Neutral Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $14,960,618) | $ | 16,131,627 | ||
Investments in affiliated money market funds, at value and cost | 1,667,419 | |||
Total investments, at value (Cost $16,628,037) | 17,799,046 | |||
Foreign currencies, at value (Cost $27,239) | 27,566 | |||
Receivable for: | ||||
Deposits with brokers for swap agreements | 50,000 | |||
Fund shares sold | 25 | |||
Dividends | 62,468 | |||
Investment for trustee deferred compensation and retirement plans | 3,669 | |||
Unrealized appreciation on swap agreements | 55,873 | |||
Other assets | 79,278 | |||
Total assets | 18,077,925 | |||
Liabilities: |
| |||
Payable for: | ||||
Amount due custodian | 225,060 | |||
Accrued fees to affiliates | 5,978 | |||
Accrued trustees’ and officers’ fees and benefits | 1,957 | |||
Accrued other operating expenses | 107,599 | |||
Trustee deferred compensation and retirement plans | 3,669 | |||
Total liabilities | 344,263 | |||
Net assets applicable to shares outstanding | $ | 17,733,662 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 17,885,362 | ||
Undistributed net investment income | 915,955 | |||
Undistributed net realized gain (loss) | (2,294,802 | ) | ||
Net unrealized appreciation | 1,227,147 | |||
$ | 17,733,662 |
Net Assets: |
| |||
Class A | $ | 5,749,511 | ||
Class C | $ | 534,959 | ||
Class R | $ | 15,065 | ||
Class Y | $ | 10,336,882 | ||
Class R5 | $ | 505,281 | ||
Class R6 | $ | 591,964 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 569,740 | |||
Class C | 53,368 | |||
Class R | 1,497 | |||
Class Y | 1,023,210 | |||
Class R5 | 50,001 | |||
Class R6 | 58,570 | |||
Class A: | ||||
Net asset value per share | $ | 10.09 | ||
Maximum offering price per share | ||||
(Net asset value of $10.09 ¸ 94.50%) | $ | 10.68 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.02 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.06 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.10 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.11 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.11 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Global Market Neutral Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $10,747) | $ | 214,708 | ||
Dividends from affiliated money market funds | 343 | |||
Total investment income | 215,051 | |||
Expenses: | ||||
Advisory fees | 95,261 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 8,139 | |||
Distribution fees: | ||||
Class A | 6,718 | |||
Class C | 1,452 | |||
Class R | 36 | |||
Transfer agent fees — A, C, R and Y | 4,117 | |||
Transfer agent fees — R5 | 27 | |||
Transfer agent fees — R6 | 35 | |||
Trustees’ and officers’ fees and benefits | 9,846 | |||
Registration and filing fees | 47,560 | |||
Professional services fees | 42,089 | |||
Other | 18,164 | |||
Total expenses | 258,238 | |||
Less: Fees waived and expenses reimbursed | (146,467 | ) | ||
Net expenses | 111,771 | |||
Net investment income | 103,280 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (150,476 | ) | ||
Foreign currencies | 22,919 | |||
Forward foreign currency contracts | 218,651 | |||
Swap agreements | (2,383,639 | ) | ||
(2,292,545 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 947,548 | |||
Foreign currencies | 4,546 | |||
Swap agreements | 878,484 | |||
1,830,578 | ||||
Net realized and unrealized gain (loss) | (461,967 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (358,687 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Global Market Neutral Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 19, 2013 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 19, 2013 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 103,280 | $ | 59,226 | ||||
Net realized gain (loss) | (2,292,545 | ) | 929,230 | |||||
Change in net unrealized appreciation (depreciation) | 1,830,578 | (603,431 | ) | |||||
Net increase (decrease) in net assets resulting from operations | (358,687 | ) | 385,025 | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (92,957 | ) | — | |||||
Class C | (1,945 | ) | — | |||||
Class R | (243 | ) | — | |||||
Class Y | (139,674 | ) | — | |||||
Class R5 | (13,133 | ) | — | |||||
Class R6 | (11,890 | ) | — | |||||
Total distributions from net investment income | (259,842 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (5,778 | ) | — | |||||
Class C | (137 | ) | — | |||||
Class R | (16 | ) | — | |||||
Class Y | (7,752 | ) | — | |||||
Class R5 | (729 | ) | — | |||||
Class R6 | (660 | ) | — | |||||
Total distributions from net realized gains | (15,072 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 759,475 | 5,052,983 | ||||||
Class C | 424,023 | 119,366 | ||||||
Class R | 1,331 | 13,770 | ||||||
Class Y | 3,394,352 | 7,129,394 | ||||||
Class R5 | (142,874 | ) | 642,586 | |||||
Class R6 | 41,302 | 546,530 | ||||||
Net increase in net assets resulting from share transactions | 4,477,609 | 13,504,629 | ||||||
Net increase in net assets | 3,844,008 | 13,889,654 | ||||||
Net assets: | ||||||||
Beginning of period | 13,889,654 | — | ||||||
End of period (includes undistributed net investment income of $915,955 and $1,072,517, respectively) | $ | 17,733,662 | $ | 13,889,654 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Global Market Neutral Fund
Statement of Cash Flows
For the six months ended April 30, 2015
(Unaudited)
Cash provided by (used in) operating activities: | ||||
Net increase in net assets resulting from operations | $ | (358,687 | ) | |
Adjustments to reconcile the change in net assets applicable from operations to net cash provided by (used in) operating activities: |
| |||
Purchases of investments | (7,840,963 | ) | ||
Proceeds from disposition of investments | 6,743,991 | |||
Net change in unrealized appreciation from swap agreements | (878,484 | ) | ||
Decrease in deposits with broker for swaps | 23,160 | |||
Decrease in receivables and other assets | 486,859 | |||
Increase in accrued expenses and other payables | 37,433 | |||
Net unrealized appreciation on investment securities | (947,548 | ) | ||
Net realized loss from investment securities | 150,476 | |||
Net cash provided by (used in) operating activities | (2,583,763 | ) | ||
Cash provided by financing activities: | ||||
Dividends paid to shareholders from net investment income | (206,983 | ) | ||
Increase in payable for amount due custodian | 225,060 | |||
Proceeds from shares of beneficial interest sold | 7,277,779 | |||
Disbursements from shares of beneficial interest reacquired | (3,072,577 | ) | ||
Net cash provided by financing activities | 4,223,279 | |||
Net increase in cash and cash equivalents | 1,639,516 | |||
Cash at beginning of period | 55,469 | |||
Cash at end of period | $ | 1,694,985 | ||
Non-cash financing activities: | ||||
Value of shares of beneficial interest issued in reinvestment of dividends paid to shareholders | $ | 67,931 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Market Neutral Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 provide a positive return over a full market cycle from a broadly diversified portfolio of stocks while seeking to limit exposure to the general risks associated with stock market investing.
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. |
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.
12 Invesco Global Market Neutral Fund
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.
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. |
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 |
13 Invesco Global Market Neutral Fund
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. | 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. |
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. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, volatility, variance, index, currency and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, equity, currency or credit risk. Such transactions are agreements between Counterparties. 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. |
14 Invesco Global Market Neutral Fund
Interest rate, total return, volatility, variance, 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.
A total return swap is an agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income generated and capital gains, if any. The unrealized appreciation (depreciation) on total return swaps includes dividends on the underlying equity securities and financing rate payable from the Counterparty. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and Counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the Counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
M. | 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. |
N. | 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 $10 billion | 1.25% | |||
Over $10 billion | 1.15% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.25%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.62%, 2.37%, 1.87%, 1.37%, 1.37% and 1.37% 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $142,288 and reimbursed class level expenses of $1,568, $85, $4, $2,460, $27 and $35 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 April 30, 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
15 Invesco Global Market Neutral Fund
course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $734 in front-end sales commissions from the sale of Class A shares.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 – | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | |||||||||||||
Australia | $ | — | $ | 510,335 | $ | — | $ | 510,335 | ||||||||
Belgium | — | 202,021 | — | 202,021 | ||||||||||||
Canada | 956,120 | — | — | 956,120 | ||||||||||||
Denmark | 305,193 | 332,027 | — | 637,220 | ||||||||||||
Finland | 169,170 | — | — | 169,170 | ||||||||||||
France | — | 315,853 | — | 315,853 | ||||||||||||
Germany | 36,094 | 458,310 | — | 494,404 | ||||||||||||
Israel | 89,332 | — | — | 89,332 | ||||||||||||
Japan | — | 3,577,005 | — | 3,577,005 | ||||||||||||
Jordan | — | 184,761 | — | 184,761 | ||||||||||||
Macau | — | 82,425 | — | 82,425 | ||||||||||||
Netherlands | — | 210,104 | — | 210,104 | ||||||||||||
New Zealand | — | 122,978 | — | 122,978 | ||||||||||||
Norway | — | 180,650 | — | 180,650 | ||||||||||||
Sweden | 211,423 | 115,905 | — | 327,328 | ||||||||||||
Switzerland | — | 336,565 | — | 336,565 | ||||||||||||
United Kingdom | — | 758,556 | — | 758,556 | ||||||||||||
United States | 8,644,219 | — | — | 8,644,219 | ||||||||||||
10,411,551 | 7,387,495 | — | 17,799,046 | |||||||||||||
Swap Agreements* | — | 55,873 | — | 55,873 | ||||||||||||
Total Investments | $ | 10,411,551 | $ | 7,443,368 | $ | — | $ | 17,854,919 |
* | Unrealized appreciation. |
16 Invesco Global Market Neutral 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk: | ||||||||
Swap agreements(a) | $ | 148,817 | $ | (92,944 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized appreciation on swap agreements. |
Effect of Derivative Investments for the six months ended April 30, 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 | Swap Agreements | |||||||
Realized Gain (Loss): | ||||||||
Currency risk | $ | 218,651 | $ | — | ||||
Equity risk | — | (2,383,639 | ) | |||||
Change in Unrealized Appreciation: | ||||||||
Equity risk | — | 878,484 | ||||||
Total | $ | 218,651 | $ | (1,505,155 | ) |
The table below summarizes the two month average notional value of forward foreign currency contracts and the six month average notional value of swap agreements outstanding during the period.
Forward Foreign Currency Contracts | Swap Agreements | |||||||
Average notional value | $ | 6,067,291 | $ | 15,229,317 |
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 April 30, 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 | |||||||||||||||||||||
Morgan Stanley & Co. LLC | $ | 148,817 | $ | (92,944 | ) | $ | 55,873 | $ | — | $ | — | $ | 55,873 | |||||||||||
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 | |||||||||||||||||||||
Morgan Stanley & Co. LLC | $ | 92,944 | $ | (92,944 | ) | $ | — | $ | — | $ | — | $ | — |
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. Obligations under the deferred compensation plan represent unsecured claims against the general assets of the Fund.
17 Invesco Global Market Neutral 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 October 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 April 30, 2015 was $7,840,963 and $6,743,991, 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 | $ | 1,675,012 | ||
Aggregate unrealized (depreciation) of investment securities | (504,003 | ) | ||
Net unrealized appreciation of investment securities | $ | 1,171,009 |
Cost of investments is the same for tax purposes and financial reporting.
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 19, 2013 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 86,493 | $ | 925,549 | 655,765 | $ | 6,691,675 | ||||||||||
Class C | 43,134 | 439,558 | 18,382 | 188,179 | ||||||||||||
Class R | 124 | 1,260 | 1,366 | 13,770 | ||||||||||||
Class Y | 562,865 | 5,812,079 | 716,863 | 7,349,692 | ||||||||||||
Class R5 | — | — | 66,552 | 670,518 | ||||||||||||
Class R6 | 7,296 | 75,201 | 54,557 | 546,530 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,092 | 11,137 | — | — | ||||||||||||
Class C | 188 | 1,909 | — | — | ||||||||||||
Class R | 7 | 71 | — | — | ||||||||||||
Class Y | 4,910 | 50,082 | — | — | ||||||||||||
Class R5 | 340 | 3,022 | — | — | ||||||||||||
Class R6 | 167 | 1,710 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (13,173 | ) | (177,211 | ) | (160,437 | ) | (1,638,692 | ) | ||||||||
Class C | (1,759 | ) | (17,444 | ) | (6,577 | ) | (68,813 | ) | ||||||||
Class Y | (239,827 | ) | (2,467,809 | ) | (21,601 | ) | (220,298 | ) | ||||||||
Class R5 | (14,236 | ) | (145,896 | ) | (2,655 | ) | (27,932 | ) | ||||||||
Class R6 | (3,450 | ) | (35,609 | ) | — | — | ||||||||||
Net increase in share activity | 434,171 | $ | 4,477,609 | 1,322,215 | $ | 13,504,629 |
18 Invesco Global Market Neutral Fund
(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, 57% of the outstanding shares of the Fund are owned by the Adviser. |
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 04/30/15 | $ | 10.49 | $ | 0.06 | $ | (0.27 | ) | $ | (0.21 | ) | $ | (0.18 | ) | $ | (0.01 | ) | $ | (0.19 | ) | $ | 10.09 | (1.98 | )% | $ | 5,750 | 1.61 | %(d) | 3.54 | %(d) | 1.21 | %(d) | 47 | % | |||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.04 | 0.45 | 0.49 | — | — | — | 10.49 | 4.90 | (f) | 5,197 | 1.61 | (g) | 4.61 | (g) | 0.43 | (g) | 46 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.41 | 0.02 | (0.24 | ) | (0.22 | ) | (0.16 | ) | (0.01 | ) | (0.17 | ) | 10.02 | (2.10 | ) | 535 | 2.36 | (d) | 4.29 | (d) | 0.46 | (d) | 47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.03 | ) | 0.44 | 0.41 | — | — | — | 10.41 | 4.10 | (f) | 123 | 2.36 | (g) | 5.36 | (g) | (0.32 | )(g) | 46 | |||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.46 | 0.05 | (0.26 | ) | (0.21 | ) | (0.18 | ) | (0.01 | ) | (0.19 | ) | 10.06 | (2.06 | ) | 15 | 1.86 | (d) | 3.79 | (d) | 0.96 | (d) | 47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.02 | 0.44 | 0.46 | — | — | — | 10.46 | 4.60 | (f) | 14 | 1.86 | (g) | 4.86 | (g) | 0.18 | (g) | 46 | ||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.52 | 0.07 | (0.27 | ) | (0.20 | ) | (0.21 | ) | (0.01 | ) | (0.22 | ) | 10.10 | (1.95 | ) | 10,337 | 1.36 | (d) | 3.29 | (d) | 1.46 | (d) | 47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.06 | 0.46 | 0.52 | — | — | — | 10.52 | 5.20 | (f) | 7,311 | 1.36 | (g) | 4.36 | (g) | 0.68 | (g) | 46 | ||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.51 | 0.08 | (0.26 | ) | (0.18 | ) | (0.21 | ) | (0.01 | ) | (0.22 | ) | 10.11 | (1.76 | ) | 505 | 1.36 | (d) | 3.24 | (d) | 1.46 | (d) | 47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.06 | 0.45 | 0.51 | — | — | — | 10.51 | 5.10 | (f) | 671 | 1.36 | (g) | 4.33 | (g) | 0.68 | (g) | 46 | ||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.51 | 0.07 | (0.25 | ) | (0.18 | ) | (0.21 | ) | (0.01 | ) | (0.22 | ) | 10.11 | (1.76 | ) | 592 | 1.36 | (d) | 3.24 | (d) | 1.46 | (d) | 47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.06 | 0.45 | 0.51 | — | — | — | 10.51 | 5.10 | (f) | 573 | 1.36 | (g) | 4.33 | (g) | 0.68 | (g) | 46 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $5,419, $293, $15, $8,502, $555 and $584 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of December 19, 2013 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Amount includes the effect of the Adviser pay-in for an economic loss of $0.41 per share. Had the pay-in not been made, the total return would have been 0.80%, 0.10%, 0.60%, 1.00%, 1.00% and 1.00% for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(g) | Annualized. |
19 Invesco Global Market Neutral Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 980.20 | $ | 7.90 | $ | 1,016.82 | $ | 8.05 | 1.61 | % | ||||||||||||
C | 1,000.00 | 979.00 | 11.58 | 1,013.10 | 11.77 | 2.36 | ||||||||||||||||||
R | 1,000.00 | 980.40 | 9.13 | 1,015.58 | 9.29 | 1.86 | ||||||||||||||||||
Y | 1,000.00 | 981.40 | 6.68 | 1,018.06 | 6.80 | 1.36 | ||||||||||||||||||
R5 | 1,000.00 | 982.40 | 6.68 | 1,018.06 | 6.80 | 1.36 | ||||||||||||||||||
R6 | 1,000.00 | 982.40 | 6.68 | 1,018.06 | 6.80 | 1.36 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Market Neutral 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: 811-05426 and 033-19338 | GMN-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Global Markets Strategy Fund | ||||
Nasdaq: | ||||
A: GMSDX ¡ C: GMSEX ¡ R: GMSJX ¡ Y: GMSHX ¡ R5: GMSKX ¡ R6: GMSLX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Consolidated Schedule of Investments | ||||
7 Consolidated Financial Statements | ||||
9 Notes to Consolidated Financial Statements | ||||
18 Consolidated 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, 10/31/14 to 4/30/15, 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 | 3.38 | % | |||
Class C Shares | 2.98 | ||||
Class R Shares | 3.31 | ||||
Class Y Shares | 3.53 | ||||
Class R5 Shares | 3.53 | ||||
Class R6 Shares | 3.53 | ||||
Barclays 3-month Treasury Bellwether Index‚ (Broad Market/Style-Specific Index) | 0.01 | ||||
Lipper Absolute Return Funds Indexn (Peer Group Index) | 0.88 | ||||
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc. | |||||
The Barclays 3-month Treasury Bellwether Index measures the performance of Treasury bills with a maturity of less than three months. |
| ||||
The Lipper Absolute Return Funds Index is an unmanaged index considered representative of absolute return funds tracked by Lipper. |
| ||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). |
| ||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
|
2 | Invesco Global Markets Strategy Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception | 1.68 | % | |||||
1 Year | –0.21 | ||||||
Class C Shares | |||||||
Inception | 3.17 | % | |||||
1 Year | 3.78 | ||||||
Class R Shares | |||||||
Inception | 3.72 | % | |||||
1 Year | 5.31 | ||||||
Class Y Shares | |||||||
Inception (9/26/12) | 4.19 | % | |||||
1 Year | 5.85 | ||||||
Class R5 Shares | |||||||
Inception | 4.23 | % | |||||
1 Year | 5.85 | ||||||
Class R6 Shares | |||||||
Inception | 4.19 | % | |||||
1 Year | 5.85 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception | 2.94 | % | |||||
1 Year | 3.78 | ||||||
Class C Shares | |||||||
Inception | 4.51 | % | |||||
1 Year | 8.05 | ||||||
Class R Shares | |||||||
Inception | 5.08 | % | |||||
1 Year | 9.58 | ||||||
Class Y Shares | |||||||
Inception (9/26/12) | 5.56 | % | |||||
1 Year | 10.14 | ||||||
Class R5 Shares | |||||||
Inception | 5.60 | % | |||||
1 Year | 10.13 | ||||||
Class R6 Shares | |||||||
Inception | 5.56 | % | |||||
1 Year | 10.14 |
On August 28, 2013, Class H1 shares converted to Class Y shares.
Class A shares incepted on August 28, 2013. Performance shown prior to that date is that of Class H1 shares and includes the 12b-1 fees applicable to Class H1 shares.
Class C shares incepted on August 28, 2013. Performance shown prior to that date is that of Class H1 shares and includes the 12b-1 fees applicable to Class H1 shares.
Class R shares incepted on August 28, 2013. Performance shown prior to that date is that of Class H1 shares and includes the 12b-1 fees applicable to Class H1 shares.
Class R5 shares incepted on August 28, 2013. Performance shown prior to that date is that of Class H1 shares and includes the 12b-1 fees applicable to Class H1 shares.
Class R6 shares incepted on August 28, 2013. Performance shown prior to that date is that of Class H1 shares and includes the 12b-1 fees applicable to Class H1 shares.
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 1.80%, 2.55%, 2.05%, 1.55%, 1.55% and 1.55%, 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 2.15%, 2.90%, 2.40%, 1.90%, 1.78% and 1.78%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for
the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
3 | Invesco Global Markets Strategy 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 Markets Strategy Fund |
Consolidated Schedule of Investments
April 30, 2015
(Unaudited)
Interest Rate | Maturity Date | Principal Amount | Value | |||||||||||||
U.S. Treasury Securities–31.21% |
| |||||||||||||||
U.S. Treasury Bills–16.54%(a) | ||||||||||||||||
U.S. Treasury Bills(b) | 0.07 | % | 06/04/15 | $ | 4,000,000 | $ | 4,000,000 | |||||||||
U.S. Treasury Bills(b) | 0.09 | % | 07/09/15 | 5,800,000 | 5,799,999 | |||||||||||
U.S. Treasury Bills(b) | 0.08 | % | 07/16/15 | 8,700,000 | 8,699,999 | |||||||||||
U.S. Treasury Bills(b) | 0.07 | % | 07/23/15 | 8,120,000 | 8,119,905 | |||||||||||
U.S. Treasury Bills(b) | 0.07 | % | 07/30/15 | 5,410,000 | 5,409,999 | |||||||||||
32,029,902 | ||||||||||||||||
U.S. Treasury Notes–14.67%(c) | ||||||||||||||||
U.S. Treasury Notes | 0.06 | % | 01/31/16 | 6,410,000 | 6,409,816 | |||||||||||
U.S. Treasury Notes(d) | 0.08 | % | 04/30/16 | 19,075,000 | 19,077,334 | |||||||||||
U.S. Treasury Notes | 0.09 | % | 07/31/16 | 2,910,000 | 2,910,233 | |||||||||||
28,397,383 | ||||||||||||||||
Total U.S. Treasury Securities (Cost $60,421,783) | 60,427,285 | |||||||||||||||
Shares | ||||||||||||||||
Money Market Funds–69.63% | ||||||||||||||||
Liquid Assets Portfolio–Institutional Class(e) | 49,831,884 | 49,831,884 | ||||||||||||||
Premier Portfolio–Institutional Class(e) | 49,831,884 | 49,831,884 | ||||||||||||||
STIC (Global Series) PLC–U.S. Dollar Liquidity Portfolio (Ireland)–Institutional Class(e) | 35,158,043 | 35,158,043 | ||||||||||||||
Total Money Market Funds (Cost $134,821,811) | 134,821,811 | |||||||||||||||
TOTAL INVESTMENTS–100.84% (Cost $195,243,594) | 195,249,096 | |||||||||||||||
OTHER ASSETS LESS LIABILITIES–(0.84)% | (1,633,387 | ) | ||||||||||||||
NET ASSETS–100.00% | $ | 193,615,709 |
Open Futures Contracts | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
Brent Crude | Short | 109 | October-2015 | $ | (7,507,920 | ) | $ | (1,011,312 | ) | |||||||||||
Cotton No.2 | Short | 201 | December-2015 | (6,697,320 | ) | (112,813 | ) | |||||||||||||
Gas Oil | Short | 144 | May-2015 | (8,629,200 | ) | (1,118,582 | ) | |||||||||||||
Gasoline Reformulated Blendstock Oxygenate Blending | Short | 56 | June-2015 | (4,810,075 | ) | (315,381 | ) | |||||||||||||
Globex Reformulated Blendstock Gasoline Physical | Short | 30 | June-2015 | (2,576,826 | ) | (182,900 | ) | |||||||||||||
Heating Oil | Short | 90 | June-2015 | (7,486,290 | ) | (990,047 | ) | |||||||||||||
Silver | Long | 7 | July-2015 | 565,355 | 7,439 | |||||||||||||||
Soybean | Short | 108 | July-2015 | (5,270,400 | ) | (44,911 | ) | |||||||||||||
WTI Crude | Short | 127 | October-2015 | (7,900,670 | ) | (1,115,831 | ) | |||||||||||||
Subtotal–Commodity Risk | (4,884,338 | ) | ||||||||||||||||||
Australia 10 Year Bonds | Long | 153 | June-2015 | 15,645,380 | (137,503 | ) | ||||||||||||||
Canada 10 Year Bonds | Long | 49 | June-2015 | 5,695,681 | (83,139 | ) | ||||||||||||||
Euro Bonds | Long | 40 | June-2015 | 7,038,337 | (18,757 | ) | ||||||||||||||
Japanese 10 Year Bonds | Long | 4 | June-2015 | 4,954,439 | 27,847 | |||||||||||||||
Long Gilt | Long | 136 | June-2015 | 24,660,338 | (95,882 | ) | ||||||||||||||
U.S. Treasury 20 Year Bonds | Long | 163 | June-2015 | 26,013,781 | (584,134 | ) | ||||||||||||||
Subtotal–Interest Rate Risk | (891,568 | ) |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
5 Invesco Global Markets Strategy Fund
Open Futures Contracts (continued) | ||||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||
Dow Jones EURO STOXX 50 Index | Long | 441 | June-2015 | 17,668,697 | $ | (147,531 | ) | |||||||||||||||
E-Mini S&P 500 Index | Long | 113 | June-2015 | 11,745,785 | 178,558 | |||||||||||||||||
FTSE 100 Index | Long | 134 | June-2015 | 14,253,189 | 419,148 | |||||||||||||||||
Hang Seng Index | Long | 106 | May-2015 | $ | 19,218,954 | (39,286 | ) | |||||||||||||||
Russell 2000 Index Mini | Long | 130 | June-2015 | 15,813,200 | (104,499 | ) | ||||||||||||||||
Tokyo Stock Price Index | Long | 135 | June-2015 | 17,960,427 | 712,600 | |||||||||||||||||
Subtotal-Equity Risk | 1,018,990 | |||||||||||||||||||||
Total Futures Contracts | $ | (4,756,916 | ) | |||||||||||||||||||
Open Over-The-Counter Total Return Swap Agreements | ||||||||||||||||||||||
Swap Agreements | Type of Contract | Counterparty | Number of Contracts | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||
Receive a return equal to the Barclays Commodity Strategy 1452 Excess Return Index and pay the product of (i) 0.33% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Barclays Bank PLC | 5,100 | October-2015 | $ | 2,477,369 | $ | 158,576 | ||||||||||||||
Pay a floating rate equal to the Barclays Capital Soymeal Nearby Excess Return Index and pay the product of (i) 0.30% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Short | Barclays Bank PLC | 4,140 | January-2016 | (4,052,402 | ) | (63,810 | ) | ||||||||||||||
Pay a floating rate equal to the Barclays Commodity Strategy 1606 Excess Return Index and pay the product of (i) 0.41% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Short | Barclays Bank PLC | 13,870 | October-2015 | (3,620,825 | ) | (47,381 | ) | ||||||||||||||
Pay a floating rate equal to the CIBC Silver Index and pay the product of (i) 0.11% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | Canadian Imperial Bank Commerce | 15,700 | February-2016 | 1,532,629 | (17,075 | ) | |||||||||||||||
Pay a floating rate equal to the S&P GSCI Sugar Excess Return A141 Strategy and receive the product of (i) 0.37% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Short | Goldman Sachs International | 13,800 | January-2016 | (2,782,994 | ) | 0 | |||||||||||||||
Pay a floating rate equal to the S&P GSCI Gold Index Excess Return and pay the product of (i) 0.09% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Long | JPMorgan Chase Bank, N.A. | 11,300 | October-2015 | 1,124,338 | (4,261 | ) | |||||||||||||||
Pay a floating rate equal to the S&P GSCI Aluminum Dynamic Roll Excess Return Index and pay the product of (i) 0.38% of the Notional Amount multiplied by (ii) days in the period divided by 365. | Short | Morgan Stanley Capital Services LLC | 42,600 | October-2015 | (4,483,160 | ) | (261,926 | ) | ||||||||||||||
Total Swap Agreements–Commodity Risk |
| $ | (235,877 | ) |
Notes to Consolidated Schedule of Investments:
(a) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(b) | 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. |
(c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on April 30, 2015. |
(d) | All or a portion of the value was designated as collateral for swap agreements. See Note 1L and Note 4. |
(e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Target Risk Allocation and Notional Asset Weights*
By asset class, based on Net Assets as of April 30, 2015
Asset Class | Risk Allocation** | % of Net Assets as of 04/30/15*** | ||||||
Equities | 40.5 | % | 48.3 | % | ||||
Fixed Income | 26.3 | 43.3 | ||||||
Commodities | 33.2 | (27.7 | ) |
* | Risk contribution is measured as the standard deviation of each asset class as a percentage of total portfolio standard deviation. The risk contribution of each underlying asset determines the dollar-weighting of the asset. Standard deviation measures a fund’s range of total returns and fluctuations over a defined period of time. |
** | Based on the expected market exposure. |
*** | Due to the use of leverage, the percentages may not equal 100%. |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
6 Invesco Global Markets Strategy Fund
Consolidated Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $60,421,783) | $ | 60,427,285 | ||
Investments in affiliated money market funds, at value and cost | 134,821,811 | |||
Total investments, at value (Cost $195,243,594) | 195,249,096 | |||
Receivable for: | ||||
Fund shares sold | 613,012 | |||
Dividends and interest | 6,960 | |||
Swaps receivables | 3,179 | |||
Investment for trustee deferred compensation and retirement plans | 11,963 | |||
Unrealized appreciation on swap agreements–OTC | 158,576 | |||
Other assets | 28,204 | |||
Total assets | 196,070,990 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 51,404 | |||
Swaps payable | 160,536 | |||
Variation margin–futures | 1,676,185 | |||
Accrued fees to affiliates | 69,669 | |||
Accrued trustees’ and officers’ fees and benefits | 3,301 | |||
Accrued other operating expenses | 87,193 | |||
Trustee deferred compensation and retirement plans | 12,540 | |||
Unrealized depreciation on swap agreements–OTC | 394,453 | |||
Total liabilities | 2,455,281 | |||
Net assets applicable to shares outstanding | $ | 193,615,709 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 186,877,076 | ||
Undistributed net investment income (loss) | (917,091 | ) | ||
Undistributed net realized gain | 12,643,016 | |||
Net unrealized appreciation (depreciation) | (4,987,292 | ) | ||
$ | 193,615,709 |
Net Assets: |
| |||
Class A | $ | 8,039,386 | ||
Class C | $ | 10,769,180 | ||
Class R | $ | 23,149 | ||
Class Y | $ | 65,936,079 | ||
Class R5 | $ | 9,554 | ||
Class R6 | $ | 108,838,361 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 803,246 | |||
Class C | 1,080,260 | |||
Class R | 2,312 | |||
Class Y | 6,572,563 | |||
Class R5 | 952 | |||
Class R6 | 10,849,748 | |||
Class A: | ||||
Net asset value per share | $ | 10.01 | ||
Maximum offering price per share | ||||
(Net asset value of $10.01 ¸ 94.50%) | $ | 10.59 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 9.97 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.01 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.03 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.04 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.03 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
7 Invesco Global Markets Strategy Fund
Consolidated Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends from affiliated money market funds | $ | 29,286 | ||
Interest | 5,610 | |||
Total investment income | 34,896 | |||
Expenses: | ||||
Advisory fees | 1,346,321 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 4,879 | |||
Distribution fees: | ||||
Class A | 8,895 | |||
Class C | 53,852 | |||
Class R | 62 | |||
Transfer agent fees — A, C, R and Y | 34,354 | |||
Trustees’ and officers’ fees and benefits | 12,239 | |||
Other | 94,623 | |||
Total expenses | 1,580,020 | |||
Less: Fees waived and expenses reimbursed | (215,416 | ) | ||
Net expenses | 1,364,604 | |||
Net investment income (loss) | (1,329,708 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Foreign currencies | (346,152 | ) | ||
Futures contracts | 15,079,604 | |||
Swap agreements | (327,627 | ) | ||
14,405,825 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (3,186 | ) | ||
Futures contracts | (7,430,424 | ) | ||
Swap agreements | (68,694 | ) | ||
(7,502,304 | ) | |||
Net realized and unrealized gain | 6,903,521 | |||
Net increase in net assets resulting from operations | $ | 5,573,813 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
8 Invesco Global Markets Strategy Fund
Consolidated Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (1,329,708 | ) | $ | (2,505,146 | ) | ||
Net realized gain | 14,405,825 | 2,656,273 | ||||||
Change in net unrealized appreciation (depreciation) | (7,502,304 | ) | (775,658 | ) | ||||
Net increase (decrease) in net assets resulting from operations | 5,573,813 | (624,531 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (101,201 | ) | — | |||||
Class C | (82,010 | ) | — | |||||
Class R | (320 | ) | — | |||||
Class Y | (696,170 | ) | — | |||||
Class R5 | (175 | ) | — | |||||
Class R6 | (2,023,415 | ) | — | |||||
Total distributions from net investment income | (2,903,291 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (119,584 | ) | (94,210 | ) | ||||
Class C | (196,803 | ) | (141,449 | ) | ||||
Class R | (455 | ) | (647 | ) | ||||
Class Y | (705,619 | ) | (692,741 | ) | ||||
Class R5 | (177 | ) | (647 | ) | ||||
Class R6 | (2,050,877 | ) | (6,922,506 | ) | ||||
Total distributions from net realized gains | (3,073,515 | ) | (7,852,200 | ) | ||||
Share transactions–net: | ||||||||
Class A | 1,052,432 | 6,388,685 | ||||||
Class C | (1,430,850 | ) | 11,581,205 | |||||
Class R | (956 | ) | 14,508 | |||||
Class Y | 29,815,775 | 30,676,861 | ||||||
Class R6 | (3,247,281 | ) | 9,379,796 | |||||
Net increase in net assets resulting from share transactions | 26,189,120 | 58,041,055 | ||||||
Net increase in net assets | 25,786,127 | 49,564,324 | ||||||
Net assets: | ||||||||
Beginning of period | 167,829,582 | 118,265,258 | ||||||
End of period (includes undistributed net investment income (loss) of $(917,091) and $3,315,908, respectively) | $ | 193,615,709 | $ | 167,829,582 |
Notes to Consolidated Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Markets Strategy Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 consolidated 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 will seek to gain exposure to the commodity markets primarily through investments in the Invesco Cayman Commodity Fund V Ltd. (the “Subsidiary”), a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands. The Subsidiary was organized by the Fund to invest in commodity-linked derivatives. The Fund may invest up to 25% of its total assets in the Subsidiary.
The Fund’s investment objective is to seek a positive absolute return over a complete economic and market cycle.
9 Invesco Global Markets Strategy Fund
The Fund currently consists of six different classes of shares: Class A, Class C, Class R, Class Y, Class R5 and Class R6. On August 28, 2013, the Fund began offering Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares and the Fund’s existing Class H1 shares were converted to Class Y shares. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver 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 consolidated 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 consolidated 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 Consolidated Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
10 Invesco Global Markets Strategy 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 Consolidated Statement of Operations and the Consolidated Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Consolidated Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Consolidated Statement of Operations and Consolidated Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Consolidated Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Consolidated Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues 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 consolidated financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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 financial statements are prepared on a consolidated basis in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. The accompanying financial statements reflect the financial position of the Fund and its Subsidiary and the results of operations on a consolidated basis. All inter-company accounts and transactions have been eliminated in consolidation. |
In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the consolidated financial statements are released to print.
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust, and under the Subsidiary’s organizational documents, the directors and officers of the Subsidiary, are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund and/or the Subsidiary, respectively. 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 Consolidated Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net 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. |
11 Invesco Global Markets Strategy Fund
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Consolidated Statement of Operations.
J. | Forward Foreign Currency Contracts — The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical 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 Consolidated Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Consolidated Statement of Assets and Liabilities.
K. | 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 Consolidated 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 Consolidated 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 Consolidated Statement of Assets and Liabilities. |
L. | 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 Counterparties. 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. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Consolidated 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 Consolidated Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Consolidated Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Consolidated 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 Consolidated 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. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
M. | Other Risks — The Fund will seek to gain exposure to commodity markets primarily through an investment in the Subsidiary and through investments in exchange traded funds and commodity-linked derivatives. The Subsidiary, unlike the Fund, may invest without limitation in |
12 Invesco Global Markets Strategy Fund
commodities, commodity-linked derivatives and other securities, such as exchange traded notes, that may provide leverage and non-leveraged exposure to commodity markets. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. |
The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.
N. | 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. |
O. | 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 $10 billion | 1.50% | |||
Over $10 billion | 1.25% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.50%.
The Subsidiary has entered into a separate contract with the Adviser whereby the Adviser provides investment advisory and other services to the Subsidiary. In consideration of these services, the Subsidiary pays an advisory fee to the Adviser based on the annual rate of the Subsidiary’s average daily net assets as set forth in the table above.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.80%, 2.55%, 2.05%, 1.55%, 1.55% and 1.55%, 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 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 a Fund directly, but are fees and expenses, including management fees of the investment companies in which a Fund invests. As a result, the total annual fund operating expenses after expense reimbursement may exceed the expense limits above. Unless Invesco continues the fee waiver agreement, it will terminate on February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $181,062 and reimbursed class level expenses of $3,609, $5,463, $13 and $25,269 of Class A, Class C, Class R and Class Y 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 April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2015, expenses incurred under the Plans are shown in the Consolidated Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption
13 Invesco Global Markets Strategy Fund
proceeds prior to remittance to the shareholder. During the six months ended April 30, 2015, IDI advised the Fund that IDI retained $898 in front-end sales commissions from the sale of Class A shares and $1,395 from Class C shares for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | |||||||||||||
Money Market Funds | $ | 134,821,811 | $ | — | $ | — | $ | 134,821,811 | ||||||||
U.S. Treasury Securities | — | 60,427,285 | — | 60,427,285 | ||||||||||||
134,821,811 | 60,427,285 | — | 195,249,096 | |||||||||||||
Futures Contracts* | (4,756,916 | ) | — | — | (4,756,916 | ) | ||||||||||
Swap Agreements* | — | (235,877 | ) | — | (235,877 | ) | ||||||||||
Total Investments | $ | 130,064,895 | $ | 60,191,408 | $ | — | $ | 190,256,303 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Commodity risk: | ||||||||
Futures contracts(a) | $ | 7,439 | $ | (4,891,777 | ) | |||
Swap agreements(b) | 158,576 | (394,453 | ) | |||||
Interest rate risk: | ||||||||
Futures contracts(a) | 27,847 | (919,415 | ) | |||||
Equity risk: | ||||||||
Futures contracts(a) | 1,310,306 | (291,316 | ) | |||||
Total | $ | 1,504,168 | $ | (6,496,961 | ) |
(a) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Consolidated Statement of Assets and Liabilities. |
(b) | Values are disclosed on the Consolidated Statement of Assets and Liabilities under the captions Unrealized appreciation on swap transactions—OTC and Unrealized depreciation on swap transactions—OTC. |
14 Invesco Global Markets Strategy Fund
Effect of Derivative Investments for the six months ended April 30, 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 Consolidated Statement of Operations | ||||||||
Futures Contracts | Swap Agreements | |||||||
Realized Gain (Loss): | ||||||||
Commodity risk | $ | 4,311,184 | $ | (1,035,508 | ) | |||
Interest rate risk | 7,036,637 | 707,881 | ||||||
Equity risk | 3,731,783 | — | ||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||
Commodity risk | (5,876,199 | ) | 192,460 | |||||
Interest rate risk | (2,865,930 | ) | (261,154 | ) | ||||
Equity risk | 1,311,705 | — | ||||||
Total | $ | 7,649,180 | $ | (396,321 | ) |
The table below summarizes the average notional value of futures contracts and swap agreements outstanding during the period.
Futures Contracts | Swap Agreements | |||||||
Average notional value | $ | 214,577,076 | $ | 24,533,304 |
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 Consolidated 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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of assets presented in Consolidated Statement of Assets and Liabilities | Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Bank of America Merrill Lynch | $ | 425 | $ | (16 | ) | $ | 409 | $ | — | $ | — | $ | 409 | |||||||||||
Barclays Bank PLC | 159,760 | (111,549 | ) | 48,211 | — | — | 48,211 | |||||||||||||||||
Goldman Sachs International | 870 | (870 | ) | — | — | — | — | |||||||||||||||||
Morgan Stanley Capital Services LLC | 700 | (700 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 161,755 | $ | (113,135 | ) | $ | 48,620 | $ | — | $ | — | $ | 48,620 | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized Liabilities | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of liabilities presented in Consolidated Statement of Assets and Liabilities | Collateral Pledged | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Bank of America Merrill Lynch | $ | 16 | $ | (16 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Barclays Bank PLC | 111,549 | (111,549 | ) | — | — | — | — | |||||||||||||||||
Canadian Imperial Bank of Commerce | 17,158 | — | 17,158 | — | — | 17,158 | ||||||||||||||||||
Goldman Sachs International | 160,054 | (870 | ) | 159,184 | (159,184 | ) | — | — | ||||||||||||||||
JPMorgan Chase Bank, N.A. | 4,286 | — | 4,286 | (4,286 | ) | — | — | |||||||||||||||||
Morgan Stanley Capital Services LLC | 261,926 | (700 | ) | 261,226 | (261,226 | ) | — | — | ||||||||||||||||
Total | $ | 554,989 | $ | (113,135 | ) | $ | 441,854 | $ | (424,696 | ) | $ | — | $ | 17,158 |
15 Invesco Global Markets Strategy 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 Consolidated Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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 October 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 April 30, 2015 was $0 and $0, 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 | $ | 12,299,428 | ||
Aggregate unrealized (depreciation) of investment securities | (12,293,926 | ) | ||
Net unrealized appreciation of investment securities | $ | 5,502 |
Cost of investments is the same for tax and financial reporting purposes.
16 Invesco Global Markets Strategy Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 289,066 | $ | 2,933,534 | 1,164,747 | $ | 11,592,503 | ||||||||||
Class C | 214,409 | 2,183,594 | 1,937,959 | 19,362,646 | ||||||||||||
Class R | 514 | 5,333 | 1,458 | 14,508 | ||||||||||||
Class Y | 4,162,203 | 42,461,883 | 6,604,938 | 66,179,795 | ||||||||||||
Class R6 | 633,156 | 6,402,796 | 1,088,964 | 10,710,094 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 20,165 | 199,635 | 9,489 | 93,564 | ||||||||||||
Class C | 26,559 | 262,665 | 14,309 | 140,802 | ||||||||||||
Class R | 48 | 472 | — | — | ||||||||||||
Class Y | 122,360 | 1,213,807 | 69,846 | 689,379 | ||||||||||||
Class R6 | 410,679 | 4,073,939 | 701,303 | 6,921,859 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (204,423 | ) | (2,080,737 | ) | (532,075 | ) | (5,297,382 | ) | ||||||||
Class C | (382,210 | ) | (3,877,109 | ) | (806,676 | ) | (7,922,243 | ) | ||||||||
Class R | (660 | ) | (6,761 | ) | — | — | ||||||||||
Class Y | (1,357,739 | ) | (13,859,915 | ) | (3,675,067 | ) | (36,192,313 | ) | ||||||||
Class R6 | (1,338,741 | ) | (13,724,016 | ) | (819,568 | ) | (8,252,157 | ) | ||||||||
Net increase in share activity | 2,595,386 | $ | 26,189,120 | 5,759,627 | $ | 58,041,055 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in aggregate own 35% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by this entity is also owned beneficially. |
In addition, 56% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco. |
17 Invesco Global Markets Strategy Fund
NOTE 10 — Consolidated Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.02 | $ | (0.08 | ) | $ | 0.42 | $ | 0.34 | $ | (0.16 | ) | $ | (0.19 | ) | $ | (0.35 | ) | $ | 10.01 | 3.38 | % | $ | 8,039 | 1.70 | %(d) | 2.00 | %(d) | (1.66 | )%(d) | 0 | % | ||||||||||||||||||||||||
Year ended 10/31/14 | 10.78 | (0.17 | ) | 0.09 | (0.08 | ) | — | (0.68 | ) | (0.68 | ) | 10.02 | (0.64 | ) | 6,996 | 1.73 | 2.06 | (1.68 | ) | 0 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13(e) | 10.52 | (0.04 | ) | 0.30 | 0.26 | — | — | — | 10.78 | 2.47 | 607 | 1.99 | (f) | 2.04 | (f) | (1.92 | )(f) | 0 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 9.94 | (0.12 | ) | 0.42 | 0.30 | (0.08 | ) | (0.19 | ) | (0.27 | ) | 9.97 | 2.98 | 10,769 | 2.45 | (d) | 2.75 | (d) | (2.41 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.78 | (0.24 | ) | 0.08 | (0.16 | ) | — | (0.68 | ) | (0.68 | ) | 9.94 | (1.42 | ) | 12,136 | 2.48 | 2.81 | (2.43 | ) | 0 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13(e) | 10.52 | (0.05 | ) | 0.31 | 0.26 | — | — | — | 10.78 | 2.47 | 818 | 2.74 | (f) | 2.79 | (f) | (2.67 | )(f) | 0 | ||||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.00 | (0.10 | ) | 0.43 | 0.33 | (0.13 | ) | (0.19 | ) | (0.32 | ) | 10.01 | 3.31 | 23 | 1.95 | (d) | 2.25 | (d) | (1.91 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.78 | (0.19 | ) | 0.09 | (0.10 | ) | — | (0.68 | ) | (0.68 | ) | 10.00 | (0.83 | ) | 24 | 1.98 | 2.31 | (1.93 | ) | 0 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13(e) | 10.52 | (0.04 | ) | 0.30 | 0.26 | — | — | — | 10.78 | 2.47 | 10 | 2.24 | (f) | 2.29 | (f) | (2.17 | )(f) | 0 | ||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | (0.07 | ) | 0.42 | 0.35 | (0.18 | ) | (0.19 | ) | (0.37 | ) | 10.03 | 3.53 | 65,936 | 1.45 | (d) | 1.75 | (d) | (1.41 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.79 | (0.14 | ) | 0.08 | (0.06 | ) | — | (0.68 | ) | (0.68 | ) | 10.05 | (0.44 | ) | 36,645 | 1.48 | 1.81 | (1.43 | ) | 0 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 9.91 | (0.19 | ) | 1.07 | 0.88 | — | — | — | 10.79 | 8.88 | 6,972 | 1.82 | 1.87 | (1.75 | ) | 0 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.00 | (0.02 | ) | (0.07 | ) | (0.09 | ) | — | — | — | 9.91 | (0.90 | ) | 10,017 | 2.00 | (f) | 6.69 | (f) | (1.87 | )(f) | 0 | |||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.06 | (0.07 | ) | 0.42 | 0.35 | (0.18 | ) | (0.19 | ) | (0.37 | ) | 10.04 | 3.53 | 10 | 1.45 | (d) | 1.65 | (d) | (1.41 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.79 | (0.14 | ) | 0.09 | (0.05 | ) | — | (0.68 | ) | (0.68 | ) | 10.06 | (0.34 | ) | 10 | 1.48 | 1.69 | (1.43 | ) | 0 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13(e) | 10.52 | (0.03 | ) | 0.30 | 0.27 | — | — | — | 10.79 | 2.57 | 10 | 1.75 | (f) | 1.80 | (f) | (1.68 | )(f) | 0 | ||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | (0.07 | ) | 0.42 | 0.35 | (0.18 | ) | (0.19 | ) | (0.37 | ) | 10.03 | 3.53 | 108,838 | 1.45 | (d) | 1.65 | (d) | (1.41 | )(d) | 0 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.80 | (0.14 | ) | 0.07 | (0.07 | ) | — | (0.68 | ) | (0.68 | ) | 10.05 | (0.53 | ) | 112,019 | 1.48 | 1.69 | (1.43 | ) | 0 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13(e) | 10.52 | (0.03 | ) | 0.31 | 0.28 | — | — | — | 10.80 | 2.66 | 109,848 | 1.71 | (f) | 1.76 | (f) | (1.64 | )(f) | 0 |
(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 $7,175, $10,860, $25, $50,229, $10 and $112,699 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of September 26, 2012 for Class Y shares and August 28, 2013 for Class A, Class C, Class R, Class R5 and Class R6 shares, respectively. |
(f) | Annualized. |
18 Invesco Global Markets Strategy Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,033.80 | $ | 8.57 | $ | 1,016.36 | $ | 8.50 | 1.70 | % | ||||||||||||
C | 1,000.00 | 1,029.80 | 12.33 | 1,012.65 | 12.23 | 2.45 | ||||||||||||||||||
R | 1,000.00 | 1,033.10 | 9.83 | 1,015.12 | 9.74 | 1.95 | ||||||||||||||||||
Y | 1,000.00 | 1,035.30 | 7.32 | 1,017.60 | 7.25 | 1.45 | ||||||||||||||||||
R5 | 1,000.00 | 1,035.30 | 7.32 | 1,017.60 | 7.25 | 1.45 | ||||||||||||||||||
R6 | 1,000.00 | 1,035.30 | 7.32 | 1,017.60 | 7.25 | 1.45 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Global Markets Strategy 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: 811-05426 and 033-19338 | GMS-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Global Targeted Returns Fund | ||||
Nasdaq: | ||||
A: GLTAX ¡ C: GLTCX ¡ R: GLTRX ¡ Y: GLTYX ¡ R5: GLTFX ¡ R6: GLTSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Consolidated Schedule of Investments | ||||
16 Consolidated Financial Statements | ||||
18 Notes to Consolidated Financial Statements | ||||
29 Consolidated 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, 10/31/14 to 4/30/15, 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 | 1.95 | % | |||||
Class C Shares | 1.59 | ||||||
Class R Shares | 1.73 | ||||||
Class Y Shares | 2.08 | ||||||
Class R5 Shares | 2.08 | ||||||
Class R6 Shares | 1.99 | ||||||
U.S. Three-Month Treasury Bills Index‚ (Broad Market/Style-Specific Index) | 0.01 | ||||||
Source(s): ‚Lipper Inc.
| |||||||
The U.S. Three-Month Treasury Bills Index is tracked by Lipper to provide performance for the three-month US Treasury bill. | |||||||
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. |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (12/19/13) | 0.44 | % | |||||
1 Year | –2.53 | ||||||
Class C Shares | |||||||
Inception (12/19/13) | 3.90 | % | |||||
1 Year | 1.38 | ||||||
Class R Shares | |||||||
Inception (12/19/13) | 4.38 | % | |||||
1 Year | 2.82 | ||||||
Class Y Shares | |||||||
Inception (12/19/13) | 4.94 | % | |||||
1 Year | 3.37 | ||||||
Class R5 Shares | |||||||
Inception (12/19/13) | 4.94 | % | |||||
1 Year | 3.37 | ||||||
Class R6 Shares | |||||||
Inception (12/19/13) | 4.86 | % | |||||
1 Year | 3.27 |
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
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (12/19/13) | 0.69 | % | |||||
1 Year | –1.44 | ||||||
Class C Shares | |||||||
Inception (12/19/13) | 4.39 | % | |||||
1 Year | 2.48 | ||||||
Class R Shares | |||||||
Inception (12/19/13) | 4.98 | % | |||||
1 Year | 4.12 | ||||||
Class Y Shares | |||||||
Inception (12/19/13) | 5.50 | % | |||||
1 Year | 4.68 | ||||||
Class R5 Shares | |||||||
Inception (12/19/13) | 5.50 | % | |||||
1 Year | 4.68 | ||||||
Class R6 Shares | |||||||
Inception (12/19/13) | 5.42 | % | |||||
1 Year | 4.58 |
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 1.80%, 2.55%, 2.05%, 1.55%, 1.55% and 1.55%, respectively.1,2,3 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 3.66%, 4.41%, 3.91%,
3.41%, 3.37% and 3.37%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
3 | The expense ratio includes acquired fund fees and expenses of the underlying funds in which the Fund invests of 0.50% for Invesco Global Targeted Returns Fund. |
2 Invesco Global Targeted Returns 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 Global Targeted Returns Fund |
Consolidated Schedule of Investments
April 30, 2015
(Unaudited)
Investments in Affiliated Issuers–79.13%(a)
% of Net Assets 04/30/15 | Value 10/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain | Dividend Income | Shares 04/30/15 | Value 04/30/15 | ||||||||||||||||||||||||||||
Domestic Equity Funds–5.81% |
| |||||||||||||||||||||||||||||||||||
Invesco Comstock Fund–Class R6 | — | $ | 4,320,674 | $ | 1,266,276 | $ | (5,666,495 | ) | $ | (219,851 | ) | $ | 299,396 | $ | 36,276 | — | $ | — | ||||||||||||||||||
Invesco Diversified Dividend Fund–Class R6 | 5.81 | % | 2,641,686 | 2,065,566 | (67,780 | ) | 88,403 | 51,383 | 32,032 | 253,471 | 4,727,224 | |||||||||||||||||||||||||
Total Domestic Equity Funds | 6,962,360 | 3,331,842 | (5,734,275 | ) | (131,448 | ) | 350,779 | 68,308 | 253,471 | 4,727,224 | ||||||||||||||||||||||||||
Fixed-Income Funds–11.80% |
| |||||||||||||||||||||||||||||||||||
Invesco High Yield Fund–Class R6 | 11.80 | % | 5,038,366 | 4,597,458 | — | (23,087 | ) | — | 191,450 | 2,199,711 | 9,612,737 | |||||||||||||||||||||||||
Foreign Equity Funds–28.46% |
| |||||||||||||||||||||||||||||||||||
Invesco Asia Pacific Growth Fund–Class Y | 8.51 | % | 5,329,933 | 1,831,347 | (230,847 | ) | 28,868 | 123,419 | 78,956 | 208,383 | 6,930,829 | |||||||||||||||||||||||||
Invesco European Growth Fund–Class Y | 10.01 | % | 4,319,208 | 3,927,847 | (270,346 | ) | 229,594 | 126,894 | 90,793 | 217,488 | 8,153,643 | |||||||||||||||||||||||||
Invesco International Growth Fund–Class R6 | 9.94 | % | 4,393,322 | 3,525,589 | — | 173,278 | 139,665 | 72,591 | 230,678 | 8,092,189 | ||||||||||||||||||||||||||
Total Foreign Equity Funds | 14,042,463 | 9,284,783 | (501,193 | ) | 431,740 | 389,978 | 242,340 | 656,549 | 23,176,661 | |||||||||||||||||||||||||||
Money Market Funds–33.06% |
| |||||||||||||||||||||||||||||||||||
Liquid Assets Portfolio–Institutional Class | 12.98 | % | 1,983,391 | 25,804,680 | (17,215,802 | ) | — | — | 937 | 10,572,269 | 10,572,269 | |||||||||||||||||||||||||
Premier Portfolio–Institutional Class | 12.99 | % | 1,983,392 | 25,804,680 | (17,215,802 | ) | — | — | 421 | 10,572,270 | 10,572,270 | |||||||||||||||||||||||||
STIC (Global Series) PLC–U.S. Dollar Liquidity Portfolio (Ireland)–Institutional Class | 7.09 | % | — | 6,276,947 | (503,840 | ) | — | — | 849 | 5,773,107 | 5,773,107 | |||||||||||||||||||||||||
Total Money Market Funds | 3,966,783 | 57,886,307 | (34,935,444 | ) | — | — | 2,207 | 26,917,646 | 26,917,646 | |||||||||||||||||||||||||||
TOTAL INVESTMENTS IN AFFILIATED ISSUERS (Cost $63,535,357) | 79.13 | % | $ | 30,009,972 | $ | 75,100,390 | $ | (41,170,912 | ) | $ | 277,205 | $ | 740,757 | (b) | $ | 504,305 | $ | 64,434,268 | ||||||||||||||||||
Principal Amount | ||||||||||||||||||||||||||||||||||||
Sovereign Debt–4.87%(c) |
| |||||||||||||||||||||||||||||||||||
Hungary Government Bond (Hungary), Series 23, Class A, Unsec. Bonds, 6.00%, 11/24/23 |
| HUF 88,330,000 | 389,976 | |||||||||||||||||||||||||||||||||
Hungary Government Bond (Hungary), Series 25, Class B, Unsec. Bonds, 5.50%, 06/24/25 |
| HUF 91,790,000 | 396,477 | |||||||||||||||||||||||||||||||||
Mexico Government Bond (Mexico), Series M 20, Sr. Unsec. Bonds, 10.00%, 12/05/24 |
| MXN 9,237,700 | 781,475 | |||||||||||||||||||||||||||||||||
Poland Government Bond (Poland), Series 0725, Unsec. Bonds, 3.25%, 07/25/25 |
| PLN 1,132,000 | 331,664 | |||||||||||||||||||||||||||||||||
Poland Government Bond (Poland), Series 1023, Unsec. Bonds, 4.00%, 10/25/23 |
| PLN 4,124,000 | 1,270,821 | |||||||||||||||||||||||||||||||||
South Africa Government Bond (South Africa), Series R186, Unsec. Bonds, 10.50%, 12/21/26 |
| ZAR 7,934,000 | 797,497 | |||||||||||||||||||||||||||||||||
Total Sovereign Debt (Cost $4,149,903) |
| 3,967,910 | ||||||||||||||||||||||||||||||||||
OPTIONS PURCHASED–4.32% (Cost $3,976,951) |
| 3,516,006 | ||||||||||||||||||||||||||||||||||
TOTAL INVESTMENTS–88.32% (Cost $71,662,211) |
| 71,918,184 | ||||||||||||||||||||||||||||||||||
OTHER ASSETS LESS LIABILITIES–11.68% |
| 9,509,091 | ||||||||||||||||||||||||||||||||||
NET ASSETS–100.00% |
| $ | 81,427,275 |
Abbreviations:
HUF | – Hungarian Forint | |
PLN | – Polish Zloty |
MXN | – Mexican Peso | |
Sr. | – Senior |
Unsec. | – Unsecured | |
ZAR | – South African Rand |
Notes to Consolidated Schedule of Investments:
(a) | Each underlying 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. |
(b) | Includes $52,034, $151,891, $179,554 and $139,665 of capital gains distributions from Invesco Diversified Dividend Fund, Invesco Asia Pacific Growth Fund, Invesco European Growth Fund and Invesco International Growth Fund, respectively. |
(c) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
4 Invesco Global Targeted Returns Fund
Open Exchange-Traded Index Options Purchased | ||||||||||||||||||||||||||
Description | Type of Contract | Broker/Counterparty | Expiration Date | Number of Contracts | Strike Price | Notional Value(d) | Value | |||||||||||||||||||
FTSE MIB Index | Put | Bank of America Merrill Lynch | 09/18/15 | 16 | EUR | 21,000 | EUR | 840,000 | $ | 30,543 | ||||||||||||||||
FTSE MIB Index | Put | Goldman Sachs International | 09/18/15 | 116 | EUR | 19,000 | EUR | 5,510,000 | 89,551 | |||||||||||||||||
FTSE MIB Index | Put | Goldman Sachs International | 09/18/15 | 16 | EUR | 21,000 | EUR | 840,000 | 30,543 | |||||||||||||||||
FTSE MIB Index | Put | UBS | 09/18/15 | 58 | EUR | 20,500 | EUR | 2,972,500 | 89,877 | |||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 12/08/16 | 6 | JPY | 16,250 | JPY | 97,500,000 | 39,699 | |||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 12/09/16 | 4 | JPY | 17,000 | JPY | 68,000,000 | 33,836 | |||||||||||||||||
Nikkei 225 Index | Put | Morgan Stanley Capital Services LLC | 12/09/16 | 46 | JPY | 16,000 | JPY | 736,000,000 | 279,313 | |||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 12/09/16 | 6 | JPY | 17,000 | JPY | 102,000,000 | 50,754 | |||||||||||||||||
SX5E Index | Put | Bank of America Merrill Lynch | 09/18/15 | 452 | EUR | 3,400 | EUR | 15,368,000 | 620,227 | |||||||||||||||||
SX5E Index | Put | UBS | 06/19/15 | 32 | EUR | 3,000 | EUR | 960,000 | 3,486 | |||||||||||||||||
SX5E Index | Put | UBS | 09/18/15 | 14 | EUR | 3,300 | EUR | 462,000 | 14,809 | |||||||||||||||||
SX7E Index | Put | Bank of America Merrill Lynch | 12/18/15 | 46 | EUR | 110 | EUR | 253,000 | 5,165 | |||||||||||||||||
SX7E Index | Put | Bank of America Merrill Lynch | 12/18/15 | 180 | EUR | 120 | EUR | 1,080,000 | 33,350 | |||||||||||||||||
SX7E Index | Put | Bank of America Merrill Lynch | 12/18/15 | 148 | EUR | 135 | EUR | 999,000 | 54,012 | |||||||||||||||||
SX7E Index | Put | Bank of America Merrill Lynch | 12/18/15 | 424 | EUR | 140 | EUR | 2,968,000 | 191,634 | |||||||||||||||||
SX7E Index | Put | Deutsche Bank Securities Inc. | 12/18/15 | 42 | EUR | 130 | EUR | 273,000 | 12,380 | |||||||||||||||||
SX7E Index | Put | Goldman Sachs International | 12/18/15 | 24 | EUR | 140 | EUR | 168,000 | 10,847 | |||||||||||||||||
SX7E Index | Put | Morgan Stanley Capital Services LLC | 12/18/15 | 7 | EUR | 130 | EUR | 45,500 | 2,063 | |||||||||||||||||
SX7E Index | Put | UBS | 12/18/15 | 70 | EUR | 130 | EUR | 455,000 | 20,633 | |||||||||||||||||
SX7E Index | Put | UBS | 12/18/15 | 1 | EUR | 140 | EUR | 7,000 | 452 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 13 | GBP | 6,200 | GBP | 806,000 | 31,531 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 2 | GBP | 6,300 | GBP | 126,000 | 5,465 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 3 | GBP | 6,400 | GBP | 192,000 | 9,280 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 3 | GBP | 6,550 | GBP | 196,500 | 11,168 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 3 | GBP | 6,600 | GBP | 198,000 | 11,859 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 5 | GBP | 6,700 | GBP | 335,000 | 22,374 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 42 | GBP | 6,750 | GBP | 2,835,000 | 199,870 | |||||||||||||||||
UKX Index | Put | Bank of America Merrill Lynch | 12/18/15 | 19 | GBP | 6,900 | GBP | 1,311,000 | 108,063 | |||||||||||||||||
UKX Index | Put | Goldman Sachs International | 12/18/15 | 1 | GBP | 6,400 | GBP | 64,000 | 3,093 | |||||||||||||||||
UKX Index | Put | Morgan Stanley Capital Services LLC | 12/18/15 | 9 | GBP | 6,300 | GBP | 567,000 | 24,592 | |||||||||||||||||
UKX Index | Put | UBS | 12/18/15 | 2 | GBP | 6,500 | GBP | 130,000 | 7,000 | |||||||||||||||||
UKX Index | Put | UBS | 12/18/15 | 17 | GBP | 6,600 | GBP | 1,122,000 | 67,199 | |||||||||||||||||
Total Index Options Purchased — Equity Risk | 1,827 | $ | 2,114,668 |
Abbreviations:
EUR | – Euro | |
GBP | – British Pound Sterling | |
JPY | – Japanese Yen |
(d) | Notional Value is calculated by multiplying the Number of Contracts by the Strike Price by the multiplier. |
Open Over-The-Counter Foreign Currency Options Purchased | ||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Notional Value | Value | ||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 01/13/20 | USD 1.270 | EUR | 338,440 | $ | 41,854 | ||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 01/27/20 | USD 1.222 | EUR | 640,440 | 63,476 | |||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 03/12/20 | USD 1.170 | EUR | 132,118 | 10,126 | |||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 04/03/20 | USD 1.172 | EUR | 431,984 | 33,421 | |||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 04/22/20 | USD 1.172 | EUR | 351,372 | 27,184 | |||||||||||||||||
EUR versus USD | Put | Goldman Sachs International | 12/12/19 | USD 1.350 | EUR | 2,792,791 | 482,732 | |||||||||||||||||
EUR versus USD | Put | Goldman Sachs International | 01/21/20 | USD 1.253 | EUR | 310,284 | 35,532 | |||||||||||||||||
EUR versus USD | Put | Goldman Sachs International | 02/06/20 | USD 1.234 | EUR | 238,027 | 24,941 | |||||||||||||||||
EUR versus USD | Put | Goldman Sachs International | 04/15/20 | USD 1.159 | EUR | 618,354 | 44,805 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
5 Invesco Global Targeted Returns Fund
Open Over-The-Counter Foreign Currency Options Purchased — (continued) | ||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Notional Value | Value | ||||||||||||||||||
USD versus JPY | Put | Barclays Bank PLC | 02/25/16 | JPY 119.100 | USD | 700,000 | $ | 23,406 | ||||||||||||||||
USD versus JPY | Put | Deutsche Bank Securities Inc. | 02/25/16 | JPY 118.000 | USD | 5,800,000 | 165,725 | |||||||||||||||||
USD versus JPY | Put | Deutsche Bank Securities Inc. | 02/25/16 | JPY 118.800 | USD | 825,000 | 26,449 | |||||||||||||||||
USD versus JPY | Put | Goldman Sachs International | 02/25/16 | JPY 120.100 | USD | 175,000 | 6,703 | |||||||||||||||||
USD versus JPY | Put | Morgan Stanley Capital Services LLC | 02/25/16 | JPY 118.850 | USD | 470,000 | 15,175 | |||||||||||||||||
Total Over-The-Counter Foreign Currency Options Purchased — Currency Risk |
| $ | 1,001,529 |
Abbreviations:
EUR | – Euro | |
JPY | – Japanese Yen | |
USD | – U.S. Dollar |
Open Over-The-Counter Swaptions Purchased | ||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Exercise Rate | Pay/Receive Exercise Rate | Floating Rate Index | Expiration Date | Notional Value | Value | ||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Deutsche Bank Securities Inc. | 3.06 | % | Pay | 3 Month USD LIBOR | 02/21/17 | $ | 8,256,000 | $ | 192,030 | |||||||||||||||||||
5 Year Interest Rate Swap | Put | Deutsche Bank Securities Inc. | 3.05 | Pay | 3 Month USD LIBOR | 02/21/17 | 2,842,000 | 64,806 | ||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.99 | Pay | 3 Month USD LIBOR | 03/13/17 | 700,000 | 17,745 | ||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.80 | Pay | 3 Month USD LIBOR | 04/03/17 | 1,168,000 | 37,760 | ||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.78 | Pay | 3 Month USD LIBOR | 04/18/17 | 1,650,000 | 55,576 | ||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.78 | Pay | 3 Month USD LIBOR | 04/24/17 | 940,000 | 31,892 | ||||||||||||||||||||||
Total Swaptions Purchased — Interest Rate Risk |
| $ | 399,809 | |||||||||||||||||||||||||||
Total Options Purchased (Cost $3,976,951) |
| $ | 3,516,006 |
Abbreviations:
LIBOR | – London Interbank Offered Rate | |
USD | – U.S. Dollar |
Open Over-The-Counter Index Options Written | ||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Number of Contracts | Strike Price | Premiums Received | Notional Value(d) | Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 07/15/15 | 4 | EUR | 11,500 | $ | 3,953 | EUR | 230,000 | $ | 10,945 | $ | (6,992 | ) | |||||||||||||||||||
DAX Index | Put | Goldman Sachs International | 05/15/15 | 10 | EUR | 10,300 | 9,250 | EUR | 515,000 | 618 | 8,632 | |||||||||||||||||||||||
DAX Index | Put | Goldman Sachs International | 05/15/15 | 10 | EUR | 10,400 | 10,360 | EUR | 520,000 | 800 | 9,560 | |||||||||||||||||||||||
DAX Index | Put | Goldman Sachs International | 05/15/15 | 10 | EUR | 10,500 | 11,600 | EUR | 525,000 | 1,036 | 10,564 | |||||||||||||||||||||||
DAX Index | Put | Goldman Sachs International | 07/15/15 | 11 | EUR | 11,300 | 17,017 | EUR | 621,500 | 24,842 | (7,825 | ) | ||||||||||||||||||||||
DAX Index | Put | Goldman Sachs International | 07/15/15 | 11 | EUR | 11,400 | 18,801 | EUR | 627,000 | 27,365 | (8,564 | ) | ||||||||||||||||||||||
DAX Index | Put | Goldman Sachs International | 07/15/15 | 11 | EUR | 11,500 | 20,884 | EUR | 632,500 | 30,100 | (9,216 | ) | ||||||||||||||||||||||
Subtotal — Over-The-Counter Index Put Options Written |
| 67 | $ | 91,865 | $ | 95,706 | $ | (3,841 | ) | |||||||||||||||||||||||||
Open Exchange-Traded Index Options Written(e) | ||||||||||||||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 05/15/15 | 1 | EUR | 11,100 | $ | 735 | EUR | 55,500 | $ | 596 | $ | 139 | ||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 05/15/15 | 6 | EUR | 11,500 | 2,342 | EUR | 345,000 | 8,526 | (6,184 | ) | ||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 06/19/15 | 1 | EUR | 11,100 | 1,121 | EUR | 55,500 | 1,401 | (280 | ) | ||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 06/19/15 | 11 | EUR | 11,200 | 11,386 | EUR | 616,000 | 17,447 | (6,061 | ) | ||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 06/19/15 | 10 | EUR | 11,300 | 11,470 | EUR | 565,000 | 17,905 | (6,435 | ) | ||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 06/19/15 | 10 | EUR | 11,400 | 12,680 | EUR | 570,000 | 20,156 | (7,476 | ) | ||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 06/19/15 | 6 | EUR | 11,500 | 5,380 | EUR | 345,000 | 13,572 | (8,192 | ) | ||||||||||||||||||||||
DAX Index | Put | Bank of America Merrill Lynch | 07/17/15 | 2 | EUR | 11,500 | 3,504 | EUR | 115,000 | 5,433 | (1,929 | ) | ||||||||||||||||||||||
FTSE MIB Index | Put | Goldman Sachs International | 09/18/15 | 58 | EUR | 21,500 | 266,386 | EUR | 3,117,500 | 136,606 | 129,780 | |||||||||||||||||||||||
FTSE MIB Index | Put | Bank of America Merrill Lynch | 09/18/15 | 8 | EUR | 23,000 | 29,354 | EUR | 460,000 | 33,170 | (3,816 | ) | ||||||||||||||||||||||
FTSE MIB Index | Put | UBS | 09/18/15 | 29 | EUR | 23,000 | 117,550 | EUR | 1,667,500 | 120,243 | (2,693 | ) | ||||||||||||||||||||||
FTSE MIB Index | Put | Goldman Sachs International | 09/18/15 | 8 | EUR | 23,500 | 25,446 | EUR | 470,000 | 39,549 | (14,103 | ) |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
6 Invesco Global Targeted Returns Fund
Open Exchange-Traded Index Options Written(e) — (continued) | ||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Number of Contracts | Strike Price | Premiums Received | Notional Value(d) | Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 05/08/15 | 4 | JPY | 17,500 | $ | 5,501 | JPY | 70,000,000 | $ | 67 | $ | 5,434 | ||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 05/08/15 | 4 | JPY | 17,750 | 6,761 | JPY | 71,000,000 | 67 | 6,694 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 05/08/15 | 4 | JPY | 18,000 | 8,683 | JPY | 72,000,000 | 134 | 8,549 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 05/08/15 | 1 | JPY | 18,250 | 1,579 | JPY | 18,250,000 | 75 | 1,504 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 05/08/15 | 2 | JPY | 19,000 | 1,578 | JPY | 38,000,000 | 1,089 | 489 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 05/08/15 | 1 | JPY | 19,000 | 342 | JPY | 19,000,000 | 545 | (203 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 06/12/15 | 4 | JPY | 17,500 | 9,080 | JPY | 70,000,000 | 2,345 | 6,735 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 06/12/15 | 4 | JPY | 17,750 | 11,168 | JPY | 71,000,000 | 3,182 | 7,986 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 06/12/15 | 4 | JPY | 18,000 | 13,621 | JPY | 72,000,000 | 4,188 | 9,433 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 06/12/15 | 1 | JPY | 18,250 | 2,966 | JPY | 18,250,000 | 1,298 | 1,668 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 06/12/15 | 2 | JPY | 19,000 | 4,935 | JPY | 38,000,000 | 5,527 | (592 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 06/12/15 | 1 | JPY | 19,000 | 1,868 | JPY | 19,000,000 | 2,764 | (896 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 07/10/15 | 2 | JPY | 18,750 | 5,884 | JPY | 37,500,000 | 6,951 | (1,067 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 07/10/15 | 2 | JPY | 18,750 | 5,891 | JPY | 37,500,000 | 6,952 | (1,061 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 07/10/15 | 3 | JPY | 19,000 | 9,781 | JPY | 57,000,000 | 12,186 | (2,405 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 07/10/15 | 4 | JPY | 19,000 | 14,426 | JPY | 76,000,000 | 16,248 | (1,822 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 07/10/15 | 2 | JPY | 19,250 | 8,205 | JPY | 38,500,000 | 9,967 | (1,762 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 07/10/15 | 2 | JPY | 19,250 | 8,262 | JPY | 38,500,000 | 9,967 | (1,705 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 12/09/16 | 23 | JPY | 18,250 | 363,389 | JPY | 419,750,000 | 288,945 | 74,444 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 12/08/16 | 3 | JPY | 18,750 | 47,869 | JPY | 56,250,000 | 43,467 | 4,402 | |||||||||||||||||||||||
Nikkei 225 Index | Put | Goldman Sachs International | 12/09/16 | 3 | JPY | 19,500 | 51,343 | JPY | 58,500,000 | 53,518 | (2,175 | ) | ||||||||||||||||||||||
Nikkei 225 Index | Put | Bank of America Merrill Lynch | 12/09/16 | 2 | JPY | 19,500 | 31,874 | JPY | 39,000,000 | 35,678 | (3,804 | ) | ||||||||||||||||||||||
SX5E Index | Put | UBS | 06/19/15 | 16 | EUR | 3,000 | 23,426 | EUR | 480,000 | 1,743 | 21,683 | |||||||||||||||||||||||
SX5E Index | Put | Deutsche Bank Securities Inc. | 06/19/15 | 16 | EUR | 3,000 | 28,869 | EUR | 480,000 | 1,743 | 27,126 | |||||||||||||||||||||||
SX5E Index | Put | UBS | 09/18/15 | 7 | EUR | 3,650 | 13,589 | EUR | 255,500 | 17,741 | (4,152 | ) | ||||||||||||||||||||||
SX5E Index | Put | UBS | 09/18/15 | 20 | EUR | 3,750 | 38,866 | EUR | 750,000 | 63,556 | (24,690 | ) | ||||||||||||||||||||||
SX5E Index | Put | Bank of America Merrill Lynch | 09/18/15 | 206 | EUR | 3,750 | 474,318 | EUR | 7,725,000 | 654,628 | (180,310 | ) | ||||||||||||||||||||||
Subtotal — Exchange-Traded Index Put Options Written | 493 | $ | 1,681,428 | $ | 1,659,175 | $ | 22,253 | |||||||||||||||||||||||||||
Total Index Options Written — Equity Risk | 560 | $ | 1,773,293 | $ | 1,754,881 | $ | 18,412 |
Currency Abbreviations:
EUR | – Euro | |
USD | – United States Dollar | |
JPY | – Japanese Yen |
(d) | Notional Value is calculated by multiplying the Number of Contracts by the Strike Price by the multiplier. |
(e) | Index options written collateralized by $4,858,951 cash held with Bank of America Merrill Lynch. |
Open Over-The-Counter Foreign Currency Options Written | ||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Premiums Received | Notional Value | Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 05/08/15 | CAD | 1.23 | $ | 2,215 | USD | 257,318 | $ | 184 | $ | 2,031 | |||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 05/08/15 | CAD | 1.25 | 20,915 | USD | 1,530,000 | 109 | 20,806 | ||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 05/08/15 | CAD | 1.26 | 1,665 | USD | 125,000 | 4 | 1,661 | ||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 06/08/15 | CAD | 1.23 | 3,270 | USD | 257,318 | 1,317 | 1,953 | ||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 06/08/15 | CAD | 1.25 | 26,254 | USD | 1,530,000 | 3,350 | 22,904 | ||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 06/08/15 | CAD | 1.26 | 2,119 | USD | 125,000 | 192 | 1,927 | ||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 07/08/15 | CAD | 1.23 | 4,078 | USD | 257,318 | 2,266 | 1,812 | ||||||||||||||||||||
CAD versus USD | Call | Barclays Bank PLC | 07/08/15 | CAD | 1.26 | 31,334 | USD | 1,530,000 | 7,499 | 23,835 | ||||||||||||||||||||
CAD versus USD | Call | Goldman Sachs International | 07/08/15 | CAD | 1.26 | 2,538 | USD | 125,000 | 480 | 2,058 | ||||||||||||||||||||
USD versus EUR | Call | Barclays Bank PLC | 01/27/20 | USD | 1.22 | 66,630 | EUR | 640,440 | 62,659 | 3,971 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
7 Invesco Global Targeted Returns Fund
Open Over-The-Counter Foreign Currency Options Written — (continued) | ||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Premiums Received | Notional Value | Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
USD versus EUR | Call | Goldman Sachs International | 01/21/20 | USD | 1.25 | $ | 30,213 | EUR | 310,284 | $ | 26,089 | $ | 4,124 | |||||||||||||||||
USD versus EUR | Call | Barclays Bank PLC | 01/13/20 | USD | 1.27 | 33,953 | EUR | 338,440 | 26,022 | 7,931 | ||||||||||||||||||||
USD versus EUR | Call | Goldman Sachs International | 02/06/20 | USD | 1.23 | 22,003 | EUR | 238,027 | 22,162 | (159 | ) | |||||||||||||||||||
USD versus EUR | Call | Barclays Bank PLC | 03/12/20 | USD | 1.17 | 13,404 | EUR | 132,118 | 16,725 | (3,321 | ) | |||||||||||||||||||
USD versus EUR | Call | Goldman Sachs International | 04/15/20 | USD | 1.16 | 63,718 | EUR | 618,354 | 83,392 | (19,674 | ) | |||||||||||||||||||
USD versus EUR | Call | Barclays Bank PLC | 04/03/20 | USD | 1.17 | 44,779 | EUR | 431,984 | 54,855 | (10,076 | ) | |||||||||||||||||||
USD versus EUR | Call | Barclays Bank PLC | 04/22/20 | USD | 1.17 | 36,888 | EUR | 351,372 | 44,618 | (7,730 | ) | |||||||||||||||||||
USD versus EUR | Call | Barclays Bank PLC | 07/17/15 | USD | 1.23 | 4,629 | EUR | 5,788,000 | 4,985 | (356 | ) | |||||||||||||||||||
USD versus EUR | Call | Goldman Sachs International | 12/12/19 | USD | 1.35 | 283,731 | EUR | 2,792,791 | 137,920 | 145,811 | ||||||||||||||||||||
Subtotal — Over-The Counter Foreign Currency Call Options Written |
| 694,336 | 494,828 | 199,508 | ||||||||||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 05/18/15 | USD | 1.04 | 246 | EUR | 65,882 | 13 | 233 | ||||||||||||||||||||
EUR versus USD | Put | Deutsche Bank Securities Inc. | 05/18/15 | USD | 1.07 | 12,628 | EUR | 1,070,000 | 1,053 | 11,575 | ||||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 05/18/15 | USD | 1.11 | 5,116 | EUR | 723,000 | 4,860 | 256 | ||||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 06/17/15 | USD | 1.04 | 555 | EUR | 65,882 | 88 | 467 | ||||||||||||||||||||
EUR versus USD | Put | Deutsche Bank Securities Inc. | 06/17/15 | USD | 1.06 | 14,469 | EUR | 1,070,000 | 2,644 | 11,825 | ||||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 06/17/15 | USD | 1.11 | 9,309 | EUR | 723,000 | 8,220 | 1,089 | ||||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 07/17/15 | USD | 1.04 | 837 | EUR | 65,882 | 231 | 606 | ||||||||||||||||||||
EUR versus USD | Put | Deutsche Bank Securities Inc. | 07/17/15 | USD | 1.05 | 15,557 | EUR | 1,070,000 | 4,581 | 10,976 | ||||||||||||||||||||
EUR versus USD | Put | Barclays Bank PLC | 07/17/15 | USD | 1.11 | 12,610 | EUR | 723,000 | 11,889 | 721 | ||||||||||||||||||||
USD versus KRW | Put | Morgan Stanley Capital Services LLC | 02/25/16 | KRW | 1,085 | 15,228 | USD | 470,000 | 15,484 | (256 | ) | |||||||||||||||||||
USD versus KRW | Put | Deutsche Bank Securities Inc. | 02/25/16 | KRW | 1,103 | 28,874 | USD | 825,000 | 35,979 | (7,105 | ) | |||||||||||||||||||
USD versus KRW | Put | Deutsche Bank Securities Inc. | 02/25/16 | KRW | 1,109 | 216,050 | USD | 5,800,000 | 275,165 | (59,115 | ) | |||||||||||||||||||
USD versus KRW | Put | Barclays Bank PLC | 02/25/16 | KRW | 1,110 | 25,311 | USD | 700,000 | 33,894 | (8,583 | ) | |||||||||||||||||||
USD versus KRW | Put | Goldman Sachs International | 02/25/16 | KRW | 1,131 | 6,629 | USD | 175,000 | 10,933 | (4,304 | ) | |||||||||||||||||||
Subtotal — Over-The Counter Foreign Currency Put Options Written | 363,419 | 405,034 | (41,615 | ) | ||||||||||||||||||||||||||
Total Foreign Currency Options Written — Currency Risk | $ | 1,057,755 | $ | 899,862 | $ | 157,893 |
Currency Abbreviations:
CAD | – Canadian Dollar | |
EUR | – Euro | |
KRW | – South Korean Won | |
USD | – United States Dollar |
Open Over-The-Counter Swaptions Written | ||||||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Exercise Rate | Pay/Receive Exercise Rate | Floating Rate Index | Expiration Date | Premiums Received | Notional Value | Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Morgan Stanley Capital Services LLC | 1.83 | % | Receive | 6 Month GBP LIBOR | 03/27/17 | $ | 1,204,551 | GBP 32,000,000 | $ | 980,054 | $ | 224,497 | ||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Morgan Stanley Capital Services LLC | 1.82 | Receive | 6 Month GBP LIBOR | 03/27/17 | 551,774 | GBP 16,000,000 | 483,927 | 67,847 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Morgan Stanley Capital Services LLC | 1.56 | Receive | 3 Month USD LIBOR | 01/07/15 | 797 | USD 290,000 | 195 | 602 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Barclays Bank PLC | 1.78 | Receive | 3 Month USD LIBOR | 05/18/15 | 2,240 | USD 711,000 | 105 | 2,135 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Barclays Bank PLC | 1.79 | Receive | 3 Month USD LIBOR | 05/19/15 | 6,926 | USD 2,131,000 | 433 | 6,493 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Goldman Sachs International | 1.76 | Receive | 3 Month USD LIBOR | 06/12/15 | 525 | USD 175,000 | 172 | 353 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Morgan Stanley Capital Services LLC | 1.78 | Receive | 6 Month GBP LIBOR | 04/03/17 | 88,960 | GBP 2,500,000 | 72,807 | 16,153 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Barclays Bank PLC | 1.73 | Receive | 6 Month GBP LIBOR | 04/18/17 | 223,622 | GBP 6,300,000 | 174,201 | 49,421 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
8 Invesco Global Targeted Returns Fund
Open Over-The-Counter Swaptions Written — (continued) | ||||||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Exercise Rate | Pay/Receive Exercise Rate | Floating Rate Index | Expiration Date | Premiums Received | Notional Value | Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Barclays Bank PLC | 1.54 | % | Receive | 3 Month USD LIBOR | 07/15/15 | $ | 909 | USD 413,000 | $ | 394 | $ | 515 | ||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Morgan Stanley Capital Services LLC | 1.84 | Receive | 6 Month GBP LIBOR | 04/24/17 | 143,479 | GBP 4,000,000 | 125,455 | 18,024 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Call | Morgan Stanley Capital Services LLC | 1.54 | Receive | 3 Month USD LIBOR | 07/22/15 | 499 | USD 235,000 | 262 | 237 | ||||||||||||||||||||||||||||
Subtotal — Over-The Counter Call Swaptions Written |
| 2,224,282 | 1,838,005 | 386,277 | ||||||||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Deutsche Bank Securities Inc. | 2.90 | Pay | 3 Month USD LIBOR | 02/21/17 | 47,912 | USD 1,421,000 | 38,861 | 9,051 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Deutsche Bank Securities Inc. | 2.91 | Pay | 3 Month USD LIBOR | 02/21/17 | 140,692 | USD 4,263,000 | 115,204 | 25,488 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.84 | Pay | 3 Month USD LIBOR | 03/13/17 | 15,000 | USD 350,000 | 10,574 | 4,426 | ||||||||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.65 | Pay | 3 Month USD LIBOR | 04/03/17 | 20,000 | USD 580,000 | 22,077 | (2,077 | ) | |||||||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.63 | Pay | 3 Month USD LIBOR | 04/18/17 | 28,999 | USD 825,000 | 32,614 | (3,615 | ) | |||||||||||||||||||||||||||
5 Year Interest Rate Swap | Put | Goldman Sachs International | 2.63 | Pay | 3 Month USD LIBOR | 04/24/17 | 15,500 | USD 470,000 | 18,700 | (3,200 | ) | |||||||||||||||||||||||||||
Subtotal — Over-The Counter Put Swaptions Written |
| 268,103 | 238,030 | 30,073 | ||||||||||||||||||||||||||||||||||
Total Swaptions Written — Interest Rate Risk |
| $ | 2,492,385 | $ | 2,076,035 | $ | 416,350 | |||||||||||||||||||||||||||||||
Total — Options Written | $ | 5,323,433 | $ | 4,730,778 | $ | 592,655 |
Abbreviations:
GBP | – British Pound Sterling | |
LIBOR | – London Interbank Offered Rate | |
USD | – U.S. Dollar |
Options Written Transactions | ||||||||||||||||||||||||
Call Options | ||||||||||||||||||||||||
Number of Contracts* | Notional Value | Notional Value | Notional Value | Notional Value | Premiums Received | |||||||||||||||||||
Beginning of period | 127 | CHF 4,212,000 | EUR3,431,000 | GBP 22,441,000 | USD 2,130,000 | $ | 1,638,111 | |||||||||||||||||
Written | 164 | CHF 78,000 | EUR19,882,810 | GBP 80,240,000 | USD 21,866,652 | 4,160,424 | ||||||||||||||||||
Closed | (291 | ) | CHF (4,290,000 | ) | EUR (11,672,000 | ) | GBP (41,881,000 | ) | USD (14,304,698 | ) | (2,879,917) | |||||||||||||
End of period | — | CHF — | EUR 11,641,810 | GBP 60,800,000 | USD 9,691,954 | $ | 2,918,618 |
Put Options | ||||||||||||||||||||
Number of Contracts* | Notional Value | Notional Value | Notional Value | Premiums Received | ||||||||||||||||
Beginning of period | 582 | EUR 10,154,250 | JPY — | USD 5,527,000 | $ | 706,900 | ||||||||||||||
Written | 1,101 | EUR 47,482,878 | JPY 1,666,250,000 | USD 31,039,000 | 3,633,813 | |||||||||||||||
Closed | (912 | ) | EUR (20,140,650 | ) | — | USD (13,611,000 | ) | (1,656,970 | ) | |||||||||||
Expired | (211 | ) | EUR (10,176,332 | ) | JPY (231,250,000 | ) | USD (7,076,000 | ) | (278,928 | ) | ||||||||||
End of period | 560 | EUR 27,320,146 | JPY 1,435,000,000 | USD 15,879,000 | $ | 2,404,815 |
* | Does not include swaptions written and foreign currency options written. |
Currency Abbreviations:
CHF | – Swiss Franc | |
EUR | – Euro |
GBP | – British Pound Sterling | |
JPY | – Japanese Yen |
USD | – United States Dollar |
Open Futures Contracts(f) | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
CAA Index | Long | 211 | June-2015 | $ | 1,810,159 | $ | 14,373 | |||||||||||||
E-Mini S&P 500 Index | Long | 23 | June-2015 | 2,390,735 | 16,464 | |||||||||||||||
FTSE 100 Index | Long | 59 | June-2015 | 6,275,658 | 117,735 | |||||||||||||||
SPI 200 Index | Long | 1 | June-2015 | 113,859 | (2,165 | ) |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
9 Invesco Global Targeted Returns Fund
Open Futures Contracts(f) — (continued) | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
CAA Index | Short | 35 | June-2015 | $ | (300,263 | ) | $ | (6,021 | ) | |||||||||||
Dow Jones EURO STOXX 50 | Short | 78 | June-2015 | (3,125,076 | ) | 25,958 | ||||||||||||||
E-Mini S&P 500 Index | Short | 15 | June-2015 | (1,559,175 | ) | (6,443 | ) | |||||||||||||
MSCI AC Asia Index | Short | 65 | June-2015 | (2,712,261 | ) | (220,913 | ) | |||||||||||||
Nikkei 225 | Short | 10 | June-2015 | (818,258 | ) | (31,851 | ) | |||||||||||||
Russell 2000 Index Mini | Short | 38 | June-2015 | (4,622,320 | ) | 16,121 | ||||||||||||||
SPI 200 Index | Short | 17 | June-2015 | (1,935,604 | ) | 21,191 | ||||||||||||||
STOXX Europe 600 Index | Short | 166 | June-2015 | (3,657,196 | ) | 26,009 | ||||||||||||||
Total — Futures Contracts — Equity Risk | $ | (29,542 | ) |
(f) | Futures contracts collateralized by $1,410,124 cash held with Bank of America Merrill Lynch, the futures commission merchant. |
Open Centrally Cleared Credit Default Swap Agreements(g)(h) | ||||||||||||||||||||||||||||||||
Counterparty/Clearinghouse | Reference Entity | Buy/Sell Protection | (Pay)/Receive Fixed Rate | Implied Credit Spread(g) | Expiration Date | Notional Value | Upfront Payments Paid (Received) | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Credit Suisse First | Markit iTraxx Europe Index | Sell | 1.00 | % | 0.91 | % | June-2025 | EUR 25,553,485 | $ | 352,307 | $ | (125,495 | ) | |||||||||||||||||||
Credit Suisse First | Markit iTraxx Europe Index | Buy | (1.00 | ) | 0.60 | June-2020 | EUR 25,553,485 | (615,994 | ) | 65,964 | ||||||||||||||||||||||
Credit Suisse First | Markit CDX NA HY Index | Buy | (5.00 | ) | 3.42 | June-2020 | USD 787,000 | (55,728 | ) | (2,505 | ) | |||||||||||||||||||||
Total — Credit Default Swap Agreements — Credit Risk |
| $ | (319,415 | ) | $ | (62,036 | ) |
Abbreviations:
CME | – Chicago Mercantile Exchange | |
EUR | – Euro |
ICE | – Intercontinental Exchange | |
USD | – U.S. Dollar |
(g) | Implied credit spreads represent the current level as of April 30, 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 spread markets generally. |
Open Centrally Cleared Interest Rate Swap Agreements(h) | ||||||||||||||||||||
Counterparty/Clearinghouse | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.69 | % | February-2025 | EUR | 121,000 | $ | (319 | ) | ||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.70 | February-2025 | EUR | 536,000 | (1,436 | ) | ||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.72 | February-2025 | EUR | 4,051,000 | (28,380 | ) | ||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.73 | February-2025 | EUR | 384,000 | (2,017 | ) | ||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.62 | March-2025 | EUR | 470,000 | 2,905 | |||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.47 | April-2025 | EUR | 439,000 | 10,265 | |||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.49 | April-2025 | EUR | 773,000 | 16,206 | |||||||||||||
Credit Suisse First Boston/CME | Receive | 6 Month EUR LIBOR | 0.55 | April-2025 | EUR | 557,000 | 7,830 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month AUD LIBOR | 2.72 | February-2025 | AUD | 6,058,400 | (101,821 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month AUD LIBOR | 2.75 | February-2025 | AUD | 683,600 | (10,624 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month AUD LIBOR | 2.77 | February-2025 | AUD | 783,000 | (11,158 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month AUD LIBOR | 2.87 | March-2025 | AUD | 296,000 | (2,262 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month AUD LIBOR | 2.67 | April-2025 | AUD | 1,897,000 | (40,163 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month AUD LIBOR | 2.80 | April-2025 | AUD | 607,000 | (7,957 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 3.06 | April-2021 | GBP | 400,000 | 38,178 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.87 | July-2021 | GBP | 450,000 | 33,017 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.93 | August-2021 | GBP | 2,425,000 | 188,210 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.67 | August-2021 | GBP | 550,000 | 30,741 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.65 | August-2021 | GBP | 2,280,000 | 122,407 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.60 | September-2021 | GBP | 1,445,500 | 71,914 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
10 Invesco Global Targeted Returns Fund
Open Centrally Cleared Interest Rate Swap Agreements(h) — (continued) | ||||||||||||||||||||
Counterparty/Clearinghouse | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.65 | % | September-2021 | GBP | 1,950,000 | $ | 104,412 | |||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.44 | October-2021 | GBP | 1,570,000 | 55,647 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.33 | October-2021 | GBP | 1,060,000 | 28,418 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 2.14 | November-2021 | GBP | 1,019,000 | 11,977 | |||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.97 | December-2021 | GBP | 3,000,000 | (10,384 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.78 | January-2022 | GBP | 2,550,000 | (46,039 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.68 | January-2022 | GBP | 2,500,000 | (59,754 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.67 | January-2022 | GBP | 1,320,000 | (34,214 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.71 | February-2022 | GBP | 900,000 | (20,975 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.99 | March-2022 | GBP | 1,500,000 | (6,194 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.70 | March-2022 | GBP | 1,700,000 | (41,885 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.82 | March-2022 | GBP | 8,000,000 | (102,553 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.78 | April-2022 | GBP | 1,250,000 | (24,520 | ) | ||||||||||||
Credit Suisse First Boston/CME | Pay | 6 Month GBP LIBOR | 1.84 | April-2022 | GBP | 2,000,000 | (32,074 | ) | ||||||||||||
Goldman Sachs International /CME | Pay | 6 Month GBP LIBOR | 1.66 | January-2022 | GBP | 500,000 | (13,286 | ) | ||||||||||||
Goldman Sachs International/CME | Pay | 6 Month GBP LIBOR | 3.02 | February-2021 | GBP | 4,000,000 | 364,319 | |||||||||||||
Subtotal – Centrally Cleared Interest Rate Swap Agreements |
| $ | 488,431 |
Abbreviations:
AUD | – Australian Dollar | |
CME | – Chicago Mercantile Exchange |
EUR | – Euro | |
GBP | – British Pound Sterling |
LIBOR | – London Interbank Offered Rate |
(h) | Centrally cleared swap agreements collateralized by $2,058,099 cash held with Credit Suisse First Boston. |
Open Over-The-Counter Inflation Swap Agreements(i) | ||||||||||||||||||||
Counterparty | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Morgan Stanley Capital Services LLC | Receive | United Kingdom RPI | 2.65 | % | March-2020 | GBP | 814,000 | $ | 15,230 | |||||||||||
Deutsche Bank Securities Inc. | Receive | United Kingdom RPI | 2.68 | April-2020 | GBP | 1,817,000 | 31,023 | |||||||||||||
Morgan Stanley Capital Services LLC | Receive | United Kingdom RPI | 2.69 | February-2020 | GBP | 11,857,170 | 93,997 | |||||||||||||
Deutsche Bank Securities Inc. | Receive | United Kingdom RPI | 2.74 | April-2020 | GBP | 1,954,000 | 23,123 | |||||||||||||
Deutsche Bank Securities Inc. | Receive | United Kingdom RPI | 2.78 | April-2020 | GBP | 1,105,000 | 9,732 | |||||||||||||
Deutsche Bank Securities Inc. | Receive | United Kingdom RPI | 2.72 | January-2020 | GBP | 1,155,175 | 2,392 | |||||||||||||
Morgan Stanley Capital Services LLC | Pay | United Kingdom RPI | 2.87 | March-2025 | GBP | 814,000 | (32,438 | ) | ||||||||||||
Deutsche Bank Securities Inc. | Pay | United Kingdom RPI | 2.90 | April-2025 | GBP | 1,817,000 | (63,049 | ) | ||||||||||||
Morgan Stanley Capital Services LLC | Pay | United Kingdom RPI | 2.92 | February-2025 | GBP | 11,857,170 | (254,710 | ) | ||||||||||||
Deutsche Bank Securities Inc. | Pay | United Kingdom RPI | 2.93 | January-2025 | GBP | 1,155,175 | (18,482 | ) | ||||||||||||
Deutsche Bank Securities Inc. | Pay | United Kingdom RPI | 2.97 | April-2025 | GBP | 1,954,000 | (46,133 | ) | ||||||||||||
Deutsche Bank Securities Inc. | Pay | United Kingdom RPI | 3.00 | April-2025 | GBP | 1,105,000 | (19,469 | ) | ||||||||||||
Subtotal — Over-The-Counter Inflation Swap Agreements |
| $ | (258,784 | ) | ||||||||||||||||
Total Interest Rate and Inflation Swap Agreements — Interest Rate Risk |
| $ | 229,647 |
Abbreviations:
GBP | – Great British Pound | |
RPI | – Retail Price Index |
(i) | Inflation swap agreements collateralized by $70,000 cash held with Morgan Stanley Capital Services, LLC. |
Open Over-The-Counter Variance Swap Agreements | ||||||||||||||||||
Counterparty | Reference Entity | Pay/Receive Variance | Volatility Strike Rate | Expiration Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||
Societe Generale | Hang Seng China Enterprise Index | Pay | 27.75 | % | June-2015 | HKD (118,000) | $ | (15,497 | ) | |||||||||
Societe Generale | Hang Seng China Enterprise Index | Pay | 28.40 | June-2015 | HKD(7,285) | 410 | ||||||||||||
Barclays Bank PLC | S&P 500 Index | Pay | 21.00 | December-2015 | USD (1,870) | 6,470 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
11 Invesco Global Targeted Returns Fund
Open Over-The-Counter Variance Swap Agreements — (continued) | ||||||||||||||||||
Counterparty | Reference Entity | Pay/Receive Variance | Volatility Strike Rate | Expiration Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||
Barclays Bank PLC | S&P 500 Index | Pay | 21.40 | % | December-2015 | USD | (1,375 | ) | $ | 5,215 | ||||||||
Goldman Sachs International | S&P 500 Index | Pay | 19.40 | December-2015 | USD | (2,343 | ) | 6,170 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 19.40 | December-2015 | USD | (2,343 | ) | 6,170 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 21.40 | December-2015 | USD | (1,375 | ) | 5,215 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 18.30 | December-2015 | USD | (2,585 | ) | (948 | ) | |||||||||
Goldman Sachs International | S&P 500 Index | Pay | 18.30 | December-2015 | USD | (2,585 | ) | (948 | ) | |||||||||
Goldman Sachs International | S&P 500 Index | Pay | 19.30 | December-2015 | USD | (3,630 | ) | 7,816 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 19.30 | December-2015 | USD | (3,630 | ) | 7,816 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 19.90 | December-2015 | USD | (2,610 | ) | 5,202 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 19.90 | December-2015 | USD | (2,610 | ) | 5,202 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 20.85 | December-2015 | USD | (2,750 | ) | 9,361 | ||||||||||
Goldman Sachs International | S&P 500 Index | Pay | 20.85 | December-2015 | USD | (2,750 | ) | 9,361 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 18.10 | December-2015 | USD | (2,500 | ) | 5,996 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 20.50 | December-2015 | USD | (1,870 | ) | 5,684 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 17.90 | December-2015 | USD | (3,000 | ) | 6,130 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 17.90 | December-2015 | USD | (3,000 | ) | 6,130 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 18.30 | December-2015 | USD | (2,100 | ) | 4,837 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 18.30 | December-2015 | USD | (2,100 | ) | 4,837 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 20.00 | December-2015 | USD | (2,750 | ) | 7,168 | ||||||||||
HSBC New York | S&P 500 Index | Pay | 20.00 | December-2015 | USD | (2,750 | ) | 7,168 | ||||||||||
Morgan Stanley Capital Services LLC | S&P 500 Index | Pay | 18.30 | December-2015 | USD | (3,360 | ) | 7,013 | ||||||||||
Morgan Stanley Capital Services LLC | S&P 500 Index | Pay | 18.30 | December-2015 | USD | (3,360 | ) | 7,013 | ||||||||||
Morgan Stanley Capital Services LLC | S&P 500 Index | Pay | 18.35 | December-2015 | USD | (5,810 | ) | 11,333 | ||||||||||
Morgan Stanley Capital Services LLC | S&P 500 Index | Pay | 18.35 | December-2015 | USD | (5,810 | ) | 11,333 | ||||||||||
Morgan Stanley Capital Services LLC | S&P 500 Index | Pay | 18.40 | December-2015 | USD | (2,895 | ) | 5,949 | ||||||||||
Morgan Stanley Capital Services LLC | S&P 500 Index | Pay | 18.40 | December-2015 | USD | (2,895 | ) | 5,949 | ||||||||||
Societe Generale | S&P 500 Index | Pay | 18.95 | December-2015 | USD | (7,229 | ) | 9,542 | ||||||||||
Societe Generale | S&P 500 Index | Pay | 18.95 | December-2015 | USD | (7,229 | ) | 9,542 | ||||||||||
Societe Generale | S&P 500 Index | Pay | 19.75 | December-2015 | USD | (5,427 | ) | 8,623 | ||||||||||
Societe Generale | S&P 500 Index | Pay | 19.75 | December-2015 | USD | (5,427 | ) | 8,623 | ||||||||||
UBS | S&P 500 Index | Pay | 18.10 | December-2015 | USD | (2,500 | ) | 5,996 | ||||||||||
Barclays Bank PLC | Hang Seng China Enterprise Index | Receive | 29.25 | December-2015 | HKD | 10,660 | (751 | ) | ||||||||||
Deutsche Bank Securities Inc. | Hang Seng China Enterprise Index | Receive | 30.90 | December-2015 | HKD | 158,920 | (43,045 | ) | ||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 26.99 | December-2015 | HKD | 28,146 | 7,424 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 27.20 | December-2015 | HKD | 15,252 | 3,065 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 28.00 | December-2015 | HKD | 33,372 | 3,128 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 28.35 | December-2015 | HKD | 21,320 | 2,010 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 30.05 | December-2015 | HKD | 20,034 | (297 | ) | ||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 31.35 | December-2015 | HKD | 15,918 | (5,165 | ) | ||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 30.70 | December-2016 | HKD | 29,869 | 2,378 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 30.97 | December-2016 | HKD | 65,100 | 2,904 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 31.70 | December-2016 | HKD | 21,615 | (1,049 | ) | ||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 32.40 | December-2016 | HKD | 28,607 | (3,885 | ) | ||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 29.65 | December-2019 | HKD | 64,185 | 14,043 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 25.60 | December-2015 | HKD | 41,278 | 27,506 | |||||||||||
Goldman Sachs International | Hang Seng China Enterprise Index | Receive | 25.65 | December-2015 | HKD | 14,873 | 4,746 | |||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 25.50 | December-2015 | HKD | 15,500 | 2,157 | |||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 25.60 | December-2015 | HKD | 38,759 | 2,982 | |||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 26.05 | December-2015 | HKD | 16,276 | 1,376 | |||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 27.00 | December-2015 | HKD | 52,749 | 12,043 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
12 Invesco Global Targeted Returns Fund
Open Over-The-Counter Variance Swap Agreements — (continued) | ||||||||||||||||||||
Counterparty | Reference Entity | Pay/Receive Variance | Volatility Strike Rate | Expiration Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 27.75 | % | December-2015 | HKD | 19,066 | $ | 2,420 | |||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 28.35 | December-2015 | HKD | 14,498 | 1,575 | |||||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 28.40 | December-2015 | HKD | 21,318 | 1,205 | |||||||||||||
HSBC New York | Hang Seng China Enterprise Index | Receive | 30.50 | December-2016 | HKD | 44,512 | 4,706 | |||||||||||||
Morgan Stanley Capital Services LLC | Hang Seng China Enterprise Index | Receive | 25.25 | December-2015 | HKD | 20,569 | 6,379 | |||||||||||||
Morgan Stanley Capital Services LLC | Hang Seng China Enterprise Index | Receive | 25.70 | December-2015 | HKD | 45,029 | 11,042 | |||||||||||||
Morgan Stanley Capital Services LLC | Hang Seng China Enterprise Index | Receive | 25.80 | December-2015 | HKD | 26,040 | 5,160 | |||||||||||||
Societe Generale | Hang Seng China Enterprise Index | Receive | 26.45 | December-2015 | HKD | 680 | 207 | |||||||||||||
Societe Generale | Hang Seng China Enterprise Index | Receive | 26.55 | December-2015 | HKD | 51,686 | 23,392 | |||||||||||||
Societe Generale | Hang Seng China Enterprise Index | Receive | 26.75 | December-2015 | HKD | 42,083 | 24,830 | |||||||||||||
Societe Generale | Hang Seng China Enterprise Index | Receive | 27.50 | December-2015 | HKD | 11,472 | 1,840 | |||||||||||||
Barclays Bank PLC | Hang Seng Index | Receive | 23.20 | December-2015 | HKD | 14,498 | (792 | ) | ||||||||||||
Barclays Bank PLC | Hang Seng Index | Receive | 23.65 | December-2015 | HKD | 10,660 | (1,820 | ) | ||||||||||||
Goldman Sachs International | Hang Seng Index | Receive | 21.99 | December-2015 | HKD | 28,146 | (1,181 | ) | ||||||||||||
Goldman Sachs International | Hang Seng Index | Receive | 22.95 | December-2015 | HKD | 21,320 | (2,036 | ) | ||||||||||||
Goldman Sachs International | Hang Seng Index | Receive | 23.50 | December-2015 | HKD | 20,034 | 1,289 | |||||||||||||
Goldman Sachs International | Hang Seng Index | Receive | 20.40 | December-2015 | HKD | 41,278 | 19,561 | |||||||||||||
Goldman Sachs International | Hang Seng Index | Receive | 21.80 | December-2015 | HKD | 14,873 | (1,705 | ) | ||||||||||||
HSBC New York | Hang Seng Index | Receive | 21.05 | December-2015 | HKD | 15,500 | (2,390 | ) | ||||||||||||
HSBC New York | Hang Seng Index | Receive | 21.40 | December-2015 | HKD | 16,276 | (2,911 | ) | ||||||||||||
HSBC New York | Hang Seng Index | Receive | 23.15 | December-2015 | HKD | 21,318 | (1,978 | ) | ||||||||||||
Morgan Stanley Capital Services LLC | Hang Seng Index | Receive | 21.35 | December-2015 | HKD | 20,569 | (1,922 | ) | ||||||||||||
Morgan Stanley Capital Services LLC | Hang Seng Index | Receive | 21.60 | December-2015 | HKD | 45,029 | (5,617 | ) | ||||||||||||
Morgan Stanley Capital Services LLC | Hang Seng Index | Receive | 22.40 | December-2015 | HKD | 26,040 | (6,359 | ) | ||||||||||||
Societe Generale | Hang Seng Index | Receive | 20.00 | December-2015 | HKD | 42,083 | 27,070 | |||||||||||||
Societe Generale | Hang Seng Index | Receive | 21.50 | December-2015 | HKD | 51,686 | 12,402 | |||||||||||||
UBS | Hang Seng Index | Receive | 21.00 | December-2015 | HKD | 31,007 | (5,442 | ) | ||||||||||||
Total — Variance Swap Agreements — Equity Risk |
| $ | 336,376 |
Currency Abbreviations:
HKD | – Hong Kong Dollar | |
USD | – United States Dollar |
Open Over-The-Counter Volatility Swap Agreements | ||||||||||||||||||
Counterparty | Reference Entity | Pay/Receive Volatility | Volatility Strike Rate | Expiration Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||
Citigroup Global Markets Inc. | USD/JPY | Pay | 9.60 | % | October-2016 | USD (6,457) | $ | (77 | ) | |||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 9.45 | September-2016 | USD (12,450) | (1,058 | ) | |||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 9.60 | August-2016 | USD (3,600) | 481 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 10.53 | November-2016 | USD (12,800) | 14,148 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 10.80 | February-2017 | USD (2,571) | 3,306 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 11.00 | March-2017 | USD (15,000) | 19,626 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 11.35 | January-2017 | USD (4,500) | 8,729 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 11.50 | February-2017 | USD (6,120) | 12,513 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 11.55 | January-2017 | USD (9,000) | 19,044 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 12.15 | December-2016 | USD (3,564) | 9,524 | ||||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 8.75 | July-2016 | USD (4,500) | (2,293 | ) | |||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 9.00 | June-2016 | USD (1,578) | (48 | ) | |||||||||||
Deutsche Bank Securities Inc. | USD/JPY | Pay | 9.05 | June-2016 | USD (2,625) | 235 | ||||||||||||
Goldman Sachs International | USD/JPY | Pay | 9.05 | June-2016 | USD (36,000) | 702 | ||||||||||||
Goldman Sachs International | USD/JPY | Pay | 10.11 | April-2017 | USD (14,850) | 5,973 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
13 Invesco Global Targeted Returns Fund
Open Over-The-Counter Volatility Swap Agreements — (continued) | ||||||||||||||||||||
Counterparty | Reference Entity | Pay/Receive Volatility | Volatility Strike Rate | Expiration Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Goldman Sachs International | USD/JPY | Pay | 10.15 | % | April-2017 | USD (8,460) | $ | 3,365 | ||||||||||||
Goldman Sachs International | USD/JPY | Pay | 11.32 | January-2017 | USD (13,500) | 25,473 | ||||||||||||||
Goldman Sachs International | USD/JPY | Pay | 11.94 | March-2017 | USD (6,300) | 14,718 | ||||||||||||||
Royal Bank of Scotland Securities Inc. | USD/JPY | Pay | 8.90 | June-2016 | USD (4,000) | (488 | ) | |||||||||||||
Royal Bank of Scotland Securities Inc. | USD/JPY | Pay | 9.20 | September-2016 | USD (2,585) | (811 | ) | |||||||||||||
Citigroup Global Markets Inc. | AUD/JPY | Receive | 10.68 | October-2016 | AUD | 2,984 | 2,956 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 10.70 | June-2016 | AUD | 4,107 | 1,230 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 10.70 | September-2016 | AUD | 13,339 | 10,575 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 11.40 | November-2016 | AUD | 14,700 | 6,476 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 12.10 | February-2017 | AUD | 13,393 | 976 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 12.95 | April-2017 | AUD | 19,718 | (10,003 | ) | ||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 10.30 | July-2016 | AUD | 4,763 | 4,170 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 10.70 | June-2016 | AUD | 4,000 | 1,198 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 10.90 | June-2016 | AUD | 2,794 | 213 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 11.90 | January-2017 | AUD | 3,735 | 996 | |||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 12.17 | December-2016 | AUD | 13,968 | (6,608 | ) | ||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 12.65 | January-2017 | AUD | 11,360 | (3,921 | ) | ||||||||||||
Deutsche Bank Securities Inc. | AUD/JPY | Receive | 13.45 | February-2017 | AUD | 7,827 | (8,056 | ) | ||||||||||||
Goldman Sachs International | AUD/JPY | Receive | 11.00 | June-2016 | AUD | 36,000 | 2,458 | |||||||||||||
Goldman Sachs International | AUD/JPY | Receive | 12.08 | January-2017 | AUD | 16,580 | 2,156 | |||||||||||||
Goldman Sachs International | AUD/JPY | Receive | 12.51 | April-2017 | AUD | 10,933 | (2,102 | ) | ||||||||||||
Goldman Sachs International | AUD/JPY | Receive | 12.64 | April-2017 | AUD | 19,468 | (5,291 | ) | ||||||||||||
Goldman Sachs International | AUD/JPY | Receive | 13.40 | March-2017 | AUD | 12,612 | (10,876 | ) | ||||||||||||
Royal Bank of Scotland Securities Inc. | AUD/JPY | Receive | 10.80 | September-2016 | AUD | 2,767 | 1,952 | |||||||||||||
Royal Bank of Scotland Securities Inc. | AUD/JPY | Receive | 10.90 | August-2016 | AUD | 3,881 | 2,174 | |||||||||||||
Total — Volatility Swap Agreements — Currency Risk | $ | 123,735 |
Currency Abbreviations:
AUD | – Australian Dollar | |
JPY | – Japanese Yen | |
USD | – United States Dollar |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement
| Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | AUD | 570,646 | USD | 444,207 | $ | 450,856 | $ | (6,649 | ) | ||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | EUR | 4,935,069 | USD | 5,308,187 | 5,542,986 | (234,799 | ) | ||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | GBP | 45,000 | USD | 67,665 | 69,070 | (1,405 | ) | ||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | HKD | 1,614,000 | USD | 208,243 | 208,244 | (1 | ) | ||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | JPY | 148,240,000 | USD | 1,246,862 | 1,241,759 | 5,103 | |||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | USD | 151,990 | AUD | 193,000 | 152,485 | 495 | |||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | USD | 716,902 | GBP | 475,740 | 730,210 | 13,308 | |||||||||||||||||||
05/22/15 | State Street Bank & Trust Co. | USD | 57,934 | HKD | 449,000 | 57,932 | (2 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | CAD | 6,551,691 | USD | 5,243,617 | 5,425,681 | (182,064 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | CNY | 45,485,052 | USD | 7,256,291 | 7,390,054 | (133,763 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | EUR | 4,713,574 | USD | 5,151,654 | 5,297,575 | (145,921 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | IDR | 6,763,184,316 | USD | 507,214 | 510,950 | (3,736 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | KRW | 48,743,492 | USD | 44,657 | 45,164 | (507 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | PHP | 2,979,727 | USD | 66,825 | 66,469 | 356 | |||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | SGD | 50,475 | USD | 37,188 | 38,099 | (911 | ) | ||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | THB | 1,445,870 | USD | 44,284 | 43,595 | 689 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
14 Invesco Global Targeted Returns Fund
Open Forward Foreign Currency Contracts — (continued) | ||||||||||||||||||||||||||
Settlement
| Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
07/08/15 | Deutsche Bank Securities Inc. | USD | 1,206,537 | INR | 76,294,877 | $ | 1,183,793 | $ | (22,744 | ) | ||||||||||||||||
07/08/15 | Goldman Sachs International | AUD | 77,873 | USD | 59,509 | 61,361 | (1,852 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | CAD | 1,276,637 | USD | 1,034,202 | 1,057,227 | (23,025 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | CHF | 385,699 | USD | 400,323 | 414,601 | (14,278 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | CNY | 2,330,862 | USD | 373,727 | 378,700 | (4,973 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | EUR | 1,279,655 | USD | 1,373,997 | 1,438,201 | (64,204 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | GBP | 1,711,095 | USD | 2,540,896 | 2,625,510 | (84,614 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | KRW | 341,859,458 | USD | 308,454 | 316,757 | (8,303 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | PHP | 22,255,276 | USD | 494,232 | 496,454 | (2,222 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | THB | 10,835,230 | USD | 330,393 | 326,699 | 3,694 | |||||||||||||||||||
07/08/15 | Goldman Sachs International | USD | 5,047,676 | INR | 322,684,244 | 5,006,777 | (40,899 | ) | ||||||||||||||||||
07/08/15 | Goldman Sachs International | USD | 1,373,313 | NOK | 10,931,310 | 1,448,910 | 75,597 | |||||||||||||||||||
07/08/15 | State Street Bank & Trust Co. | AUD | 520,496 | USD | 406,656 | 410,130 | (3,474 | ) | ||||||||||||||||||
07/08/15 | State Street Bank & Trust Co. | CHF | 1,261,467 | USD | 1,325,812 | 1,355,995 | (30,183 | ) | ||||||||||||||||||
07/08/15 | State Street Bank & Trust Co. | EUR | 231,883 | USD | 246,724 | 260,613 | (13,889 | ) | ||||||||||||||||||
07/08/15 | State Street Bank & Trust Co. | GBP | 4,429,210 | USD | 6,596,050 | 6,796,195 | (200,145 | ) | ||||||||||||||||||
07/08/15 | State Street Bank & Trust Co. | SGD | 353,327 | USD | 258,121 | 266,693 | (8,572 | ) | ||||||||||||||||||
07/08/15 | State Street Bank & Trust Co. | USD | 4,600,081 | NOK | 36,068,896 | 4,780,817 | 180,736 | |||||||||||||||||||
Total Forward Foreign Currency Contracts — Currency Risk | $ | (953,157 | ) |
Currency Abbreviations:
AUD | – Australian Dollar | |
CAD | – Canadian Dollar | |
CHF | – Swiss Franc | |
CNY | – Chinese Yuan | |
EUR | – Euro | |
GBP | – British Pound Sterling |
HKD | – Hong Kong Dollar | |
IDR | – Indonesian Rupiah | |
INR | – Indian Rupee | |
JPY | – Japanese Yen | |
KRW | – South Korean Won | |
NOK | – Norwegian Krone |
PHP | – Philippine Peso | |
SGD | – Singapore Dollar | |
THB | – Thai Baht | |
USD | – United States Dollar |
Portfolio Composition
By Asset Type
Risk Allocation(1) | Notional Value as % of Total Net Assets(2) | Value as % of Total Net Assets(3) | ||||||||||
Credit | 12.20 | % | 71.44 | % | (0.08 | )% | ||||||
Equity | 29.75 | 156.09 | 47.94 | |||||||||
Currency | 22.74 | 117.80 | 0.25 | |||||||||
Interest Rate | 9.43 | 248.30 | 6.47 | |||||||||
Inflation | 7.02 | 70.51 | (0.32 | ) | ||||||||
Volatility(4) | 18.86 | 0.79 | 0.57 | |||||||||
Money Market Funds Plus Other Assets less Liabilities | 45.17 |
(1) | The values in this column represent the Adviser’s proprietary measure of risk that each asset type contributes to the Fund. The risk associated with each asset type is calculated by aggregating the independent risk, as of the end of the fiscal period, of each of the Fund’s investment ideas that are included in that asset type. Independent risk is determined by measuring the historical price volatility of the assets or asset classes that comprise the investment idea using a statistical measurement called standard deviation. Standard deviation measures how much historical prices vary from their average over a certain period of time. The risk of each investment idea takes into account the Adviser’s evaluation of the risk dynamics and expected correlation of the components of the investment idea based on historical price movements. Historical price movements may not be representative of future price movements and, therefore, the actual risk of each asset type may be much greater or lower than the values shown. In addition, there are ways to measure risk other than standard deviation which, if used, may have resulted in a different risk allocation. |
(2) | The values in this column represent the gross notional amount of the derivative instruments and other investments held by the Fund, including purchased and written options, futures, forwards, swaps and investment companies. The notional amount of a derivative is the nominal or face amount used to calculate payments made on the instrument. The gross notional amount does not reflect any offsetting or netting of long and short positions. The notional amounts of derivatives and other investments denominated in foreign currencies have been adjusted to the U.S. dollar equivalent using spot exchange rates. See the Consolidated Schedule of Investments for a complete list of derivative instruments held by the Fund as of April 30, 2015. |
(3) | The percentages in this column were calculated by adding the market value of purchased options, the net unrealized appreciation/depreciation of written options, futures, swaps and forwards, and the net asset value of affiliated money market funds held by the Fund. See the Consolidated Schedule of Investments for the complete list of derivative instruments held by the Fund as of April 30, 2015. |
(4) | Includes the volatility and variance swaps held by the Fund, the gains and losses on which are driven by the volatility (i.e., the positive and negative changes in value over time) of a particular asset, such as stocks or currencies, and not by the asset itself. |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
15 Invesco Global Targeted Returns Fund
Consolidated Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $8,126,854) | $ | 7,483,916 | ||
Investments in affiliated funds, at value (Cost $63,535,357) | 64,434,268 | |||
Total investments, at value (Cost $71,662,211) | 71,918,184 | |||
Foreign currencies, at value (Cost $1,294,402) | 1,540,968 | |||
Receivable for: | ||||
Deposits with brokers | 11,607,174 | |||
Investments sold | 195,874 | |||
Variation margin — futures | 398,264 | |||
Fund shares sold | 1,918,218 | |||
Dividends and interest | 151,520 | |||
Investment for trustee deferred compensation and retirement plans | 3,709 | |||
Unrealized appreciation on swap agreements — OTC | 792,978 | |||
Other assets | 350,947 | |||
Total assets | 88,877,836 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 453,964 | |||
Investments purchased — affiliated funds | 41,725 | |||
Fund shares reacquired | 10,828 | |||
Options written, at value (premiums received $5,323,433) | 4,730,778 | |||
Swaps payable | 5 | |||
Variation margin — centrally cleared swap agreements | 484,095 | |||
Accrued fees to affiliates | 61,415 | |||
Accrued trustees’ and officers’ fees and benefits | 1,820 | |||
Accrued other operating expenses | 117,414 | |||
Trustee deferred compensation and retirement plans | 3,709 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 953,157 | |||
Unrealized depreciation on swap agreements — OTC | 591,651 | |||
Total liabilities | 7,450,561 | |||
Net assets applicable to shares outstanding | $ | 81,427,275 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 80,401,005 | ||
Undistributed net investment income | (3,583 | ) | ||
Undistributed net realized gain | 289,923 | |||
Net unrealized appreciation | 739,930 | |||
$ | 81,427,275 |
Net Assets: |
| |||
Class A | $ | 23,971,190 | ||
Class C | $ | 3,577,766 | ||
Class R | $ | 10,452 | ||
Class Y | $ | 43,034,330 | ||
Class R5 | $ | 1,366,282 | ||
Class R6 | $ | 9,467,255 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 2,288,455 | |||
Class C | 344,822 | |||
Class R | 1,001 | |||
Class Y | 4,095,900 | |||
Class R5 | 129,990 | |||
Class R6 | 901,314 | |||
Class A: | ||||
Net asset value per share | $ | 10.47 | ||
Maximum offering price per share | ||||
(Net asset value of $10.47 ¸ 94.50%) | $ | 11.08 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.38 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.44 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.51 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.51 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.50 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
16 Invesco Global Targeted Returns Fund
Consolidated Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends from affiliated funds | $ | 504,305 | ||
Other Income | 67,152 | |||
Total investment income | 571,457 | |||
Expenses: | ||||
Advisory fees | 408,627 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 10,560 | |||
Distribution fees: | ||||
Class A | 23,314 | |||
Class C | 7,387 | |||
Class R | 26 | |||
Transfer agent fees — A, C, R and Y | 13,321 | |||
Transfer agent fees — R5 | 21 | |||
Transfer agent fees — R6 | 25 | |||
Trustees’ and officers’ fees and benefits | 9,739 | |||
Registration and filing fees | 41,989 | |||
Professional services fees | 43,314 | |||
Other | 76,911 | |||
Total expenses | 660,028 | |||
Less: Fees waived and expenses reimbursed | (337,506 | ) | ||
Net expenses | 322,522 | |||
Net investment income | 248,935 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (560,490 | ) | ||
Sales of affiliated funds | 217,613 | |||
Distributions of affiliated funds | 523,144 | |||
Foreign currencies | (603,637 | ) | ||
Forward foreign currency contracts | 1,697,995 | |||
Futures contracts | (874,973 | ) | ||
Option contracts written | (696,032 | ) | ||
Swap agreements | 890,902 | |||
594,522 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (398,296 | ) | ||
Investment securities — affiliated funds | 277,205 | |||
Foreign currencies | 359,618 | |||
Forward foreign currency contracts | (1,424,926 | ) | ||
Futures contracts | 115,761 | |||
Option contracts written | 790,964 | |||
Swap agreements | (122,467 | ) | ||
(402,141 | ) | |||
Net realized and unrealized gain | 192,381 | |||
Net increase in net assets resulting from operations | $ | 441,316 |
See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.
17 Invesco Global Targeted Returns Fund
Consolidated Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 19, 2013 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 19, 2013 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | 248,935 | $ | (9,276 | ) | |||
Net realized gain | 594,522 | 50,163 | ||||||
Change in net unrealized appreciation (depreciation) | (402,141 | ) | 1,142,071 | |||||
Net increase in net assets resulting from operations | 441,316 | 1,182,958 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (77,701 | ) | — | |||||
Class C | (3,526 | ) | — | |||||
Class R | (54 | ) | — | |||||
Class Y | (99,329 | ) | — | |||||
Class R5 | (15,936 | ) | — | |||||
Class R6 | (54,412 | ) | — | |||||
Total distributions from net investment income | (250,958 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (141,226 | ) | — | |||||
Class C | (7,470 | ) | — | |||||
Class R | (104 | ) | — | |||||
Class Y | (168,145 | ) | — | |||||
Class R5 | (26,976 | ) | — | |||||
Class R6 | (92,109 | ) | — | |||||
Total distributions from net realized gains | (436,030 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 10,590,494 | 13,012,317 | ||||||
Class C | 3,171,096 | 443,040 | ||||||
Class R | — | 10,014 | ||||||
Class Y | 26,802,692 | 15,803,099 | ||||||
Class R5 | (1,357,966 | ) | 2,627,776 | |||||
Class R6 | 133,847 | 9,253,580 | ||||||
Net increase in net assets resulting from share transactions | 39,340,163 | 41,149,826 | ||||||
Net increase in net assets | 39,094,491 | 42,332,784 | ||||||
Net assets: | ||||||||
Beginning of period | 42,332,784 | — | ||||||
End of period (includes undistributed net investment income (loss) of $(3,583) and $(1,560), respectively) | $ | 81,427,275 | $ | 42,332,784 |
Notes to Consolidated Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Targeted Returns Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 will seek to gain exposure to the commodity markets primarily through investments in the Invesco Cayman Commodity Fund VII Ltd. (the “Subsidiary”), a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands. The Subsidiary was organized by the Fund to invest in commodity-linked derivatives. The Fund may invest up to 25% of its total assets in the Subsidiary.
18 Invesco Global Targeted Returns Fund
The Fund’s investment objective is to seek a positive total return over the long term in all market environments.
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. |
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.
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 Consolidated Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Consolidated Statement of Operations and the Consolidated Statement of
19 Invesco Global Targeted Returns Fund
Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Consolidated Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Consolidated Statement of Operations and Consolidated Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Consolidated Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Consolidated Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues 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 consolidated financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated 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 financial statements are prepared on a consolidated basis in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. The accompanying financial statements reflect the financial position of the Fund and its Subsidiary and the results of operations on a consolidated basis. All inter-company accounts and transactions have been eliminated in consolidation. |
In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the consolidated financial statements are released to print.
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust, and under the Subsidiary’s organizational documents, the directors and officers of the Subsidiary, are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund and/or the Subsidiary, respectively. 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 Consolidated Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Consolidated Statement of Operations.
20 Invesco Global Targeted Returns 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 Consolidated Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Consolidated Statement of Assets and Liabilities.
K. | 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 Consolidated 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 Consolidated 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 Consolidated Statement of Assets and Liabilities. |
L. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, inflation, total return, volatility, variance, index, currency and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, equity, 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, volatility, variance, 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.
Inflation swap agreements are contracts in which one party agrees to pay the cumulative percentage increase in a price index, such as the Consumer Price Index, over the term of the swap, and the other party pays a compounded fixed rate.
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 Consolidated 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 Consolidated 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
21 Invesco Global Targeted Returns Fund
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.
A volatility swap involves an exchange between the Fund and a Counterparty of periodic payments based on the measured volatility of an underlying security, currency, commodity, interest rate, index or other reference asset over a specified time frame. Depending on the structure of the swap, either the Fund’s or the Counterparty’s payment obligation will typically be based on the realized volatility of the reference asset as measured by changes in its price or level over a specified time period while the other party’s payment obligation will be based on a specified rate representing expected volatility for the reference asset at the time the swap is executed, or the measured volatility of a different reference asset over a specified time period. The Fund will typically make or lose money on a volatility swap depending on the magnitude of the reference asset’s volatility, or size of the movements in its price, over a specified time period, rather than general increases or decreases in the price of the reference asset. Volatility swaps are often used to speculate on future volatility levels, to trade the spread between realized and expected volatility, or to decrease the volatility exposure of other investments held by the Fund. Variance swaps are similar to volatility swaps except payments are based on the difference between the implied and measured volatility mathematically squared.
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 Consolidated 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 Consolidated Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Consolidated Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Consolidated 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 Consolidated 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. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
Notional amounts of each individual credit default swap agreement outstanding as of April 30, 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.
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 Consolidated Statement of Assets and Liabilities. The amount of the liability is subsequently “marked-to-market” to reflect the current market value of the option written. If a written covered call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written covered call option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized and unrealized gains and losses on these contracts are included in the Consolidated 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.
22 Invesco Global Targeted Returns Fund
When the Fund buys a call option, an amount equal to the premium paid by the Fund is recorded as an investment on the Consolidated Statement of Assets and Liabilities. The amount of the investment is subsequently “marked-to-market” to reflect the current value of the option purchased. Realized and unrealized gains and losses on these contracts are included in the Consolidated 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. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund’s resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the underlying portfolio securities. The Fund may write put options to earn additional income in the form of option premiums if it expects the price of the underlying instrument to remain stable or rise during the option period so that the option will not be exercised. The risk in this strategy is that the price of the underlying securities may decline by an amount greater than the premium received. Put options written are reported as a liability in the Consolidated Statement of Assets and Liabilities. Realized and unrealized gains and losses on these contracts are included in the Consolidated 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. | Other Risks — The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly. |
P. | 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. |
Q. | 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 less the amount paid by the Subsidiary to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $10 billion | 1 | .50% | ||||
Over $10 billion | 1 | .25% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.50%.
The Subsidiary has entered into a separate contract with the Adviser whereby the Adviser provides investment advisory and other services to the Subsidiary. In consideration of these services, the Subsidiary pays an advisory fee to the Adviser based on the annual rate of the Subsidiary’s average daily net assets as set forth in the table above.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.71%, 2.46%, 1.96%, 1.46%, 1.46% and 1.46%, 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 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 a Fund directly, but are fees and expenses, including management fees of the investment companies in which a Fund invests. As a result, the total annual fund operating expenses after expense reimbursement may exceed the expense limits above. Unless Invesco continues the fee waiver agreement, it will terminate on February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, 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 April 30, 2015, the Adviser waived advisory fees of $324,140 and reimbursed class level expenses of $5,734, $454, $3, $7,129, $21 and $25 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 April 30, 2015, expenses incurred under the agreement are shown in the Consolidated 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
23 Invesco Global Targeted Returns Fund
course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2015, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2015, expenses incurred under the Plans are shown in the Consolidated Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2015, IDI advised the Fund that IDI retained $2,700 in front-end sales commissions from the sale of Class A shares and $10 from Class C shares, for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | $ | 64,434,268 | $ | — | $ | — | $ | 64,434,268 | ||||||||
Foreign Sovereign Debt Securities | — | 3,967,910 | — | 3,967,910 | ||||||||||||
Options Purchased | 2,114,668 | 1,401,338 | — | 3,516,006 | ||||||||||||
66,548,936 | 5,369,248 | — | 71,918,184 | |||||||||||||
Forward Foreign Currency Contracts* | — | (953,157 | ) | — | (953,157 | ) | ||||||||||
Futures Contracts* | (29,542 | ) | — | — | (29,542 | ) | ||||||||||
Options Written* | (1,659,175 | ) | (3,071,603 | ) | — | (4,730,778 | ) | |||||||||
Swap Agreements* | — | 627,722 | — | 627,722 | ||||||||||||
Total Investments | $ | 64,860,219 | $ | 1,972,210 | $ | — | $ | 66,832,429 |
* | Forward Foreign Currency Contracts, Futures Contracts and Swap Agreements are valued at unrealized appreciation (depreciation). Options Written are shown at value. |
24 Invesco Global Targeted Returns 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Credit risk: | ||||||||
Swap agreements(a) | $ | 65,964 | $ | (128,000 | ) | |||
Currency risk: | ||||||||
Forward foreign currency contracts(b) | 279,978 | (1,233,135 | ) | |||||
Options purchased(c) | 1,001,529 | — | ||||||
Options written(d) | — | (899,862 | ) | |||||
Swap agreements(e) | 175,367 | (51,632 | ) | |||||
Interest rate risk: | ||||||||
Options purchased(c) | 399,809 | — | ||||||
Options written(d) | — | (2,076,035 | ) | |||||
Swap agreements(a)(e) | 1,261,943 | (1,032,296 | ) | |||||
Equity risk: | ||||||||
Futures contracts(f) | 237,851 | (267,393 | ) | |||||
Options purchased(c) | 2,114,668 | — | ||||||
Options written(d) | — | (1,754,881 | ) | |||||
Swap agreements(e) | 442,114 | (105,738 | ) | |||||
Total | $ | 5,979,223 | $ | (7,548,972 | ) |
(a) | Includes cumulative appreciation (depreciation) of centrally cleared swap agreements. Only current day’s variation margin receivable (payable) is reported within the Consolidated Statement of Assets and Liabilities. |
(b) | Values are disclosed on the Consolidated Statement of Assets and Liabilities under the caption Unrealized depreciation on forward foreign currency contracts outstanding. |
(c) | Options purchased at value as reported in the Consolidated Schedule of Investments. |
(d) | Values are disclosed on the Consolidated Statement of Assets and Liabilities under the caption Options written, at value. |
(e) | Values are disclosed on the Consolidated Statement of Assets and Liabilities under the captions Unrealized appreciation on swap agreements — OTC and Unrealized depreciation on swap agreements — OTC. |
(f) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Consolidated Statement of Assets and Liabilities. |
Effect of Derivative Investments for the six months ended April 30, 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 Consolidated Statement of Operations | ||||||||||||||||||||
Forward Foreign Currency Contracts | Futures Contracts | Option | Option Contracts | Swap Agreements | ||||||||||||||||
Realized Gain (Loss): | ||||||||||||||||||||
Credit risk | $ | — | $ | — | $ | — | $ | (1,486,706 | ) | $ | 165,763 | |||||||||
Currency risk | 1,697,995 | — | — | (184,104 | ) | — | ||||||||||||||
Interest rate risk | — | (90,509 | ) | 878,996 | — | 787,149 | ||||||||||||||
Equity risk | — | (784,464 | ) | (1,356,325 | ) | 974,778 | (62,010 | ) | ||||||||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||||||
Credit risk | — | — | — | 871,631 | (51,625 | ) | ||||||||||||||
Currency risk | (1,424,926 | ) | — | 86,111 | 157,893 | 185,300 | ||||||||||||||
Interest rate risk | — | (29,383 | ) | (182,078 | ) | — | (880,680 | ) | ||||||||||||
Equity risk | — | 145,144 | (171,492 | ) | (238,560 | ) | 624,538 | |||||||||||||
Total Contracts | $ | 273,069 | $ | (759,212 | ) | $ | (744,788 | ) | $ | 94,932 | $ | 768,435 |
(a) | Option contracts purchased are included in the net realized gain (loss) from investment securities and the change in net unrealized appreciation (depreciation) of investment securities. |
25 Invesco Global Targeted Returns Fund
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.
Futures | Forward Foreign Currency Contracts | Swap Agreements | Index Options Written | Index Options Purchased | Foreign Currency Options | Swaptions | ||||||||||||||||||||||
Average notional value | $ | 30,806,737 | $ | 73,693,603 | $ | 179,402,968 | $ | 27,683,788 | $ | 42,573,554 | $ | 26,753,344 | $ | 83,831,863 | ||||||||||||||
Average contracts | — | — | — | 641 | 1,287 | — | — |
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 Consolidated 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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in | Net amounts of assets presented in Consolidated Statement of Assets & Liabilities | Collateral Received | Net Amount(a) | ||||||||||||||||||||
Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Fund | ||||||||||||||||||||||||
Barclays Bank PLC(b) | $ | 11,685 | $ | (3,363 | ) | $ | 8,322 | $ | — | $ | — | $ | 8,322 | |||||||||||
Citigroup Global Markets Inc.(b) | 2,956 | (77 | ) | 2,879 | — | — | 2,879 | |||||||||||||||||
Credit Suisse First Boston(c) | 788,065 | (712,707 | ) | 75,358 | — | — | 75,358 | |||||||||||||||||
Deutsche Bank Securities Inc.(b) | 113,440 | (75,032 | ) | 38,408 | — | — | 38,408 | |||||||||||||||||
Deutsche Bank Securities Inc.(d) | 1,045 | (1,045 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International(b) | 205,212 | (35,483 | ) | 169,729 | — | — | 169,729 | |||||||||||||||||
Goldman Sachs International(c) | 364,319 | (13,286 | ) | 351,033 | — | — | 351,033 | |||||||||||||||||
Goldman Sachs International(d) | 79,291 | (79,291 | ) | — | — | — | — | |||||||||||||||||
HSBC New York(b) | 76,414 | (7,279 | ) | 69,135 | — | — | 69,135 | |||||||||||||||||
Morgan Stanley Capital Services LLC(b) | 71,171 | (13,898 | ) | 57,273 | — | — | 57,273 | |||||||||||||||||
Royal Bank of Scotland Securities Inc.(b) | 4,126 | (1,299 | ) | 2,827 | — | — | 2,827 | |||||||||||||||||
Societe Generale(b) | 126,481 | (15,497 | ) | 110,984 | — | — | 110,984 | |||||||||||||||||
State Street Bank & Trust Co.(d) | 199,642 | (199,642 | ) | — | — | — | — | |||||||||||||||||
UBS(b) | 5,996 | (5,442 | ) | 554 | — | — | 554 | |||||||||||||||||
Subtotal — Fund | 2,049,843 | (1,163,341 | ) | 886,502 | — | — | 886,502 | |||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Deutsche Bank Securities Inc.(b) | 66,270 | (66,270 | ) | — | — | — | — | |||||||||||||||||
Morgan Stanley Capital Services LLC(b) | 109,227 | (109,227 | ) | — | — | — | — | |||||||||||||||||
Subtotal — Subsidiary | 175,497 | (175,497 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 2,225,340 | $ | (1,338,838 | ) | $ | 886,502 | $ | — | $ | — | $ | 886,502 | |||||||||||
26 Invesco Global Targeted Returns Fund
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized Liabilities | Gross amounts offset in Consolidated Statement of Assets & Liabilities | Net amounts of liabilities Consolidated Statement of | Collateral Pledged | Net Amount(a) | ||||||||||||||||||||
Counterparty | Financial Instruments | Cash | ||||||||||||||||||||||
Fund | ||||||||||||||||||||||||
Barclays Bank PLC(b) | $ | 3,363 | $ | (3,363 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Citigroup Global Markets Inc.(b) | 77 | (77 | ) | — | — | — | — | |||||||||||||||||
Credit Suisse First Boston(c) | 712,707 | (712,707 | ) | — | — | — | — | |||||||||||||||||
Deutsche Bank Securities Inc.(b) | 75,032 | (75,032 | ) | — | — | — | — | |||||||||||||||||
Deutsche Bank Securities Inc.(d) | 489,646 | (1,045 | ) | 488,601 | — | — | 488,601 | |||||||||||||||||
Goldman Sachs International(b) | 35,483 | (35,483 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International(c) | 13,286 | (13,286 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International(d) | 244,370 | (79,291 | ) | 165,079 | — | — | 165,079 | |||||||||||||||||
HSBC New York(b) | 7,279 | (7,279 | ) | — | — | — | — | |||||||||||||||||
Morgan Stanley Capital Services LLC(b) | 13,898 | (13,898 | ) | — | — | — | — | |||||||||||||||||
Royal Bank of Scotland Securities Inc.(b) | 1,299 | (1,299 | ) | — | — | — | — | |||||||||||||||||
Societe Generale(b) | 15,497 | (15,497 | ) | — | — | — | — | |||||||||||||||||
State Street Bank & Trust Co.(d) | 499,119 | (199,642 | ) | 299,477 | — | — | 299,477 | |||||||||||||||||
UBS(b) | 5,442 | (5,442 | ) | — | — | — | — | |||||||||||||||||
Subtotal — Fund | 2,116,498 | (1,163,341 | ) | 953,157 | — | — | 953,157 | |||||||||||||||||
Subsidiary | ||||||||||||||||||||||||
Deutsche Bank Securities Inc.(b) | 147,133 | (66,270 | ) | 80,863 | — | — | 80,863 | |||||||||||||||||
Morgan Stanley Capital Services LLC(b) | 287,148 | (109,227 | ) | 177,921 | — | (70,000 | ) | 107,921 | ||||||||||||||||
Subtotal — Subsidiary | 434,281 | (175,497 | ) | 258,784 | — | (70,000 | ) | 188,784 | ||||||||||||||||
Total | $ | 2,550,779 | $ | (1,338,838 | ) | $ | 1,211,941 | $ | — | $ | (70,000 | ) | $ | 1,141,941 |
(a) | The Fund and the Subsidiary are recognized as separate legal entities and as such are subject to separate netting arrangements with the Counterparty. |
(b) | Swap agreements — OTC Counterparty. |
(c) | Swap agreements — centrally cleared Counterparty. Includes cumulative appreciation (depreciation). |
(d) | Forward foreign currency contracts Counterparty. |
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. Obligations under the deferred compensation plan 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 Consolidated Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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 October 31, 2014.
27 Invesco Global Targeted Returns Fund
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $34,083,567 and $19,448,298, 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 | $ | 1,449,704 | ||
Aggregate unrealized (depreciation) of investment securities | (1,199,751 | ) | ||
Net unrealized appreciation of investment securities | $ | 249,953 |
Cost of investments for tax purposes is $71,668,231.
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 19, 2013 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 1,201,110 | $ | 12,744,126 | 1,491,403 | $ | 15,070,925 | ||||||||||
Class C | 321,132 | 3,372,365 | 42,851 | 443,040 | ||||||||||||
Class R | — | — | 1,001 | 10,014 | ||||||||||||
Class Y | 2,589,259 | 27,401,219 | 1,586,102 | 16,042,737 | ||||||||||||
Class R5 | 3,477 | 38,593 | 261,687 | 2,641,159 | ||||||||||||
Class R6 | — | 7,925 | 889,089 | 9,253,580 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 3,477 | 35,775 | — | — | ||||||||||||
Class C | 965 | 9,861 | — | — | ||||||||||||
Class Y | 7,638 | 78,750 | — | — | ||||||||||||
Class R5 | 2,164 | 22,311 | — | — | ||||||||||||
Class R6 | 12,225 | 125,922 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (209,791 | ) | (2,189,407 | ) | (197,744 | ) | (2,058,608 | ) | ||||||||
Class C | (20,126 | ) | (211,130 | ) | — | — | ||||||||||
Class Y | (64,030 | ) | (677,277 | ) | (23,069 | ) | (239,638 | ) | ||||||||
Class R5 | (136,037 | ) | (1,418,870 | ) | (1,301 | ) | (13,383 | ) | ||||||||
Net increase in share activity | 3,711,463 | $ | 39,340,163 | 4,050,019 | $ | 41,149,826 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 40% 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. Also, 36% of the outstanding shares of the Fund are owned by the Adviser. |
28 Invesco Global Targeted Returns Fund
NOTE 10—Consolidated 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 (both | Total from investment operations | Dividends from net investment | 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(c) | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.44 | $ | 0.04 | $ | 0.15 | $ | 0.19 | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.16 | ) | $ | 10.47 | 1.85 | % | $ | 23,971 | 1.32 | %(f) | 2.57 | %(f) | 0.78 | %(f) | 60 | % | |||||||||||||||||||||||||
Period ended 10/31/14(e) | 10.00 | (0.02 | ) | 0.46 | 0.44 | — | — | — | 10.44 | 4.40 | 13,504 | 1.29 | (g) | 3.16 | (g) | (0.18 | )(g) | 20 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.37 | 0.00 | 0.16 | 0.16 | (0.05 | ) | (0.10 | ) | (0.15 | ) | 10.38 | 1.59 | 3,578 | 2.07 | (f) | 3.32 | (f) | 0.03 | (f) | 60 | ||||||||||||||||||||||||||||||||||||
Period ended 10/31/14(e) | 10.00 | (0.08 | ) | 0.45 | 0.37 | — | — | — | 10.37 | 3.70 | 444 | 2.04 | (g) | 3.91 | (g) | (0.93 | )(g) | 20 | ||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.42 | 0.03 | 0.14 | 0.17 | (0.05 | ) | (0.10 | ) | (0.15 | ) | 10.44 | 1.73 | 10 | 1.57 | (f) | 2.82 | (f) | 0.53 | (f) | 60 | ||||||||||||||||||||||||||||||||||||
Period ended 10/31/14(e) | 10.00 | (0.04 | ) | 0.46 | 0.42 | — | — | — | 10.42 | 4.20 | 10 | 1.54 | (g) | 3.41 | (g) | (0.43 | )(g) | 20 | ||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.46 | 0.05 | 0.16 | 0.21 | (0.06 | ) | (0.10 | ) | (0.16 | ) | 10.51 | 2.08 | 43,034 | 1.07 | (f) | 2.32 | (f) | 1.03 | (f) | 60 | ||||||||||||||||||||||||||||||||||||
Period ended 10/31/14(e) | 10.00 | 0.01 | 0.45 | 0.46 | — | — | — | 10.46 | 4.60 | 16,352 | 1.04 | (g) | 2.91 | (g) | 0.07 | (g) | 20 | |||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.46 | 0.05 | 0.16 | 0.21 | (0.06 | ) | (0.10 | ) | (0.16 | ) | 10.51 | 2.08 | 1,366 | 1.07 | (f) | 2.26 | (f) | 1.03 | (f) | 60 | ||||||||||||||||||||||||||||||||||||
Period ended 10/31/14(e) | 10.00 | 0.01 | 0.45 | 0.46 | — | — | — | 10.46 | 4.60 | 2,724 | 1.04 | (g) | 2.87 | (g) | 0.07 | (g) | 20 | |||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.46 | 0.05 | 0.15 | 0.20 | (0.06 | ) | (0.10 | ) | (0.16 | ) | 10.50 | 1.99 | 9,467 | 1.07 | (f) | 2.26 | (f) | 1.03 | (f) | 60 | ||||||||||||||||||||||||||||||||||||
Period ended 10/31/14(e) | 10.00 | 0.01 | 0.45 | 0.46 | — | — | — | 10.46 | 4.60 | 9,298 | 1.04 | (g) | 2.87 | (g) | 0.07 | (g) | 20 |
(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) | 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 0.50% and 0.50% for the six months ended April 30, 2015 and the period ended October 31, 2014. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Commencement date of December 19, 2013. |
(f) | Ratios are annualized and based on average daily net assets (000’s omitted) of $18,805, $1,490, $11, $23,376, $1,753 and $9,500 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(g) | Annualized. |
29 Invesco Global Targeted Returns Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 2015.
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 your Fund invests. The amount of fees and expenses incurred indirectly by your Fund will vary because the underlying funds have varied expenses and fee levels and the Fund may own different proportions of the underlying funds at different times. 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 underlying funds your Fund invests in. The effect of the estimated underlying fund expenses that you bear indirectly are included in your Fund’s total return.
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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by the Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Class | Beginning Account Value (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,019.50 | $ | 6.61 | $ | 1,018.25 | $ | 6.61 | 1.32 | % | ||||||||||||
C | 1,000.00 | 1,015.90 | 10.35 | 1,014.53 | 10.34 | 2.07 | ||||||||||||||||||
R | 1,000.00 | 1,017.30 | 7.85 | 1,017.01 | 7.85 | 1.57 | ||||||||||||||||||
Y | 1,000.00 | 1,020.80 | 5.36 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||
R5 | 1,000.00 | 1,020.80 | 5.36 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||
R6 | 1,000.00 | 1,019.90 | 5.36 | 1,019.49 | 5.36 | 1.07 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Global Targeted Returns 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: 811-05426 and 033-19338 | GTR-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Greater China Fund | ||||
Effective June 15, 2015, after the close of the reporting period, Invesco China Fund was renamed Invesco Greater China Fund.
Nasdaq: | ||||
A: AACFX ¡ B: ABCFX ¡ C: CACFX ¡ Y: AMCYX ¡ R5: IACFX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
6 Financial Statements | ||||
8 Notes to Financial Statements | ||||
14 Financial Highlights | ||||
15 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
|
Fund vs. Indexes Cumulative total returns, 10/31/14 to 4/30/15, 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 | 22.81 | % | ||
Class B Shares | 22.34 | |||
Class C Shares | 22.32 | |||
Class Y Shares | 22.92 | |||
Class R5 Shares | 23.04 | |||
MSCI EAFE Index▼ (Broad Market Index) | 6.81 | |||
MSCI China 10/40 Index▼ (Style-Specific Index) | 29.88 | |||
Lipper China Region Funds Indexn (Peer Group Index) | 16.98 | |||
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc.
The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The MSCI China 10/40 Index is a free float-adjusted market capitalization index that measures equity market performance in China, taking into consideration concentration constraints applicable to funds registered for sale in Europe pursuant to the UCITS III Directive. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The Lipper China Region Funds Index is an unmanaged index considered representative of China region funds tracked by Lipper. The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
|
Average Annual Total Returns |
As of 4/30/15, including maximum applicable sales charges
Class A Shares | |||||
Inception (3/31/06) | 10.57 | % | |||
5 Years | 4.47 | ||||
1 Year | 24.05 | ||||
Class B Shares | |||||
Inception (3/31/06) | 10.55 | % | |||
5 Years | 4.54 | ||||
1 Year | 25.29 | ||||
Class C Shares | |||||
Inception (3/31/06) | 10.43 | % | |||
5 Years | 4.87 | ||||
1 Year | 29.28 | ||||
Class Y Shares | |||||
Inception | 11.46 | % | |||
5 Years | 5.93 | ||||
1 Year | 31.55 | ||||
Class R5 Shares | |||||
Inception (3/31/06) | 11.79 | % | |||
5 Years | 6.15 | ||||
1 Year | 31.87 |
Average Annual Total Returns |
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
Class A Shares | |||||
Inception (3/31/06) | 8.80 | % | |||
5 Years | 0.92 | ||||
1 Year | –0.96 | ||||
Class B Shares | |||||
Inception (3/31/06) | 8.77 | % | |||
5 Years | 0.92 | ||||
1 Year | –1.00 | ||||
Class C Shares | |||||
Inception (3/31/06) | 8.66 | % | |||
5 Years | 1.30 | ||||
1 Year | 3.00 | ||||
Class Y Shares | |||||
Inception | 9.67 | % | |||
5 Years | 2.33 | ||||
1 Year | 5.05 | ||||
Class R5 Shares | |||||
Inception (3/31/06) | 9.99 | % | |||
5 Years | 2.53 | ||||
1 Year | 5.26 |
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.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y and Class R5 shares was 1.85%, 2.60%, 2.60%, 1.60% and 1.39%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y and 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.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
2 Invesco Greater China 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 Greater China Fund |
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–97.57%(b) |
| |||||||
Auto Parts & Equipment–3.26% | ||||||||
Minth Group Ltd. | 1,272,000 | $ | 3,193,745 | |||||
Construction & Engineering–1.77% | ||||||||
China Communications Construction Co. Ltd.–Class H | 950,000 | 1,738,081 | ||||||
Diversified Banks–20.09% | ||||||||
Agricultural Bank of China Ltd.–Class H | 992,000 | 560,604 | ||||||
Bank of China Ltd.–Class H | 6,675,000 | 4,590,381 | ||||||
China Construction Bank Corp.–Class H | 7,896,290 | 7,692,019 | ||||||
China Merchants Bank Co., Ltd.–Class H | 432,000 | 1,307,064 | ||||||
China Minsheng Banking Corp., Ltd.–Class H | 671,500 | 985,958 | ||||||
Industrial & Commercial Bank of China Ltd.–Class H | 5,231,000 | 4,548,989 | ||||||
19,685,015 | ||||||||
Education Services–2.66% | ||||||||
New Oriental Education & Technology Group, Inc.–ADR(c) | 42,775 | 1,094,612 | ||||||
TAL Education Group–ADR(c) | 41,040 | 1,508,220 | ||||||
2,602,832 | ||||||||
Electronic Components–1.55% | ||||||||
Chin-Poon Industrial Co., Ltd. (Taiwan) | 269,000 | 516,445 | ||||||
Largan Precision Co. Ltd. (Taiwan) | 10,000 | 1,000,566 | ||||||
1,517,011 | ||||||||
Electronic Manufacturing Services–5.05% | ||||||||
FIH Mobile Ltd.(c) | 5,924,000 | 3,164,359 | ||||||
Hon Hai Precision Industry Co., Ltd. (Taiwan) | 596,000 | 1,786,902 | ||||||
4,951,261 | ||||||||
Footwear–4.01% | ||||||||
Stella International Holdings Ltd. | 335,500 | 909,038 | ||||||
Yue Yuen Industrial (Holdings) Ltd. (Hong Kong) | 792,500 | 3,016,418 | ||||||
3,925,456 | ||||||||
Hypermarkets & Super Centers–3.01% | ||||||||
Sun Art Retail Group Ltd. | 2,862,500 | 2,950,955 | ||||||
Independent Power Producers & Energy Traders–2.13% | ||||||||
China Power International Development Ltd. | 3,236,000 | 2,088,044 | ||||||
Industrial Conglomerates–2.07% | ||||||||
Beijing Enterprises Holdings Ltd. | 222,000 | 2,030,588 | ||||||
Integrated Oil & Gas–1.97% | ||||||||
PetroChina Co. Ltd.–Class H | 1,494,000 | 1,925,502 | ||||||
Integrated Telecommunication Services–1.77% | ||||||||
China Unicom (Hong Kong) Ltd. | 924,000 | 1,735,816 |
Shares | Value | |||||||
Internet Retail–1.91% | ||||||||
E-commerce China Dangdang, Inc.–Class A,–ADR(c) | 197,875 | $ | 1,871,897 | |||||
Internet Software & Services–10.93% | ||||||||
Baidu, Inc.–ADR(c) | 21,251 | 4,256,150 | ||||||
Tencent Holdings Ltd. | 265,700 | 5,487,391 | ||||||
Weibo Corp.–ADR(c) | 58,028 | 967,907 | ||||||
10,711,448 | ||||||||
Life & Health Insurance–8.32% | ||||||||
China Life Insurance Co., Ltd.–Class H | 853,000 | 4,137,060 | ||||||
Ping An Insurance (Group) Co. of China Ltd.–Class H | 279,500 | 4,017,328 | ||||||
8,154,388 | ||||||||
Multi-Line Insurance–0.91% | ||||||||
China Pacific Insurance (Group) Co., Ltd.–Class H | 162,400 | 886,332 | ||||||
Oil & Gas Exploration & Production–2.65% | ||||||||
CNOOC Ltd. | 1,523,000 | 2,596,017 | ||||||
Packaged Foods & Meats–3.42% | ||||||||
Uni-President China Holdings Ltd. | 4,139,000 | 3,348,368 | ||||||
Property & Casualty Insurance–0.97% | ||||||||
PICC Property and Casualty Co. Ltd.–Class H | 426,080 | 945,060 | ||||||
Real Estate Development–2.27% | ||||||||
China Overseas Land & Investment Ltd. | 252,000 | 1,052,619 | ||||||
China Resources Land Ltd. | 320,444 | 1,167,995 | ||||||
2,220,614 | ||||||||
Restaurants–2.38% | ||||||||
Ajisen China Holdings Ltd. (Hong Kong) | 3,747,000 | 2,330,242 | ||||||
Semiconductors–0.96% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 195,000 | 941,512 | ||||||
Specialized Finance–2.04% | ||||||||
Far East Horizon Ltd. | 1,888,000 | 2,002,369 | ||||||
Specialty Stores–2.10% | ||||||||
Chow Tai Fook Jewellery Group Ltd. (Hong Kong) | 1,691,600 | 2,051,615 | ||||||
Wireless Telecommunication Services–9.37% | ||||||||
China Mobile Ltd. | 643,000 | 9,183,937 | ||||||
Total Common Stocks & Other Equity Interests |
| 95,588,105 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Greater China Fund
Shares | Value | |||||||
Money Market Funds–2.68% |
| |||||||
Liquid Assets Portfolio–Institutional Class(d) | 1,314,582 | $ | 1,314,582 | |||||
Premier Portfolio–Institutional Class(d) | 1,314,581 | 1,314,581 | ||||||
Total Money Market Funds |
| 2,629,163 | ||||||
TOTAL INVESTMENTS–100.25% |
| 98,217,268 | ||||||
OTHER ASSETS LESS LIABILITIES–(0.25)% |
| (245,403 | ) | |||||
NET ASSETS–100.00% |
| $ | 97,971,865 |
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) | Country of issuer and/or credit risk exposure listed in Common Stocks & Other Equity Interests has been determined to be China unless otherwise noted. |
(c) | Non-income producing security. |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2015
Financials | 34.6 | % | ||
Information Technology | 18.5 | |||
Consumer Discretionary | 16.3 | |||
Telecommunication Services | 11.2 | |||
Consumer Staples | 6.4 | |||
Energy | 4.6 | |||
Industrials | 3.9 | |||
Utilities | 2.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.4 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Greater China Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $80,685,603) | $ | 95,588,105 | ||
Investments in affiliated money market funds, at value and cost | 2,629,163 | |||
Total investments, at value (Cost $83,314,766) | 98,217,268 | |||
Foreign currencies, at value (Cost $219,410) | 222,735 | |||
Receivable for: | ||||
Investments sold | 842,521 | |||
Fund shares sold | 368,321 | |||
Dividends | 169 | |||
Investment for trustee deferred compensation and retirement plans | 50,301 | |||
Other assets | 37,380 | |||
Total assets | 99,738,695 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 1,407,261 | |||
Fund shares reacquired | 118,201 | |||
Accrued fees to affiliates | 85,718 | |||
Accrued trustees’ and officers’ fees and benefits | 2,071 | |||
Accrued other operating expenses | 98,073 | |||
Trustee deferred compensation and retirement plans | 55,506 | |||
Total liabilities | 1,766,830 | |||
Net assets applicable to shares outstanding | $ | 97,971,865 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 122,464,928 | ||
Undistributed net investment income (loss) | (883,717 | ) | ||
Undistributed net realized gain (loss) | (38,515,043 | ) | ||
Net unrealized appreciation | 14,905,697 | |||
$ | 97,971,865 |
Net Assets: | ||||
Class A | $ | 71,075,699 | ||
Class B | $ | 4,602,569 | ||
Class C | $ | 17,803,955 | ||
Class Y | $ | 4,423,834 | ||
Class R5 | $ | 65,808 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 2,919,263 | |||
Class B | 194,519 | |||
Class C | 753,692 | |||
Class Y | 181,586 | |||
Class R5 | 2,700 | |||
Class A: | ||||
Net asset value per share | $ | 24.35 | ||
Maximum offering price per share | ||||
(Net asset value of $24.35 ¸ 94.50%) | $ | 25.77 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 23.66 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 23.62 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 24.36 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 24.37 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Greater China Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: | ||||
Dividends (net of foreign withholding taxes of $1,950) | $ | 20,261 | ||
Dividends from affiliated money market funds | 628 | |||
Total investment income | 20,889 | |||
Expenses: | ||||
Advisory fees | 393,970 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 20,829 | |||
Distribution fees: | ||||
Class A | 75,358 | |||
Class B | 23,522 | |||
Class C | 77,570 | |||
Transfer Agent Fees — A, B, C and Y | 136,000 | |||
Transfer agent fees — R5 | 34 | |||
Trustees’ and officers’ fees and benefits | 11,263 | |||
Other | 82,196 | |||
Total expenses | 845,536 | |||
Less: Fees waived and expense offset arrangement(s) | (2,010 | ) | ||
Net expenses | 843,526 | |||
Net investment income (loss) | (822,637 | ) | ||
Realized and unrealized gain from: | ||||
Net realized gain from: | ||||
Investment securities | 3,245,501 | |||
Foreign currencies | 4,685 | |||
3,250,186 | ||||
Change in net unrealized appreciation of: | ||||
Investment securities | 15,253,180 | |||
Foreign currencies | 3,226 | |||
15,256,406 | ||||
Net realized and unrealized gain | 18,506,592 | |||
Net increase in net assets resulting from operations | $ | 17,683,955 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Greater China Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: | ||||||||
Net investment income (loss) | $ | (822,637 | ) | $ | (318,816 | ) | ||
Net realized gain | 3,250,186 | 12,285,009 | ||||||
Change in net unrealized appreciation (depreciation) | 15,256,406 | (13,395,379 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 17,683,955 | (1,429,186 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (268,684 | ) | (846,845 | ) | ||||
Class B | — | (16,420 | ) | |||||
Class C | — | (47,698 | ) | |||||
Class Y | (25,936 | ) | (59,852 | ) | ||||
Class R5 | (865 | ) | (5,462 | ) | ||||
Total distributions from net investment income | (295,485 | ) | (976,277 | ) | ||||
Share transactions–net: | ||||||||
Class A | (4,426,272 | ) | (11,916,527 | ) | ||||
Class B | (1,609,642 | ) | (2,003,637 | ) | ||||
Class C | (1,429,193 | ) | (4,995,375 | ) | ||||
Class Y | (738,151 | ) | 52,909 | |||||
Class R5 | (48,525 | ) | (307,144 | ) | ||||
Net increase (decrease) in net assets resulting from share transactions | (8,251,783 | ) | (19,169,774 | ) | ||||
Net increase (decrease) in net assets | 9,136,687 | (21,575,237 | ) | |||||
Net assets: | ||||||||
Beginning of period | 88,835,178 | 110,410,415 | ||||||
End of period (includes undistributed net investment income (loss) of $(883,717) and $234,405, respectively) | $ | 97,971,865 | $ | 88,835,178 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Greater China Fund, formerly Invesco China Fund, (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Class R5. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will 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.
8 Invesco Greater China Fund
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. |
9 Invesco Greater China 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 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. 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 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 — Investing in a single-country mutual fund involves greater risk than investing in a more diversified fund due to lack of exposure to other countries. The political and economic conditions and changes in regulatory, tax or economic policy in a single country could significantly affect the market in that country and in surrounding or related countries. |
Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar.
Transaction costs are often higher and there may be delays in settlement procedures.
Certain securities issued by companies in China may be less liquid, harder to sell or more volatile than may U.S. securities.
10 Invesco Greater China Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $250 million | 0 | .935% | ||||
Next $250 million | 0 | .91% | ||||
Next $500 million | 0 | .885% | ||||
Next $1.5 billion | 0 | .86% | ||||
Next $2.5 billion | 0 | .835% | ||||
Next $2.5 billion | 0 | .81% | ||||
Next $2.5 billion | 0 | .785% | ||||
Over $10 billion | 0 | .76% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.94%.
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, through at least June 30, 2016, 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 and Class R5 shares to 2.25%, 3.00%, 3.00%, 2.00% and 2.00% 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, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $1,570.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 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 April 30, 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 Y and Class R5 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B and Class C shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $6,751 in front-end sales commissions from the sale of Class A shares and $487, $2,824 and $164 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
11 Invesco Greater China Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 April 30, 2015, there were transfers from Level 2 to Level 1 of $31,232,936, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Consumer Discretionary | $ | 15,975,787 | $ | — | $ | — | $ | 15,975,787 | ||||||||
Consumer Staples | 6,299,323 | — | — | 6,299,323 | ||||||||||||
Energy | — | 4,521,519 | — | 4,521,519 | ||||||||||||
Financials | 27,759,039 | 6,134,739 | — | 33,893,778 | ||||||||||||
Industrials | 1,738,081 | 2,030,588 | — | 3,768,669 | ||||||||||||
Information Technology | 8,388,416 | 9,732,816 | — | 18,121,232 | ||||||||||||
Telecommunication Services | 10,919,753 | — | — | 10,919,753 | ||||||||||||
Utilities | — | 2,088,044 | — | 2,088,044 | ||||||||||||
Money Market Funds | 2,629,163 | — | — | 2,629,163 | ||||||||||||
Total Investments | $ | 73,709,562 | $ | 24,507,706 | $ | — | $ | 98,217,268 |
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $440.
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.
12 Invesco Greater China Fund
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. 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 October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
October 31, 2016 | $ | 30,359,492 | $ | — | $ | 30,359,492 | ||||||
October 31, 2017 | 11,347,858 | — | 11,347,858 | |||||||||
$ | 41,707,350 | $ | — | $ | 41,707,350 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $59,829,845 and $70,537,828, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 15,823,908 | ||
Aggregate unrealized (depreciation) of investment securities | (982,862 | ) | ||
Net unrealized appreciation of investment securities | $ | 14,841,046 |
Cost of investments for tax purposes is $83,376,222.
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 277,218 | $ | 6,064,829 | 720,306 | $ | 14,781,137 | ||||||||||
Class B | 2,338 | 45,743 | 10,113 | 199,431 | ||||||||||||
Class C | 50,619 | 1,069,960 | 55,095 | 1,084,665 | ||||||||||||
Class Y | 58,219 | 1,283,803 | 105,131 | 2,148,178 | ||||||||||||
Class R5 | 158 | 3,169 | 998 | 19,651 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 13,413 | 255,787 | 36,522 | 773,530 | ||||||||||||
Class B | — | — | 736 | 15,234 | ||||||||||||
Class C | — | — | 2,087 | 43,148 | ||||||||||||
Class Y | 1,259 | 24,001 | 2,588 | 54,829 | ||||||||||||
Class R5 | 37 | 721 | 242 | 5,129 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 30,140 | 643,221 | 28,520 | 569,466 | ||||||||||||
Class B | (30,980 | ) | (643,221 | ) | (29,290 | ) | (569,466 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (560,657 | ) | (11,390,109 | ) | (1,401,485 | ) | (28,040,660 | ) | ||||||||
Class B | (50,922 | ) | (1,012,164 | ) | (83,442 | ) | (1,648,836 | ) | ||||||||
Class C | (124,055 | ) | (2,499,153 | ) | (315,673 | ) | (6,123,188 | ) | ||||||||
Class Y | (102,851 | ) | (2,045,955 | ) | (105,289 | ) | (2,150,098 | ) | ||||||||
Class R5 | (2,674 | ) | (52,415 | ) | (16,233 | ) | (331,924 | ) | ||||||||
Net increase (decrease) in share activity | (438,738 | ) | $ | (8,251,783 | ) | (989,074 | ) | $ | (19,169,774 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 26% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
13 Invesco Greater China Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Net asset value, end of period(b) | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 19.93 | $ | (0.18 | ) | $ | 4.69 | $ | 4.51 | $ | (0.09 | ) | $ | 24.35 | 22.75 | % | $ | 71,076 | 1.84 | %(e) | 1.84 | %(e) | (1.79 | )%(e) | 71 | % | ||||||||||||||||||||||
Year ended 10/31/14 | 20.31 | (0.03 | ) | (0.13 | ) | (0.16 | ) | (0.22 | ) | 19.93 | (0.87 | ) | 62,957 | 1.85 | 1.85 | (0.15 | ) | 124 | ||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.90 | 0.09 | 2.44 | 2.53 | (0.12 | ) | 20.31 | 14.18 | 76,691 | 1.78 | 1.78 | 0.50 | 148 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.52 | 0.11 | 0.37 | 0.48 | (0.10 | ) | 17.90 | 2.79 | 82,713 | 1.80 | 1.80 | 0.64 | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 21.93 | 0.12 | (4.49 | ) | (4.37 | ) | (0.04 | ) | 17.52 | (19.96 | ) | 102,248 | 1.67 | 1.67 | 0.57 | 97 | ||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 18.18 | 0.06 | 3.83 | 3.89 | (0.14 | ) | 21.93 | 21.49 | 166,662 | 1.67 | 1.67 | 0.30 | 100 | |||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 19.35 | (0.25 | ) | 4.56 | 4.31 | — | 23.66 | 22.27 | 4,603 | 2.59 | (e) | 2.59 | (e) | (2.54 | )(e) | 71 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 19.71 | (0.18 | ) | (0.14 | ) | (0.32 | ) | (0.04 | ) | 19.35 | (1.61 | ) | 5,303 | 2.60 | 2.60 | (0.90 | ) | 124 | ||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.39 | (0.05 | ) | 2.37 | 2.32 | — | 19.71 | 13.34 | 7,411 | 2.53 | 2.53 | (0.25 | ) | 148 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.05 | (0.02 | ) | 0.36 | 0.34 | — | 17.39 | 1.99 | 9,703 | 2.55 | 2.55 | (0.11 | ) | 109 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 21.46 | (0.04 | ) | (4.37 | ) | (4.41 | ) | — | 17.05 | (20.55 | ) | 13,988 | 2.42 | 2.42 | (0.18 | ) | 97 | |||||||||||||||||||||||||||||||
Year ended 10/31/10 | 17.85 | (0.09 | ) | 3.76 | 3.67 | (0.06 | ) | 21.46 | 20.61 | 23,945 | 2.42 | 2.42 | (0.45 | ) | 100 | |||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 19.32 | (0.25 | ) | 4.55 | 4.30 | — | 23.62 | 22.26 | 17,804 | 2.59 | (e) | 2.59 | (e) | (2.54 | )(e) | 71 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 19.68 | (0.18 | ) | (0.14 | ) | (0.32 | ) | (0.04 | ) | 19.32 | (1.62 | ) | 15,978 | 2.60 | 2.60 | (0.90 | ) | 124 | ||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.36 | (0.05 | ) | 2.37 | 2.32 | — | 19.68 | 13.36 | 21,366 | 2.53 | 2.53 | (0.25 | ) | 148 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.02 | (0.02 | ) | 0.36 | 0.34 | — | 17.36 | 2.00 | 24,728 | 2.55 | 2.55 | (0.11 | ) | 109 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 21.43 | (0.04 | ) | (4.37 | ) | (4.41 | ) | — | 17.02 | (20.58 | ) | 32,319 | 2.42 | 2.42 | (0.18 | ) | 97 | |||||||||||||||||||||||||||||||
Year ended 10/31/10 | 17.83 | (0.09 | ) | 3.75 | 3.66 | (0.06 | ) | 21.43 | 20.58 | 59,812 | 2.42 | 2.42 | (0.45 | ) | 100 | |||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 19.98 | (0.16 | ) | 4.69 | 4.53 | (0.15 | ) | 24.36 | 22.86 | 4,424 | 1.59 | (e) | 1.59 | (e) | (1.54 | )(e) | 71 | |||||||||||||||||||||||||||||||
Year ended 10/31/14 | 20.36 | 0.02 | (0.13 | ) | (0.11 | ) | (0.27 | ) | 19.98 | (0.62 | ) | 4,494 | 1.60 | 1.60 | 0.10 | 124 | ||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.95 | 0.14 | 2.44 | 2.58 | (0.17 | ) | 20.36 | 14.43 | 4,531 | 1.53 | 1.53 | 0.75 | 148 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.58 | 0.15 | 0.38 | 0.53 | (0.16 | ) | 17.95 | 3.08 | 4,384 | 1.55 | 1.55 | 0.89 | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.01 | 0.17 | (4.51 | ) | (4.34 | ) | (0.09 | ) | 17.58 | (19.78 | ) | 6,483 | 1.42 | 1.42 | 0.82 | 97 | ||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 18.23 | 0.10 | 3.85 | 3.95 | (0.17 | ) | 22.01 | 21.76 | 11,638 | 1.42 | 1.42 | 0.55 | 100 | |||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 20.01 | (0.13 | ) | 4.69 | 4.56 | (0.20 | ) | 24.37 | 23.04 | 66 | 1.36 | (e) | 1.36 | (e) | (1.31 | )(e) | 71 | |||||||||||||||||||||||||||||||
Year ended 10/31/14 | 20.38 | 0.06 | (0.14 | ) | (0.08 | ) | (0.29 | ) | 20.01 | (0.46 | ) | 104 | 1.39 | 1.39 | 0.31 | 124 | ||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 17.97 | 0.18 | 2.45 | 2.63 | (0.22 | ) | 20.38 | 14.71 | 411 | 1.33 | 1.33 | 0.95 | 148 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.61 | 0.20 | 0.37 | 0.57 | (0.21 | ) | 17.97 | 3.29 | 757 | 1.30 | 1.30 | 1.14 | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.04 | 0.21 | (4.51 | ) | (4.30 | ) | (0.13 | ) | 17.61 | (19.61 | ) | 770 | 1.23 | 1.23 | 1.01 | 97 | ||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 18.25 | 0.14 | 3.86 | 4.00 | (0.21 | ) | 22.04 | 22.04 | 982 | 1.25 | 1.25 | 0.72 | 100 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the united States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than on 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 $60,786, $4,743, $15,643, $3,729 and $70 for Class A, Class B, Class C, Class Y and Class R5 shares, respectively. |
14 Invesco Greater China Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,228.10 | $ | 10.17 | $ | 1,015.67 | $ | 9.20 | 1.84 | % | ||||||||||||
B | 1,000.00 | 1,223.40 | 14.28 | 1,011.95 | 12.92 | 2.59 | ||||||||||||||||||
C | 1,000.00 | 1,223.20 | 14.28 | 1,011.95 | 12.92 | 2.59 | ||||||||||||||||||
Y | 1,000.00 | 1,229.20 | 8.79 | 1,016.91 | 7.95 | 1.59 | ||||||||||||||||||
R5 | 1,000.00 | 1,230.40 | 7.52 | 1,018.05 | 6.80 | 1.36 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
15 Invesco Greater China 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: 811-05426 and 033-19338 | CHI-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco International Total Return Fund | ||||
Nasdaq: | ||||
A: AUBAX ¡ B: AUBBX ¡ C: AUBCX ¡ Y: AUBYX ¡ R5: AUBIX ¡ R6: AUBFX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
9 Financial Statements | ||||
11 Notes to Financial Statements | ||||
22 Financial Highlights | ||||
23 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| |||||||
Fund vs. Indexes | |||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | –2.19 | % | |||||
Class B Shares | –2.66 | ||||||
Class C Shares | –2.66 | ||||||
Class Y Shares | –2.16 | ||||||
Class R5 Shares | –2.16 | ||||||
Class R6 Shares | –2.07 | ||||||
Barclays Global Aggregate ex-U.S. Index‚ (Broad Market/Style-Specific Index) | –4.83 | ||||||
Lipper International Income Funds Indexn (Peer Group Index) | –1.63 | ||||||
Source(s): ‚FactSet Research Systems Inc.; nLipper Inc.
| |||||||
The Barclays Global Aggregate ex-U.S. Index is an unmanaged index considered representative of bonds of foreign countries. | |||||||
The Lipper International Income Funds Index is an unmanaged index considered representative of international income funds tracked by Lipper. | |||||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). | |||||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
2 Invesco International Total Return Fund
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (3/31/06) | 3.25 | % | |||||
5 Years | 1.32 | ||||||
1 Year | –10.52 | ||||||
Class B Shares | |||||||
Inception (3/31/06) | 3.06 | % | |||||
5 Years | 1.11 | ||||||
1 Year | –11.80 | ||||||
Class C Shares | |||||||
Inception (3/31/06) | 2.95 | % | |||||
5 Years | 1.42 | ||||||
1 Year | –8.15 | ||||||
Class Y Shares | |||||||
Inception | 3.92 | % | |||||
5 Years | 2.47 | ||||||
1 Year | –6.28 | ||||||
Class R5 Shares | |||||||
Inception (3/31/06) | 4.00 | % | |||||
5 Years | 2.47 | ||||||
1 Year | –6.28 | ||||||
Class R6 Shares | |||||||
Inception | 3.82 | % | |||||
5 Years | 2.34 | ||||||
1 Year | –6.28 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (3/31/06) | 3.10 | % | |||||
5 Years | 0.88 | ||||||
1 Year | –10.69 | ||||||
Class B Shares | |||||||
Inception (3/31/06) | 2.90 | % | |||||
5 Years | 0.67 | ||||||
1 Year | –11.99 | ||||||
Class C Shares | |||||||
Inception (3/31/06) | 2.80 | % | |||||
5 Years | 0.99 | ||||||
1 Year | –8.36 | ||||||
Class Y Shares | |||||||
Inception | 3.77 | % | |||||
5 Years | 2.02 | ||||||
1 Year | –6.50 | ||||||
Class R5 Shares | |||||||
Inception (3/31/06) | 3.85 | % | |||||
5 Years | 2.02 | ||||||
1 Year | –6.49 | ||||||
Class R6 Shares | |||||||
Inception | 3.66 | % | |||||
5 Years | 1.87 | ||||||
1 Year | –6.58 |
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 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.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date
of this report for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares was 1.10%, 1.85%, 1.85%, 0.85%, 0.85% and 0.85%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares was 1.68%, 2.43%, 2.43%, 1.43%, 1.15% and 1.14%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 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, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
3 Invesco International Total 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.
4 Invesco International Total Return Fund |
Schedule of Investments
April 30, 2015
(Unaudited)
Principal Amount | Value | |||||||
Non U.S. Dollar Denominated Bonds & |
| |||||||
Australia–2.40% | ||||||||
Australia Government Bond, | AUD | 1,380,000 | $ | 1,314,140 | ||||
Austria–0.92% | ||||||||
OMV AG, Jr. Unsec. Sub. Medium-Term Euro Notes, 6.75%(b) | EUR | 400,000 | 505,083 | |||||
Belgium–0.61% | ||||||||
Anheuser-Busch InBev N.V., | GBP | 200,000 | 335,802 | |||||
Canada–4.43% | ||||||||
Province of Ontario Canada, Unsec. Bonds, 3.45%, 06/02/45 | CAD | 2,700,000 | 2,426,408 | |||||
Denmark–1.09% | ||||||||
Danske Bank AS, Jr. Unsec. Sub. Medium-Term Euro Notes, 5.68%(b) | GBP | 170,000 | 271,536 | |||||
TDC AS, Sr. Unsec. Medium-Term Euro Notes, 3.75%, 03/02/22 | EUR | 250,000 | 327,159 | |||||
598,695 | ||||||||
France–0.89% | ||||||||
Banque Federative du Credit Mutuel S.A., Sr. Unsec. Medium-Term Euro Notes, 2.63%, 02/24/21 | EUR | 200,000 | 247,785 | |||||
Electricite de France S.A., Jr. Unsec. Sub. Medium-Term Euro Notes, 4.13%(b) | EUR | 200,000 | 242,406 | |||||
490,191 | ||||||||
Germany–3.84% | ||||||||
EnBW Energie Baden- Wuerttemberg AG, Jr. Unsec. Sub. Medium-Term Euro Notes, 7.38%, 04/02/72 | EUR | 120,000 | 148,983 | |||||
HeidelbergCement Finance Luxembourg S.A., Sr. Unsec. Gtd. Medium-Term Euro Notes, | EUR | 100,000 | 125,905 | |||||
Kreditanstalt fur Wiederaufbau, Sr. Unsec. Gtd. Global Notes, | JPY | 150,000,000 | 1,497,573 | |||||
RWE AG, Jr. Unsec. Sub. Euro Notes, 7.00%(b) | GBP | 200,000 | 334,446 | |||||
2,106,907 | ||||||||
Italy–8.44% | ||||||||
Italy Buoni Poliennali Del Tesoro, | EUR | 3,045,000 | 4,517,214 | |||||
Manutencoop Facility Management SpA, REGS, Sr. Sec. Gtd. Euro Notes, 8.50%, 08/01/20(c) | EUR | 100,000 | 106,406 | |||||
4,623,620 |
Principal Amount | Value | |||||||
Japan–4.83% | ||||||||
Japan Government Forty Year Bond, Series 7, Sr. Unsec. Bonds, 1.70%, 03/20/54 | JPY | 75,000,000 | $ | 670,295 | ||||
Japan Government Twenty Year Bond, Series 122, Sr. Unsec. Bonds, 1.80%, 09/20/30 | JPY | 205,000,000 | 1,977,809 | |||||
2,648,104 | ||||||||
Luxembourg–0.22% | ||||||||
Magnolia BC S.A., REGS, Sr. Sec. Gtd. Medium-Term Euro Notes, | EUR | 100,000 | 120,714 | |||||
Netherlands–6.17% | ||||||||
Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, Unsec. Sub. Euro Bonds, 3.88%, 07/25/23 | EUR | 600,000 | 780,555 | |||||
Netherlands Government Bond, | EUR | 700,000 | 1,159,953 | |||||
Unsec. Euro Bonds, | EUR | 800,000 | 1,440,963 | |||||
3,381,471 | ||||||||
New Zealand–5.13% | ||||||||
New Zealand Government Bond, Series 521, Sr. Unsec. Bonds, | NZD | 3,200,000 | 2,812,981 | |||||
Norway–2.73% | ||||||||
DNB Bank ASA, Unsec. Sub. Medium-Term Euro Notes, | EUR | 250,000 | 300,484 | |||||
Norway Government Bond, Series 476, Unsec. Bonds, | NOK | 8,000,000 | 1,194,406 | |||||
1,494,890 | ||||||||
Poland–6.65% | ||||||||
Poland Government Bond, Series 0718, Unsec. Bonds, | PLN | 800,000 | 225,709 | |||||
Poland Government International Bond, Series 12, Sr. Unsec. Bonds, 1.05%, 11/08/17 | JPY | 400,000,000 | 3,416,650 | |||||
3,642,359 | ||||||||
Portugal–3.20% | ||||||||
Portugal Obrigacoes do Tesouro OT, Sr. Unsec. Euro Bonds, | EUR | 1,000,000 | 1,206,174 | |||||
4.10%, 02/15/45(c) | EUR | 400,000 | 548,825 | |||||
1,754,999 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco International Total Return Fund
Principal Amount | Value | |||||||
Romania–1.10% | ||||||||
Romanian Government International Bond, REGS, Sr. Unsec. Medium-Term Euro Notes, | EUR | 500,000 | $ | 604,261 | ||||
South Korea–3.55% | ||||||||
Korea Treasury Bond, Series 2403, Sr. Unsec. Bonds, | KRW | 1,200,000,000 | 1,219,627 | |||||
Republic of Korea, Sr. Unsec. Euro Notes, 2.13%, 06/10/24 | EUR | 600,000 | 727,641 | |||||
1,947,268 | ||||||||
Spain–4.98% | ||||||||
Spain Government Bond, REGS, Unsec. Euro Notes, | EUR | 2,400,000 | 2,729,466 | |||||
Supranational–2.46% | ||||||||
Asian Development Bank, Series 339-00-1, Sr. Unsec. Medium-Term Global Notes, | JPY | 130,000,000 | 1,348,724 | |||||
Sweden–0.22% | ||||||||
Nordea Bank AB, Unsec. Sub. Medium-Term Euro Notes, 4.63%, 02/15/22 | EUR | 100,000 | 120,167 | |||||
United Arab Emirates–0.53% | ||||||||
IPIC GMTN Ltd., REGS, Sr. Unsec. Gtd. Medium-Term Euro Notes, 5.88%, 03/14/21(c) | EUR | 200,000 | 288,585 | |||||
United Kingdom–11.64% | ||||||||
Abbey National Treasury Services PLC, Sr. Sec. Gtd. Mortgage- Backed Medium-Term Euro Notes, 5.25%, 02/16/29 | GBP | 200,000 | 401,128 | |||||
Cabot Financial Luxembourg S.A., REGS, Sr. Sec. Gtd. Euro Notes, 10.38%, 10/01/19(c) | GBP | 100,000 | 169,245 | |||||
Direct Line Insurance Group PLC, Unsec. Sub. Gtd. Euro Notes, 9.25%, 04/27/42 | GBP | 150,000 | 294,133 | |||||
Lloyds Bank PLC, Unsec. Sub. Medium-Term Euro Notes, 10.75%, 12/16/21 | GBP | 200,000 | 351,751 | |||||
Lowell Group Financing PLC, REGS, Sr. Sec. Gtd. Euro Notes, 10.75%, 04/01/19(c) | GBP | 100,000 | 166,175 | |||||
Moy Park Bondco PLC, REGS, Sr. Unsec. Gtd. Euro Notes, | GBP | 100,000 | 151,207 | |||||
Nationwide Building Society, Jr. Unsec. Sub. Euro Bonds, 6.00%(b) | GBP | 200,000 | 322,064 | |||||
New Look Bondco I PLC, REGS, Sr. Sec. Gtd. Euro Notes, | GBP | 100,000 | 160,994 |
Principal Amount | Value | |||||||
United Kingdom–(continued) | ||||||||
NGG Finance PLC, Unsec. Sub. Gtd. Euro Notes, 5.63%, 06/18/73 | GBP | 250,000 | $ | 428,619 | ||||
Odeon & UCI Finco PLC, REGS, Sr. Sec. Gtd. Medium-Term Euro Notes, 9.00%, 08/01/18(c) | GBP | 100,000 | 157,732 | |||||
Scottish Widows PLC, Unsec. Sub. Euro Notes, 5.50%, 06/16/23 | GBP | 150,000 | 247,294 | |||||
SSE PLC, Jr. Unsec. Sub. Medium- Term Euro Notes, 5.45%(b) | GBP | 400,000 | 623,097 | |||||
Travelex Financing PLC, REGS, Sr. Sec. Gtd. Euro Notes, | GBP | 100,000 | 161,953 | |||||
United Kingdom Gilt, Series 2025, Unsec. Bonds, | GBP | 1,390,000 | 2,745,371 | |||||
6,380,763 | ||||||||
United States–1.59% | ||||||||
Bank of America Corp., Series 8, Sr. Unsec. Bonds, | JPY | 100,000,000 | 873,809 | |||||
Total Non U.S. Dollar Denominated Bonds & Notes |
| 42,549,407 | ||||||
U.S. Dollar Denominated Bonds & Notes–9.20% |
| |||||||
Canada–0.43% | ||||||||
Air Canada Pass Through Trust, Series 2015-1, Class B, Sec. Pass Through Ctfs., 3.88%, 03/15/23(c) | $ | 237,000 | 236,302 | |||||
China–0.75% | ||||||||
Alibaba Group Holding Ltd., Sr. Unsec. Gtd. Notes, | 200,000 | 201,008 | ||||||
Bank of China Ltd., Unsec. Sub. Notes, 5.00%, 11/13/24(c) | 200,000 | 210,304 | ||||||
411,312 | ||||||||
Dominican Repubic–0.61% | ||||||||
Dominican Republic International Bond, Sr. Unsec. Notes, | 322,000 | 334,075 | ||||||
Morocco–1.06% | ||||||||
OCP S.A., Sr. Unsec. Notes, | 600,000 | 584,250 | ||||||
Russia–0.36% | ||||||||
Gazprom OAO Via Gaz Capital S.A., Sr. Unsec. Bonds, | 200,000 | 200,490 | ||||||
Singapore–0.59% | ||||||||
BOC Aviation Pte. Ltd., Sr. Unsec. Notes, 3.00%, 03/30/20(c) | 323,000 | 321,994 | ||||||
Switzerland–0.91% | ||||||||
Credit Suisse Group AG, Jr. Unsec. Sub. Notes, 6.25%(b)(c) | 500,000 | 497,500 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco International Total Return Fund
Principal Amount | Value | |||||||
United Kingdom–0.85% | ||||||||
HSBC Holdings PLC, Jr. Unsec. Sub. Global Bonds, | $ | 202,000 | $ | 209,070 | ||||
5.63%(b) | 250,000 | 255,838 | ||||||
464,908 | ||||||||
United States–3.64% | ||||||||
AT&T Inc., Sr. Unsec. Global Notes, 3.40%, 05/15/25 | 386,000 | 382,313 | ||||||
Berry Plastics Corp., Sec. Gtd. Notes, 5.50%, 05/15/22 | 200,000 | 208,750 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Floating Rate Notes, 3.53%, 04/15/19(d) | 200,000 | 192,500 | ||||||
EarthLink Holdings Corp., Sr. Unsec. Gtd. Global Notes, 8.88%, 05/15/19 | 200,000 | 206,750 | ||||||
EPR Properties, Sr. Unsec. Gtd. Global Notes, | 196,000 | 198,904 | ||||||
JPMorgan Chase & Co., Series Z, Jr. Unsec. Sub. Global Notes, 5.30%(b) | 300,000 | 301,875 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, | 200,000 | 183,000 | ||||||
Wells Fargo & Co., Series U, Jr. Unsec. Sub. Global Notes, 5.88%(b) | 300,000 | 320,250 | ||||||
1,994,342 | ||||||||
Total U.S. Dollar Denominated Bonds & Notes |
| 5,045,173 | ||||||
Collateralized Mortgage Obligations–4.21% |
| |||||||
United States–4.21% | ||||||||
BLCP Hotel Trust, Series 2014-CLRN, Class C, Floating Rate Pass Through Ctfs., 2.13%, 08/15/29(c)(d) | 450,000 | 452,356 | ||||||
COMM Mortgage Trust, Series 2013-LC6, Class B, Pass Through Ctfs., 3.74%, 01/10/46 | 300,000 | 313,469 |
Principal Amount | Value | |||||||
United States–(continued) | ||||||||
GMACM Mortgage Loan Trust, Series 2006-AR1, Class 1A1, Floating Rate Pass Through Ctfs., 2.98%, 04/19/36(d) | $ | 276,821 | $ | 247,581 | ||||
JP Morgan Mortgage Trust, Series 2007-A4, Class 3A1, Floating Rate Pass Through Ctfs., 5.17%, 06/25/37(d) | 286,820 | 264,467 | ||||||
WaMu Mortgage Pass Through Trust, Series 2005-AR12, Class 1A8, Floating Rate Pass Through Ctfs., | 283,502 | 274,383 | ||||||
Wells Fargo Mortgage Backed Securities Trust, Series 2005-AR14, Class A1, Floating Rate Pass Through Ctfs., 5.35%, 08/25/35(d) | 192,041 | 191,046 | ||||||
WFRBS Commercial Mortgage Trust, Series 2013-C16, Class A5, Pass Through Ctfs., | 500,000 | 564,636 | ||||||
Total Collateralized Mortgage Obligations |
| 2,307,938 | ||||||
Shares | ||||||||
Money Market Funds–0.01% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 3,082 | 3,082 | ||||||
Premier Portfolio–Institutional Class(e) | 3,081 | 3,081 | ||||||
Total Money Market Funds |
| 6,163 | ||||||
Options Purchased–0.05% |
| |||||||
(Cost $67,538)(f) | 24,730 | |||||||
TOTAL INVESTMENTS–91.09% |
| 49,933,411 | ||||||
OTHER ASSETS LESS LIABILITIES–8.91% |
| 4,882,665 | ||||||
NET ASSETS–100.00% |
| $ | 54,816,076 |
Investment Abbreviations:
AUD | – Australian Dollar | |
CAD | – Canadian Dollar | |
Ctfs. | – Certificates | |
EUR | – Euro | |
GBP | – British Pound Sterling | |
Gtd. | – Guaranteed |
JPY | – Japanese Yen | |
Jr. | – Junior | |
KRW | – South Korean Won | |
NOK | – Norwegian Krona | |
NZD | – New Zealand Dollar | |
PLN | – Poland Zloty |
REGS | – Regulation S | |
Sec. | – Secured | |
Sr. | – Senior | |
Sub. | – Subordinated | |
Unsec. | – Unsecured |
Notes to Schedule of Investments:
(a) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(b) | Perpetual bond with no specified maturity date. |
(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 April 30, 2015 was $14,127,230, which represented 25.77% of the Fund’s Net Assets. |
(d) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on April 30, 2015. |
(e) | The money market fund and the Fund are affiliated by having the same investment adviser. |
(f) | The tables below detail options purchased. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco International Total Return Fund
Open Over-The-Counter Foreign Currency Options Purchased | ||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Notional Value(a) | Value | ||||||||||||||||
CHF versus JPY | Put | Barclays Bank PLC | 07/23/15 | JPY | 126.30 | CHF | 1,100,000 | $ | 14,375 | |||||||||||||
CHF versus JPY | Put | Deutsche Bank Securities Inc. | 07/23/15 | JPY | 116.00 | CHF | 1,100,000 | 1,081 | ||||||||||||||
USD versus BRL | Put | Goldman Sachs International | 10/06/15 | BRL | 2.92 | USD | 600,000 | 8,577 | ||||||||||||||
USD versus KRW | Call | Deutsche Bank Securities Inc. | 06/08/15 | KRW | 1,150.00 | USD | 1,500,000 | 697 | ||||||||||||||
Subtotal Foreign Currency Options Purchased — Currency Risk | $ | 24,730 |
Open Over-The-Counter Interest Rate Swaptions Purchased — Interest Rate Risk | ||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Exercise Rate | Pay/Receive Exercise Rate | 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 | $ | 1,000,000 | $ | 0 | |||||||||||||||||
Total Options Purchased (Cost $67,538) | $ | 24,730 |
(a) | Notional Value is calculated by multiplying the Number of Contracts by the multiplier. |
Abbreviations:
BRL | – Brazilian Real | |
CHF | – Swiss Franc | |
JPY | – Japanese Yen | |
KRW | – South Korean Won | |
LIBOR | – London Interbank Offered Rate | |
USD | – U.S. Dollar |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2015
Sovereign Debt | 57.1 | % | ||
Financials | 18.8 | |||
Collateralized Mortgage Obligations | 4.2 | |||
Utilities | 3.2 | |||
Materials | 1.9 | |||
Energy | 1.6 | |||
Telecommunication Services | 1.6 | |||
Other Sectors, Each Less than 2% | 2.6 | |||
Money Market Funds Plus Other Assets Less Liabilities | 9.0 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco International Total Return Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $51,726,207) | $ | 49,927,248 | ||
Investments in affiliated money market funds, at value and cost | 6,163 | |||
Total investments, at value (Cost $51,732,370) | 49,933,411 | |||
Cash | 1,077,272 | |||
Foreign currencies, at value (Cost $1,161,406) | 1,166,545 | |||
Receivable for: | ||||
Deposits with brokers for open futures contracts | 116,500 | |||
Investments sold | 2,499,350 | |||
Variation margin — futures | 104,867 | |||
Fund shares sold | 89,466 | |||
Dividends and interest | 467,067 | |||
Fund expenses absorbed | 11,058 | |||
Investment for trustee deferred compensation and retirement plans | 36,087 | |||
Unrealized appreciation on forward foreign currency contracts outstanding | 177,622 | |||
Other assets | 43,033 | |||
Total assets | 55,722,278 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 720,906 | |||
Fund shares reacquired | 13,155 | |||
Options written, at value (premiums received $68,141) | 17,613 | |||
Accrued fees to affiliates | 34,058 | |||
Accrued trustees’ and officers’ fees and benefits | 1,829 | |||
Accrued other operating expenses | 80,596 | |||
Trustee deferred compensation and retirement plans | 38,045 | |||
Total liabilities | 906,202 | |||
Net assets applicable to shares outstanding | $ | 54,816,076 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 58,124,793 | ||
Undistributed net investment income | 252,081 | |||
Undistributed net realized gain (loss) | (2,206,671 | ) | ||
Net unrealized appreciation (depreciation) | (1,354,127 | ) | ||
$ | 54,816,076 |
Net Assets: |
| |||
Class A | $ | 28,960,623 | ||
Class B | $ | 1,194,605 | ||
Class C | $ | 5,340,187 | ||
Class Y | $ | 1,981,786 | ||
Class R5 | $ | 826 | ||
Class R6 | $ | 17,338,049 | ||
Shares outstanding, $0.01 par value per share, | �� | |||
Class A | 2,840,367 | |||
Class B | 117,324 | |||
Class C | 524,870 | |||
Class Y | 194,519 | |||
Class R5 | 81 | |||
Class R6 | 1,700,457 | |||
Class A: | ||||
Net asset value per share | $ | 10.20 | ||
Maximum offering price per share | ||||
(Net asset value of $10.20 ¸ 95.75%) | $ | 10.65 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 10.18 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.17 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.19 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.20 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.20 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco International Total Return Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Interest (net of foreign withholding taxes of $ 2,931) | $ | 774,989 | ||
Dividends from affiliated money market funds | 224 | |||
Total investment income | 775,213 | |||
Expenses: | ||||
Advisory fees | 180,583 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 10,567 | |||
Distribution fees: | ||||
Class A | 37,795 | |||
Class B | 7,810 | |||
Class C | 29,169 | |||
Transfer agent fees — A, B, C and Y | 62,819 | |||
Transfer agent fees — R6 | 110 | |||
Trustees’ and officers’ fees and benefits | 10,155 | |||
Registration and filing fees | 37,451 | |||
Professional services fees | 26,979 | |||
Other | 21,286 | |||
Total expenses | 449,519 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) | (139,448 | ) | ||
Net expenses | 310,071 | |||
Net investment income | 465,142 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (811,573 | ) | ||
Foreign currencies | (260,193 | ) | ||
Forward foreign currency contracts | (363,811 | ) | ||
Futures contracts | (832,977 | ) | ||
Option contracts written | (17,382 | ) | ||
Swap agreements | (1,246 | ) | ||
(2,287,182 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (133,272 | ) | ||
Foreign currencies | 91,592 | |||
Forward foreign currency contracts | 257,490 | |||
Futures contracts | 228,275 | |||
Option contracts written | 50,528 | |||
494,613 | ||||
Net realized and unrealized gain (loss) | (1,792,569 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (1,327,427 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco International Total Return Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 465,142 | $ | 980,847 | ||||
Net realized gain (loss) | (2,287,182 | ) | 499,572 | |||||
Change in net unrealized appreciation (depreciation) | 494,613 | (2,359,518 | ) | |||||
Net increase (decrease) in net assets resulting from operations | (1,327,427 | ) | (879,099 | ) | ||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (171,398 | ) | (342,384 | ) | ||||
Class B | (2,893 | ) | (6,778 | ) | ||||
Class C | (10,994 | ) | (17,273 | ) | ||||
Class Y | (22,150 | ) | (43,342 | ) | ||||
Class R5 | (399 | ) | (2,735 | ) | ||||
Class R6 | (104,905 | ) | (136,738 | ) | ||||
Total distributions from net investment income | (312,739 | ) | (549,250 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (424,234 | ) | (627,066 | ) | ||||
Class B | (23,163 | ) | (54,188 | ) | ||||
Class C | (82,956 | ) | (109,020 | ) | ||||
Class Y | (58,822 | ) | (20,619 | ) | ||||
Class R5 | (1,571 | ) | (5,529 | ) | ||||
Class R6 | (190,546 | ) | (179,473 | ) | ||||
Total distributions from net realized gains | (781,292 | ) | (995,895 | ) | ||||
Share transactions–net: | ||||||||
Class A | (2,359,715 | ) | 1,008,873 | |||||
Class B | (595,984 | ) | (900,676 | ) | ||||
Class C | (834,840 | ) | 1,140,625 | |||||
Class Y | (2,832,856 | ) | 4,234,543 | |||||
Class R5 | (113,630 | ) | (160,180 | ) | ||||
Class R6 | 5,254,549 | 4,374,306 | ||||||
Net increase (decrease) in net assets resulting from share transactions | (1,482,476 | ) | 9,697,491 | |||||
Net increase (decrease) in net assets | (3,903,934 | ) | 7,273,247 | |||||
Net assets: | ||||||||
Beginning of period | 58,720,010 | 51,446,763 | ||||||
End of period (includes undistributed net investment income of $252,081 and $99,678, respectively) | $ | 54,816,076 | $ | 58,720,010 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco International Total Return Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is total return, comprised of current income and capital appreciation.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class 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
11 Invesco International Total Return Fund
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. |
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. 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
12 Invesco International Total Return 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 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. |
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 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.
13 Invesco International Total Return Fund
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. | 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.
M. | 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 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.
14 Invesco International Total Return Fund
N. | 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”). 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.
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 swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and Counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the Counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.
Notional amounts of each individual credit default swap agreement outstanding as of April 30, 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.
O. | 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. |
15 Invesco International Total Return Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $250 million | 0 | .65% | ||||
Next $250 million | 0 | .59% | ||||
Next $500 million | 0 | .565% | ||||
Next $1.5 billion | 0 | .54% | ||||
Next $2.5 billion | 0 | .515% | ||||
Next $5 billion | 0 | .49% | ||||
Over $10 billion | 0 | .465% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.65%.
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, through at least February 29, 2016, 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 1.10%, 1.85%, 1.85%, 0.85%, 0.85% and 0.85% 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $76,519 and reimbursed class level expenses of $46,622, $2,408, $8,995, $4,610 and $110 of Class A, Class B, Class C, Class Y 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 April 30, 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 April 30, 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 Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B and Class C shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $2,759 in front-end sales commissions from the sale of Class A shares and $253, $2,098 and $288 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.
16 Invesco International Total Return Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | |||||||||||||
Collateralized Mortgage Obligations | $ | — | $ | 2,307,938 | $ | — | $ | 2,307,938 | ||||||||
Corporate Debt Securities | — | 16,322,612 | — | 16,322,612 | ||||||||||||
Foreign Sovereign Debt Securities | — | 31,271,968 | — | 31,271,968 | ||||||||||||
Money Market Funds | 6,163 | — | — | 6,163 | ||||||||||||
Options Purchased | — | 24,730 | — | 24,730 | ||||||||||||
6,163 | 49,927,248 | — | 49,933,411 | |||||||||||||
Forward Foreign Currency Contracts* | — | 177,622 | — | 177,622 | ||||||||||||
Futures Contracts* | 175,252 | — | — | 175,252 | ||||||||||||
Options Written* | — | (17,613 | ) | — | (17,613 | ) | ||||||||||
Total Investments | $ | 181,415 | $ | 50,087,257 | $ | — | $ | 50,268,672 |
* | Forward Foreign Currency Contracts and Futures Contracts are valued at unrealized appreciation. Options Written are shown at value. |
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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | 268,057 | $ | (90,435 | ) | |||
Options purchased(b) | 24,730 | — | ||||||
Options written(c) | — | (17,613 | ) | |||||
Interest rate risk: | ||||||||
Futures contracts(d) | 175,630 | (378 | ) | |||||
Options purchased(b) | 0 | — | ||||||
Total | $ | 468,417 | $ | (108,426 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized appreciation on forward foreign currency contracts outstanding. |
(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) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
17 Invesco International Total Return Fund
Effect of Derivative Investments for the six months ended April 30, 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 Contracts(a) | Swap Agreements | |||||||||||||
Realized Gain (Loss): | ||||||||||||||||
Currency risk | $ | (363,811 | ) | $ | — | $ | — | $ | — | |||||||
Interest rate risk | — | (832,977 | ) | 92,802 | — | |||||||||||
Market risk | — | — | — | (1,246 | ) | |||||||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||
Currency risk | 257,490 | — | 12,968 | — | ||||||||||||
Interest rate risk | — | 228,275 | (16,225 | ) | — | |||||||||||
Total | $ | (106,321 | ) | $ | (604,702 | ) | $ | 89,545 | $ | (1,246 | ) |
(a) | Options purchased net realized gain (loss) of $110,184 and change in net unrealized appreciation (depreciation) of $(53,784) are included in the net realized gain (loss) from investment securities and the change in net unrealized appreciation (depreciation) of investment securities. |
The table below summarizes the six month average notional value of forward foreign currency contracts, futures contracts, options written and the five month average notional value of options purchased outstanding during the period.
Forward Foreign Currency Contracts | Futures Contracts | Options Written | Options Purchased | |||||||||||||
Average notional value | $ | 40,309,926 | $ | 24,176,863 | $ | 2,986,515 | $ | 7,938,657 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
07/31/15 | Deutsche Bank Securities Inc. | USD | 5,433,940 | EUR | 5,000,000 | $ | 5,621,361 | $ | 187,421 | |||||||||||||||||
07/31/15 | Goldman Sachs International | NOK | 4,200,000 | EUR | 563,444 | 550,027 | 7,071 | |||||||||||||||||||
07/31/15 | Deutsche Bank Securities Inc. | GBP | 550,000 | USD | 832,382 | 843,795 | (11,413 | ) | ||||||||||||||||||
07/31/15 | Citigroup Global Markets Inc. | GBP | 400,000 | USD | 613,864 | 613,669 | 195 | |||||||||||||||||||
07/31/15 | Goldman Sachs International | JPY | 5,201,058 | USD | 620,000,000 | 5,198,373 | (2,685 | ) | ||||||||||||||||||
07/31/15 | Deutsche Bank Securities Inc. | JPY | 842,362 | USD | 100,000,000 | 838,447 | (3,915 | ) | ||||||||||||||||||
04/30/15 | Goldman Sachs International | KRW | 1,200,000,000 | USD | 1,120,553 | 1,119,100 | �� | 1,453 | ||||||||||||||||||
07/31/15 | Goldman Sachs International | KRW | 1,200,000,000 | USD | 1,114,413 | 1,111,137 | 3,276 | |||||||||||||||||||
07/31/15 | Deutsche Bank Securities Inc. | USD | 1,121,495 | KRW | 1,200,000,000 | 1,111,137 | (10,358 | ) | ||||||||||||||||||
07/31/15 | Citigroup Global Markets Inc. | USD | 646,718 | NOK | 5,000,000 | 662,349 | 15,631 | |||||||||||||||||||
07/31/15 | Goldman Sachs International | NOK | 4,522,881 | SEK | 5,000,000 | 585,727 | 2,026 | |||||||||||||||||||
07/31/15 | Goldman Sachs International | NOK | 4,000,000 | USD | 532,309 | 529,879 | 2,430 | |||||||||||||||||||
07/31/15 | Goldman Sachs International | NZD | 3,600,000 | USD | 2,732,328 | 2,723,599 | 8,729 | |||||||||||||||||||
07/31/15 | Deutsche Bank Securities Inc. | SEK | 15,300,000 | USD | 1,777,520 | 1,839,584 | (62,064 | ) | ||||||||||||||||||
07/31/15 | Deutsche Bank Securities Inc. | USD | 1,173,361 | SEK | 10,000,000 | 1,202,342 | 28,981 | |||||||||||||||||||
07/31/15 | Goldman Sachs International | USD | 1,107,334 | SEK | 9,300,000 | 1,118,178 | 10,844 | |||||||||||||||||||
Total open forward foreign currency contracts — Currency Risk |
| $ | 177,622 |
Currency Abbreviations:
EUR | – Euro | |
GBP | – British Pound Sterling | |
JPY | – Japanese Yen | |
KRW | – South Korean Won | |
NZD | – New Zealand Dollar | |
NOK | – Norwegian Krona | |
SEK | – Swedish Krona | |
USD | – U.S. Dollar |
18 Invesco International Total Return Fund
Open Futures Contracts(a) | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
Japanese 10 Year Muni Bonds | Long | 51 | June-2015 | $ | 6,310,930 | $ | 35,337 | |||||||||||||
Canadian 10 Year Bonds | Short | 28 | June-2015 | (3,254,675 | ) | 55,524 | ||||||||||||||
U.S. Treasury 10 Year Notes | Short | 30 | June-2015 | (3,851,250 | ) | (378 | ) | |||||||||||||
U.S. Ultra Bond | Short | 20 | June-2015 | (3,290,000 | ) | 84,769 | ||||||||||||||
Total futures contracts — Interest Rate Risk |
| $ | 175,252 |
(a) | Futures contracts collateralized by $116,500 cash held with Bank of America, the futures commission merchant. |
Open Over-The-Counter Foreign Currency Options Written | ||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Number of Contracts | Strike Price | Premiums Received | Notional Value | Value | Unrealized Appreciation | |||||||||||||||||||||||||
CHF versus JPY | Put | Deutsche Bank Securities Inc. | 07/23/15 | 1,100 | JPY 126.30 | $ | 62,141 | CHF 1,100,000 | $ | (14,375 | ) | $ | 47,766 | |||||||||||||||||||||
USD versus BRL | Call | Goldman Sachs International | 10/06/15 | 600 | BRL 4.00 | 6,000 | USD 600,000 | (3,238 | ) | 2,762 | ||||||||||||||||||||||||
Total Options Written — Currency Risk | $ | 68,141 | $ | (17,613 | ) | $ | 50,528 |
Options Written Transactions | ||||||||||||||||||||||||
Call Options | ||||||||||||||||||||||||
Number of Contracts | Notional Value | Notional Value | Premiums Received | |||||||||||||||||||||
Beginning of period | — | — | — | $ | — | |||||||||||||||||||
Written | 7,300 | CHF | 1,100,000 | USD | 6,200,000 | 38,505 | ||||||||||||||||||
Closed | (4,700 | ) | CHF | (1,100,000 | ) | USD | (3,600,000 | ) | (28,425 | ) | ||||||||||||||
Expired | (2,000 | ) | CHF | — | USD | (2,000,000 | ) | (4,080 | ) | |||||||||||||||
End of period | 600 | CHF | — | USD | 600,000 | $ | 6,000 | |||||||||||||||||
Put Options | ||||||||||||||||||||||||
Number of Contracts | Notional Value | Notional Value | Premiums Received | |||||||||||||||||||||
Beginning of period | — | CHF | — | EUR | — | $ | — | |||||||||||||||||
Written | 3,100 | CHF | 1,100,000 | EUR | 2,000,000 | 68,581 | ||||||||||||||||||
Closed | (2,000 | ) | CHF | — | EUR | (2,000,000 | ) | (6,440 | ) | |||||||||||||||
End of period | 1,100 | CHF | 1,100,000 | EUR | — | $ | 62,141 |
Currency Abbreviations:
BRL | – Brazilian Real | |
CHF | – Swiss Franc | |
EUR | – Euro | |
JPY | – Japanese Yen | |
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.
19 Invesco International Total Return 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 April 30, 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 | ||||||||||||||||||||||
Deutsche Bank Securities Inc. | $ | 216,402 | $ | (87,750 | ) | $ | 128,652 | $ | — | $ | — | $ | 128,652 | |||||||||||
Goldman Sachs International | 35,829 | (2,685 | ) | 33,144 | — | — | 33,144 | |||||||||||||||||
Citigroup Global Markets Inc. | 15,826 | — | 15,826 | — | — | 15,826 | ||||||||||||||||||
Total | $ | 268,057 | $ | (90,435 | ) | $ | 177,622 | $ | — | $ | — | $ | 177,622 | |||||||||||
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 | ||||||||||||||||||||||
Deutsche Bank Securities Inc. | $ | 87,750 | $ | (87,750 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Goldman Sachs International | 2,685 | (2,685 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 90,435 | $ | (90,435 | ) | $ | — | $ | — | $ | — | $ | — |
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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $184.
NOTE 6—Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7—Cash Balances
The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.
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 October 31, 2014.
20 Invesco International Total Return 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 April 30, 2015 was $35,268,251 and $39,742,861, 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 | $ | 1,244,976 | ||
Aggregate unrealized (depreciation) of investment securities | (3,047,246 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (1,802,270 | ) |
Cost of investments for tax purposes is $51,735,681.
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 204,866 | $ | 2,102,145 | 873,924 | $ | 9,646,186 | ||||||||||
Class B | 2,048 | 20,773 | 12,209 | 135,159 | ||||||||||||
Class C | 38,346 | 390,531 | 226,250 | 2,495,660 | ||||||||||||
Class Y | 37,196 | 382,712 | 445,420 | 4,940,833 | ||||||||||||
Class R5 | — | — | 6,347 | 70,569 | ||||||||||||
Class R6 | 492,492 | 5,052,202 | 381,785 | 4,207,536 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 54,046 | 558,353 | 82,518 | 894,078 | ||||||||||||
Class B | 2,430 | 25,189 | 5,314 | 57,314 | ||||||||||||
Class C | 8,754 | 90,643 | 11,145 | 120,169 | ||||||||||||
Class Y | 5,139 | 53,090 | 4,004 | 43,516 | ||||||||||||
Class R5 | 188 | 1,953 | 717 | 7,759 | ||||||||||||
Class R6 | 28,667 | 295,451 | 29,168 | 316,211 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 23,970 | 244,256 | 43,428 | 478,998 | ||||||||||||
Class B | (23,999 | ) | (244,256 | ) | (43,477 | ) | (478,998 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (514,605 | ) | (5,264,469 | ) | (911,714 | ) | (10,010,389 | ) | ||||||||
Class B | (38,984 | ) | (397,690 | ) | (56,118 | ) | (614,151 | ) | ||||||||
Class C | (129,222 | ) | (1,316,014 | ) | (134,146 | ) | (1,475,204 | ) | ||||||||
Class Y | (317,236 | ) | (3,268,658 | ) | (68,813 | ) | (749,806 | ) | ||||||||
Class R5 | (11,226 | ) | (115,583 | ) | (21,419 | ) | (238,508 | ) | ||||||||
Class R6 | (9,013 | ) | (93,104 | ) | (13,494 | ) | (149,441 | ) | ||||||||
Net increase (decrease) in share activity | (146,143 | ) | $ | (1,482,476 | ) | 873,048 | $ | 9,697,491 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 21% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The 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, 31% of the outstanding shares of the Fund are owned by an affiliated mutual fund. Affiliated mutual funds are mutual funds that are advised by Invesco. |
21 Invesco International Total Return 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(b) | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(d) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.63 | $ | 0.09 | $ | (0.32 | ) | $ | (0.23 | ) | $ | (0.06 | ) | $ | (0.14 | ) | $ | (0.20 | ) | $ | 10.20 | (2.19 | )% | $ | 28,961 | 1.10 | %(e) | 1.68 | %(e) | 1.69 | %(e) | 66 | % | |||||||||||||||||||||||
Year ended 10/31/14 | 11.07 | 0.20 | (0.30 | ) | (0.10 | ) | (0.12 | ) | (0.22 | ) | (0.34 | ) | 10.63 | (0.97 | ) | 32,668 | 1.10 | 1.68 | 1.83 | 237 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 11.37 | 0.18 | (0.37 | ) | (0.19 | ) | (0.11 | ) | — | (0.11 | ) | 11.07 | (1.68 | ) | 33,019 | 1.10 | 1.68 | 1.65 | 233 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.63 | 0.16 | 0.20 | 0.36 | (0.39 | ) | (0.12 | ) | (0.62 | ) | 11.37 | 3.42 | 40,771 | 1.10 | 1.57 | 1.46 | 119 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 12.22 | 0.19 | 0.16 | 0.35 | (0.58 | ) | (0.36 | ) | (0.94 | ) | 11.63 | 3.37 | 47,162 | 1.10 | 1.58 | 1.64 | 226 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.68 | 0.19 | 0.51 | 0.70 | (0.16 | ) | — | (0.16 | ) | 12.22 | 6.12 | 32,947 | 1.10 | 1.55 | 1.69 | 203 | ||||||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.62 | 0.05 | (0.33 | ) | (0.28 | ) | (0.02 | ) | (0.14 | ) | (0.16 | ) | 10.18 | (2.66 | ) | 1,195 | 1.85 | (e) | 2.43 | (e) | 0.94 | (e) | 66 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 11.05 | 0.12 | (0.30 | ) | (0.18 | ) | (0.03 | ) | (0.22 | ) | (0.25 | ) | 10.62 | (1.63 | ) | 1,867 | 1.85 | 2.43 | 1.08 | 237 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 11.36 | 0.10 | (0.38 | ) | (0.28 | ) | (0.03 | ) | — | (0.03 | ) | 11.05 | (2.50 | ) | 2,850 | 1.85 | 2.43 | 0.90 | 233 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.61 | 0.08 | 0.20 | 0.28 | (0.30 | ) | (0.12 | ) | (0.53 | ) | 11.36 | 2.72 | 4,430 | 1.85 | 2.32 | 0.71 | 119 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 12.19 | 0.10 | 0.17 | 0.27 | (0.49 | ) | (0.36 | ) | (0.85 | ) | 11.61 | 2.66 | 5,934 | 1.85 | 2.33 | 0.89 | 226 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.65 | 0.11 | 0.51 | 0.62 | (0.08 | ) | — | (0.08 | ) | 12.19 | 5.34 | 6,591 | 1.85 | 2.30 | 0.94 | 203 | ||||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.61 | 0.05 | (0.33 | ) | (0.28 | ) | (0.02 | ) | (0.14 | ) | (0.16 | ) | 10.17 | (2.66 | ) | 5,340 | 1.85 | (e) | 2.43 | (e) | 0.94 | (e) | 66 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 11.04 | 0.12 | (0.30 | ) | (0.18 | ) | (0.03 | ) | (0.22 | ) | (0.25 | ) | 10.61 | (1.63 | ) | 6,441 | 1.85 | 2.43 | 1.08 | 237 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 11.35 | 0.10 | (0.38 | ) | (0.28 | ) | (0.03 | ) | — | (0.03 | ) | 11.04 | (2.50 | ) | 5,562 | 1.85 | 2.43 | 0.90 | 233 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.61 | 0.07 | 0.20 | 0.27 | (0.30 | ) | (0.12 | ) | (0.53 | ) | 11.35 | 2.63 | 8,016 | 1.85 | 2.32 | 0.71 | 119 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 12.19 | 0.10 | 0.17 | 0.27 | (0.49 | ) | (0.36 | ) | (0.85 | ) | 11.61 | 2.65 | 10,782 | 1.85 | 2.33 | 0.89 | 226 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.66 | 0.11 | 0.50 | 0.61 | (0.08 | ) | — | (0.08 | ) | 12.19 | 5.24 | 9,165 | 1.85 | 2.30 | 0.94 | 203 | ||||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.63 | 0.10 | (0.33 | ) | (0.23 | ) | (0.07 | ) | (0.14 | ) | (0.21 | ) | 10.19 | (2.16 | ) | 1,982 | 0.85 | (e) | 1.43 | (e) | 1.94 | (e) | 66 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 11.06 | 0.23 | (0.30 | ) | (0.07 | ) | (0.14 | ) | (0.22 | ) | (0.36 | ) | 10.63 | (0.63 | ) | 4,989 | 0.85 | 1.43 | 2.08 | 237 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 11.37 | 0.21 | (0.39 | ) | (0.18 | ) | (0.13 | ) | — | (0.13 | ) | 11.06 | (1.52 | ) | 982 | 0.85 | 1.43 | 1.90 | 233 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.63 | 0.19 | 0.20 | 0.39 | (0.42 | ) | (0.12 | ) | (0.65 | ) | 11.37 | 3.68 | 1,105 | 0.85 | 1.32 | 1.71 | 119 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 12.22 | 0.22 | 0.16 | 0.38 | (0.61 | ) | (0.36 | ) | (0.97 | ) | 11.63 | 3.63 | 1,322 | 0.85 | 1.33 | 1.89 | 226 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.68 | 0.22 | 0.51 | 0.73 | (0.19 | ) | — | (0.19 | ) | 12.22 | 6.39 | 726 | 0.85 | 1.30 | 1.94 | 203 | ||||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.64 | 0.10 | (0.33 | ) | (0.23 | ) | (0.07 | ) | (0.14 | ) | (0.21 | ) | 10.20 | (2.16 | ) | 1 | 0.85 | (e) | 1.13 | (e) | 1.94 | (e) | 66 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 11.07 | 0.23 | (0.30 | ) | (0.07 | ) | (0.14 | ) | (0.22 | ) | (0.36 | ) | 10.64 | (0.63 | ) | 118 | 0.85 | 1.15 | 2.08 | 237 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 11.37 | 0.21 | (0.38 | ) | (0.17 | ) | (0.13 | ) | — | (0.13 | ) | 11.07 | (1.43 | ) | 282 | 0.85 | 1.16 | 1.90 | 233 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 11.63 | 0.19 | 0.20 | 0.39 | (0.42 | ) | (0.12 | ) | (0.65 | ) | 11.37 | 3.68 | 221 | 0.85 | 1.07 | 1.71 | 119 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 12.22 | 0.22 | 0.16 | 0.38 | (0.61 | ) | (0.36 | ) | (0.97 | ) | 11.63 | 3.63 | 4,696 | 0.85 | 1.08 | 1.89 | 226 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.68 | 0.22 | 0.51 | 0.73 | (0.19 | ) | — | (0.19 | ) | 12.22 | 6.39 | 4,457 | 0.85 | 1.03 | 1.94 | 203 | ||||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.63 | 0.10 | (0.32 | ) | (0.22 | ) | (0.07 | ) | (0.14 | ) | (0.21 | ) | 10.20 | (2.07 | ) | 17,338 | 0.85 | (e) | 1.13 | (e) | 1.94 | (e) | 66 | |||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 11.07 | 0.23 | (0.31 | ) | (0.08 | ) | (0.14 | ) | (0.22 | ) | (0.36 | ) | 10.63 | (0.72 | ) | 12,637 | 0.85 | 1.14 | 2.08 | 237 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 11.37 | 0.21 | (0.38 | ) | (0.17 | ) | (0.13 | ) | — | (0.13 | ) | 11.07 | (1.43 | ) | 8,752 | 0.85 | 1.16 | 1.90 | 233 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(f) | 11.40 | 0.02 | (0.05 | ) | (0.03 | ) | — | — | — | 11.37 | (0.26 | ) | 5,493 | 0.85 | (g) | 1.10 | (g) | 1.71 | (g) | 119 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class Y and Class R5 shares which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $30,487, $1,575, $5,882, $3,014, $34 and $15,033 for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Commencement date of September 24, 2012. |
(g) | Annualized. |
22 Invesco International Total 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 November 1, 2014 through April 30, 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.
ACTUAL | HYPOTHETICAL (5% annual return before expenses) | |||||||||||||||||||||||
Class | Beginning Account Value (11/01/14) | Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | Annualized Expense Ratio | ||||||||||||||||||
A | $ | 1,000.00 | $ | 978.10 | $ | 5.40 | $ | 1,019.34 | $ | 5.51 | 1.10 | % | ||||||||||||
B | 1,000.00 | 973.40 | 9.05 | 1,015.62 | 9.25 | 1.85 | ||||||||||||||||||
C | 1,000.00 | 973.40 | 9.05 | 1,015.62 | 9.25 | 1.85 | ||||||||||||||||||
Y | 1,000.00 | 978.40 | 4.17 | 1,020.58 | 4.26 | 0.85 | ||||||||||||||||||
R5 | 1,000.00 | 978.40 | 4.17 | 1,020.58 | 4.26 | 0.85 | ||||||||||||||||||
R6 | 1,000.00 | 979.30 | 4.17 | 1,020.58 | 4.26 | 0.85 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
23 Invesco International Total 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: 811-05426 and 033-19338 | ITR-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Long/Short Equity Fund | ||||
Nasdaq: | ||||
A: LSQAX ¡ C: LSQCX ¡ R: LSQRX ¡ Y: LSQYX ¡ R5: LSQFX ¡ R6: LSQSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
11 Financial Statements | ||||
14 Notes to Financial Statements | ||||
21 Financial Highlights | ||||
22 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||
Fund vs. Indexes | ||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | –3.97 | % | ||
Class C Shares | –4.37 | |||
Class R Shares | –4.16 | |||
Class Y Shares | –3.87 | |||
Class R5 Shares | –3.87 | |||
Class R6 Shares | –3.87 | |||
S&P 500 Indexq (Broad Market Index) | 4.40 | |||
Citigroup 90-Day Treasury Bill Indexq (Style-Specific Index) | 0.01 | |||
Lipper Alternative Long/Short Equity Indexn (Peer Group Index) | 1.37 | |||
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 Citigroup 90-Day Treasury Bill Index is an unmanaged index representative of three-month Treasury bills. | ||||
The Lipper Alternative Long/Short Equity Index is composed of domestic or foreign funds that employ portfolio strategies combining long holdings of equities with short sales of equity, equity options or equity index options. The funds may be either net long or net short, depending on the portfolio manager’s view of the 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. |
Average Annual Total Returns | ||||
As of 4/30/15, including maximum applicable sales charges
|
| |||
Class A Shares | ||||
Inception (12/19/13) | –0.12 | % | ||
1 Year | –9.72 | |||
Class C Shares | ||||
Inception (12/19/13) | 3.31 | % | ||
1 Year | –6.10 | |||
Class R Shares | ||||
Inception (12/19/13) | 3.81 | % | ||
1 Year | –4.77 | |||
Class Y Shares | ||||
Inception (12/19/13) | 4.39 | % | ||
1 Year | –4.22 | |||
Class R5 Shares | ||||
Inception (12/19/13) | 4.39 | % | ||
1 Year | –4.22 | |||
Class R6 Shares | ||||
Inception (12/19/13) | 4.39 | % | ||
1 Year | –4.22 |
Average Annual Total Returns | ||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | ||||
Class A Shares | ||||
Inception (12/19/13) | 2.16 | % | ||
1 Year | –2.57 | |||
Class C Shares | ||||
Inception (12/19/13) | 5.91 | % | ||
1 Year | 1.21 | |||
Class R Shares | ||||
Inception (12/19/13) | 6.45 | % | ||
1 Year | 2.78 | |||
Class Y Shares | ||||
Inception (12/19/13) | 6.99 | % | ||
1 Year | 3.25 | |||
Class R5 Shares | ||||
Inception (12/19/13) | 6.99 | % | ||
1 Year | 3.25 | |||
Class R6 Shares | ||||
Inception (12/19/13) | 6.99 | % | ||
1 Year | 3.25 |
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 1.87%, 2.62%, 2.12%, 1.62%, 1.62% and 1.62%, 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 3.06%, 3.81%, 3.31%, 2.81%, 2.71% and 2.71%, 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 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Long/Short Equity 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 |
PhilipTaylor | Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a Invesco’s efforts to help investors achieve their financial objectives include providing timely on our homepage to get started. Invesco’s mobile apps for iPhone® and iPad® (both available free from the App StoreSM) allow | |||
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 Long/Short Equity Fund
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–90.60% |
| |||||||
Aerospace & Defense–0.98% | ||||||||
L-3 Communications Holdings, Inc. | 2,050 | $ | 235,566 | |||||
Agricultural Products–2.46% | ||||||||
Bunge Ltd. | 2,700 | 233,199 | ||||||
Ingredion Inc. | 4,500 | 357,300 | ||||||
590,499 | ||||||||
Air Freight & Logistics–1.37% | ||||||||
C.H. Robinson Worldwide, Inc. | 5,100 | 328,389 | ||||||
Apparel Retail–0.02% | ||||||||
Gap, Inc. (The) | 150 | 5,946 | ||||||
Biotechnology–0.08% | ||||||||
Medivation Inc.(b) | 150 | 18,111 | ||||||
Brewers–1.43% | ||||||||
Molson Coors Brewing Co.–Class B | 4,650 | 341,822 | ||||||
Cable & Satellite–1.18% | ||||||||
Cablevision Systems Corp.–Class A | 14,100 | 281,718 | ||||||
Coal & Consumable Fuels–0.68% | ||||||||
Peabody Energy Corp. | 34,400 | 162,712 | ||||||
Communications Equipment–1.51% | ||||||||
Juniper Networks, Inc. | 13,700 | 362,091 | ||||||
Computer & Electronics Retail–1.62% | ||||||||
Best Buy Co., Inc. | 11,200 | 388,080 | ||||||
Construction Machinery & Heavy Trucks–1.49% | ||||||||
Allison Transmission Holdings, Inc. | 11,600 | 355,888 | ||||||
Consumer Finance–3.15% | ||||||||
Ally Financial Inc.(b) | 17,250 | 377,602 | ||||||
Santander Consumer USA Holdings Inc. | 15,300 | 377,757 | ||||||
755,359 | ||||||||
Data Processing & Outsourced Services–4.49% | ||||||||
Computer Sciences Corp. | 6,050 | 389,922 | ||||||
Western Union Co. (The) | 22,050 | 447,174 | ||||||
Xerox Corp. | 20,670 | 237,705 | ||||||
1,074,801 | ||||||||
Department Stores–0.42% | ||||||||
Kohl’s Corp. | 1,420 | 101,743 | ||||||
Diversified Support Services–0.43% | ||||||||
Cintas Corp. | 1,300 | 103,935 | ||||||
Electric Utilities–3.13% | ||||||||
Entergy Corp. | 3,920 | 302,546 | ||||||
FirstEnergy Corp. | 3,400 | 122,094 |
Shares | Value | |||||||
Electric Utilities–(continued) | ||||||||
Pinnacle West Capital Corp. | 5,300 | $ | 324,360 | |||||
749,000 | ||||||||
Electronic Manufacturing Services–1.63% | ||||||||
Flextronics International Ltd.(b) | 33,800 | 389,545 | ||||||
Fertilizers & Agricultural Chemicals–0.23% | ||||||||
Mosaic Co. (The) | 1,250 | 55,000 | ||||||
Gas Utilities–2.92% | ||||||||
AGL Resources Inc. | 6,250 | 314,188 | ||||||
National Fuel Gas Co. | 5,650 | 364,142 | ||||||
UGI Corp. | 600 | 20,886 | ||||||
699,216 | ||||||||
Gold–1.54% | ||||||||
Newmont Mining Corp. | 13,950 | 369,536 | ||||||
Health Care Equipment–1.68% | ||||||||
Hologic, Inc.(b) | 11,950 | 403,193 | ||||||
Health Care Facilities–1.27% | ||||||||
Universal Health Services, Inc.–Class B | 2,600 | 304,070 | ||||||
Health Care Services–1.48% | ||||||||
Quest Diagnostics Inc. | 4,950 | 353,529 | ||||||
Health Care Supplies–1.32% | ||||||||
DENTSPLY International Inc. | 6,200 | 316,200 | ||||||
Home Entertainment Software–1.18% | ||||||||
Electronic Arts Inc.(b) | 4,850 | 281,737 | ||||||
Integrated Oil & Gas–0.40% | ||||||||
Cenovus Energy Inc. | 5,050 | 95,041 | ||||||
Integrated Telecommunication Services–0.27% | ||||||||
Windstream Holdings Inc. | 5,508 | 64,337 | ||||||
Internet Retail–1.69% | ||||||||
Expedia, Inc. | 4,300 | 405,189 | ||||||
Internet Software & Services–3.50% | ||||||||
AOL Inc.(b) | 9,500 | 379,050 | ||||||
Rackspace Hosting, Inc.(b) | 1,500 | 80,850 | ||||||
VeriSign, Inc.(b) | 5,950 | 377,884 | ||||||
837,784 | ||||||||
IT Consulting & Other Services–3.31% | ||||||||
CGI Group Inc.–Class A(b) | 1,250 | 52,587 | ||||||
Leidos Holdings, Inc. | 8,900 | 370,596 | ||||||
Teradata Corp.(b) | 8,400 | 369,516 | ||||||
792,699 | ||||||||
Life & Health Insurance–1.54% | ||||||||
Lincoln National Corp. | 4,680 | 264,373 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Long/Short Equity Fund
Shares | Value | |||||||
Life & Health Insurance–(continued) | ||||||||
Unum Group | 3,050 | $ | 104,188 | |||||
368,561 | ||||||||
Mortgage REIT’s–1.27% | ||||||||
Annaly Capital Management Inc. | 30,300 | 305,121 | ||||||
Multi-Line Insurance–0.09% | ||||||||
Assurant, Inc. | 350 | 21,511 | ||||||
Office REIT’s–1.02% | ||||||||
Alexandria Real Estate Equities, Inc. | 2,650 | 244,807 | ||||||
Office Services & Supplies–1.55% | ||||||||
Pitney Bowes Inc. | 16,550 | 370,224 | ||||||
Oil & Gas Drilling–2.75% | ||||||||
Ensco PLC–Class A | 7,500 | 204,600 | ||||||
Transocean Ltd. | 24,150 | 454,503 | ||||||
659,103 | ||||||||
Oil & Gas Equipment & Services–2.02% | ||||||||
Cameron International Corp.(b) | 2,000 | 109,640 | ||||||
Superior Energy Services, Inc. | 14,650 | 373,575 | ||||||
483,215 | ||||||||
Oil & Gas Exploration & Production–2.49% | ||||||||
California Resources Corp. | 8,850 | 82,305 | ||||||
Denbury Resources Inc. | 33,050 | 291,171 | ||||||
Encana Corp. | 13,420 | 190,698 | ||||||
Newfield Exploration Co.(b) | 850 | 33,354 | ||||||
597,528 | ||||||||
Oil & Gas Refining & Marketing–3.08% | ||||||||
HollyFrontier Corp. | 7,650 | 296,667 | ||||||
Tesoro Corp. | 5,150 | 442,024 | ||||||
738,691 | ||||||||
Packaged Foods & Meats–1.88% | ||||||||
ConAgra Foods, Inc. | 1,850 | 66,877 | ||||||
Pilgrim’s Pride Corp. | 15,500 | 382,850 | ||||||
449,727 | ||||||||
Regional Banks–1.53% | ||||||||
CIT Group, Inc. | 8,150 | 366,995 | ||||||
Reinsurance–2.23% | ||||||||
Everest Re Group, Ltd. | 1,600 | 286,256 | ||||||
Reinsurance Group of America, Inc. | 2,700 | 247,374 | ||||||
533,630 |
Shares | Value | |||||||
Residential REIT’s–1.00% | ||||||||
UDR, Inc. | 7,350 | $ | 240,860 | |||||
Restaurants–1.65% | ||||||||
Darden Restaurants, Inc. | 6,200 | 395,374 | ||||||
Retail REIT’s–1.53% | ||||||||
Regency Centers Corp. | 5,850 | 367,263 | ||||||
Security & Alarm Services–1.47% | ||||||||
ADT Corp. (The) | 9,350 | 351,560 | ||||||
Semiconductor Equipment–1.53% | ||||||||
Lam Research Corp. | 4,850 | 366,563 | ||||||
Semiconductors–5.26% | ||||||||
Marvell Technology Group Ltd. | 25,950 | 363,560 | ||||||
NVIDIA Corp. | 19,400 | 430,583 | ||||||
Skyworks Solutions, Inc. | 5,050 | 465,862 | ||||||
1,260,005 | ||||||||
Soft Drinks–1.82% | ||||||||
Dr Pepper Snapple Group, Inc. | 5,850 | 436,293 | ||||||
Specialized Finance–1.42% | ||||||||
NASDAQ OMX Group, Inc. (The) | 7,000 | 340,410 | ||||||
Specialized REIT’s–1.75% | ||||||||
Extra Space Storage Inc. | 6,350 | 418,655 | ||||||
Steel–1.20% | ||||||||
United States Steel Corp. | 12,000 | 288,240 | ||||||
Systems Software–0.78% | ||||||||
CA, Inc. | 5,850 | 185,855 | ||||||
Technology Hardware, Storage & Peripherals–2.88% | ||||||||
Lexmark International, Inc.–Class A | 7,850 | 348,461 | ||||||
NetApp, Inc. | 9,400 | 340,750 | ||||||
689,211 | ||||||||
Total Common Stocks & Other Equity Interests |
| 21,702,138 | ||||||
Money Market Funds–15.04% |
| |||||||
Liquid Assets Portfolio–Institutional Class(c) | 1,801,695 | 1,801,695 | ||||||
Premier Portfolio–Institutional Class(c) | 1,801,695 | 1,801,695 | ||||||
Total Money Market Funds | 3,603,390 | |||||||
TOTAL INVESTMENTS–105.64% |
| 25,305,528 | ||||||
OTHER ASSETS LESS LIABILITIES–(5.64)% |
| (1,351,865 | ) | |||||
NET ASSETS–100.00% | $ | 23,953,663 |
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 money market fund and the Fund are affiliated by having the same investment adviser. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Long/Short Equity Fund
Open Total Return Swap Agreements | ||||||||||||||||||||
Reference Entity | Counterparty | Expiration Dates | Floating Rate Index(1) | Notional Amount | Unrealized Appreciation (Depreciation)(2) | Net Value of Reference Entities | ||||||||||||||
Equity Securities — Long | Morgan Stanley & Co. LLC | 12/21/15 | Federal Funds floating rate | $ | 24,337,429 | $ | (321,318 | )(3) | $ | 23,999,193 | ||||||||||
Equity Securities — Short | Morgan Stanley & Co. LLC | 12/21/15 | Federal Funds floating rate | (24,463,765 | ) | 137,463 | (4) | (24,313,629 | ) | |||||||||||
Total Return Swap Agreements — Equity Risk |
| $ | (183,855 | ) |
(1) | The Fund receives or pays the total return on the long and short positions underlying the total return swap and pays or receives a specific Federal Funds floating rate. |
(2) | Swaps collateralized by $75,698 cash held with Morgan Stanley & Co. LLC, the Counterparty. |
(3) | Amount includes $16,918 of dividends receivable and fees from the Fund to the Counterparty. |
(4) | Amount includes $(12,673) of dividends payable and fees from the Fund to the Counterparty. |
Portfolio Composition
By sector, based on Total Investments
as of April 30, 2015
Portfolio Holdings | Equity Securities | Total Investments | ||||||||||||||
Long(1) | Short(2) | |||||||||||||||
Information Technology | 8.5 | % | 5.2 | % | 4.9 | % | 18.6 | % | ||||||||
Energy | 3.7 | 5.0 | 8.0 | 16.7 | ||||||||||||
Consumer Discretionary | 2.1 | 1.7 | 8.7 | 12.5 | ||||||||||||
Health Care | 1.9 | 8.9 | 1.5 | 12.3 | ||||||||||||
Financials | 5.4 | 4.1 | 2.0 | 11.5 | ||||||||||||
Industrials | 2.4 | 1.4 | 2.7 | 6.5 | ||||||||||||
Materials | 1.0 | 1.6 | 3.2 | 5.8 | ||||||||||||
Consumer Staples | 2.5 | 1.8 | 1.0 | 5.3 | ||||||||||||
Utilities | 2.0 | 2.8 | — | 4.8 | ||||||||||||
Telecommunication Services | 0.1 | 0.1 | 1.0 | 1.2 | ||||||||||||
Money Market Funds Plus Other Assets Less Liabilities | 4.8 | — | — | 4.8 | ||||||||||||
Total | 34.4 | % | 32.6 | % | 33.0 | % | 100.0 | % |
(1) | Represents the value of the equity securities underlying the equity long portfolio swap with Morgan Stanley & Co. LLC. |
(2) | Represents the value of the equity securities underlying the equity short portfolio swap with Morgan Stanley & Co. LLC. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Long/Short Equity Fund
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Morgan Stanley & Co. LLC as of April 30, 2015.
Shares | Value | |||||||
Equity Securities–Long |
| |||||||
Aerospace & Defense | ||||||||
L-3 Communications Holdings, Inc. | 950 | $ | 109,164 | |||||
Northrop Grumman Corp. | 1,750 | 269,570 | ||||||
378,734 | ||||||||
Agricultural Products | ||||||||
Archer-Daniels-Midland Co. | 7,750 | 378,820 | ||||||
Bunge Ltd. | 1,950 | 168,422 | ||||||
547,242 | ||||||||
Air Freight & Logistics | ||||||||
United Parcel Service, Inc.–Class B | 3,800 | 382,014 | ||||||
Aluminum | ||||||||
Alcoa Inc. | 22,450 | 301,279 | ||||||
Apparel Retail | ||||||||
Gap, Inc. (The) | 5,800 | 229,912 | ||||||
Asset Management & Custody Banks | ||||||||
State Street Corp. | 1,900 | 146,528 | ||||||
Biotechnology | ||||||||
Amgen Inc. | 2,000 | 315,820 | ||||||
Gilead Sciences, Inc. | 3,650 | 366,862 | ||||||
Incyte Corp. | 4,700 | 456,652 | ||||||
Isis Pharmaceuticals, Inc. | 5,900 | 334,648 | ||||||
Medivation Inc. | 2,800 | 338,072 | ||||||
1,812,054 | ||||||||
Brewers | ||||||||
Molson Coors Brewing Co.–Class B | 250 | 18,377 | ||||||
Commodity Chemicals | ||||||||
LyondellBasell Industries N.V.–Class A | 4,650 | 481,368 | ||||||
Communications Equipment | ||||||||
Cisco Systems, Inc. | 13,850 | 399,296 | ||||||
Palo Alto Networks, Inc. | 2,750 | 406,230 | ||||||
805,526 | ||||||||
Consumer Finance | ||||||||
Capital One Financial Corp. | 4,300 | 347,655 | ||||||
Data Processing & Outsourced Services | ||||||||
Xerox Corp. | 7,580 | 87,170 | ||||||
Department Stores | ||||||||
Kohl’s Corp. | 4,580 | 328,157 | ||||||
Diversified Banks | ||||||||
Citigroup Inc. | 4,550 | 242,606 | ||||||
Diversified Support Services | ||||||||
Cintas | 3,400 | 271,830 |
Shares | Value | |||||||
Drug Retail | ||||||||
CVS Health Corp. | 3,600 | $ | 357,444 | |||||
Electric Utilities | ||||||||
Edison International | 5,900 | 359,546 | ||||||
Entergy Corp. | 730 | 56,341 | ||||||
Exelon Corp. | 11,050 | 375,921 | ||||||
FirstEnergy Corp | 6,200 | 222,642 | ||||||
1,014,450 | ||||||||
Electronic Components | ||||||||
Corning Inc. | 17,300 | 362,089 | ||||||
Electronic Manufacturing Services | ||||||||
Flextronics International Ltd. | 1,550 | 17,864 | ||||||
Fertilizers & Agricultural Chemicals | ||||||||
Mosaic Co. (The) | 7,050 | 310,200 | ||||||
Food Retail | ||||||||
Kroger Co. (The) | 5,650 | 389,341 | ||||||
General Merchandise Stores | ||||||||
Target Corp. | 4,550 | 358,677 | ||||||
Health Care Distributors | ||||||||
AmerisourceBergen Corp. | 3,950 | 451,485 | ||||||
Cardinal Health, Inc. | 4,250 | 358,445 | ||||||
809,930 | ||||||||
Health Care Equipment | ||||||||
Boston Scientific Corp. | 18,700 | 333,234 | ||||||
St. Jude Medical, Inc. | 3,300 | 231,165 | ||||||
564,399 | ||||||||
Health Care Facilities | ||||||||
HCA Holdings, Inc. | 5,250 | 388,552 | ||||||
Health Care REIT’s | ||||||||
Ventas, Inc. | 5,100 | 351,390 | ||||||
Health Care Services | ||||||||
Express Scripts Holding Co. | 5,200 | 449,280 | ||||||
Omnicare, Inc. | 4,850 | 426,703 | ||||||
875,983 | ||||||||
Health Care Supplies | ||||||||
Halyard Health Inc. | 950 | 46,056 | ||||||
Home Entertainment Software | ||||||||
Electronic Arts Inc. | 3,400 | 197,506 | ||||||
Home Improvement Retail | ||||||||
Lowe’s Companies, Inc. | 5,000 | 344,300 | ||||||
Hotels, Resorts & Cruise Lines | ||||||||
Marriott International Inc.–Class A | 150 | 12,007 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Long/Short Equity Fund
Shares | Value | |||||||
Integrated Oil & Gas | ||||||||
Cenovus Energy Inc. | 14,050 | $ | 264,421 | |||||
Occidental Petroleum Corp. | 4,600 | 368,460 | ||||||
Suncor Energy, Inc. | 12,400 | 404,240 | ||||||
1,037,121 | ||||||||
Integrated Telecommunication Services | ||||||||
CenturyLink Inc. | 1,500 | 53,940 | ||||||
Internet Software & Services | ||||||||
Rackspace Hosting, Inc. | 5,650 | 304,535 | ||||||
Yahoo! Inc. | 8,100 | 344,777 | ||||||
649,312 | ||||||||
Life & Health Insurance | ||||||||
Lincoln National Corp. | 2,720 | 153,653 | ||||||
MetLife, Inc. | 6,250 | 320,562 | ||||||
474,215 | ||||||||
Managed Health Care | ||||||||
Aetna Inc. | 4,300 | 459,541 | ||||||
Anthem Inc. | 3,050 | 460,337 | ||||||
Cigna Corp. | 2,850 | 355,224 | ||||||
1,275,102 | ||||||||
Multi-Line Insurance | ||||||||
American International Group, Inc. | 5,150 | 289,893 | ||||||
Multi-Utilities | ||||||||
Consolidated Edison, Inc. | 5,450 | 335,448 | ||||||
PG&E Corp. | 7,150 | 378,378 | ||||||
Public Service Enterprise Group Inc. | 8,350 | 346,859 | ||||||
1,060,685 | ||||||||
Oil & Gas Equipment & Services | ||||||||
Cameron International Corp. | 6,050 | 331,661 | ||||||
Superior Energy Services, Inc. | 3,300 | 84,150 | ||||||
415,811 | ||||||||
Oil & Gas Exploration & Production | ||||||||
Canadian Natural Resources Ltd. | 8,000 | 266,000 | ||||||
Chesapeake Energy Corp. | 25,650 | 404,501 | ||||||
Denbury Resources Inc. | 9,750 | 85,898 | ||||||
Encana Corp. | 15,930 | 226,365 | ||||||
Hess Corp. | 5,700 | 438,330 | ||||||
1,421,094 | ||||||||
Oil & Gas Refining & Marketing | ||||||||
Marathon Petroleum Corp. | 4,100 | 404,137 | ||||||
Valero Energy Corp. | 7,350 | 418,215 | ||||||
822,352 | ||||||||
Pharmaceuticals | ||||||||
Johnson & Johnson | 3,700 | 367,040 | ||||||
Pfizer Inc. | 11,450 | 388,498 | ||||||
Zoetis Inc. | 600 | 26,652 | ||||||
782,190 |
Shares | Value | |||||||
Property & Casualty Insurance | ||||||||
Travelers Cos., Inc. (The) | 3,650 | $ | 369,052 | |||||
Residential REIT’s | ||||||||
Equity Residential | 4,850 | 358,221 | ||||||
Retail REIT’s | ||||||||
General Growth Properties, Inc. | 14,350 | 393,190 | ||||||
Urban Edge Prop | 1,725 | 39,037 | ||||||
432,227 | ||||||||
Semiconductors | ||||||||
Intel Corp. | 12,300 | 400,365 | ||||||
Steel | ||||||||
United States Steel Corp. | 3,150 | 75,663 | ||||||
Systems Software | ||||||||
Microsoft Corp. | 9,100 | 442,624 | ||||||
Technology Hardware, Storage & Peripherals | ||||||||
Apple Inc. | 3,700 | 463,055 | ||||||
Hewlett-Packard Co. | 11,450 | 377,506 | ||||||
NetApp, Inc. | 500 | 18,125 | ||||||
858,686 | ||||||||
Total Equity Securities–Long | 23,999,193 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Long/Short Equity Fund
Shares | Value | |||||||
Equity Securities–Short |
| |||||||
Aerospace & Defense | ||||||||
Precision Castparts Corp. | (1,750 | ) | $ | (361,708 | ) | |||
Apparel, Accessories & Luxury Goods | ||||||||
Gildan Activewear Inc. | (11,450 | ) | (363,079 | ) | ||||
Michael Kors Holdings Ltd. | (5,450 | ) | (337,137 | ) | ||||
Under Armour, Inc.–Class A | (4,500 | ) | (348,975 | ) | ||||
(1,049,191 | ) | |||||||
Application Software | ||||||||
Workday, Inc.–Class A | (3,550 | ) | (323,796 | ) | ||||
Auto Parts & Equipment | ||||||||
BorgWarner, Inc. | (5,950 | ) | (352,240 | ) | ||||
Automobile Manufacturers | ||||||||
General Motors Co. | (9,500 | ) | (333,070 | ) | ||||
Tesla Motors, Inc. | (1,550 | ) | (350,378 | ) | ||||
(683,448 | ) | |||||||
Automotive Retail | ||||||||
CarMax, Inc. | (5,250 | ) | (357,577 | ) | ||||
Biotechnology | ||||||||
Biogen Inc. | (960 | ) | (358,973 | ) | ||||
Building Products | ||||||||
Fortune Brands Home & Security Inc. | (7,750 | ) | (345,650 | ) | ||||
Cable & Satellite | ||||||||
AMC Networks Inc. | (1,550 | ) | (116,932 | ) | ||||
DISH Network Corp.–Class A | (5,250 | ) | (355,215 | ) | ||||
(472,147 | ) | |||||||
Casinos & Gaming | ||||||||
MGM Resorts International | (16,350 | ) | (345,803 | ) | ||||
Wynn Resorts Ltd. | (2,800 | ) | (310,996 | ) | ||||
(656,799 | ) | |||||||
Commodity Chemicals | ||||||||
Methanex Corp. | (4,000 | ) | (240,840 | ) | ||||
Construction & Engineering | ||||||||
Chicago Bridge & Iron Co. N.V. | (7,300 | ) | (347,845 | ) | ||||
Quanta Services, Inc. | (12,350 | ) | (357,039 | ) | ||||
(704,884 | ) | |||||||
Construction Materials | ||||||||
Martin Marietta Materials, Inc. | (2,650 | ) | (378,023 | ) | ||||
Data Processing & Outsourced Services | ||||||||
MasterCard, Inc.–Class A | (4,050 | ) | (365,350 | ) | ||||
Distributors | ||||||||
LKQ Corp. | (14,600 | ) | (395,222 | ) | ||||
Diversified Metals & Mining | ||||||||
Freeport-McMoRan Inc. | (16,100 | ) | (374,647 | ) |
Shares | Value | |||||||
Diversified REIT’s | ||||||||
American Realty Capital Properties, Inc. | (40,300 | ) | $ | (363,909 | ) | |||
Gold | ||||||||
Franco-Nevada Corp. | (7,150 | ) | (370,584 | ) | ||||
Health Care Facilities | ||||||||
Tenet Healthcare Corp. | (7,300 | ) | (349,378 | ) | ||||
Homebuilding | ||||||||
D.R. Horton, Inc. | (13,650 | ) | (346,710 | ) | ||||
Lennar Corp.–Class A | (7,850 | ) | (359,530 | ) | ||||
(706,240 | ) | |||||||
Industrial Machinery | ||||||||
Colfax Corp. | (7,450 | ) | (369,445 | ) | ||||
Insurance Brokers | ||||||||
Arthur J. Gallagher & Co. | (5,200 | ) | (248,716 | ) | ||||
Integrated Oil & Gas | ||||||||
Chevron Corp. | (3,250 | ) | (360,945 | ) | ||||
Internet Retail | ||||||||
Amazon.com, Inc. | (840 | ) | (354,295 | ) | ||||
Netflix Inc. | (620 | ) | (345,030 | ) | ||||
TripAdvisor Inc. | (4,300 | ) | (346,107 | ) | ||||
(1,045,432 | ) | |||||||
Internet Software & Services | ||||||||
Google Inc.,–Class A | (560 | ) | (307,311 | ) | ||||
Google Inc.,–Class C | (80 | ) | (42,987 | ) | ||||
LinkedIn Corp.–Class A | (150 | ) | (37,819 | ) | ||||
Pandora Media Inc. | (19,950 | ) | (355,908 | ) | ||||
Twitter, Inc. | (4,100 | ) | (159,736 | ) | ||||
(903,761 | ) | |||||||
Life Sciences Tools & Services | ||||||||
Illumina, Inc. | (1,950 | ) | (359,287 | ) | ||||
Oil & Gas Drilling | ||||||||
Diamond Offshore Drilling, Inc. | (12,200 | ) | (408,334 | ) | ||||
Helmerich & Payne, Inc. | (4,750 | ) | (370,357 | ) | ||||
Rowan Cos. PLC–Class A | (15,100 | ) | (319,969 | ) | ||||
(1,098,660 | ) | |||||||
Oil & Gas Exploration & Production | ||||||||
Antero Resources Corp. | (8,700 | ) | (385,497 | ) | ||||
Cobalt International Energy, Inc. | (35,800 | ) | (383,060 | ) | ||||
ConocoPhillips | (5,400 | ) | (366,768 | ) | ||||
Continental Resources, Inc. | (7,200 | ) | (378,936 | ) | ||||
Noble Energy, Inc. | (7,300 | ) | (370,256 | ) | ||||
Pioneer Natural Resources Co. | (2,100 | ) | (362,838 | ) | ||||
Southwestern Energy Co. | (13,700 | ) | (384,011 | ) | ||||
Whiting Petroleum Corp. | (10,200 | ) | (386,682 | ) | ||||
(3,018,048 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Long/Short Equity Fund
Shares | Value | |||||||
Oil & Gas Storage & Transportation | ||||||||
Cheniere Energy, Inc. | (4,850 | ) | $ | (370,977 | ) | |||
Enbridge Inc. | (6,800 | ) | (355,844 | ) | ||||
Pembina Pipeline Corp. Ordinary Shares | (8,400 | ) | (292,404 | ) | ||||
Williams Cos., Inc. (The) | (7,050 | ) | (360,890 | ) | ||||
(1,380,115 | ) | |||||||
Packaged Foods & Meats | ||||||||
Keurig Green Mountain Inc. | (3,100 | ) | (360,747 | ) | ||||
WhiteWave Foods Co. (The)–Class A | (8,050 | ) | (353,959 | ) | ||||
(714,706 | ) | |||||||
Paper Packaging | ||||||||
Packaging Corp. of America | (4,150 | ) | (287,139 | ) | ||||
Property & Casualty Insurance | ||||||||
FNF Group | (4,850 | ) | (174,552 | ) | ||||
Markel Corp. | (480 | ) | (355,507 | ) | ||||
(530,059 | ) | |||||||
Real Estate Development | ||||||||
Howard Hughes Corp. | (2,350 | ) | (348,904 | ) | ||||
Semiconductor Equipment | ||||||||
SunEdison, Inc. | (14,100 | ) | (357,012 | ) | ||||
Semiconductors | ||||||||
Cree, Inc. | (10,550 | ) | (334,224 | ) | ||||
Micron Technology, Inc. | (12,600 | ) | (354,438 | ) | ||||
(688,662 | ) | |||||||
Specialty Chemicals | ||||||||
W.R. Grace & Co. | (3,750 | ) | (362,700 | ) | ||||
Specialty Stores | ||||||||
Signet Jewelers Ltd. | (2,650 | ) | (355,445 | ) | ||||
Steel | ||||||||
Allegheny Technologies, Inc. | (10,350 | ) | (351,796 | ) | ||||
Systems Software | ||||||||
FireEye, Inc. | (8,500 | ) | (351,050 | ) | ||||
NetSuite Inc. | (3,900 | ) | (372,723 | ) | ||||
(723,773 | ) | |||||||
Technology Hardware, Storage & Peripherals | ||||||||
3D Systems Corp. | (10,400 | ) | (260,936 | ) | ||||
Tires & Rubber | ||||||||
Goodyear Tire & Rubber Co. (The) | (13,350 | ) | (378,673 | ) | ||||
Trading Companies & Distributors | ||||||||
MSC Industrial Direct Co., Inc.–Class A | (1,250 | ) | (88,825 | ) | ||||
W.W. Grainger, Inc. | (600 | ) | (149,058 | ) | ||||
(237,883 | ) |
Shares | Value | |||||||
Wireless Telecommunication Services | ||||||||
Sprint Corp. | (69,200 | ) | $ | (354,996 | ) | |||
T-Mobile US, Inc. | (10,750 | ) | (365,930 | ) | ||||
(720,926 | ) | |||||||
Total Equity Securities–Short | (24,313,629 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Long/Short Equity Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $20,634,546) | $ | 21,702,138 | ||
Investments in affiliated money market funds, at value and cost | 3,603,390 | |||
Total investments, at value (Cost $24,237,936) | 25,305,528 | |||
Receivable for: | ||||
Deposits with brokers for swap agreements | 75,698 | |||
Investments sold | 876,472 | |||
Fund shares sold | 62,078 | |||
Dividends | 13,084 | |||
Fund expenses absorbed | 16,449 | |||
Investment for trustee deferred compensation and retirement plans | 3,693 | |||
Other assets | 39,781 | |||
Total assets | 26,392,783 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 2,027,238 | |||
Fund shares reacquired | 60,728 | |||
Swaps payable | 68,596 | |||
Accrued fees to affiliates | 14,097 | |||
Accrued trustees’ and officers’ fees and benefits | 2,012 | |||
Accrued other operating expenses | 78,901 | |||
Trustee deferred compensation and retirement plans | 3,693 | |||
Unrealized depreciation on swap agreements | 183,855 | |||
Total liabilities | 2,439,120 | |||
Net assets applicable to shares outstanding | $ | 23,953,663 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 24,864,288 | ||
Undistributed net investment income | 400,664 | |||
Undistributed net realized gain (loss) | (2,195,026 | ) | ||
Net unrealized appreciation | 883,737 | |||
$ | 23,953,663 |
Net Assets: | ||||
Class A | $ | 12,060,711 | ||
Class C | $ | 2,535,064 | ||
Class R | $ | 33,517 | ||
Class Y | $ | 8,245,210 | ||
Class R5 | $ | 529,781 | ||
Class R6 | $ | 549,380 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 1,142,207 | |||
Class C | 242,592 | |||
Class R | 3,185 | |||
Class Y | 778,002 | |||
Class R5 | 50,001 | |||
Class R6 | 51,845 | |||
Class A: | ||||
Net asset value per share | $ | 10.56 | ||
Maximum offering price per share | ||||
(Net asset value of $10.56 ¸ 94.50%) | $ | 11.17 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.45 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.52 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.60 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.60 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.60 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Long/Short Equity Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $1,262) | $ | 310,400 | ||
Dividends from affiliated money market funds | 1,082 | |||
Total investment income | 311,482 | |||
Expenses: | ||||
Advisory fees | 192,178 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 3,062 | |||
Distribution fees: | ||||
Class A | 20,060 | |||
Class C | 14,748 | |||
Class R | 80 | |||
Transfer agent fees — A, C, R and Y | 25,075 | |||
Transfer agent fees — R5 | 50 | |||
Transfer agent fees — R6 | 24 | |||
Trustees’ and officers’ fees and benefits | 9,994 | |||
Registration and filing fees | 43,328 | |||
Professional services fees | 41,385 | |||
Other | 18,780 | |||
Total expenses | 393,558 | |||
Less: Fees waived and expenses reimbursed | (112,851 | ) | ||
Net expenses | 280,707 | |||
Net investment income | 30,775 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 69,008 | |||
Swap agreements | (1,761,407 | ) | ||
(1,692,399 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 372,320 | |||
Swap agreements | 187,583 | |||
559,903 | ||||
Net realized and unrealized gain (loss) | (1,132,496 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (1,101,721 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Long/Short Equity Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 19, 2013 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 19, 2013 October 31, 2014 | |||||||
Operations: | ||||||||
Net investment income (loss) | $ | 30,775 | $ | (36,302 | ) | |||
Net realized gain (loss) | (1,692,399 | ) | (444,221 | ) | ||||
Change in net unrealized appreciation | 559,903 | 323,834 | ||||||
Net increase (decrease) in net assets resulting from operations | (1,101,721 | ) | (156,689 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (4,528 | ) | — | |||||
Class C | (854 | ) | — | |||||
Class R | (7 | ) | — | |||||
Class Y | (2,596 | ) | — | |||||
Class R5 | (189 | ) | — | |||||
Class R6 | (150 | ) | — | |||||
Total distributions from net realized gains | (8,324 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | (4,169,607 | ) | 17,061,810 | |||||
Class C | 49,244 | 2,778,453 | ||||||
Class R | 7,994 | 25,838 | ||||||
Class Y | (3,769,733 | ) | 12,233,158 | |||||
Class R5 | (173,215 | ) | 656,660 | |||||
Class R6 | 9,325 | 510,470 | ||||||
Net increase (decrease) in net assets resulting from share transactions | (8,045,992 | ) | 33,266,389 | |||||
Net increase (decrease) in net assets | (9,156,037 | ) | 33,109,700 | |||||
Net assets: | ||||||||
Beginning of period | 33,109,700 | — | ||||||
End of period (includes undistributed net investment income of $400,664 and $369,889, respectively) | $ | 23,953,663 | $ | 33,109,700 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Long/Short Equity Fund
Statement of Cash Flows
For the six months ended April 30, 2015
(Unaudited)
Cash provided by (used by) operating activities: |
| |||
Net increase (decrease) in net assets resulting from operations | $ | (1,101,721 | ) | |
Adjustments to reconcile the change in net assets applicable from operations to net cash provided by operating activities: |
| |||
Purchases of investments | (12,074,286 | ) | ||
Net change in unrealized depreciation on swap agreements | (187,583 | ) | ||
Increase in swap agreement payable, net | (20,136 | ) | ||
Proceeds from sales of investments | 25,075,120 | |||
Increase in receivables and other assets | (56,073 | ) | ||
Increase in accrued expenses and other payables | 16,545 | |||
Net realized gain from investment securities | (69,008 | ) | ||
Net change in unrealized appreciation on investment securities | (372,320 | ) | ||
Net cash provided by operating activities | 11,210,538 | |||
Cash provided by (used in) financing activities: | ||||
Dividends paid to shareholders from net realized gains | (3,989 | ) | ||
Proceeds from shares of beneficial interest sold | 9,137,076 | |||
Disbursements from shares of beneficial interest reacquired | (17,632,064 | ) | ||
Net cash provided by (used in) financing activities | (8,498,977 | ) | ||
Net increase in cash and cash equivalents | 2,711,561 | |||
Cash and cash equivalents at beginning of period | 891,829 | |||
Cash and cash equivalents at end of period | $ | 3,603,390 | ||
Non-cash financing activities: | ||||
Value of shares of beneficial interest issued in reinvestment of dividends paid to shareholders | $ | 4,335 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Long/Short Equity Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is to seek long-term capital appreciation.
The Fund currently consists of 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. |
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.
14 Invesco Long/Short Equity Fund
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.
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 Long/Short Equity 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. | 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. |
J. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, volatility, variance, index, currency and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, equity, currency or credit risk. Such transactions are agreements between two parties (“Counterparties”). 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, volatility, variance, 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.
A total return swap is an agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income generated and capital gains, if any. The unrealized appreciation (depreciation) on total return swaps includes dividends on the underlying equity securities and financing rate payable from the Counterparty. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and Counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the Counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
K. | 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. |
16 Invesco Long/Short Equity Fund
L. | Collateral — To the extent the Fund has designated or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||
First $10 billion | 1.25% | |||
Over $10 billion | 1.15% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.25%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.87%, 2.62%, 2.12%, 1.62%, 1.62% and 1.62% 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed Fund expenses of $87,702 and reimbursed class level expenses of $13,602, $2,500, $27, $8,946, $50 and $24 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 April 30, 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $10,474 in front-end sales commissions from the sale of Class A shares and $394 from Class C shares for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
17 Invesco Long/Short Equity Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | $ | 25,305,528 | $ | — | $ | — | $ | 25,305,528 | ||||||||
Swap Agreements* | — | (183,855 | ) | — | (183,855 | ) | ||||||||||
Total Investments | $ | 25,305,528 | $ | (183,855 | ) | $ | — | $ | 25,121,673 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk: | ||||||||
Swap agreements(a) | $ | 137,463 | $ | (321,318 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized depreciation on swap agreements. |
Effect of Derivative Investments for the six months ended April 30, 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 | ||||
Swap Agreements | ||||
Realized Gain (Loss): | ||||
Equity risk | $ | (1,761,407 | ) | |
Change in Unrealized Appreciation: | ||||
Equity risk | 187,583 | |||
Total | $ | (1,573,824 | ) |
The table below summarizes the average notional value of swap agreements outstanding during the period.
Swap Agreements | ||||
Average notional value | $ | 61,297,199 |
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.
18 Invesco Long/Short Equity 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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets presented in the Statement of Assets and Liabilities | Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Morgan Stanley & Co. LLC | $ | 137,463 | $ | (137,463 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized Liabilities | Gross amounts Assets & Liabilities | Net amounts of liabilities presented in the Statement of Assets & Liabilities | Collateral Pledged | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Morgan Stanley & Co. LLC | $ | 389,914 | $ | (137,463 | ) | $ | 252,451 | $ | — | $ | (75,698 | ) | $ | 176,753 |
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. Obligations under the deferred compensation plan 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. 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 October 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 April 30, 2015 was $14,101,524 and $20,946,593, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as 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 | $ | 1,434,006 | ||
Aggregate unrealized (depreciation) of investment securities | (867,093 | ) | ||
Net unrealized appreciation of investment securities | $ | 566,913 |
Cost of investments for tax purposes is $24,738,615.
19 Invesco Long/Short Equity Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 19, 2013 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 386,248 | $ | 4,314,288 | 2,709,563 | $ | 30,100,662 | ||||||||||
Class C | 158,873 | 1,756,096 | 358,125 | 4,081,564 | ||||||||||||
Class R | 1,375 | 15,275 | 2,468 | 25,838 | ||||||||||||
Class Y | 262,996 | 2,939,956 | 1,361,368 | 14,864,488 | ||||||||||||
Class R5 | — | — | 69,434 | 702,762 | ||||||||||||
Class R6 | 1,402 | 15,694 | 51,004 | 510,470 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 238 | 2,611 | — | — | ||||||||||||
Class C | 77 | 839 | — | — | ||||||||||||
Class Y | 76 | 841 | — | — | ||||||||||||
Class R5 | 4 | 44 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (771,435 | ) | (8,486,506 | ) | (1,182,407 | ) | (13,038,852 | ) | ||||||||
Class C | (155,978 | ) | (1,707,691 | ) | (118,505 | ) | (1,303,111 | ) | ||||||||
Class R | (658 | ) | (7,281 | ) | — | — | ||||||||||
Class Y | (608,839 | ) | (6,710,530 | ) | (237,599 | ) | (2,631,330 | ) | ||||||||
Class R5 | (15,106 | ) | (173,259 | ) | (4,331 | ) | (46,102 | ) | ||||||||
Class R6 | (561 | ) | (6,369 | ) | — | — | ||||||||||
Net increase (decrease) in share activity | (741,288 | ) | $ | (8,045,992 | ) | 3,009,120 | $ | 33,266,389 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 31% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
In addition, 44% of the outstanding shares of the Fund are owned by the Adviser. |
20 Invesco Long/Short Equity Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Distributions from net realized gains | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 11.00 | $ | 0.01 | $ | (0.45 | ) | $ | (0.44 | ) | $ | (0.00 | ) | $ | 10.56 | (3.97 | )% | $ | 12,061 | 1.85 | %(d) | 2.59 | %(d) | 0.18 | %(d) | 53 | % | |||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.02 | ) | 1.02 | 1.00 | — | 11.00 | 10.00 | 16,796 | 1.85 | (f) | 3.04 | (f) | (0.25 | )(f) | 102 | ||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.92 | (0.03 | ) | (0.44 | ) | (0.47 | ) | (0.00 | ) | 10.45 | (4.28 | ) | 2,535 | 2.60 | (d) | 3.34 | (d) | (0.57 | )(d) | 53 | ||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.10 | ) | 1.02 | 0.92 | — | 10.92 | 9.20 | 2,618 | 2.60 | (f) | 3.79 | (f) | (1.00 | )(f) | 102 | ||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.98 | 0.00 | (0.46 | ) | (0.46 | ) | (0.00 | ) | 10.52 | (4.16 | ) | 34 | 2.10 | (d) | 2.84 | (d) | (0.07 | )(d) | 53 | |||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | (0.04 | ) | 1.02 | 0.98 | — | 10.98 | 9.80 | 27 | 2.10 | (f) | 3.29 | (f) | (0.50 | )(f) | 102 | ||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 11.02 | 0.02 | (0.44 | ) | (0.42 | ) | (0.00 | ) | 10.60 | (3.79 | ) | 8,245 | 1.60 | (d) | 2.34 | (d) | 0.43 | (d) | 53 | |||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.00 | 1.02 | 1.02 | — | 11.02 | 10.20 | 12,389 | 1.60 | (f) | 2.79 | (f) | 0.00 | (f) | 102 | |||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 11.02 | 0.02 | (0.44 | ) | (0.42 | ) | (0.00 | ) | 10.60 | (3.79 | ) | 530 | 1.60 | (d) | 2.19 | (d) | 0.43 | (d) | 53 | |||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.00 | 1.02 | 1.02 | — | 11.02 | 10.20 | 718 | 1.60 | (f) | 2.69 | (f) | 0.00 | (f) | 102 | |||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 11.02 | 0.02 | (0.44 | ) | (0.42 | ) | (0.00 | ) | 10.60 | (3.79 | ) | 549 | 1.60 | (d) | 2.18 | (d) | 0.43 | (d) | 53 | |||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.00 | 1.02 | 1.02 | — | 11.02 | 10.20 | 562 | 1.60 | (f) | 2.69 | (f) | 0.00 | (f) | 102 |
(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 $16,181, $2,974, $32, $10,642, $603 and $572 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of December 19, 2013. |
(f) | Annualized. |
21 Invesco Long/Short Equity Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 960.30 | $ | 8.99 | $ | 1,015.62 | $ | 9.25 | 1.85 | % | ||||||||||||
C | 1,000.00 | 956.30 | 12.61 | 1,011.90 | 12.97 | 2.60 | ||||||||||||||||||
R | 1,000.00 | 958.40 | 10.20 | 1,014.38 | 10.49 | 2.10 | ||||||||||||||||||
Y | 1,000.00 | 961.30 | 7.78 | 1,016.86 | 8.00 | 1.60 | ||||||||||||||||||
R5 | 1,000.00 | 961.30 | 7.78 | 1,016.86 | 8.00 | 1.60 | ||||||||||||||||||
R6 | 1,000.00 | 961.30 | 7.78 | 1,016.86 | 8.00 | 1.60 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Long/Short Equity Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov.
The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. | ||
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-05426 and 033-19338 | LSE-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Low Volatility Emerging Markets Fund | ||||
Nasdaq: | ||||
A: LVLAX ¡ C: LVLCX ¡ R: LVLRX ¡ Y: LVLYX ¡ R5: LVLFX ¡ R6: LVLSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
6 Financial Statements | ||||
8 Notes to Financial Statements | ||||
15 Financial Highlights | ||||
16 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| |||||||
Fund vs. Indexes | |||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | 0.57 | % | |||||
Class C Shares | 0.10 | ||||||
Class R Shares | 0.44 | ||||||
Class Y Shares | 0.63 | ||||||
Class R5 Shares | 0.63 | ||||||
Class R6 Shares | 0.63 | ||||||
MSCI All Country World Index▼ (Broad Market Index) | 4.97 | ||||||
MSCI Emerging Markets Index▼ (Style-Specific Index) | 3.92 | ||||||
Lipper Emerging Market Funds Indexn (Peer Group Index) | 0.71 | ||||||
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc.
| |||||||
The MSCI All Country World Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The MSCI Emerging Markets Index is an unmanaged index considered representative of stocks of developing countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The Lipper Emerging Market Funds Index is an unmanaged index considered representative of emerging market funds tracked by Lipper. The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (12/17/13) | –1.39 | % | |||||
1 Year | –5.21 | ||||||
Class C Shares | |||||||
Inception (12/17/13) | 1.97 | % | |||||
1 Year | –1.44 | ||||||
Class R Shares | |||||||
Inception (12/17/13) | 2.51 | % | |||||
1 Year | 0.05 | ||||||
Class Y Shares | |||||||
Inception (12/17/13) | 3.02 | % | |||||
1 Year | 0.54 | ||||||
Class R5 Shares | |||||||
Inception (12/17/13) | 3.02 | % | |||||
1 Year | 0.44 | ||||||
Class R6 Shares | |||||||
Inception (12/17/13) | 3.02 | % | |||||
1 Year | 0.54 |
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
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (12/17/13) | –6.09 | % | |||||
1 Year | –9.39 | ||||||
Class C Shares | |||||||
Inception (12/17/13) | –2.64 | % | |||||
1 Year | –5.81 | ||||||
Class R Shares | |||||||
Inception (12/17/13) | –2.14 | % | |||||
1 Year | –4.37 | ||||||
Class Y Shares | |||||||
Inception (12/17/13) | –1.61 | % | |||||
1 Year | –3.89 | ||||||
Class R5 Shares | |||||||
Inception (12/17/13) | –1.61 | % | |||||
1 Year | –3.89 | ||||||
Class R6 Shares | |||||||
Inception (12/17/13) | –1.69 | % | |||||
1 Year | –3.99 |
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 1.72%, 2.47%, 1.97%, 1.47%, 1.47% and 1.47%, 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 10.37%, 11.12%, 10.62%, 10.12%, 10.07% and 10.07%, 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 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Low Volatility Emerging Markets 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 Low Volatility Emerging Markets Fund
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–95.95% |
| |||||||
Brazil–11.69% | ||||||||
AES Tiete S.A.–Preference Shares | 4,000 | $ | 22,691 | |||||
Arteris S.A. | 2,400 | 6,373 | ||||||
Banco do Brasil S.A. | 1,300 | 11,301 | ||||||
BRF S.A. | 2,300 | 49,310 | ||||||
CESP–Cia Energetica de Sao Paulo–Class B–Preference Shares | 4,500 | 27,902 | ||||||
Cia Brasileira de Distribuicao–Preference Shares | 1,100 | 36,877 | ||||||
Companhia de Transmissao de Energia Eletrica Paulista–Preference Shares | 2,700 | 37,211 | ||||||
Companhia Energetica de Minas Gerais–ADR | 7,192 | 35,385 | ||||||
JBS S.A. | 9,200 | 46,905 | ||||||
Lojas Renner S.A. | 1,300 | 45,403 | ||||||
Multiplus S.A. | 1,700 | 18,734 | ||||||
Porto Seguro S.A. | 1,800 | 22,220 | ||||||
Telefonica Brasil S.A.–ADR | 2,400 | 39,408 | ||||||
Transmissora Alianca de Energia Eletrica S.A. | 7,800 | 51,289 | ||||||
WEG S.A. | 1,820 | 9,738 | ||||||
460,747 | ||||||||
Chile–3.21% | ||||||||
Aguas Andinas S.A.–Class A | 16,538 | 9,732 | ||||||
Banco de Chile | 84,849 | 9,831 | ||||||
Compania Cervecerias Unidas S.A.–ADR | 800 | 17,496 | ||||||
Empresa Nacional de Electricidad S.A. | 25,512 | 39,233 | ||||||
Enersis S.A. | 144,307 | 50,233 | ||||||
126,525 | ||||||||
China–5.85% | ||||||||
Chongqing Rural Commercial Bank Co., Ltd.–Class H | 57,000 | 51,039 | ||||||
Guangdong Electric Power Development Co., Ltd.–Class B | 17,700 | 17,904 | ||||||
Huadian Power International Corp. Ltd.–Class H | 56,000 | 62,066 | ||||||
Shanghai Bailian Group Co. Ltd.–Class B | 9,416 | 21,365 | ||||||
Shenzhen Expressway Co. Ltd.–Class H | 22,000 | 21,034 | ||||||
Zhejiang Expressway Co., Ltd.–Class H | 36,000 | 57,169 | ||||||
230,577 | ||||||||
Colombia–1.01% | ||||||||
Bancolombia S.A.–ADR | 700 | 31,689 | ||||||
Cemex Latam Holdings S.A.(a) | 1,459 | 8,144 | ||||||
39,833 | ||||||||
Greece–0.61% | ||||||||
OPAP S.A. | 2,688 | 23,887 | ||||||
Indonesia–3.62% | ||||||||
PT Astra Agro Lestari Tbk | 10,300 | 16,103 | ||||||
PT Indofood Sukses Makmur Tbk | 90,300 | 46,811 | ||||||
PT Telekomunikasi Indonesia Persero Tbk | 215,300 | 43,682 |
Shares | Value | |||||||
Indonesia–(continued) | ||||||||
PT United Tractors Tbk | 22,000 | $ | 36,195 | |||||
142,791 | ||||||||
Malaysia–7.01% | ||||||||
AMMB Holdings Berhad | 28,800 | 52,313 | ||||||
Axiata Group Berhad | 23,900 | 45,207 | ||||||
British American Tobacco Malaysia Berhad | 700 | 13,059 | ||||||
DiGi.Com Berhad | 6,600 | 11,132 | ||||||
Hong Leong Financial Group Berhad | 2,100 | 9,528 | ||||||
IJM Corp. Berhad | 24,900 | 51,221 | ||||||
IOI Corp. Berhad | 36,300 | 44,212 | ||||||
Tenaga Nasional Berhad | 12,300 | 49,484 | ||||||
276,156 | ||||||||
Mexico–6.36% | ||||||||
Arca Continental S.A.B. de C.V. | 7,100 | 43,561 | ||||||
Gruma, S.A.B. de C.V.–Class B | 3,700 | 44,581 | ||||||
Grupo Aeroportuario del Pacifico S.A.B. de C.V.–ADR | 600 | 42,630 | ||||||
Grupo Mexico S.A.B. de C.V.–Series B | 16,200 | 50,071 | ||||||
Industrias Bachoco, S.A.–Series B(a) | 3,400 | 15,144 | ||||||
Industrias Peñoles, S.A.B. de C.V. | 1,435 | 24,324 | ||||||
Kimberly-Clark de Mexico, S.A.B. de C.V.–Class A | 13,700 | 30,171 | ||||||
250,482 | ||||||||
Philippines–0.36% | ||||||||
DMCI Holdings Inc. | 42,500 | 14,297 | ||||||
Poland–3.52% | ||||||||
KGHM Polska Miedz S.A. | 1,549 | 54,298 | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 3,286 | 32,922 | ||||||
Powszechny Zaklad Ubezpieczen S.A. | 394 | 51,445 | ||||||
138,665 | ||||||||
Russia–4.23% | ||||||||
Gazprom OAO–ADR | 4,297 | 25,455 | ||||||
Mining and Metallurgical Co. Norilsk Nickel OJSC–ADR | 2,935 | 54,898 | ||||||
Mobile TeleSystems OJSC–ADR | 3,100 | 37,448 | ||||||
Moscow Exchange OAO | 32,607 | 48,732 | ||||||
166,533 | ||||||||
South Africa–12.15% | ||||||||
AVI Ltd. | 7,116 | 48,872 | ||||||
FirstRand Ltd. | 11,542 | 55,097 | ||||||
Imperial Holdings Ltd. | 3,265 | 54,592 | ||||||
Liberty Holdings Ltd. | 1,476 | 20,553 | ||||||
Mondi Ltd. | 1,447 | 29,132 | ||||||
Mr. Price Group Ltd. | 2,360 | 50,476 | ||||||
Nedbank Group Ltd. | 2,609 | 56,251 | ||||||
Netcare Ltd. | 13,926 | 48,679 | ||||||
Omnia Holdings Ltd. | 586 | 8,087 | ||||||
Sibanye Gold Ltd. | 19,723 | 46,570 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Low Volatility Emerging Markets Fund
Shares | Value | |||||||
South Africa–(continued) | ||||||||
SPAR Group Ltd. (The) | 1,840 | $ | 29,553 | |||||
Steinhoff International Holdings Ltd. | 4,835 | 30,699 | ||||||
478,561 | ||||||||
South Korea–17.21% | ||||||||
AMOREPACIFIC Group | 39 | 59,284 | ||||||
Coway Co., Ltd. | 586 | 49,348 | ||||||
Hanwha Corp. | 1,488 | 58,375 | ||||||
Hyosung Corp. | 247 | 27,321 | ||||||
Hyundai Marine & Fire Insurance Co., Ltd. | 1,361 | 36,300 | ||||||
Kangwon Land Inc. | 1,567 | 53,413 | ||||||
Kia Motors Corp. | 1,254 | 57,773 | ||||||
Korean Air Lines Co., Ltd.(a) | 1,191 | 50,752 | ||||||
KT&G Corp. | 605 | 53,533 | ||||||
Kyongnam Bank(a) | 0 | 3 | ||||||
LG Display Co. Ltd. | 1,729 | 47,769 | ||||||
LG Hausys, Ltd. | 294 | 45,704 | ||||||
LS Corp. | 561 | 28,171 | ||||||
LS Industrial Systems Co., Ltd. | 251 | 13,858 | ||||||
Samsung Electronics Co., Ltd. | 37 | 48,513 | ||||||
SK Hynix Inc. | 1,122 | 47,955 | ||||||
678,072 | ||||||||
Taiwan–13.67% | ||||||||
AU Optronics Corp. | 108,000 | 54,488 | ||||||
China Steel Corp. | 66,000 | 55,439 | ||||||
Chunghwa Telecom Co., Ltd. | 8,000 | 25,843 | ||||||
CTBC Financial Holding Co. Ltd. | 68,000 | 52,932 | ||||||
Highwealth Construction Corp. | 3,000 | 7,835 | ||||||
Hon Hai Precision Industry Co., Ltd. | 15,000 | 44,972 |
Shares | Value | |||||||
Taiwan–(continued) | ||||||||
Innolux Corp. | 100,000 | $ | 51,702 | |||||
Pegatron Corp. | 20,000 | 59,342 | ||||||
Pou Chen Corp. | 38,000 | 53,279 | ||||||
Taishin Financial Holding Co., Ltd. | 50,000 | 22,895 | ||||||
Taiwan Cement Corp. | 37,000 | 52,567 | ||||||
Teco Electric & Machinery Co., Ltd. | 11,000 | 10,690 | ||||||
Wan Hai Lines Ltd. | 42,000 | 46,632 | ||||||
538,616 | ||||||||
Turkey–3.92% | ||||||||
TAV Havalimanlari Holding A.S. | 5,702 | 50,060 | ||||||
Turkiye Is Bankasi–Class C | 24,852 | 55,979 | ||||||
Ulker Biskuvi Sanayi A.S. | 6,342 | 48,435 | ||||||
154,474 | ||||||||
United Arab Emirates–1.53% | ||||||||
Air Arabia | 94,461 | 41,973 | ||||||
Al Waha Capital P.J.S.C. | 25,938 | 18,283 | ||||||
60,256 | ||||||||
Total Common Stocks & Other Equity Interests |
| 3,780,472 | ||||||
Money Market Funds–2.09% | ||||||||
Liquid Assets Portfolio–Institutional Class(b) | 41,168 | 41,168 | ||||||
Premier Portfolio–Institutional Class(b) | 41,168 | 41,168 | ||||||
Total Money Market Funds |
| 82,336 | ||||||
TOTAL INVESTMENTS–98.04% |
| 3,862,808 | ||||||
OTHER ASSETS LESS LIABILITIES–1.96% |
| 77,301 | ||||||
NET ASSETS–100.00% |
| $ | 3,940,109 |
Investment Abbreviations:
ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets as of April 30, 2015
Consumer Staples | 16.9 | % | ||
Financials | 16.4 | |||
Industrials | 13.4 | |||
Materials | 11.9 | |||
Consumer Discretionary | 11.1 | |||
Utilities | 10.2 | |||
Information Technology | 9.0 | |||
Telecommunication Services | 5.1 | |||
Health Care | 1.2 | |||
Energy | 0.7 | |||
Money Market Funds plus other assets less liabilities | 4.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Low Volatility Emerging Markets Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $3,615,766) | $ | 3,780,472 | ||
Investments in affiliated money market funds, at value and cost | 82,336 | |||
Total investments, at value (Cost $3,698,102) | 3,862,808 | |||
Foreign currencies, at value (Cost $70,906) | 70,832 | |||
Receivable for: | ||||
Deposits with brokers for open futures contracts | 3,700 | |||
Investments sold | 26,979 | |||
Fund shares sold | 6,274 | |||
Dividends | 16,381 | |||
Fund expenses absorbed | 46,159 | |||
Investment for trustee deferred compensation and retirement plans | 3,652 | |||
Other assets | 21,716 | |||
Total assets | 4,058,501 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 38,744 | |||
Variation margin — futures | 3,020 | |||
Accrued fees to affiliates | 875 | |||
Accrued trustees’ and officers’ fees and benefits | 1,778 | |||
Accrued other operating expenses | 70,323 | |||
Trustee deferred compensation and retirement plans | 3,652 | |||
Total liabilities | 118,392 | |||
Net assets applicable to shares outstanding | $ | 3,940,109 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 3,903,055 | ||
Undistributed net investment income | 3,521 | |||
Undistributed net realized gain (loss) | (130,911 | ) | ||
Net unrealized appreciation | 164,444 | |||
$ | 3,940,109 |
Net Assets: |
| |||
Class A | $ | 1,887,316 | ||
Class C | $ | 92,088 | ||
Class R | $ | 27,208 | ||
Class Y | $ | 1,637,082 | ||
Class R5 | $ | 148,220 | ||
Class R6 | $ | 148,195 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 191,255 | |||
Class C | 9,395 | |||
Class R | 2,762 | |||
Class Y | 165,689 | |||
Class R5 | 15,001 | |||
Class R6 | 15,001 | |||
Class A: | ||||
Net asset value per share | $ | 9.87 | ||
Maximum offering price per share | ||||
(Net asset value of $9.87 ¸ 94.50%) | $ | 10.44 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 9.80 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 9.85 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 9.88 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 9.88 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 9.88 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Low Volatility Emerging Markets Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $9,062) | $ | 56,345 | ||
Dividends from affiliated money market funds | 28 | |||
Total investment income | 56,373 | |||
Expenses: | ||||
Advisory fees | 17,489 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 9,556 | |||
Distribution fees: | ||||
Class A | 2,019 | |||
Class C | 367 | |||
Class R | 60 | |||
Transfer agent fees — A, C, R and Y | 1,616 | |||
Transfer agent fees — R5 | 4 | |||
Transfer agent fees — R6 | 3 | |||
Trustees’ and officers’ fees and benefits | 9,464 | |||
Registration and filing fees | 22,801 | |||
Reports to shareholders | 8,171 | |||
Professional services fees | 28,778 | |||
Other | 7,927 | |||
Total expenses | 133,049 | |||
Less: Fees waived and expenses reimbursed | (103,186 | ) | ||
Net expenses | 29,863 | |||
Net investment income | 26,510 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (119,756 | ) | ||
Foreign currencies | (13,846 | ) | ||
Futures contracts | 4,421 | |||
(129,181 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities | 170,587 | |||
Foreign currencies | 776 | |||
Futures contracts | 756 | |||
172,119 | ||||
Net realized and unrealized gain | 42,938 | |||
Net increase in net assets resulting from operations | $ | 69,448 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Low Volatility Emerging Markets Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 17, 2013 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 17, 2013 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 26,510 | $ | 56,770 | ||||
Net realized gain (loss) | (129,181 | ) | 48,924 | |||||
Change in net unrealized appreciation (depreciation) | 172,119 | (7,675 | ) | |||||
Net increase in net assets resulting from operations | 69,448 | 98,019 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (57,658 | ) | — | |||||
Class C | (2,197 | ) | — | |||||
Class R | (796 | ) | — | |||||
Class Y | (50,753 | ) | — | |||||
Class R5 | (17,161 | ) | — | |||||
Class R6 | (5,585 | ) | — | |||||
Total distributions from net investment income | (134,150 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (20,025 | ) | — | |||||
Class C | (848 | ) | — | |||||
Class R | (287 | ) | — | |||||
Class Y | (16,495 | ) | — | |||||
Class R5 | (5,577 | ) | — | |||||
Class R6 | (1,815 | ) | — | |||||
Total distributions from net realized gains | (45,047 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 247,480 | 1,683,585 | ||||||
Class C | 36,757 | 59,815 | ||||||
Class R | 13,735 | 13,730 | ||||||
Class Y | 218,173 | 1,362,792 | ||||||
Class R5 | (285,563 | ) | 451,325 | |||||
Class R6 | — | 150,010 | ||||||
Net increase in net assets resulting from share transactions | 230,582 | 3,721,257 | ||||||
Net increase in net assets | 120,833 | 3,819,276 | ||||||
Net assets: | ||||||||
Beginning of period | 3,819,276 | — | ||||||
End of period (includes undistributed net investment income of $3,521 and $111,161, respectively) | $ | 3,940,109 | $ | 3,819,276 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Low Volatility Emerging Markets Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
8 Invesco Low Volatility Emerging Markets Fund
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.
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 are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment
9 Invesco Low Volatility Emerging Markets Fund
income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions — Distributions from 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. |
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 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
10 Invesco Low Volatility Emerging Markets Fund
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. | 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 | 0.935% | |||||
Next $250 million | 0.910% | |||||
Next $500 million | 0.885% | |||||
Next $1.5 billion | 0.860% | |||||
Next $2.5 billion | 0.835% | |||||
Next $2.5 billion | 0.810% | |||||
Next $2.5 billion | 0.785% | |||||
Over $10 billion | 0.760% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.94%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.72%, 2.47%, 1.97%, 1.47%, 1.47% and 1.47% 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $101,563 and reimbursed class level expenses of $775, $35, $11, $795, $4 and $3 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 April 30, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
11 Invesco Low Volatility Emerging Markets 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $572 in front-end sales commissions from the sale of Class A shares and $2 and Class C shares, for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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.
12 Invesco Low Volatility Emerging Markets Fund
During the six months ended April 30, 2015, there were transfers from Level 1 to Level 2 of $112,586 and from Level 2 to Level 1 of $579,149, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Brazil | $ | 460,747 | $ | — | $ | — | $ | 460,747 | ||||||||
Chile | 126,525 | — | — | 126,525 | ||||||||||||
China | 173,408 | 57,169 | — | 230,577 | ||||||||||||
Colombia | 39,833 | — | — | 39,833 | ||||||||||||
Greece | — | 23,887 | — | 23,887 | ||||||||||||
Indonesia | — | 142,791 | — | 142,791 | ||||||||||||
Malaysia | 151,772 | 124,384 | — | 276,156 | ||||||||||||
Mexico | 250,482 | — | — | 250,482 | ||||||||||||
Philippines | 14,297 | — | — | 14,297 | ||||||||||||
Poland | 51,445 | 87,220 | — | 138,665 | ||||||||||||
Russia | 62,903 | 103,630 | — | 166,533 | ||||||||||||
South Africa | 136,988 | 341,573 | — | 478,561 | ||||||||||||
South Korea | 99,506 | 578,566 | — | 678,072 | ||||||||||||
Taiwan | 101,120 | 437,496 | — | 538,616 | ||||||||||||
Turkey | 55,979 | 98,495 | — | 154,474 | ||||||||||||
United Arab Emirates | — | 60,256 | — | 60,256 | ||||||||||||
United States | 82,336 | — | — | 82,336 | ||||||||||||
1,807,341 | 2,055,467 | — | 3,862,808 | |||||||||||||
Futures Contracts* | 266 | — | — | 266 | ||||||||||||
Total Investments | $ | 1,807,607 | $ | 2,055,467 | $ | — | $ | 3,863,074 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk: | ||||||||
Futures contracts(a) | $ | 266 | $ | — |
(a) | Includes cumulative appreciation of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
Effect of Derivative Investments for the six months ended April 30, 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: | ||||
Equity risk | $ | 4,421 | ||
Change in Uanrelized Appreciation: | ||||
Equity risk | 756 | |||
Total | $ | 5,177 |
The table below summarizes the average notional value of futures contracts outstanding during the period.
Futures Contracts | ||||
Average notional value | $ | 147,198 |
Open Futures Contracts(a) | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation | |||||||||||||||
MSCI Emerging Markets Mini Index | Long | 2 | June-2015 | $ | 103,870 | $ | 266 |
(a) | Futures contracts collateralized by $3,700 cash held with Merrill Lynch, the futures commission merchant. |
13 Invesco Low Volatility Emerging Markets 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. Obligations under the deferred compensation plan 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 October 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 April 30, 2015 was $1,846,892 and $1,744,061, 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 | $ | 378,280 | ||
Aggregate unrealized (depreciation) of investment securities | (223,683 | ) | ||
Net unrealized appreciation of investment securities | $ | 154,597 |
Cost of investments for tax purposes is $3,708,211.
14 Invesco Low Volatility Emerging Markets Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 17, 2013 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 35,536 | $ | 339,156 | 206,424 | $ | 2,131,506 | ||||||||||
Class C | 4,781 | 46,706 | 5,851 | 62,593 | ||||||||||||
Class R | 1,334 | 13,125 | 1,361 | 13,730 | ||||||||||||
Class Y | 113,987 | 1,037,476 | 143,538 | 1,436,470 | ||||||||||||
Class R5 | — | — | 46,638 | 456,961 | ||||||||||||
Class R6 | — | — | 15,001 | 150,010 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,508 | 13,720 | — | — | ||||||||||||
Class C | 288 | 2,611 | — | — | ||||||||||||
Class R | 69 | 625 | — | — | ||||||||||||
Class Y | 126 | 1,146 | — | — | ||||||||||||
Class R5 | 1,686 | 15,338 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (10,953 | ) | (105,396 | ) | (41,260 | ) | (447,921 | ) | ||||||||
Class C | (1,251 | ) | (12,560 | ) | (274 | ) | (2,778 | ) | ||||||||
Class R | (2 | ) | (15 | ) | — | — | ||||||||||
Class Y | (84,748 | ) | (820,449 | ) | (7,214 | ) | (73,678 | ) | ||||||||
Class R5 | (32,778 | ) | (300,901 | ) | (545 | ) | (5,636 | ) | ||||||||
Net increase in share activity | 29,583 | $ | 230,582 | 369,520 | $ | 3,721,257 |
(a) | 83% of the outstanding shares of the Fund are by the Adviser. |
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 04/30/15 | $ | 10.32 | $ | 0.06 | $ | (0.04 | ) | $ | 0.02 | $ | (0.35 | ) | $ | (0.12 | ) | $ | (0.47 | ) | $ | 9.87 | 0.57 | % | $ | 1,887 | 1.72 | %(e) | 7.24 | %(e) | 1.30 | %(e) | 49 | % | ||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.15 | 0.17 | 0.32 | — | — | — | 10.32 | 3.20 | 1,705 | 1.71 | (f) | 10.36 | (f) | 1.69 | (f) | 38 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.26 | 0.02 | (0.05 | ) | (0.03 | ) | (0.31 | ) | (0.12 | ) | (0.43 | ) | 9.80 | 0.10 | 92 | 2.47 | (e) | 7.99 | (e) | 0.55 | (e) | 49 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.09 | 0.17 | 0.26 | — | — | — | 10.26 | 2.60 | 57 | 2.46 | (f) | 11.11 | (f) | 0.94 | (f) | 38 | |||||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.30 | 0.05 | (0.04 | ) | 0.01 | (0.34 | ) | (0.12 | ) | (0.46 | ) | 9.85 | 0.44 | 27 | 1.97 | (e) | 7.49 | (e) | 1.05 | (e) | 49 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.13 | 0.17 | 0.30 | — | — | — | 10.30 | 3.00 | 14 | 1.96 | (f) | 10.61 | (f) | 1.44 | (f) | 38 | |||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.35 | 0.07 | (0.05 | ) | 0.02 | (0.37 | ) | (0.12 | ) | (0.49 | ) | 9.88 | 0.63 | 1,637 | 1.47 | (e) | 6.99 | (e) | 1.55 | (e) | 49 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.18 | 0.17 | 0.35 | — | — | — | 10.35 | 3.50 | 1,411 | 1.46 | (f) | 10.11 | (f) | 1.94 | (f) | 38 | |||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.35 | 0.07 | (0.05 | ) | 0.02 | (0.37 | ) | (0.12 | ) | (0.49 | ) | 9.88 | 0.63 | 148 | 1.47 | (e) | 6.90 | (e) | 1.55 | (e) | 49 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.18 | 0.17 | 0.35 | — | — | — | 10.35 | 3.50 | 477 | 1.46 | (f) | 10.06 | (f) | 1.94 | (f) | 38 | |||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.35 | 0.07 | (0.05 | ) | 0.02 | (0.37 | ) | (0.12 | ) | (0.49 | ) | 9.88 | 0.63 | 148 | 1.47 | (e) | 6.90 | (e) | 1.55 | (e) | 49 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.18 | 0.17 | 0.35 | — | — | — | 10.35 | 3.50 | 155 | 1.46 | (f) | 10.06 | (f) | 1.94 | (f) | 38 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(d) | Commencement date of December 17, 2013. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $1,628, $74, $24, $1,671, $231 and $143 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Annualized. |
15 Invesco Low Volatility Emerging Markets Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,005.70 | $ | 8.55 | $ | 1,016.27 | $ | 8.60 | 1.72 | % | ||||||||||||
C | 1,000.00 | 1,001.00 | 12.25 | 1,012.55 | 12.33 | 2.47 | ||||||||||||||||||
R | 1,000.00 | 1,004.40 | 9.79 | 1,015.03 | 9.84 | 1.97 | ||||||||||||||||||
Y | 1,000.00 | 1,006.30 | 7.31 | 1,017.50 | 7.35 | 1.47 | ||||||||||||||||||
R5 | 1,000.00 | 1,006.30 | 7.31 | 1,017.50 | 7.35 | 1.47 | ||||||||||||||||||
R6 | 1,000.00 | 1,006.30 | 7.31 | 1,017.50 | 7.35 | 1.47 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
16 Invesco Low Volatility Emerging Markets 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: 811-05426 and 033-19338 | LVEM-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Macro International Equity Fund | ||||
Nasdaq: | ||||
A: VZMAX ¡ C: VZMCX ¡ R: VZMRX ¡ Y: VZMYX ¡ R5: VZMFX ¡ R6: VZMSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
14 Financial Statements | ||||
16 Notes to Financial Statements | ||||
24 Financial Highlights | ||||
25 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, 10/31/14 to 4/30/15, 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 | 4.66 | % | |||
Class C Shares | 4.21 | ||||
Class R Shares | 4.49 | ||||
Class Y Shares | 4.79 | ||||
Class R5 Shares | 4.69 | ||||
Class R6 Shares | 4.79 | ||||
MSCI All Country World ex-US Index▼ (Broad Market/Style-Specific Index) | 5.56 | ||||
Lipper International Large-Cap Core Funds Indexn (Peer Group Index) | 5.60 |
Source(s): ▼ FactSet Research Systems Inc.; nLipper Inc.
The MSCI All Country World ex-US Index is an index considered representative of developed and emerging market stock markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for non-resident investors.
The Lipper International Large-Cap Core Funds Index is an unmanaged index considered representative of international large-cap core funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
Average Annual Total Returns |
As of 4/30/15, including maximum applicable sales charges
Class A Shares | |||||
Inception (12/17/13) | 0.30 | % | |||
1 Year | –3.60 | ||||
Class C Shares | |||||
Inception (12/17/13) | 3.74 | % | |||
1 Year | 0.31 | ||||
Class R Shares | |||||
Inception (12/17/13) | 4.24 | % | |||
1 Year | 1.78 | ||||
Class Y Shares | |||||
Inception (12/17/13) | 4.77 | % | |||
1 Year | 2.38 | ||||
Class R5 Shares | |||||
Inception (12/17/13) | 4.77 | % | |||
1 Year | 2.28 | ||||
Class R6 Shares | |||||
Inception (12/17/13) | 4.77 | % | |||
1 Year | 2.38 |
Average Annual Total Returns |
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
Class A Shares | |||||
Inception (12/17/13) | –3.56 | % | |||
1 Year | –6.75 | ||||
Class C Shares | |||||
Inception (12/17/13) | –0.05 | % | |||
1 Year | –2.99 | ||||
Class R Shares | |||||
Inception (12/17/13) | 0.48 | % | |||
1 Year | –1.55 | ||||
Class Y Shares | |||||
Inception (12/17/13) | 1.03 | % | |||
1 Year | –0.95 | ||||
Class R5 Shares | |||||
Inception (12/17/13) | 0.95 | % | |||
1 Year | –1.05 | ||||
Class R6 Shares | |||||
Inception (12/17/13) | 0.95 | % | |||
1 Year | –1.05 |
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 1.44%, 2.19%, 1.69%, 1.19%, 1.19% and 1.19%, 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 8.22%, 8.97%, 8.47%, 7.97%, 7.94% and 7.94%, 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 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Macro International Equity 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 Macro International Equity Fund |
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–91.56% |
| |||||||
Australia–7.73% | ||||||||
AGL Energy Ltd. | 930 | $ | 11,148 | |||||
ALS Ltd. | 2,640 | 10,955 | ||||||
Alumina Ltd. | 8,004 | 9,710 | ||||||
Amcor Ltd. | 927 | 9,862 | ||||||
AMP Ltd. | 2,010 | 10,189 | ||||||
APA Group | 1,518 | 11,477 | ||||||
Asciano Ltd. | 2,071 | 10,751 | ||||||
ASX Ltd. | 315 | 10,477 | ||||||
Aurizon Holdings Ltd. | 2,729 | 10,438 | ||||||
AusNet Services | 9,610 | 11,185 | ||||||
Australia and New Zealand Banking Group Ltd. | 371 | 9,943 | ||||||
Bank of Queensland Ltd. | 937 | 9,618 | ||||||
Bendigo and Adelaide Bank Ltd. | 1,049 | 9,994 | ||||||
BHP Billiton Ltd. | 445 | 11,417 | ||||||
BHP Billiton PLC | 1,399 | 33,294 | ||||||
BlueScope Steel Ltd. | 2,879 | 7,907 | ||||||
Boral Ltd. | 2,173 | 10,847 | ||||||
Brambles Ltd. | 1,170 | 9,993 | ||||||
Caltex Australia Ltd. | 360 | 10,043 | ||||||
Challenger Ltd. | 1,903 | 10,596 | ||||||
CIMIC Group Ltd. | 628 | 10,438 | ||||||
Coca-Cola Amatil Ltd. | 1,247 | 10,104 | ||||||
Cochlear Ltd. | 148 | 9,765 | ||||||
Commonwealth Bank of Australia | 142 | 9,951 | ||||||
Computershare Ltd. | 1,022 | 9,926 | ||||||
Crown Resorts Ltd. | 1,023 | 10,494 | ||||||
CSL Ltd. | 143 | 10,262 | ||||||
Federation Centres | 4,402 | 10,250 | ||||||
Fortescue Metals Group Ltd. | 6,823 | 11,657 | ||||||
Iluka Resources Ltd. | 1,854 | 11,880 | ||||||
Incitec Pivot Ltd. | 3,403 | 10,704 | ||||||
Insurance Australia Group Ltd. | 2,215 | 10,139 | ||||||
Lend Lease Group | 820 | 10,346 | ||||||
Macquarie Group Ltd. | 175 | 10,711 | ||||||
Metcash Ltd. | 6,564 | 6,860 | ||||||
National Australia Bank Ltd. | 346 | 10,032 | ||||||
Newcrest Mining Ltd.(a) | 1,054 | 12,049 | ||||||
Novion Property Group Pty Ltd. | 5,054 | 9,819 | ||||||
Oil Search Ltd. | 1,791 | 11,406 | ||||||
Orica Ltd. | 733 | 11,664 | ||||||
Origin Energy Ltd. | 1,177 | 11,789 | ||||||
Primary Health Care Ltd. | 2,708 | 10,599 | ||||||
Qantas Airways Ltd.(a) | 4,431 | 11,883 | ||||||
QBE Insurance Group Ltd. | 1,009 | 10,897 | ||||||
Ramsay Health Care Ltd. | 203 | 9,997 | ||||||
Santos Ltd. | 1,864 | 12,165 | ||||||
Scentre Group | 3,472 | 10,240 |
Shares | Value | |||||||
Australia–(continued) | ||||||||
Seek Ltd. | 764 | $ | 9,784 | |||||
Sonic Healthcare Ltd. | 681 | 10,675 | ||||||
Suncorp Group Ltd. | 987 | 10,208 | ||||||
Tabcorp Holdings Ltd. | 2,825 | 10,848 | ||||||
Tatts Group Ltd. | 3,455 | 11,010 | ||||||
Telstra Corp. Ltd. | 2,142 | 10,530 | ||||||
Toll Holdings Ltd. | 1,535 | 10,893 | ||||||
Treasury Wine Estates Ltd. | 2,594 | 11,390 | ||||||
Wesfarmers Ltd. | 309 | 10,659 | ||||||
Westfield Corp. | 1,318 | 9,803 | ||||||
Westpac Banking Corp. | 343 | 9,859 | ||||||
Woodside Petroleum Ltd. | 382 | 10,539 | ||||||
Woolworths Ltd. | 469 | 10,887 | ||||||
WorleyParsons Ltd. | 1,333 | 12,008 | ||||||
664,964 | ||||||||
Austria–0.28% | ||||||||
Erste Group Bank AG | 283 | 8,041 | ||||||
OMV AG | 256 | 8,552 | ||||||
Voestalpine AG | 185 | 7,754 | ||||||
24,347 | ||||||||
Belgium–0.48% | ||||||||
Ageas | 193 | 7,239 | ||||||
Anheuser-Busch InBev N.V. | 57 | 6,925 | ||||||
Delhaize Group S.A. | 77 | 6,202 | ||||||
KBC Groep N.V.(a) | 108 | 7,116 | ||||||
Solvay S.A. | 48 | 7,077 | ||||||
UCB S.A. | 93 | 6,698 | ||||||
41,257 | ||||||||
Brazil–0.35% | ||||||||
Ambev S.A. | 1,100 | 6,923 | ||||||
Cia Brasileira de Distribuicao–Preference Shares | 200 | 6,705 | ||||||
Klabin S.A.(b) | 1,100 | 6,755 | ||||||
M Dias Branco S.A. | 200 | 5,696 | ||||||
WEG S.A. | 700 | 3,745 | ||||||
29,824 | ||||||||
Chile–0.92% | ||||||||
Banco de Chile | 103,125 | 11,949 | ||||||
Banco Santander Chile | 164,615 | 8,797 | ||||||
Colbun S.A. | 28,815 | 8,695 | ||||||
Empresa Nacional de Electricidad S.A. | 5,528 | 8,501 | ||||||
Empresas CMPC S.A. | 2,668 | 7,578 | ||||||
Empresas COPEC S.A. | 847 | 9,749 | ||||||
Enersis S.A. | 24,865 | 8,656 | ||||||
LATAM Airlines Group S.A.(a) | 725 | 6,966 | ||||||
S.A.C.I. Falabella | 1,060 | 8,297 | ||||||
79,188 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Macro International Equity Fund
Shares | Value | |||||||
China–2.88% | ||||||||
AAC Technologies Holdings Inc. | 1,500 | $ | 7,964 | |||||
Agricultural Bank of China Ltd.–Class H | 16,000 | 9,042 | ||||||
Bank of China Ltd.–Class H | 13,000 | 8,940 | ||||||
Belle International Holdings Ltd. | 9,000 | 11,577 | ||||||
China Construction Bank Corp.–Class H | 9,000 | 8,767 | ||||||
China Mobile Ltd. | 500 | 7,141 | ||||||
China National Building Material Co. Ltd.–Class H | 8,000 | 9,744 | ||||||
COSCO Pacific Ltd. | 6,000 | 9,429 | ||||||
ENN Energy Holdings Ltd. | 2,000 | 14,407 | ||||||
Evergrande Real Estate Group Ltd. | 23,000 | 21,812 | ||||||
GCL-Poly Energy Holdings Ltd.(a) | 39,000 | 11,783 | ||||||
Hengan International Group Co. Ltd. | 1,500 | 18,541 | ||||||
Industrial & Commercial Bank of China Ltd.–Class H | 10,000 | 8,696 | ||||||
Jiangsu Expressway Co. Ltd.–Class H | 6,000 | 8,268 | ||||||
Shanghai Industrial Holdings Ltd. | 3,000 | 11,999 | ||||||
Shimao Property Holdings Ltd. | 5,000 | 11,844 | ||||||
Sino-Ocean Land Holdings Ltd. | 17,000 | 14,213 | ||||||
Sun Art Retail Group Ltd. | 13,000 | 13,402 | ||||||
Tencent Holdings Ltd. | 600 | 12,392 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 8,000 | 16,907 | ||||||
Want Want China Holdings Ltd. | 10,000 | 10,980 | ||||||
247,848 | ||||||||
Colombia–0.31% | ||||||||
Bancolombia S.A.–Preference Shares | 782 | 8,553 | ||||||
Grupo Aval Acciones y Valores S.A.–Preference Shares | 19,032 | 9,665 | ||||||
Grupo de Inversiones Suramericana S.A. | 530 | 8,707 | ||||||
26,925 | ||||||||
Czech Republic–0.17% | ||||||||
CEZ A.S. | 294 | 7,643 | ||||||
Komercni Banka A.S. | 32 | 7,135 | ||||||
14,778 | ||||||||
Denmark–0.74% | ||||||||
A. P. Moller–Maersk AS–Class B | 5 | 9,900 | ||||||
Carlsberg A/S–Class B | 117 | 10,681 | ||||||
Coloplast AS–Class B | 129 | 10,535 | ||||||
Danske Bank AS | 386 | 10,939 | ||||||
Novo Nordisk AS–Class B | 197 | 11,036 | ||||||
Vestas Wind Systems AS | 233 | 10,583 | ||||||
63,674 | ||||||||
Egypt–0.07% | ||||||||
Commercial International Bank (Egypt) S.A.E. | 833 | 6,044 | ||||||
Finland–0.53% | ||||||||
Fortum Oyj | 322 | 6,367 | ||||||
Kone Oyj–Class B | 153 | 6,595 | ||||||
Nokia Oyj | 887 | 5,999 | ||||||
Sampo Oyj–Class A | 128 | 6,213 | ||||||
Stora Enso Oyj–Class R | 674 | 7,108 | ||||||
UPM-Kymmene Oyj | 348 | 6,313 |
Shares | Value | |||||||
Finland–(continued) | ||||||||
Wartsila OYJ Abp | 154 | $ | 7,070 | |||||
45,665 | ||||||||
France–4.07% | ||||||||
Accor S.A. | 130 | 7,114 | ||||||
Air Liquide S.A. | 53 | 6,939 | ||||||
Airbus Group N.V. | 105 | 7,292 | ||||||
Alcatel-Lucent(a) | 1,816 | 6,315 | ||||||
Alstom S.A.(a) | 220 | 6,903 | ||||||
Arkema S.A. | 89 | 7,167 | ||||||
AXA S.A. | 262 | 6,614 | ||||||
BNP Paribas S.A. | 120 | 7,556 | ||||||
Bouygues S.A. | 167 | 6,910 | ||||||
Bureau Veritas S.A. | 319 | 7,502 | ||||||
Cap Gemini S.A. | 83 | 7,371 | ||||||
Carrefour S.A. | 194 | 6,691 | ||||||
Casino Guichard-Perrachon S.A. | 75 | 6,642 | ||||||
Christian Dior S.A. | 34 | 6,667 | ||||||
Cie Generale des Etablissements Michelin | 71 | 7,909 | ||||||
Compagnie de Saint-Gobain | 156 | 7,106 | ||||||
Credit Agricole S.A. | 483 | 7,496 | ||||||
Danone | 103 | 7,447 | ||||||
Dassault Systemes | 102 | 7,865 | ||||||
Edenred | 271 | 7,261 | ||||||
Electricite de France S.A. | 283 | 7,197 | ||||||
Essilor International S.A. | 60 | 7,290 | ||||||
GDF Suez | 341 | 6,946 | ||||||
Kering | 34 | 6,281 | ||||||
L’Oreal S.A. | 36 | 6,868 | ||||||
Lafarge S.A. | 102 | 7,466 | ||||||
Legrand S.A. | 128 | 7,395 | ||||||
LVMH Moet Hennessy Louis Vuitton S.E. | 38 | 6,645 | ||||||
Numericable–SFR(a) | 133 | 7,393 | ||||||
Orange S.A. | 435 | 7,161 | ||||||
Pernod Ricard S.A. | 59 | 7,324 | ||||||
Publicis Groupe S.A. | 84 | 7,026 | ||||||
Renault S.A. | 77 | 8,074 | ||||||
Safran S.A. | 99 | 7,226 | ||||||
Sanofi | 66 | 6,712 | ||||||
Schneider Electric S.E. | 83 | 6,190 | ||||||
SCOR S.E. | 206 | 7,412 | ||||||
Societe Generale S.A. | 145 | 7,234 | ||||||
Sodexo | 69 | 6,998 | ||||||
Suez Environnement Co. | 384 | 7,821 | ||||||
Technip S.A. | 109 | 7,425 | ||||||
TOTAL S.A. | 136 | 7,366 | ||||||
Unibail-Rodamco S.E. | 25 | 6,867 | ||||||
Valeo S.A. | 47 | 7,512 | ||||||
Vallourec S.A. | 253 | 5,949 | ||||||
Veolia Environnement S.A. | 370 | 7,840 | ||||||
Vinci S.A. | 117 | 7,177 | ||||||
Vivendi S.A. | 292 | 7,326 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Macro International Equity Fund
Shares | Value | |||||||
France–(continued) | ||||||||
Zodiac Aerospace | 205 | $ | 7,543 | |||||
350,431 | ||||||||
Germany–2.80% | ||||||||
adidas AG | 92 | 7,585 | ||||||
Allianz S.E. | 40 | 6,840 | ||||||
BASF S.E. | 68 | 6,822 | ||||||
Bayer AG | 43 | 6,264 | ||||||
Bayerische Motoren Werke AG | 55 | 6,542 | ||||||
Beiersdorf AG | 79 | 6,905 | ||||||
Brenntag AG | 115 | 6,946 | ||||||
Commerzbank AG(a) | 514 | 6,973 | ||||||
Continental AG | 29 | 6,852 | ||||||
Daimler AG | 71 | 6,864 | ||||||
Deutsche Bank AG | 205 | 6,612 | ||||||
Deutsche Boerse AG | 86 | 7,170 | ||||||
Deutsche Lufthansa AG(a) | 463 | 6,434 | ||||||
Deutsche Post AG | 219 | 7,268 | ||||||
Deutsche Telekom AG | 381 | 7,034 | ||||||
E.ON S.E. | 454 | 7,117 | ||||||
Fresenius Medical Care AG & Co. KGaA | 84 | 7,085 | ||||||
Fresenius S.E. & Co. KGaA | 117 | 6,985 | ||||||
GEA Group AG | 137 | 6,606 | ||||||
HeidelbergCement AG | 88 | 6,793 | ||||||
Henkel AG & Co. KGaA–Preference Shares | 59 | 6,897 | ||||||
Infineon Technologies AG | 553 | 6,570 | ||||||
K+S AG | 208 | 6,848 | ||||||
LANXESS AG | 133 | 7,141 | ||||||
Linde AG | 34 | 6,663 | ||||||
Merck KGaA | 62 | 6,725 | ||||||
Metro AG | 204 | 7,402 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 32 | 6,280 | ||||||
Porsche Automobil Holding S.E.–Preference Shares | 72 | 6,881 | ||||||
ProSiebenSat.1 Media AG | 143 | 7,359 | ||||||
RWE AG | 263 | 6,574 | ||||||
SAP S.E. | 96 | 7,323 | ||||||
Siemens AG | 64 | 7,008 | ||||||
ThyssenKrupp AG | 264 | 7,068 | ||||||
Volkswagen AG–Preference Shares | 26 | 6,741 | ||||||
241,177 | ||||||||
Greece–0.06% | ||||||||
National Bank of Greece S.A.(a) | 3,958 | 5,556 | ||||||
Hong Kong–5.77% | ||||||||
AIA Group Ltd. | 1,800 | 12,030 | ||||||
ASM Pacific Technology Ltd. | 1,100 | 12,319 | ||||||
Bank of East Asia, Ltd. (The) | 2,800 | 12,159 | ||||||
Cheung Kong Infrastructure Holdings Ltd. | 1,000 | 8,490 | ||||||
China Gas Holdings Ltd. | 6,000 | 10,637 | ||||||
CLP Holdings Ltd. | 1,500 | 13,151 | ||||||
Dairy Farm International Holdings Ltd. | 1,200 | 11,328 | ||||||
Esprit Holdings Ltd. | 11,600 | 11,016 |
Shares | Value | |||||||
Hong Kong–(continued) | ||||||||
First Pacific Co. Ltd. | 10,000 | $ | 9,703 | |||||
Galaxy Entertainment Group Ltd. | 2,000 | 9,641 | ||||||
Hang Lung Group Ltd. | 2,000 | 10,606 | ||||||
Hang Lung Properties Ltd. | 4,000 | 13,520 | ||||||
Hang Seng Bank Ltd. | 600 | 11,713 | ||||||
Henderson Land Development Co. Ltd. | 2,100 | 16,880 | ||||||
HKT Trust and HKT Ltd. | 8,000 | 10,714 | ||||||
Hong Kong & China Gas Co. Ltd. | 4,300 | 10,264 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 500 | 19,072 | ||||||
Hongkong Land Holdings Ltd. | 1,400 | 11,314 | ||||||
Hutchison Whampoa Ltd. | 1,000 | 14,734 | ||||||
Hysan Development Co. Ltd. | 2,000 | 9,251 | ||||||
Jardine Matheson Holdings Ltd. | 200 | 12,365 | ||||||
Jardine Strategic Holdings Ltd. | 300 | 10,304 | ||||||
Kerry Properties Ltd. | 3,000 | 12,270 | ||||||
Li & Fung Ltd. | 12,000 | 12,247 | ||||||
Link REIT (The) | 1,500 | 9,304 | ||||||
MTR Corp. Ltd. | 2,500 | 12,322 | ||||||
New World Development Co. Ltd. | 9,000 | 11,946 | ||||||
Noble Group Ltd. | 16,700 | 10,860 | ||||||
NWS Holdings Ltd. | 7,000 | 11,922 | ||||||
Power Assets Holdings Ltd. | 1,000 | 10,102 | ||||||
Sands China Ltd. | 2,400 | 9,832 | ||||||
Shangri-La Asia Ltd. | 8,000 | 12,180 | ||||||
Sino Land Co. Ltd. | 8,000 | 14,103 | ||||||
SJM Holdings Ltd. | 8,000 | 10,140 | ||||||
Sun Hung Kai Properties Ltd. | 1,000 | 16,657 | ||||||
Swire Pacific Ltd.–Class A | 1,000 | 13,535 | ||||||
Swire Properties Ltd. | 3,600 | 12,402 | ||||||
Techtronic Industries Co. Ltd. | 3,000 | 10,664 | ||||||
VTech Holdings Ltd. | 700 | 9,745 | ||||||
Wharf Holdings Ltd. (The) | 2,000 | 14,464 | ||||||
Wheelock and Co. Ltd. | 2,000 | 11,276 | ||||||
Yue Yuen Industrial (Holdings) Ltd. | 2,500 | 9,515 | ||||||
496,697 | ||||||||
Hungary–0.18% | ||||||||
MOL Hungarian Oil and Gas PLC | 149 | 8,287 | ||||||
Richter Gedeon Nyrt | 447 | 7,534 | ||||||
15,821 | ||||||||
India–0.06% | ||||||||
Infosys Ltd.–ADR | 168 | 5,205 | ||||||
Indonesia–0.71% | ||||||||
Golden Agri-Resources Ltd. | 36,600 | 11,617 | ||||||
PT Bank Central Asia Tbk | 6,400 | 6,637 | ||||||
PT Bank Mandiri Persero Tbk | 6,800 | 5,630 | ||||||
PT Indofood Sukses Makmur Tbk | 11,700 | 6,065 | ||||||
PT Jasa Marga Persero Tbk | 14,100 | 6,744 | ||||||
PT Kalbe Farma Tbk | 51,000 | 7,062 | ||||||
PT Perusahaan Gas Negara Persero Tbk | 15,700 | 4,954 | ||||||
PT Telekomunikasi Indonesia Persero Tbk | 27,600 | 5,600 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Macro International Equity Fund
Shares | Value | |||||||
Indonesia–(continued) | ||||||||
PT Unilever Indonesia Tbk | 2,100 | $ | 6,913 | |||||
61,222 | ||||||||
Ireland–0.53% | ||||||||
CRH PLC | 253 | 7,095 | ||||||
Kerry Group PLC–Class A | 100 | 7,337 | ||||||
Shire PLC | 379 | 30,837 | ||||||
45,269 | ||||||||
Italy–1.10% | ||||||||
Assicurazioni Generali S.p.A. | 352 | 6,896 | ||||||
Atlantia S.p.A. | 249 | 7,010 | ||||||
Enel S.p.A. | 1,488 | 7,039 | ||||||
Eni S.p.A. | 398 | 7,662 | ||||||
Intesa Sanpaolo S.p.A. | 2,071 | 6,936 | ||||||
Luxottica Group S.p.A. | 110 | 7,256 | ||||||
Prada S.p.A. | 1,600 | 8,712 | ||||||
Saipem S.p.A.(a) | 489 | 6,479 | ||||||
Snam S.p.A. | 1,409 | 7,342 | ||||||
Telecom Italia S.p.A.(a) | 5,918 | 6,958 | ||||||
Terna–Rete Elettrica Nazionale S.p.A. | 1,584 | 7,455 | ||||||
UniCredit S.p.A. | 1,028 | 7,361 | ||||||
Unione di Banche Italiane S.C.p.A. | 907 | 7,218 | ||||||
94,324 | ||||||||
Japan–17.35% | ||||||||
Aeon Co., Ltd. | 600 | 7,450 | ||||||
Aisin Seiki Co., Ltd. | 200 | 9,100 | ||||||
Amada Co., Ltd. | 700 | 7,078 | ||||||
ANA Holdings Inc. | 2,000 | 5,535 | ||||||
Aozora Bank, Ltd. | 2,000 | 7,464 | ||||||
Asahi Glass Co., Ltd. | 1,000 | 6,681 | ||||||
Asahi Group Holdings, Ltd. | 200 | 6,415 | ||||||
Asahi Kasei Corp. | 1,000 | 9,387 | ||||||
ASICS Corp. | 200 | 5,100 | ||||||
Astellas Pharma Inc. | 400 | 6,226 | ||||||
Bank of Yokohama, Ltd. (The) | 1,000 | 6,358 | ||||||
Benesse Holdings, Inc. | 200 | 6,263 | ||||||
Bridgestone Corp. | 200 | 8,357 | ||||||
Brother Industries, Ltd. | 500 | 7,962 | ||||||
Canon Inc. | 200 | 7,137 | ||||||
Casio Computer Co., Ltd. | 400 | 8,091 | ||||||
Chiba Bank, Ltd. (The) | 1,000 | 8,219 | ||||||
Chubu Electric Power Co., Inc. | 600 | 7,878 | ||||||
Chugai Pharmaceutical Co., Ltd. | 200 | 6,089 | ||||||
Chugoku Bank, Ltd. (The) | 500 | 8,026 | ||||||
Chugoku Electric Power Co., Inc. (The) | 500 | 7,297 | ||||||
Credit Saison Co., Ltd. | 400 | 7,562 | ||||||
Dai Nippon Printing Co., Ltd. | 1,000 | 10,348 | ||||||
Dai-ichi Life Insurance Co. Ltd. (The) | 500 | 8,188 | ||||||
Daihatsu Motor Co., Ltd. | 500 | 7,230 | ||||||
Daiichi Sankyo Co., Ltd. | 400 | 6,962 | ||||||
Daikin Industries, Ltd. | 100 | 6,732 |
Shares | Value | |||||||
Japan–(continued) | ||||||||
Daiwa House Industry Co., Ltd. | 400 | $ | 8,905 | |||||
Daiwa Securities Group Inc. | 1,000 | 8,281 | ||||||
Denso Corp. | 100 | 4,961 | ||||||
Dentsu Inc. | 100 | 4,635 | ||||||
East Japan Railway Co. | 100 | 8,829 | ||||||
Eisai Co., Ltd. | 100 | 6,663 | ||||||
Electric Power Development Co., Ltd. | 200 | 6,740 | ||||||
FamilyMart Co., Ltd. | 200 | 8,598 | ||||||
Fuji Heavy Industries Ltd. | 200 | 6,670 | ||||||
Fuji Media Holdings, Inc. | 500 | 6,997 | ||||||
FUJIFILM Holdings Corp. | 200 | 7,555 | ||||||
Fujitsu Ltd. | 1,000 | 6,590 | ||||||
Fukuoka Financial Group, Inc. | 1,000 | 5,738 | ||||||
GungHo Online Entertainment, Inc. | 1,600 | 6,580 | ||||||
Gunma Bank, Ltd. (The) | 1,000 | 7,087 | ||||||
Hachijuni Bank, Ltd. (The) | 1,000 | 7,798 | ||||||
Hamamatsu Photonics K.K. | 200 | 5,845 | ||||||
Hankyu Hanshin Holdings, Inc. | 1,000 | 6,033 | ||||||
Hino Motors, Ltd. | 500 | 6,523 | ||||||
Hiroshima Bank, Ltd. (The) | 1,000 | 5,835 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 100 | 4,310 | ||||||
Hitachi, Ltd. | 1,000 | 6,815 | ||||||
Hokuhoku Financial Group, Inc. | 3,000 | 7,171 | ||||||
Hokuriku Electric Power Co. | 500 | 7,393 | ||||||
Honda Motor Co., Ltd. | 200 | 6,763 | ||||||
Hoya Corp. | 100 | 3,859 | ||||||
Hulic Co. Ltd. | 600 | 6,435 | ||||||
Idemitsu Kosan Co., Ltd. | 400 | 7,755 | ||||||
IHI Corp. | 1,000 | 4,587 | ||||||
INPEX Corp. | 600 | 7,514 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 400 | 6,472 | ||||||
Isuzu Motors Ltd. | 500 | 6,625 | ||||||
ITOCHU Corp. | 600 | 7,391 | ||||||
Iyo Bank, Ltd. (The) | 600 | 7,465 | ||||||
J. Front Retailing Co., Ltd. | 500 | 8,297 | ||||||
Japan Airlines Co. Ltd. | 200 | 6,670 | ||||||
Japan Exchange Group Inc. | 200 | 5,745 | ||||||
Japan Prime Realty Investment Corp. | 2 | 7,183 | ||||||
Japan Real Estate Investment Corp. | 1 | 4,727 | ||||||
Japan Retail Fund Investment Corp. | 4 | 8,501 | ||||||
Japan Tobacco, Inc. | 200 | 6,998 | ||||||
JFE Holdings, Inc. | 300 | 6,759 | ||||||
Joyo Bank, Ltd. (The) | 1,000 | 5,461 | ||||||
JSR Corp. | 400 | 6,820 | ||||||
JTEKT Corp. | 400 | 6,814 | ||||||
JX Holdings, Inc. | 1,500 | 6,532 | ||||||
Kajima Corp. | 1,000 | 4,777 | ||||||
Kansai Electric Power Co., Inc. (The)(a) | 700 | 7,040 | ||||||
Kao Corp. | 100 | 4,774 | ||||||
Kawasaki Heavy Industries, Ltd. | 1,000 | 5,134 | ||||||
KDDI Corp. | 300 | 7,089 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Macro International Equity Fund
Shares | Value | |||||||
Japan–(continued) | ||||||||
Keikyu Corp. | 1,000 | $ | 7,935 | |||||
Keio Corp. | 1,000 | 7,708 | ||||||
Kintetsu Corp. | 2,000 | 7,089 | ||||||
Kirin Holdings Co., Ltd. | 500 | 6,606 | ||||||
Kobe Steel, Ltd. | 4,000 | 7,196 | ||||||
Komatsu Ltd. | 400 | 8,034 | ||||||
Konica Minolta Inc. | 600 | 6,595 | ||||||
Kuraray Co., Ltd. | 500 | 6,733 | ||||||
Kurita Water Industries Ltd. | 200 | 5,201 | ||||||
Kyocera Corp. | 100 | 5,220 | ||||||
Kyushu Electric Power Co. Inc.(a) | 700 | 7,442 | ||||||
Lawson, Inc. | 100 | 7,158 | ||||||
LIXIL Group Corp. | 300 | 6,234 | ||||||
Makita Corp. | 100 | 5,009 | ||||||
Marubeni Corp. | 1,100 | 6,824 | ||||||
Marui Group Co., Ltd. | 600 | 6,496 | ||||||
Mazda Motor Corp. | 400 | 7,812 | ||||||
Medipal Holdings Corp. | 500 | 6,795 | ||||||
Mitsubishi Chemical Holdings Corp. | 1,000 | 6,174 | ||||||
Mitsubishi Corp. | 400 | 8,648 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 1,000 | 5,587 | ||||||
Mitsubishi Heavy Industries, Ltd. | 1,000 | 5,556 | ||||||
Mitsubishi Materials Corp. | 2,000 | 7,235 | ||||||
Mitsubishi Motors Corp. | 700 | 6,448 | ||||||
Mitsubishi Tanabe Pharma Corp. | 400 | 6,767 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 1,000 | 7,056 | ||||||
Mitsui & Co., Ltd. | 500 | 7,001 | ||||||
Mitsui Chemicals Inc. | 2,000 | 6,603 | ||||||
Mitsui O.S.K. Lines, Ltd. | 2,000 | 7,047 | ||||||
Mizuho Financial Group, Inc. | 3,200 | 6,106 | ||||||
MS&AD Insurance Group Holdings, Inc. | 200 | 5,727 | ||||||
Nagoya Railroad Co., Ltd. | 1,000 | 3,950 | ||||||
Namco Bandai Holdings Inc. | 400 | 8,200 | ||||||
NEC Corp. | 2,000 | 6,703 | ||||||
NGK Spark Plug Co., Ltd. | 200 | 5,575 | ||||||
Nidec Corp. | 100 | 7,456 | ||||||
Nikon Corp. | 500 | 7,072 | ||||||
Nippon Building Fund Inc. | 1 | 4,968 | ||||||
Nippon Express Co., Ltd. | 1,000 | 5,749 | ||||||
Nippon Paint Holdings Co., Ltd. | 200 | �� | 6,695 | |||||
Nippon Prologis REIT Inc. | 4 | 8,648 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 2,000 | 5,211 | ||||||
Nippon Telegraph & Telephone Corp. | 100 | 6,740 | ||||||
Nippon Television Holdings, Inc. | 400 | 6,824 | ||||||
Nippon Yusen Kabushiki Kaisha | 2,000 | 6,298 | ||||||
Nissan Motor Co., Ltd. | 600 | 6,214 | ||||||
Nisshin Seifun Group Inc. | 600 | 7,017 | ||||||
Nissin Foods Holdings Co., Ltd. | 100 | 4,777 | ||||||
Nitori Holdings Co., Ltd. | 100 | 7,655 | ||||||
Nitto Denko Corp. | 100 | 6,398 | ||||||
NKSJ Holdings, Inc. | 200 | 6,502 |
Shares | Value | |||||||
Japan–(continued) | ||||||||
Nomura Holdings, Inc. | 1,000 | $ | 6,494 | |||||
Nomura Research Institute, Ltd. | 200 | 7,859 | ||||||
NSK Ltd. | 500 | 7,826 | ||||||
NTT Data Corp. | 100 | 4,453 | ||||||
NTT DoCoMo, Inc. | 400 | 7,108 | ||||||
Obayashi Corp. | 1,000 | 6,686 | ||||||
Oji Holdings Corp. | 1,000 | 4,447 | ||||||
Olympus Corp.(a) | 200 | 7,212 | ||||||
OMRON Corp. | 100 | 4,591 | ||||||
Oriental Land Co., Ltd. | 100 | 6,738 | ||||||
ORIX Corp. | 500 | 7,646 | ||||||
Osaka Gas Co., Ltd. | 1,000 | 4,243 | ||||||
Otsuka Holdings Co., Ltd. | 200 | 6,302 | ||||||
Panasonic Corp. | 500 | 7,168 | ||||||
Rakuten Inc. | 400 | 6,982 | ||||||
Renesas Electronics Corp.(a) | 900 | 6,431 | ||||||
Resona Holdings, Inc. | 1,200 | 6,384 | ||||||
Ricoh Co., Ltd. | 600 | 6,231 | ||||||
Rinnai Corp. | 100 | 7,603 | ||||||
Rohm Co. Ltd. | 100 | 6,925 | ||||||
Santen Pharmaceutical Co., Ltd. | 500 | 6,621 | ||||||
SECOM Co., Ltd. | 100 | 7,070 | ||||||
Sega Sammy Holdings Inc. | 500 | 6,990 | ||||||
Seibu Holdings Inc. | 200 | 5,787 | ||||||
Seiko Epson Corp. | 400 | 6,974 | ||||||
Sekisui House, Ltd. | 500 | 7,778 | ||||||
Seven & i Holdings Co., Ltd. | 100 | 4,306 | ||||||
Sharp Corp.(a) | 4,000 | 8,656 | ||||||
Shikoku Electric Power Co. Inc. | 600 | 8,138 | ||||||
Shimamura Co., Ltd. | 100 | 9,929 | ||||||
Shimizu Corp. | 1,000 | 7,212 | ||||||
Shin-Etsu Chemical Co., Ltd. | 100 | 6,121 | ||||||
Shinsei Bank, Ltd. | 4,000 | 8,188 | ||||||
Shionogi & Co., Ltd. | 200 | 6,519 | ||||||
Shiseido Co., Ltd. | 400 | 7,208 | ||||||
Shizuoka Bank, Ltd. (The) | 1,000 | 11,014 | ||||||
SoftBank Corp. | 100 | 6,249 | ||||||
Sony Corp. | 200 | 6,041 | ||||||
Sony Financial Holdings Inc. | 400 | 7,167 | ||||||
Stanley Electric Co., Ltd. | 300 | 6,734 | ||||||
Sumitomo Chemical Co., Ltd. | 1,000 | 5,586 | ||||||
Sumitomo Corp. | 600 | 7,091 | ||||||
Sumitomo Electric Industries, Ltd. | 500 | 7,064 | ||||||
Sumitomo Heavy Industries, Ltd. | 1,000 | 6,211 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 200 | 8,722 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 1,000 | 4,391 | ||||||
Suntory Beverage & Food Ltd. | 200 | 8,517 | ||||||
Suruga Bank Ltd. | 400 | 8,818 | ||||||
Suzuken Co., Ltd. | 200 | 6,229 | ||||||
Suzuki Motor Corp. | 200 | 6,463 | ||||||
Sysmex Corp. | 100 | 5,525 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Macro International Equity Fund
Shares | Value | |||||||
Japan–(continued) | ||||||||
T&D Holdings, Inc. | 500 | $ | 7,170 | |||||
Taiheiyo Cement Corp. | 2,000 | 6,307 | ||||||
Taisei Corp. | 1,000 | 5,792 | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. | 100 | 6,998 | ||||||
Takashimaya Co., Ltd. | 1,000 | 9,335 | ||||||
Takeda Pharmaceutical Co. Ltd. | 100 | 5,137 | ||||||
TDK Corp. | 100 | 7,179 | ||||||
Teijin Ltd. | 2,000 | 6,772 | ||||||
Terumo Corp. | 200 | 5,134 | ||||||
THK Co., Ltd. | 200 | 5,048 | ||||||
Tobu Railway Co., Ltd. | 1,000 | 4,762 | ||||||
Toho Co., Ltd. | 300 | 7,455 | ||||||
Toho Gas Co., Ltd. | 1,000 | 6,049 | ||||||
Tohoku Electric Power Co., Inc. | 600 | 7,527 | ||||||
Tokio Marine Holdings, Inc. | 200 | 8,154 | ||||||
Tokyo Electric Power Co. Inc.(a) | 1,700 | 6,941 | ||||||
Tokyo Electron Ltd. | 100 | 5,463 | ||||||
Tokyo Gas Co., Ltd. | 1,000 | 5,745 | ||||||
Tokyo Tatemono Co., Ltd. | 1,000 | 7,269 | ||||||
Tokyu Corp. | 1,000 | 6,658 | ||||||
Tokyu Fudosan Holdings, Corp. | 900 | 6,677 | ||||||
TonenGeneral Sekiyu K.K. | 1,000 | 9,583 | ||||||
Toppan Printing Co. Ltd. | 1,000 | 8,384 | ||||||
Toray Industries, Inc. | 1,000 | 8,655 | ||||||
Toshiba Corp. | 1,000 | 3,999 | ||||||
Toyo Seikan Group Holdings Ltd. | 500 | 7,899 | ||||||
Toyo Suisan Kaisha, Ltd. | 200 | 6,977 | ||||||
Toyota Industries Corp. | 100 | 5,665 | ||||||
Toyota Motor Corp. | 100 | 6,947 | ||||||
Toyota Tsusho Corp. | 200 | 5,140 | ||||||
Trend Micro Inc. | 200 | 6,770 | ||||||
Unicharm Corp. | 200 | 5,017 | ||||||
United Urban Investment Corp. | 5 | 7,942 | ||||||
West Japan Railway Co. | 100 | 5,537 | ||||||
Yahoo Japan Corp. | 1,400 | 5,733 | ||||||
Yakult Honsha Co., Ltd. | 100 | 6,269 | ||||||
Yamada Denki Co., Ltd. | 1,400 | 5,738 | ||||||
Yamaha Motor Co. Ltd. | 300 | 7,045 | ||||||
Yamato Holdings Co., Ltd. | 300 | 6,691 | ||||||
Yaskawa Electric Corp. | 500 | 6,891 | ||||||
Yokogawa Electric Corp. | 600 | 6,989 | ||||||
1,492,659 | ||||||||
Luxembourg–0.18% | ||||||||
ArcelorMittal S.A. | 692 | 7,355 | ||||||
Tenaris S.A. | 499 | 7,685 | ||||||
15,040 | ||||||||
Macau–0.12% | ||||||||
Wynn Macau, Ltd. | 5,200 | 10,542 | ||||||
Malaysia–2.56% | ||||||||
AMMB Holdings Berhad | 6,300 | 11,443 |
Shares | Value | |||||||
Malaysia–(continued) | ||||||||
Axiata Group Berhad | 7,300 | $ | 13,808 | |||||
British American Tobacco Malaysia Berhad | 388 | 7,238 | ||||||
CIMB Group Holdings Berhad | 3,500 | 5,788 | ||||||
DiGi.Com Berhad | 5,900 | 9,951 | ||||||
Gamuda Berhad | 5,400 | 7,926 | ||||||
Genting Berhad | 3,600 | 8,840 | ||||||
Genting Malaysia Berhad | 6,000 | 7,229 | ||||||
Hong Leong Bank Berhad | 3,400 | 13,330 | ||||||
IHH Healthcare Berhad | 6,100 | 10,134 | ||||||
IJM Corp. Berhad | 5,000 | 10,285 | ||||||
IOI Corp. Berhad | 6,300 | 7,673 | ||||||
Kuala Lumpur Kepong Berhad | 1,100 | 6,835 | ||||||
Malayan Banking Berhad | 4,300 | 11,088 | ||||||
Maxis Berhad | 4,900 | 9,530 | ||||||
MISC Berhad | 2,900 | 7,420 | ||||||
Petronas Gas Berhad | 1,100 | 7,014 | ||||||
Public Bank Berhad | 2,300 | 12,574 | ||||||
RHB Capital Berhad | 3,600 | 7,981 | ||||||
Sime Darby Berhad | 4,200 | 10,667 | ||||||
Telekom Malaysia Berhad | 4,300 | 8,942 | ||||||
Tenaga Nasional Berhad | 2,100 | 8,449 | ||||||
UMW Holdings Berhad | 3,000 | 8,943 | ||||||
YTL Corp. Berhad | 15,300 | 7,171 | ||||||
220,259 | ||||||||
Mexico–0.86% | ||||||||
America Movil S.A.B. de C.V.–Series L | 6,400 | 6,709 | ||||||
Arca Continental S.A.B. de C.V. | 1,300 | 7,976 | ||||||
Coca-Cola Femsa, S.A.B. de C.V.–Series L | 900 | 7,199 | ||||||
El Puerto de Liverpool, S.A.B. de C.V.– | 600 | 6,615 | ||||||
Fibra Uno Administracion S.A. de C.V. | 2,800 | 6,984 | ||||||
Fomento Economico Mexicano, S.A.B. de C.V.–Series BD(a)(c) | 800 | 7,240 | ||||||
Grupo Bimbo, S.A.B. de C.V.–Series A(a) | 2,200 | 5,899 | ||||||
Grupo Financiero Banorte S.A.B. de C.V.– | 1,100 | 6,241 | ||||||
Grupo Lala, S.A.B. de C.V. | 3,700 | 7,454 | ||||||
Grupo Televisa S.A.B.–Series CPO(a)(d) | 900 | 6,554 | ||||||
Wal-Mart de México, S.A.B. de C.V.–Class V | 2,300 | 5,413 | ||||||
74,284 | ||||||||
Morocco–0.13% | ||||||||
Attijariwafa Bank | 301 | 11,243 | ||||||
Netherlands–0.99% | ||||||||
Aegon N.V. | 853 | 6,713 | ||||||
Akzo Nobel N.V. | 93 | 7,088 | ||||||
ASML Holding N.V. | 64 | 6,872 | ||||||
Gemalto N.V. | 85 | 7,898 | ||||||
Heineken Holding N.V. | 100 | 6,968 | ||||||
Heineken N.V. | 89 | 6,980 | ||||||
Koninklijke Ahold N.V. | 353 | 6,817 | ||||||
Koninklijke DSM N.V. | 126 | 7,164 | ||||||
Koninklijke KPN N.V. | 2,125 | 7,871 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Macro International Equity Fund
Shares | Value | |||||||
Netherlands–(continued) | ||||||||
Koninklijke Philips N.V. | 243 | $ | 6,941 | |||||
Randstad Holding N.V. | 113 | 6,699 | ||||||
Wolters Kluwer N.V. | 212 | 6,845 | ||||||
84,856 | ||||||||
New Zealand–0.36% | ||||||||
Auckland International Airport Ltd. | 3,128 | 10,992 | ||||||
Fletcher Building Ltd. | 1,569 | 9,939 | ||||||
Spark New Zealand Ltd. | 4,565 | 10,339 | ||||||
31,270 | ||||||||
Norway–0.62% | ||||||||
DNB ASA | 609 | 10,820 | ||||||
Orkla ASA | 1,287 | 10,084 | ||||||
Statoil ASA | 548 | 11,605 | ||||||
Telenor ASA | 493 | 11,130 | ||||||
Yara International ASA | 187 | 9,576 | ||||||
53,215 | ||||||||
Philippines–1.14% | ||||||||
Aboitiz Power Corp. | 7,700 | 7,408 | ||||||
Ayala Corp. | 460 | 8,034 | ||||||
Bank of the Philippine Islands | 3,570 | 8,097 | ||||||
BDO Unibank, Inc. | 3,050 | 7,456 | ||||||
DMCI Holdings Inc. | 18,300 | 6,156 | ||||||
Energy Development Corp. | 35,400 | 6,419 | ||||||
GT Capital Holdings, Inc. | 240 | 6,760 | ||||||
International Container Terminal Services, Inc. | 3,360 | 8,289 | ||||||
Jollibee Foods Corp. | 1,220 | 5,445 | ||||||
Metropolitan Bank & Trust Co. | 3,500 | 7,300 | ||||||
Philippine Long Distance Telephone Co. | 110 | 6,825 | ||||||
SM Investments Corp. | 380 | 7,674 | ||||||
SM Prime Holdings Inc. | 13,600 | 5,691 | ||||||
Universal Robina Corp. | 1,360 | 6,643 | ||||||
98,197 | ||||||||
Poland–0.42% | ||||||||
Bank Pekao S.A. | 123 | 6,408 | ||||||
Energa S.A. | 1,038 | 7,207 | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 767 | 7,684 | ||||||
Powszechny Zaklad Ubezpieczen S.A. | 59 | 7,704 | ||||||
TAURON Polska Energia S.A. | 5,195 | 6,957 | ||||||
35,960 | ||||||||
Portugal–0.08% | ||||||||
Energias de Portugal, S.A. | 1,822 | 7,293 | ||||||
Qatar–0.06% | ||||||||
Commercial Bank of Qatar Q.S.C. (The) | 347 | 5,361 | ||||||
Russia–0.07% | ||||||||
Polyus Gold International Ltd. | 2,197 | 6,318 | ||||||
Singapore–2.92% | ||||||||
Ascendas REIT | 5,600 | 10,437 |
Shares | Value | |||||||
Singapore–(continued) | ||||||||
CapitaLand Ltd. | 4,200 | $ | 11,690 | |||||
CapitaMall Trust | 6,800 | 11,224 | ||||||
City Developments Ltd. | 1,500 | 12,072 | ||||||
ComfortDelGro Corp. Ltd. | 5,000 | 11,601 | ||||||
DBS Group Holdings Ltd. | 700 | 11,127 | ||||||
Genting Singapore PLC | 15,500 | 11,974 | ||||||
Global Logistic Properties Ltd. | 5,700 | 11,796 | ||||||
Jardine Cycle & Carriage Ltd. | 400 | 12,232 | ||||||
Keppel Corp. Ltd. | 1,700 | 11,149 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 1,400 | 11,275 | ||||||
SembCorp Industries Ltd. | 3,400 | 11,573 | ||||||
SembCorp Marine Ltd. | 4,900 | 10,952 | ||||||
Singapore Airlines Ltd. | 1,200 | 11,064 | ||||||
Singapore Exchange Ltd. | 1,900 | 12,211 | ||||||
Singapore Press Holdings Ltd. | 3,500 | 11,071 | ||||||
Singapore Technologies Engineering Ltd. | 4,300 | 11,744 | ||||||
Singapore Telecommunications Ltd. | 3,400 | 11,361 | ||||||
Suntec REIT | 7,900 | 10,540 | ||||||
United Overseas Bank Ltd. | 600 | 11,076 | ||||||
UOL Group Ltd. | 1,900 | 11,392 | ||||||
Wilmar International Ltd. | 4,600 | 11,290 | ||||||
250,851 | ||||||||
South Africa–1.82% | ||||||||
Barclays Africa Group Ltd. | 469 | 7,507 | ||||||
Barloworld Ltd. | 864 | 6,910 | ||||||
Bidvest Group Ltd. | 257 | 6,953 | ||||||
Discovery Ltd. | 617 | 6,830 | ||||||
FirstRand Ltd. | 1,466 | 6,998 | ||||||
Growthpoint Properties Ltd. | 3,234 | 7,575 | ||||||
Investec Ltd. | 782 | 7,421 | ||||||
Liberty Holdings Ltd. | 693 | 9,650 | ||||||
Life Healthcare Group Holdings Ltd. | 1,507 | 5,155 | ||||||
MMI Holdings Ltd. | 2,562 | 7,293 | ||||||
MTN Group Ltd. | 336 | 6,735 | ||||||
Nedbank Group Ltd. | 306 | 6,598 | ||||||
Netcare Ltd. | 1,773 | 6,198 | ||||||
Rand Merchant Insurance Holdings Ltd. | 2,006 | 7,883 | ||||||
Redefine Properties Ltd. | 8,310 | 8,416 | ||||||
Remgro Ltd. | 299 | 6,644 | ||||||
Sanlam Ltd. | 897 | 5,797 | ||||||
SPAR Group Ltd. (The) | 419 | 6,730 | ||||||
Standard Bank Group Ltd. | 499 | 7,318 | ||||||
Steinhoff International Holdings Ltd. | 1,160 | 7,365 | ||||||
Tsogo Sun Holdings Ltd. | 2,916 | 6,792 | ||||||
Vodacom Group Ltd. | 617 | 7,684 | ||||||
156,452 | ||||||||
South Korea–0.86% | ||||||||
GS Holdings | 200 | 9,311 | ||||||
Hana Financial Group Inc. | 248 | 7,306 | ||||||
Hankook Tire Co. Ltd. | 300 | 5,932 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Macro International Equity Fund
Shares | Value | |||||||
South Korea–(continued) | ||||||||
Hanwha Life Insurance Co., Ltd. | 1,001 | $ | 7,391 | |||||
Hyundai Marine & Fire Insurance Co., Ltd. | 362 | 9,655 | ||||||
KB Financial Group Inc. | 181 | 6,887 | ||||||
KT Corp.(a) | 248 | 7,321 | ||||||
Kumho Petrochemical Co., Ltd. | 85 | 6,799 | ||||||
LG Electronics Inc. | 115 | 6,463 | ||||||
LS Corp. | 132 | 6,629 | ||||||
73,694 | ||||||||
Spain–1.45% | ||||||||
Abertis Infraestructuras S.A. | 388 | 7,153 | ||||||
Amadeus IT Holding S.A.–Class A | 166 | 7,578 | ||||||
Banco Bilbao Vizcaya Argentaria, S.A. | 691 | 6,957 | ||||||
Banco de Sabadell S.A.(a) | 3,039 | 8,127 | ||||||
Banco Popular Espanol S.A. | 1,561 | 8,131 | ||||||
Banco Santander S.A. | 952 | 7,203 | ||||||
Bankia S.A.(a) | 4,767 | 6,641 | ||||||
CaixaBank S.A. | 1,532 | 7,673 | �� | |||||
Enagas S.A. | 239 | 7,364 | ||||||
Ferrovial S.A. | 331 | 7,525 | ||||||
Gas Natural SDG, S.A. | 302 | 7,413 | ||||||
Grifols S.A. | 161 | 6,860 | ||||||
Iberdrola S.A. | 1,044 | 6,983 | ||||||
Industria de Diseno Textil, S.A. | 214 | 6,859 | ||||||
Red Electrica Corp. S.A. | 86 | 7,218 | ||||||
Repsol S.A. | 373 | 7,671 | ||||||
Telefónica, S.A. | 487 | 7,427 | ||||||
124,783 | ||||||||
Sweden–1.92% | ||||||||
Assa Abloy AB–Class B | 165 | 9,539 | ||||||
Atlas Copco AB–Class A | 299 | 9,333 | ||||||
Hennes & Mauritz AB–Class B | 242 | 9,616 | ||||||
Hexagon AB–Class B | 282 | 10,448 | ||||||
Investor AB–Class B | 246 | 10,030 | ||||||
Nordea Bank AB | 772 | 9,762 | ||||||
Sandvik AB | 862 | 10,845 | ||||||
Skandinaviska Enskilda Banken AB–Class A | 763 | 9,641 | ||||||
Skanska AB–Class B | 423 | 9,409 | ||||||
SKF AB–Class B | 380 | 9,215 | ||||||
Svenska Cellulosa AB–Class B | 410 | 10,357 | ||||||
Svenska Handelsbanken AB–Class A | 204 | 9,385 | ||||||
Swedbank AB–Class A | 382 | 8,877 | ||||||
Swedish Match AB | 324 | 9,949 | ||||||
Telefonaktiebolaget LM Ericsson–Class B | 753 | 8,264 | ||||||
TeliaSonera AB | 1,544 | 9,603 | ||||||
Volvo AB–Class B | 823 | 11,301 | ||||||
165,574 | ||||||||
Switzerland–2.98% | ||||||||
ABB Ltd. | 458 | 10,031 | ||||||
Actelion Ltd. | 80 | 10,594 | ||||||
Adecco S.A | 116 | 9,512 |
Shares | Value | |||||||
Switzerland–(continued) | ||||||||
Cie Financiere Richemont S.A. | 114 | $ | 10,179 | |||||
Credit Suisse Group AG | 371 | 9,831 | ||||||
Geberit AG | 26 | 9,265 | ||||||
Givaudan S.A. | 5 | 9,419 | ||||||
Glencore PLC | 7,192 | 34,253 | ||||||
Holcim Ltd. | 126 | 10,180 | ||||||
Julius Baer Group Ltd. | 192 | 10,129 | ||||||
Kuehne + Nagel International AG | 65 | 9,774 | ||||||
Nestle S.A. | 125 | 9,749 | ||||||
Novartis AG | 96 | 9,920 | ||||||
Roche Holding AG | 35 | 10,083 | ||||||
Schindler Holding AG–Participation Ctfs. | 57 | 9,704 | ||||||
SGS S.A. | 5 | 9,731 | ||||||
Sika AG | 3 | 10,355 | ||||||
STMicroelectronics N.V. | 704 | 5,611 | ||||||
Swatch Group AG (The) | 22 | 9,874 | ||||||
Swiss Re AG | 101 | 8,980 | ||||||
Swisscom AG | 17 | 10,151 | ||||||
Syngenta AG | 28 | 9,414 | ||||||
UBS Group AG | 522 | 10,519 | ||||||
Zurich Insurance Group AG | 29 | 8,984 | ||||||
256,242 | ||||||||
Taiwan–5.10% | ||||||||
Asia Cement Corp. | 8,140 | 10,302 | ||||||
Asia Pacific Telecom Co., Ltd. | 13,000 | 5,604 | ||||||
Cathay Financial Holding Co., Ltd. | 4,250 | 7,427 | ||||||
Chailease Holding Co. Ltd. | 3,000 | 8,225 | ||||||
Chang Hwa Commercial Bank | 16,360 | 9,998 | ||||||
Cheng Shin Rubber Industry Co., Ltd. | 3,000 | 7,180 | ||||||
China Airlines Ltd.(a) | 13,000 | 6,920 | ||||||
China Development Financial Holding Corp. | 25,000 | 10,425 | ||||||
China Life Insurance Co., Ltd. | 9,800 | 10,372 | ||||||
China Steel Chemical Corp. | 2,000 | 9,716 | ||||||
China Steel Corp. | 15,240 | 12,801 | ||||||
Chunghwa Telecom Co., Ltd. | 6,000 | 19,382 | ||||||
CTBC Financial Holding Co. Ltd. | 12,517 | 9,743 | ||||||
E.Sun Financial Holding Co. Ltd. | 16,159 | 11,064 | ||||||
Far Eastern New Century Corp. | 9,160 | 10,058 | ||||||
Far EasTone Telecommunications Co., Ltd. | 3,000 | 7,155 | ||||||
First Financial Holding Co., Ltd. | 19,610 | 12,335 | ||||||
Formosa Chemicals & Fibre Corp. | 4,000 | 10,177 | ||||||
Formosa Petrochemical Corp. | 4,000 | 10,294 | ||||||
Formosa Plastics Corp. | 4,000 | 10,278 | ||||||
Foxconn Technology Co. Ltd. | 3,150 | 8,979 | ||||||
Fubon Financial Holding Co. Ltd. | 4,000 | 8,598 | ||||||
Highwealth Construction Corp. | 3,500 | 9,141 | ||||||
Hon Hai Precision Industry Co., Ltd. | 2,360 | 7,076 | ||||||
Hua Nan Financial Holdings Co., Ltd. | 18,000 | 11,058 | ||||||
Kenda Rubber Industrial Co., Ltd. | 4,000 | 7,823 | ||||||
Lite-On Technology Corp. | 5,000 | 6,310 | ||||||
Makalot Industrial Co., Ltd. | 1,000 | 7,815 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Macro International Equity Fund
Shares | Value | |||||||
Taiwan–(continued) | ||||||||
Mega Financial Holding Co., Ltd. | 13,000 | $ | 11,564 | |||||
Nan Ya Plastics Corp. | 3,000 | 7,364 | ||||||
President Chain Store Corp. | 1,000 | 7,406 | ||||||
Ruentex Development Co., Ltd. | 5,000 | 8,882 | ||||||
Ruentex Industries Ltd. | 3,000 | 7,359 | ||||||
Shin Kong Financial Holding Co., Ltd. | 38,952 | 12,631 | ||||||
SinoPac Financial Holdings Co., Ltd. | 25,616 | 11,605 | ||||||
Synnex Technology International Corp. | 5,000 | 7,085 | ||||||
Taishin Financial Holding Co., Ltd. | 22,086 | 10,113 | ||||||
Taiwan Cement Corp. | 5,000 | 7,104 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 30,500 | 16,463 | ||||||
Taiwan Fertilizer Co., Ltd. | 6,000 | 11,031 | ||||||
Taiwan Mobile Co., Ltd. | 2,000 | 7,032 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,000 | 4,828 | ||||||
Tong Yang Industry Co., Ltd. | 5,000 | 5,928 | ||||||
Tripod Technology Corp. | 3,000 | 5,870 | ||||||
Uni-President Enterprises Corp. | 4,240 | 6,953 | ||||||
WPG Holdings Ltd. | 6,000 | 7,506 | ||||||
Yang Ming Marine Transport(a) | 12,000 | 6,271 | ||||||
Yuanta Financial Holding Co., Ltd. | 16,350 | 9,503 | ||||||
438,754 | ||||||||
Thailand–1.33% | ||||||||
Advanced Info Service PCL | 900 | 6,528 | ||||||
Bangkok Bank PCL | 1,500 | 8,388 | ||||||
Bangkok Dusit Medical Services PCL–Class F | 9,800 | 5,990 | ||||||
BTS Group Holdings PCL | 26,500 | 7,425 | ||||||
Central Pattana PCL | 4,700 | 5,979 | ||||||
CP ALL PCL | 6,100 | 7,749 | ||||||
Home Product Center Public Co. Ltd. | 28,800 | 6,270 | ||||||
Intouch Holdings PCL | 3,600 | 8,390 | ||||||
Kasikornbank PCL | 900 | 5,707 | ||||||
Krungthai Bank PCL | 9,700 | 5,861 | ||||||
PTT Global Chemical PCL | 3,500 | 6,785 | ||||||
Siam Cement PCL (The) | 500 | 8,132 | ||||||
Siam Commercial Bank PCL (The) | 1,400 | 6,729 | ||||||
Thai Beverage PCL | 19,300 | 10,413 | ||||||
Thai Oil PCL | 4,200 | 7,426 | ||||||
Thai Union Frozen Products PCL | 10,300 | 6,364 | ||||||
114,136 | ||||||||
Turkey–0.38% | ||||||||
Aselsan Elektronik Sanayi Ve Ticaret A.S. | 1,349 | 7,027 | ||||||
BIM Birlesik Magazalar A.S. | 347 | 6,427 | ||||||
Koc Holding A.S. | 1,512 | 7,156 | ||||||
Turk Telekomunikasyon A.S. | 2,252 | 6,227 | ||||||
Turkcell Iletisim Hizmetleri A.S. | 1,235 | 5,499 | ||||||
32,336 | ||||||||
United Kingdom–17.99% | ||||||||
Anglo American PLC | 1,956 | 33,179 | ||||||
ARM Holdings PLC | 1,791 | 30,447 | ||||||
Associated British Foods PLC | 708 | 31,006 |
Shares | Value | |||||||
United Kingdom–(continued) | ||||||||
AstraZeneca PLC | 444 | $ | 30,600 | |||||
Aviva PLC | 3,776 | 30,470 | ||||||
BAE Systems PLC | 3,946 | 30,720 | ||||||
Barclays PLC | 8,431 | 33,009 | ||||||
BG Group PLC | 2,435 | 44,202 | ||||||
BP PLC | 4,773 | 34,444 | ||||||
British American Tobacco PLC | 589 | 32,398 | ||||||
BT Group PLC | 4,625 | 32,318 | ||||||
Burberry Group PLC | 1,147 | 30,645 | ||||||
Centrica PLC | 8,415 | 32,898 | ||||||
CNH Industrial N.V. | 861 | 7,581 | ||||||
Compass Group PLC | 1,789 | 31,716 | ||||||
Diageo PLC | 1,119 | 31,082 | ||||||
Experian PLC | 1,883 | 33,668 | ||||||
Fiat Chrysler Automobiles N.V.(a) | 426 | 6,334 | ||||||
GlaxoSmithKline PLC | 1,316 | 30,447 | ||||||
HSBC Holdings PLC | 3,681 | 36,516 | ||||||
Imperial Tobacco Group PLC | 693 | 33,885 | ||||||
Kingfisher PLC | 5,818 | 31,324 | ||||||
Land Securities Group PLC | 1,687 | 32,272 | ||||||
Legal & General Group PLC | 7,339 | 29,192 | ||||||
Lloyds Banking Group PLC | 26,696 | 31,677 | ||||||
Marks & Spencer Group PLC | 4,005 | 33,928 | ||||||
National Grid PLC | 2,421 | 32,552 | ||||||
Next PLC | 296 | 33,345 | ||||||
Old Mutual PLC | 9,290 | 33,365 | ||||||
Pearson PLC | 1,443 | 29,168 | ||||||
Prudential PLC | 1,232 | 30,747 | ||||||
Reckitt Benckiser Group PLC | 361 | 32,237 | ||||||
Reed Elsevier N.V. | 276 | 6,634 | ||||||
Reed Elsevier PLC | 1,835 | 30,390 | ||||||
Rio Tinto Ltd. | 233 | 10,486 | ||||||
Rio Tinto PLC | 739 | 32,922 | ||||||
Rolls-Royce Holdings PLC(a) | 307,380 | 472 | ||||||
Rolls-Royce Holdings PLC(a) | 2,180 | 34,935 | ||||||
Royal Bank of Scotland Group PLC(a) | 6,041 | 31,269 | ||||||
Royal Dutch Shell PLC–Class A | 1,043 | 32,855 | ||||||
SABMiller PLC | 580 | 30,732 | ||||||
Sky PLC | 2,086 | 34,431 | ||||||
Smith & Nephew PLC | 1,875 | 32,082 | ||||||
SSE PLC | 1,385 | 32,809 | ||||||
Standard Chartered PLC | 2,009 | 32,857 | ||||||
Standard Life PLC | 4,424 | 31,703 | ||||||
Tesco PLC | 8,791 | 29,707 | ||||||
Tullow Oil PLC | 4,410 | 28,020 | ||||||
Unilever PLC | 742 | 32,581 | ||||||
Vodafone Group PLC | 9,430 | 33,282 | ||||||
Wolseley PLC | 511 | 30,304 | ||||||
WPP PLC | 1,362 | 31,807 | ||||||
1,547,650 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Macro International Equity Fund
Shares | Value | |||||||
United States–0.13% | ||||||||
Samsonite International S.A. | 3,000 | $ | 10,973 | |||||
Total Common Stocks & Other Equity Interests |
| 7,878,158 | ||||||
Money Market Funds–6.11% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 262,752 | 262,752 | ||||||
Premier Portfolio–Institutional Class(e) | 262,751 | 262,751 | ||||||
Total Money Market Funds |
| 525,503 | ||||||
TOTAL INVESTMENTS–97.67% |
| 8,403,661 | ||||||
OTHER ASSETS LESS LIABILITIES–2.33% |
| 200,251 | ||||||
NET ASSETS–100.00% |
| $ | 8,603,912 |
Investment Abbreviations:
ADR | – American Depositary Receipt | |
CPO | – Certificates of Ordinary Participation | |
Ctfs. | – Certificates | |
REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Each unit represents one common stock and four preferred stocks. |
(c) | Each unit represents one Series B share, two Series D-B shares and two Series D-L shares. |
(d) | Each CPO represents twenty-five A shares, twenty-two B shares, thirty-five L shares and thirty-five D shares. |
(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 April 30, 2015
Financials | 25.0 | % | ||
Industrials | 13.5 | |||
Consumer Discretionary | 12.5 | |||
Consumer Staples | 9.4 | |||
Materials | 8.0 | |||
Utilities | 5.6 | |||
Health Care | 4.9 | |||
Information Technology | 4.4 | |||
Telecommunication Services | 4.2 | |||
Energy | 4.1 | |||
Money Market Funds Plus Other Assets Less Liabilities | 8.4 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Macro International Equity Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $7,622,702) | $ | 7,878,158 | ||
Investments in affiliated money market funds, at value and cost | 525,503 | |||
Total investments, at value (Cost $8,148,205) | 8,403,661 | |||
Foreign currencies, at value (Cost $55,036) | 55,687 | |||
Receivable for: | ||||
Deposits with brokers for open futures contracts | 265,000 | |||
Investments sold | 9,736 | |||
Dividends | 32,047 | |||
Investment for trustee deferred compensation and retirement plans | 3,661 | |||
Other assets | 102,185 | |||
Total assets | 8,871,977 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 10,020 | |||
Fund shares reacquired | 122,629 | |||
Variation margin — futures | 21,352 | |||
Accrued fees to affiliates | 10,629 | |||
Accrued trustees’ and officers’ fees and benefits | 1,795 | |||
Accrued other operating expenses | 97,979 | |||
Trustee deferred compensation and retirement plans | 3,661 | |||
Total liabilities | 268,065 | |||
Net assets applicable to shares outstanding | $ | 8,603,912 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 8,287,343 | ||
Undistributed net investment income | 30,474 | |||
Undistributed net realized gain (loss) | (47,181 | ) | ||
Net unrealized appreciation | 333,276 | |||
$ | 8,603,912 |
Net Assets: |
| |||
Class A | $ | 3,538,624 | ||
Class C | $ | 67,943 | ||
Class R | $ | 10,330 | ||
Class Y | $ | 4,262,689 | ||
Class R5 | $ | 362,084 | ||
Class R6 | $ | 362,242 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 342,303 | |||
Class C | 6,610 | |||
Class R | 1,001 | |||
Class Y | 411,850 | |||
Class R5 | 35,001 | |||
Class R6 | 35,001 | |||
Class A: | ||||
Net asset value per share | $ | 10.34 | ||
Maximum offering price per share | ||||
(Net asset value of $10.34 ¸ 94.50%) | $ | 10.94 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.28 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.32 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.35 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.34 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.35 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Macro International Equity Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $9,853) | $ | 91,743 | ||
Dividends from affiliated money market funds | 140 | |||
Total investment income | 91,883 | |||
Expenses: | ||||
Advisory fees | 35,726 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 88,657 | |||
Distribution fees: | ||||
Class A | 4,044 | |||
Class C | 157 | |||
Class R | 24 | |||
Transfer agent fees — A, C, R and Y | 1,198 | |||
Transfer agent fees — R5 | 8 | |||
Transfer agent fees — R6 | 5 | |||
Trustees’ and officers’ fees and benefits | 9,390 | |||
Registration and filing fees | 40,212 | |||
Licensing Fees | 37,101 | |||
Professional services fees | 28,296 | |||
Other | 53,779 | |||
Total expenses | 323,392 | |||
Less: Fees waived and expenses reimbursed | (274,469 | ) | ||
Net expenses | 48,923 | |||
Net investment income | 42,960 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (net of foreign taxes of $475) | (22,334 | ) | ||
Foreign currencies | (10,924 | ) | ||
Futures contracts | (47,246 | ) | ||
(80,504 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities (net of foreign taxes on holdings of $572) | 259,858 | |||
Foreign currencies | 1,828 | |||
Futures contracts | 140,168 | |||
401,854 | ||||
Net realized and unrealized gain | 321,350 | |||
Net increase in net assets resulting from operations | $ | 364,310 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Macro International Equity Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 17, 2013 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 17, 2013 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 42,960 | $ | 97,231 | ||||
Net realized gain (loss) | (80,504 | ) | 92,682 | |||||
Change in net unrealized appreciation (depreciation) | 401,854 | (68,578 | ) | |||||
Net increase in net assets resulting from operations | 364,310 | 121,335 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (63,932 | ) | — | |||||
Class C | (323 | ) | — | |||||
Class R | (179 | ) | — | |||||
Class Y | (68,456 | ) | — | |||||
Class R5 | (19,684 | ) | — | |||||
Class R6 | (7,613 | ) | — | |||||
Total distributions from net investment income | (160,187 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (19,588 | ) | — | |||||
Class C | (127 | ) | — | |||||
Class R | (60 | ) | — | |||||
Class Y | (18,853 | ) | — | |||||
Class R5 | (5,421 | ) | — | |||||
Class R6 | (2,097 | ) | — | |||||
Total distributions from net realized gains | (46,146 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 223,871 | 3,198,397 | ||||||
Class C | 44,910 | 20,866 | ||||||
Class R | — | 10,010 | ||||||
Class Y | 948,611 | 3,146,281 | ||||||
Class R5 | (529,245 | ) | 910,889 | |||||
Class R6 | — | 350,010 | ||||||
Net increase in net assets resulting from share transactions | 688,147 | 7,636,453 | ||||||
Net increase in net assets | 846,124 | 7,757,788 | ||||||
Net assets: | ||||||||
Beginning of period | 7,757,788 | — | ||||||
End of period (includes undistributed net investment income of $30,474 and $147,701, respectively) | $ | 8,603,912 | $ | 7,757,788 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Macro International Equity Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is to provide total return.
16 Invesco Macro International Equity Fund
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. |
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 are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
17 Invesco Macro International Equity Fund
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions — Distributions from 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. |
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 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
18 Invesco Macro International Equity Fund
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. | 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 | .935% | ||||
Next $250 million | 0 | .910% | ||||
Next $500 million | 0 | .885% | ||||
Next $1.5 billion | 0 | .860% | ||||
Next $2.5 billion | 0 | .835% | ||||
Next $2.5 billion | 0 | .810% | ||||
Next $2.5 billion | 0 | .785% | ||||
Over $10 billion | 0 | .760% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.94%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.43%, 2.18%, 1.68%, 1.18%, 1.18% and 1.18% 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $273,258 and reimbursed class level expenses of $570, $5, $2, $621, $8, 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 April 30, 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
19 Invesco Macro International Equity Fund
course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $194 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 April 30, 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 April 30, 2015, there were transfers from Level 1 to Level 2 of $656,593 and from Level 2 to Level 1 of $931,964, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | $ | 35,940 | $ | 629,024 | $ | — | $ | 664,964 | ||||||||
Austria | 8,552 | 15,795 | — | 24,347 | ||||||||||||
Belgium | — | 41,257 | — | 41,257 | ||||||||||||
Brazil | 29,824 | — | — | 29,824 | ||||||||||||
Chile | 79,188 | — | — | 79,188 | ||||||||||||
China | 209,266 | 38,582 | — | 247,848 | ||||||||||||
Colombia | 26,925 | — | — | 26,925 | ||||||||||||
Czech Republic | 14,778 | — | — | 14,778 | ||||||||||||
Denmark | 10,681 | 52,993 | — | 63,674 | ||||||||||||
Egypt | 6,044 | — | — | 6,044 | ||||||||||||
Finland | — | 45,665 | — | 45,665 | ||||||||||||
France | 21,934 | 328,497 | — | 350,431 | ||||||||||||
Germany | 56,331 | 184,846 | — | 241,177 | ||||||||||||
Greece | 5,556 | — | — | 5,556 | ||||||||||||
Hong Kong | 321,340 | 175,357 | — | 496,697 | ||||||||||||
Hungary | 15,821 | — | — | 15,821 | ||||||||||||
India | 5,205 | — | — | 5,205 | ||||||||||||
Indonesia | 25,423 | 35,799 | — | 61,222 | ||||||||||||
Ireland | — | 45,269 | — | 45,269 |
20 Invesco Macro International Equity Fund
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Italy | $ | 8,712 | $ | 85,612 | $ | — | $ | 94,324 | ||||||||
Japan | 6,621 | 1,486,038 | — | 1,492,659 | ||||||||||||
Luxembourg | — | 15,040 | — | 15,040 | ||||||||||||
Macau | — | 10,542 | — | 10,542 | ||||||||||||
Malaysia | 119,134 | 101,125 | — | 220,259 | ||||||||||||
Mexico | 74,284 | — | — | 74,284 | ||||||||||||
Morocco | — | 11,243 | — | 11,243 | ||||||||||||
Netherlands | — | 84,856 | — | 84,856 | ||||||||||||
New Zealand | — | 31,270 | — | 31,270 | ||||||||||||
Norway | — | 53,215 | — | 53,215 | ||||||||||||
Philippines | 61,414 | 36,783 | — | 98,197 | ||||||||||||
Poland | 21,069 | 14,891 | — | 35,960 | ||||||||||||
Portugal | — | 7,293 | — | 7,293 | ||||||||||||
Qatar | 5,361 | — | — | 5,361 | ||||||||||||
Russia | — | 6,318 | — | 6,318 | ||||||||||||
Singapore | 22,665 | 228,186 | — | 250,851 | ||||||||||||
South Africa | 27,725 | 128,727 | — | 156,452 | ||||||||||||
South Korea | 9,655 | 64,039 | — | 73,694 | ||||||||||||
Spain | — | 124,783 | — | 124,783 | ||||||||||||
Sweden | 8,264 | 157,310 | — | 165,574 | ||||||||||||
Switzerland | 44,404 | 211,838 | — | 256,242 | ||||||||||||
Taiwan | 12,524 | 426,230 | — | 438,754 | ||||||||||||
Thailand | 26,553 | 87,583 | — | 114,136 | ||||||||||||
Turkey | 25,309 | 7,027 | — | 32,336 | ||||||||||||
United Kingdom | 140,317 | 1,407,333 | — | 1,547,650 | ||||||||||||
United States | 536,476 | — | — | 536,476 | ||||||||||||
2,023,295 | 6,380,366 | — | 8,403,661 | |||||||||||||
Futures Contracts* | 76,884 | — | — | 76,884 | ||||||||||||
Total Investments | $ | 2,100,179 | $ | 6,380,366 | $ | — | $ | 8,480,545 |
* | 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Equity risk: | ||||||||
Futures contracts(a) | $ | 83,616 | $ | (6,732 | ) |
(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 April 30, 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): | ||||
Equity risk | $ | (47,246 | ) | |
Change in Unrealized Appreciation: | ||||
Equity risk | 140,168 | |||
Total | $ | 92,922 |
21 Invesco Macro International Equity Fund
The table below summarizes the average notional value of futures contracts outstanding during the period.
Futures Contracts | ||||
Average notional value | $ | 1,905,102 |
Open Futures Contracts(a) | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
Dow Jones EURO STOXX 50 Index | Long | 11 | June-2015 | $ | 440,716 | $ | (6,732 | ) | ||||||||||||
FTSE 100 Index | Long | 4 | June-2015 | 425,468 | 11,632 | |||||||||||||||
Hang Seng Index | Long | 2 | May-2015 | 362,622 | 153 | |||||||||||||||
Mini MSCI Emerging Markets Index | Long | 11 | June-2015 | 571,285 | 56,843 | |||||||||||||||
Tokyo Stock Price Index | Long | 3 | June-2015 | 399,121 | 14,988 | |||||||||||||||
Total Futures Contracts — Equity Risk | $ | 76,884 |
(a) | Futures contracts collateralized by $265,000 cash held with Goldman Sachs & Co., the futures commission merchant. |
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. Obligations under the deferred compensation plan 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 October 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 April 30, 2015 was $2,080,908 and $1,525,802, 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 | $ | 610,209 | ||
Aggregate unrealized (depreciation) of investment securities | (378,878 | ) | ||
Net unrealized appreciation of investment securities | $ | 231,331 |
Cost of investments for tax purposes is $8,172,330.
22 Invesco Macro International Equity Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 17, 2013 (commencement date) to October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 38,334 | $ | 387,963 | 332,714 | $ | 3,329,683 | ||||||||||
Class C | 4,564 | 45,055 | 2,059 | 20,866 | ||||||||||||
Class R | — | — | 1,001 | 10,010 | ||||||||||||
Class Y | 114,468 | 1,127,374 | 322,560 | 3,225,939 | ||||||||||||
Class R5 | — | — | 91,465 | 921,027 | ||||||||||||
Class R6 | — | — | 35,001 | 350,010 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 351 | 3,272 | — | — | ||||||||||||
Class C | 25 | 237 | — | — | ||||||||||||
Class Y | 22 | 206 | — | — | ||||||||||||
Class R5 | 1,650 | 15,396 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (16,248 | ) | (167,364 | ) | (12,848 | ) | (131,286 | ) | ||||||||
Class C | (38 | ) | (382 | ) | — | — | ||||||||||
Class Y | (17,382 | ) | (178,969 | ) | (7,818 | ) | (79,658 | ) | ||||||||
Class R5 | (57,150 | ) | (544,641 | ) | (964 | ) | (10,138 | ) | ||||||||
Net increase in share activity | 68,596 | $ | 688,147 | 763,170 | $ | 7,636,453 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 6% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
In addition, 90% of the outstanding shares of the Fund are owned by the Adviser. |
23 Invesco Macro International Equity Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income(a) | Net gains on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.15 | $ | 0.05 | $ | 0.40 | $ | 0.45 | $ | (0.20 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | 10.34 | 4.66 | % | $ | 3,539 | 1.42 | %(d) | 8.61 | %(d) | 0.98 | %(d) | 22 | % | |||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.12 | 0.03 | 0.15 | — | — | — | 10.15 | 1.50 | 3,247 | 1.42 | (f) | 8.20 | (f) | 1.29 | (f) | 45 | |||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.09 | 0.01 | 0.39 | 0.40 | (0.15 | ) | (0.06 | ) | (0.21 | ) | 10.28 | 4.21 | 68 | 2.17 | (d) | 9.36 | (d) | 0.23 | (d) | 22 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.05 | 0.04 | 0.09 | — | — | — | 10.09 | 0.90 | 21 | 2.17 | (f) | 8.95 | (f) | 0.54 | (f) | 45 | |||||||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.13 | 0.04 | 0.39 | 0.43 | (0.18 | ) | (0.06 | ) | (0.24 | ) | 10.32 | 4.49 | 10 | 1.67 | (d) | 8.86 | (d) | 0.73 | (d) | 22 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.09 | 0.04 | 0.13 | — | — | — | 10.13 | 1.30 | 10 | 1.67 | (f) | 8.45 | (f) | 1.04 | (f) | 45 | |||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.17 | 0.06 | 0.40 | 0.46 | (0.22 | ) | (0.06 | ) | (0.28 | ) | 10.35 | 4.79 | 4,263 | 1.17 | (d) | 8.36 | (d) | 1.23 | (d) | 22 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.14 | 0.03 | 0.17 | — | — | — | 10.17 | 1.70 | 3,202 | 1.17 | (f) | 7.95 | (f) | 1.54 | (f) | 45 | |||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.18 | 0.06 | 0.38 | 0.44 | (0.22 | ) | (0.06 | ) | (0.28 | ) | 10.34 | 4.59 | 362 | 1.17 | (d) | 8.32 | (d) | 1.23 | (d) | 22 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.14 | 0.04 | 0.18 | — | — | — | 10.18 | 1.80 | 921 | 1.17 | (f) | 7.92 | (f) | 1.54 | (f) | 45 | |||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.17 | 0.06 | 0.40 | 0.46 | (0.22 | ) | (0.06 | ) | (0.28 | ) | 10.35 | 4.79 | 362 | 1.17 | (d) | 8.32 | (d) | 1.23 | (d) | 22 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.14 | 0.03 | 0.17 | — | — | — | 10.17 | 1.70 | 356 | 1.17 | (f) | 7.92 | (f) | 1.54 | (f) | 45 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | 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 $3,262, $32, $10, $3,557, $501 and $345 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of December 17, 2013. |
(f) | Annualized |
24 Invesco Macro International Equity Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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.
ACTUAL | HYPOTHETICAL (5% annual return before expenses) | |||||||||||||||||||||||
Class | Beginning Account Value (11/01/14) | Ending Account Value (04/30/15)1 | Expenses Paid During | Ending Account Value (04/30/15) | Expenses Paid During | Annualized Expense Ratio | ||||||||||||||||||
A | $ | 1,000.00 | $ | 1,046.60 | $ | 7.21 | $ | 1,017.75 | $ | 7.10 | 1.42 | % | ||||||||||||
C | 1,000.00 | 1,042.10 | 10.99 | 1,014.03 | 10.84 | 2.17 | ||||||||||||||||||
R | 1,000.00 | 1,044.90 | 8.47 | 1,016.51 | 8.35 | 1.67 | ||||||||||||||||||
Y | 1,000.00 | 1,047.90 | 5.94 | 1,018.99 | 5.86 | 1.17 | ||||||||||||||||||
R5 | 1,000.00 | 1,046.90 | 5.94 | 1,018.99 | 5.86 | 1.17 | ||||||||||||||||||
R6 | 1,000.00 | 1,047.90 | 5.94 | 1,018.99 | 5.86 | 1.17 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
25 Invesco Macro International Equity Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov.
The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-05426 and 033-19338 | MIE-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Macro Long/Short Fund | ||||
Nasdaq: | ||||
A: LSTAX ¡ C: LSTCX ¡ R: LSTRX ¡ Y: LSTYX ¡ R5: LSTFX ¡ R6: LSTSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
17 Financial Statements | ||||
19 Notes to Financial Statements | ||||
28 Financial Highlights | ||||
29 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| |||||||
Fund vs. Indexes | |||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | 3.20 | % | |||||
Class C Shares | 2.82 | ||||||
Class R Shares | 3.08 | ||||||
Class Y Shares | 3.42 | ||||||
Class R5 Shares | 3.32 | ||||||
Class R6 Shares | 3.42 | ||||||
MSCI All Country World Index▼ (Broad Market Index) | 4.97 | ||||||
Barclays 3-Month Treasury Bellwether Index▼ (Style-Specific Index) | 0.01 | ||||||
Lipper Alternative Long/Short Equity Indexn (Peer Group Index) | 1.37 | ||||||
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc.
| |||||||
The MSCI All Country World Index is a free-float-adjusted market capitalization index that is designed to measure equity market performance of developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. The Barclays 3-Month Treasury Bellwether Index measures the performance of Treasury bills with a maturity of less than three months. The Lipper Alternative Long/Short Equity Index is composed of domestic or foreign funds that employ portfolio strategies combining long holdings of equities with short sales of equity, equity options or equity index options. The funds may be either net long or net short, depending on the portfolio manager’s view of the 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.
|
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (12/17/13) | –1.95 | % | |||||
1 Year | –4.10 | ||||||
Class C Shares | |||||||
Inception (12/17/13) | 1.46 | % | |||||
1 Year | –0.31 | ||||||
Class R Shares | |||||||
Inception (12/17/13) | 1.94 | % | |||||
1 Year | 1.25 | ||||||
Class Y Shares | |||||||
Inception (12/17/13) | 2.49 | % | |||||
1 Year | 1.80 | ||||||
Class R5 Shares | |||||||
Inception (12/17/13) | 2.49 | % | |||||
1 Year | 1.80 | ||||||
Class R6 Shares | |||||||
Inception (12/17/13) | 2.49 | % | |||||
1 Year | 1.80 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
| |||||||
Class A Shares | |||||||
Inception (12/17/13) | –3.20 | % | |||||
1 Year | –4.54 | ||||||
Class C Shares | |||||||
Inception (12/17/13) | 0.39 | % | |||||
1 Year | –0.80 | ||||||
Class R Shares | |||||||
Inception (12/17/13) | 0.89 | % | |||||
1 Year | 0.75 | ||||||
Class Y Shares | |||||||
Inception (12/17/13) | 1.40 | % | |||||
1 Year | 1.20 | ||||||
Class R5 Shares | |||||||
Inception (12/17/13) | 1.48 | % | |||||
1 Year | 1.30 | ||||||
Class R6 Shares | |||||||
Inception (12/17/13) | 1.40 | % | |||||
1 Year | 1.20 |
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 1.88%, 2.63%, 2.13%, 1.63%, 1.63% and 1.63%, 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 5.85%, 6.60%, 6.10%, 5.60%, 5.57% and 5.57%, 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 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Macro Long/Short 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 Macro Long/Short Fund
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–78.50% |
| |||||||
Australia–4.76% | ||||||||
AGL Energy Ltd. | 948 | $ | 11,364 | |||||
ALS Ltd. | 2,688 | 11,154 | ||||||
Alumina Ltd. | 8,151 | 9,888 | ||||||
Amcor Ltd. | 982 | 10,447 | ||||||
AMP Ltd. | 2,047 | 10,377 | ||||||
APA Group | 1,546 | 11,689 | ||||||
Asciano Ltd. | 2,169 | 11,260 | ||||||
ASX Ltd. | 321 | 10,677 | ||||||
Aurizon Holdings Ltd. | 2,792 | 10,679 | ||||||
AusNet Services | 9,526 | 11,088 | ||||||
Australia and New Zealand Banking Group Ltd. | 378 | 10,131 | ||||||
Bank of Queensland Ltd. | 953 | 9,782 | ||||||
Bendigo and Adelaide Bank Ltd. | 1,061 | 10,108 | ||||||
BHP Billiton Ltd. | 451 | 11,571 | ||||||
BHP Billiton PLC | 1,425 | 33,913 | ||||||
BlueScope Steel Ltd. | 2,932 | 8,053 | ||||||
Boral Ltd. | 2,213 | 11,046 | ||||||
Brambles Ltd. | 1,192 | 10,181 | ||||||
Caltex Australia Ltd. | 385 | 10,740 | ||||||
Challenger Ltd. | 2,024 | 11,269 | ||||||
CIMIC Group Ltd. | 640 | 10,637 | ||||||
Coca-Cola Amatil Ltd. | 1,270 | 10,291 | ||||||
Cochlear Ltd. | 150 | 9,897 | ||||||
Commonwealth Bank of Australia | 145 | 10,161 | ||||||
Computershare Ltd. | 1,041 | 10,110 | ||||||
Crown Resorts Ltd. | 1,050 | 10,770 | ||||||
CSL Ltd. | 151 | 10,836 | ||||||
Federation Centres | 4,630 | 10,781 | ||||||
Fortescue Metals Group Ltd. | 6,950 | 11,874 | ||||||
Iluka Resources Ltd. | 1,888 | 12,097 | ||||||
Incitec Pivot Ltd. | 3,467 | 10,905 | ||||||
Insurance Australia Group Ltd. | 2,257 | 10,331 | ||||||
Lend Lease Group | 822 | 10,372 | ||||||
Macquarie Group Ltd. | 178 | 10,894 | ||||||
Metcash Ltd. | 6,685 | 6,987 | ||||||
National Australia Bank Ltd. | 352 | 10,206 | ||||||
Newcrest Mining Ltd.(a) | 1,073 | 12,266 | ||||||
Novion Property Group Pty Ltd. | 5,148 | 10,002 | ||||||
Oil Search Ltd. | 1,824 | 11,616 | ||||||
Orica Ltd. | 747 | 11,887 | ||||||
Origin Energy Ltd. | 1,199 | 12,009 | ||||||
Primary Health Care Ltd. | 2,758 | 10,795 | ||||||
Qantas Airways Ltd.(a) | 4,513 | 12,103 | ||||||
QBE Insurance Group Ltd. | 1,028 | 11,102 | ||||||
Ramsay Health Care Ltd. | 206 | 10,145 | ||||||
Santos Ltd. | 1,899 | 12,394 | ||||||
Scentre Group | 3,537 | 10,432 | ||||||
Seek Ltd. | 757 | 9,694 |
Shares | Value | |||||||
Australia–(continued) | ||||||||
Sonic Healthcare Ltd. | 708 | $ | 11,098 | |||||
Suncorp Group Ltd. | 1,006 | 10,404 | ||||||
Tabcorp Holdings Ltd. | 2,877 | 11,048 | ||||||
Tatts Group Ltd. | 3,519 | 11,214 | ||||||
Telstra Corp. Ltd. | 2,217 | 10,898 | ||||||
Toll Holdings Ltd. | 1,563 | 11,092 | ||||||
Treasury Wine Estates Ltd. | 2,733 | 12,001 | ||||||
Wesfarmers Ltd. | 316 | 10,901 | ||||||
Westfield Corp. | 1,343 | 9,989 | ||||||
Westpac Banking Corp. | 350 | 10,060 | ||||||
Woodside Petroleum Ltd. | 389 | 10,732 | ||||||
Woolworths Ltd. | 477 | 11,072 | ||||||
WorleyParsons Ltd. | 1,357 | 12,225 | ||||||
679,745 | ||||||||
Austria–0.17% | ||||||||
Erste Group Bank AG | 301 | 8,552 | ||||||
OMV AG | 257 | 8,586 | ||||||
Voestalpine AG | 174 | 7,293 | ||||||
24,431 | ||||||||
Belgium–0.30% | ||||||||
Ageas | 201 | 7,539 | ||||||
Anheuser-Busch InBev N.V. | 59 | 7,168 | ||||||
Delhaize Group S.A. | 78 | 6,283 | ||||||
KBC Groep N.V.(a) | 114 | 7,511 | ||||||
Solvay S.A. | 50 | 7,372 | ||||||
UCB S.A. | 95 | 6,842 | ||||||
42,715 | ||||||||
Bermuda–0.11% | ||||||||
Montpelier Re Holdings Ltd. | 394 | 15,015 | ||||||
Brazil–0.21% | ||||||||
Ambev S.A. | 1,100 | 6,923 | ||||||
Cia Brasileira de Distribuicao–Preference Shares | 163 | 5,464 | ||||||
Klabin S.A.(b) | 1,100 | 6,755 | ||||||
M Dias Branco S.A. | 263 | 7,490 | ||||||
WEG S.A. | 760 | 4,066 | ||||||
30,698 | ||||||||
Chile–0.56% | ||||||||
Banco de Chile | 105,037 | 12,170 | ||||||
Banco Santander Chile | 167,666 | 8,960 | ||||||
Colbun S.A. | 29,349 | 8,856 | ||||||
Empresa Nacional de Electricidad S.A. | 5,631 | 8,660 | ||||||
Empresas CMPC S.A. | 2,742 | 7,788 | ||||||
Empresas COPEC S.A. | 863 | 9,933 | ||||||
Enersis S.A. | 25,325 | 8,816 | ||||||
LATAM Airlines Group S.A.(a) | 738 | 7,091 | ||||||
S.A.C.I. Falabella | 1,061 | 8,305 | ||||||
80,579 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Macro Long/Short Fund
Shares | Value | |||||||
China–1.78% | ||||||||
AAC Technologies Holdings Inc. | 1,784 | $ | 9,472 | |||||
Agricultural Bank of China Ltd.–Class H | 15,000 | 8,477 | ||||||
Bank of China Ltd.–Class H | 13,000 | 8,940 | ||||||
Belle International Holdings Ltd. | 10,000 | 12,864 | ||||||
China Construction Bank Corp.–Class H | 10,000 | 9,741 | ||||||
China Mobile Ltd. | 375 | 5,356 | ||||||
China National Building Material Co. Ltd.–Class H | 8,000 | 9,744 | ||||||
COSCO Pacific Ltd. | 6,000 | 9,429 | ||||||
ENN Energy Holdings Ltd. | 1,167 | 8,406 | ||||||
Evergrande Real Estate Group Ltd. | 22,704 | 21,531 | ||||||
GCL-Poly Energy Holdings Ltd.(a) | 39,555 | 11,951 | ||||||
Hengan International Group Co. Ltd. | 1,817 | 22,459 | ||||||
Industrial & Commercial Bank of China Ltd.–Class H | 11,000 | 9,566 | ||||||
Jiangsu Expressway Co. Ltd.–Class H | 6,000 | 8,268 | ||||||
Shanghai Industrial Holdings Ltd. | 2,217 | 8,867 | ||||||
Shimao Property Holdings Ltd. | 5,109 | 12,102 | ||||||
Sino-Ocean Land Holdings Ltd. | 17,000 | 14,213 | ||||||
Sun Art Retail Group Ltd. | 13,000 | 13,402 | ||||||
Tencent Holdings Ltd. | 548 | 11,318 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 7,034 | 14,866 | ||||||
Tsingtao Brewery Co. Ltd.–Class H | 2,000 | 12,715 | ||||||
Want Want China Holdings Ltd. | 10,068 | 11,054 | ||||||
254,741 | ||||||||
Colombia–0.19% | ||||||||
Bancolombia S.A.–Preference Shares | 796 | 8,706 | ||||||
Grupo Aval Acciones y Valores S.A.–Preference Shares | 19,386 | 9,845 | ||||||
Grupo de Inversiones Suramericana S.A. | 539 | 8,855 | ||||||
27,406 | ||||||||
Czech Republic–0.10% | ||||||||
CEZ A.S. | 300 | 7,799 | ||||||
Komercni Banka A.S. | 30 | 6,689 | ||||||
14,488 | ||||||||
Denmark–0.45% | ||||||||
A. P. Moller — Maersk AS–Class B | 5 | 9,901 | ||||||
Carlsberg AS–Class B | 120 | 10,955 | ||||||
Coloplast AS–Class B | 131 | 10,698 | ||||||
Danske Bank AS | 393 | 11,137 | ||||||
Novo Nordisk AS–Class B | 201 | 11,260 | ||||||
Vestas Wind Systems AS | 238 | 10,810 | ||||||
64,761 | ||||||||
Egypt–0.05% | ||||||||
Commercial International Bank (Egypt) S.A.E. | 898 | 6,516 | ||||||
Finland–0.33% | ||||||||
Fortum Oyj | 327 | 6,465 | ||||||
Kone Oyj–Class B | 157 | 6,768 | ||||||
Nokia Oyj | 854 | 5,776 | ||||||
Sampo Oyj–Class A | 147 | 7,135 | ||||||
Stora Enso Oyj–Class R | 687 | 7,245 |
Shares | Value | |||||||
Finland–(continued) | ||||||||
UPM-Kymmene Oyj | 354 | $ | 6,422 | |||||
Wartsila OYJ Abp | 153 | 7,024 | ||||||
46,835 | ||||||||
France–2.54% | ||||||||
Accor S.A. | 132 | 7,224 | ||||||
Air Liquide S.A. | 58 | 7,594 | ||||||
Airbus Group N.V. | 107 | 7,431 | ||||||
Alcatel-Lucent(a) | 1,850 | 6,434 | ||||||
Alstom S.A.(a) | 224 | 7,029 | ||||||
Arkema S.A. | 91 | 7,328 | ||||||
AXA S.A. | 293 | 7,397 | ||||||
BNP Paribas S.A. | 122 | 7,682 | ||||||
Bouygues S.A. | 184 | 7,613 | ||||||
Bureau Veritas S.A. | 321 | 7,549 | ||||||
Cap Gemini S.A. | 92 | 8,170 | ||||||
Carrefour S.A. | 207 | 7,139 | ||||||
Casino Guichard-Perrachon S.A. | 73 | 6,465 | ||||||
Christian Dior S.A. | 36 | 7,059 | ||||||
Cie Generale des Etablissements Michelin | 73 | 8,132 | ||||||
Compagnie de Saint-Gobain | 155 | 7,061 | ||||||
Credit Agricole S.A. | 513 | 7,961 | ||||||
Danone | 104 | 7,519 | ||||||
Dassault Systemes | 104 | 8,019 | ||||||
Edenred | 259 | 6,940 | ||||||
Electricite de France S.A. | 288 | 7,324 | ||||||
Essilor International S.A. | 64 | 7,776 | ||||||
GDF Suez | 348 | 7,089 | ||||||
Kering | 33 | 6,096 | ||||||
L’Oreal S.A. | 38 | 7,250 | ||||||
Lafarge S.A. | 103 | 7,539 | ||||||
Legrand S.A. | 127 | 7,338 | ||||||
LVMH Moet Hennessy Louis Vuitton S.E. | 38 | 6,645 | ||||||
Numericable–SFR(a) | 136 | 7,560 | ||||||
Orange S.A. | 415 | 6,831 | ||||||
Pernod Ricard S.A. | 64 | 7,945 | ||||||
Publicis Groupe S.A. | 93 | 7,779 | ||||||
Renault S.A. | 78 | 8,178 | ||||||
Safran S.A. | 101 | 7,372 | ||||||
Sanofi | 70 | 7,119 | ||||||
Schneider Electric S.E. | 93 | 6,935 | ||||||
SCOR S.E. | 210 | 7,556 | ||||||
Societe Generale S.A. | 160 | 7,982 | ||||||
Sodexo | 69 | 6,998 | ||||||
Suez Environnement Co. | 391 | 7,964 | ||||||
Technip S.A. | 118 | 8,038 | ||||||
TOTAL S.A. | 138 | 7,474 | ||||||
Unibail-Rodamco S.E. | 26 | 7,141 | ||||||
Valeo S.A. | 47 | 7,512 | ||||||
Vallourec S.A. | 257 | 6,043 | ||||||
Veolia Environnement S.A. | 397 | 8,412 | ||||||
Vinci S.A. | 126 | 7,729 | ||||||
Vivendi S.A. | 298 | 7,476 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Macro Long/Short Fund
Shares | Value | |||||||
France–(continued) | ||||||||
Zodiac Aerospace | 200 | $ | 7,359 | |||||
362,206 | ||||||||
Germany–1.74% | ||||||||
adidas AG | 94 | 7,750 | ||||||
Allianz S.E. | 42 | 7,182 | ||||||
BASF S.E. | 71 | 7,123 | ||||||
Bayer AG | 48 | 6,993 | ||||||
Bayerische Motoren Werke AG | 56 | 6,661 | ||||||
Beiersdorf AG | 81 | 7,080 | ||||||
Brenntag AG | 118 | 7,127 | ||||||
Commerzbank AG(a) | 543 | 7,367 | ||||||
Continental AG | 28 | 6,615 | ||||||
Daimler AG | 72 | 6,961 | ||||||
Deutsche Bank AG | 220 | 7,096 | ||||||
Deutsche Boerse AG | 93 | 7,754 | ||||||
Deutsche Lufthansa AG(a) | 443 | 6,156 | ||||||
Deutsche Post AG | 221 | 7,334 | ||||||
Deutsche Telekom AG | 413 | 7,624 | ||||||
E.ON S.E. | 462 | 7,242 | ||||||
Fresenius Medical Care AG & Co. KGaA | 91 | 7,676 | ||||||
Fresenius S.E. & Co. KGaA | 119 | 7,104 | ||||||
GEA Group AG | 145 | 6,992 | ||||||
HeidelbergCement AG | 95 | 7,334 | ||||||
Henkel AG & Co. KGaA–Preference Shares | 62 | 7,248 | ||||||
Infineon Technologies AG | 590 | 7,009 | ||||||
K+S AG | 212 | 6,980 | ||||||
LANXESS AG | 144 | 7,731 | ||||||
Linde AG | 33 | 6,467 | ||||||
Merck KGaA | 62 | 6,725 | ||||||
Metro AG | 208 | 7,547 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 33 | 6,476 | ||||||
Porsche Automobil Holding S.E.–Preference Shares | 74 | 7,072 | ||||||
ProSiebenSat.1 Media AG | 145 | 7,462 | ||||||
RWE AG | 268 | 6,699 | ||||||
SAP S.E. | 100 | 7,628 | ||||||
Siemens AG | 60 | 6,570 | ||||||
ThyssenKrupp AG | 279 | 7,470 | ||||||
Volkswagen AG–Preference Shares | 26 | 6,741 | ||||||
248,996 | ||||||||
Greece–0.04% | ||||||||
National Bank of Greece S.A.(a) | 4,363 | 6,124 | ||||||
Hong Kong–3.53% | ||||||||
AIA Group Ltd. | 1,800 | 12,030 | ||||||
ASM Pacific Technology Ltd. | 1,100 | 12,319 | ||||||
Bank of East Asia, Ltd. (The) | 2,800 | 12,159 | ||||||
Cheung Kong Infrastructure Holdings Ltd. | 1,000 | 8,490 | ||||||
China Gas Holdings Ltd. | 6,000 | 10,637 | ||||||
CLP Holdings Ltd. | 1,500 | 13,151 | ||||||
Dairy Farm International Holdings Ltd. | 1,200 | 11,328 | ||||||
Esprit Holdings Ltd. | 11,800 | 11,205 | ||||||
First Pacific Co. Ltd. | 10,000 | 9,703 |
Shares | Value | |||||||
Hong Kong–(continued) | ||||||||
Galaxy Entertainment Group Ltd. | 2,000 | $ | 9,641 | |||||
Hang Lung Group Ltd. | 2,000 | 10,606 | ||||||
Hang Lung Properties Ltd. | 4,000 | 13,520 | ||||||
Hang Seng Bank Ltd. | 600 | 11,713 | ||||||
Henderson Land Development Co. Ltd. | 2,100 | 16,880 | ||||||
HKT Trust and HKT Ltd. | 8,000 | 10,714 | ||||||
Hong Kong & China Gas Co. Ltd. | 4,400 | 10,503 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 500 | 19,072 | ||||||
Hongkong Land Holdings Ltd. | 1,500 | 12,122 | ||||||
Hutchison Whampoa Ltd. | 1,000 | 14,735 | ||||||
Hysan Development Co. Ltd. | 2,000 | 9,251 | ||||||
Jardine Matheson Holdings Ltd. | 200 | 12,365 | ||||||
Jardine Strategic Holdings Ltd. | 300 | 10,304 | ||||||
Kerry Properties Ltd. | 3,000 | 12,270 | ||||||
Li & Fung Ltd. | 12,000 | 12,247 | ||||||
Link REIT (The) | 2,000 | 12,405 | ||||||
MTR Corp. Ltd. | 2,500 | 12,322 | ||||||
New World Development Co. Ltd. | 10,000 | 13,273 | ||||||
Noble Group Ltd. | 17,000 | 11,055 | ||||||
NWS Holdings Ltd. | 7,000 | 11,922 | ||||||
Power Assets Holdings Ltd. | 1,000 | 10,102 | ||||||
Sands China Ltd. | 2,800 | 11,470 | ||||||
Shangri-La Asia Ltd. | 8,000 | 12,180 | ||||||
Sino Land Co. Ltd. | 8,000 | 14,103 | ||||||
SJM Holdings Ltd. | 8,000 | 10,140 | ||||||
Sun Hung Kai Properties Ltd. | 1,000 | 16,657 | ||||||
Swire Pacific Ltd.–Class A | 1,000 | 13,535 | ||||||
Swire Properties Ltd. | 3,600 | 12,402 | ||||||
Techtronic Industries Co. Ltd. | 3,000 | 10,664 | ||||||
VTech Holdings Ltd. | 700 | 9,745 | ||||||
Wharf Holdings Ltd. (The) | 2,000 | 14,464 | ||||||
Wheelock and Co. Ltd. | 2,000 | 11,276 | ||||||
Yue Yuen Industrial (Holdings) Ltd. | 2,500 | 9,516 | ||||||
504,196 | ||||||||
Hungary–0.11% | ||||||||
MOL Hungarian Oil and Gas PLC | 151 | 8,398 | ||||||
Gedeon Richter PLC | 455 | 7,669 | ||||||
16,067 | ||||||||
India–0.04% | ||||||||
Infosys Ltd.–ADR | 174 | 5,390 | ||||||
Indonesia–0.44% | ||||||||
Golden Agri-Resources Ltd. | 37,200 | 11,808 | ||||||
PT Bank Central Asia Tbk | 6,400 | 6,637 | ||||||
PT Bank Mandiri Persero Tbk | 6,900 | 5,713 | ||||||
PT Indofood Sukses Makmur Tbk | 12,500 | 6,480 | ||||||
PT Jasa Marga Persero Tbk | 14,300 | 6,839 | ||||||
PT Kalbe Farma Tbk | 52,000 | 7,201 | ||||||
PT Perusahaan Gas Negara Persero Tbk | 15,900 | �� | 5,017 | |||||
PT Telekomunikasi Indonesia Persero Tbk | 28,100 | 5,701 | ||||||
PT Unilever Indonesia Tbk | 2,100 | 6,913 | ||||||
62,309 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Macro Long/Short Fund
Shares | Value | |||||||
Ireland–0.32% | ||||||||
CRH PLC | 257 | $ | 7,207 | |||||
Kerry Group PLC–Class A | 96 | 7,043 | ||||||
Shire PLC | 385 | 31,325 | ||||||
45,575 | ||||||||
Italy–0.69% | ||||||||
Assicurazioni Generali S.p.A. | 358 | 7,013 | ||||||
Atlantia S.p.A. | 268 | 7,544 | ||||||
Enel S.p.A. | 1,607 | 7,602 | ||||||
Eni S.p.A. | 398 | 7,662 | ||||||
Intesa Sanpaolo S.p.A. | 2,259 | 7,566 | ||||||
Luxottica Group S.p.A. | 112 | 7,388 | ||||||
Prada S.p.A. | 1,600 | 8,712 | ||||||
Saipem S.p.A.(a) | 498 | 6,598 | ||||||
Snam S.p.A. | 1,458 | 7,597 | ||||||
Telecom Italia S.p.A.(a) | 6,173 | 7,258 | ||||||
Terna — Rete Elettrica Nazionale S.p.A. | 1,613 | 7,592 | ||||||
UniCredit S.p.A. | 1,113 | 7,970 | ||||||
Unione di Banche Italiane S.C.p.A. | 924 | 7,354 | ||||||
97,856 | ||||||||
Japan–11.16% | ||||||||
Aeon Co., Ltd. | 700 | 8,691 | ||||||
Aisin Seiki Co., Ltd. | 200 | 9,100 | ||||||
Amada Co., Ltd. | 700 | 7,079 | ||||||
ANA Holdings Inc. | 2,000 | 5,535 | ||||||
Aozora Bank, Ltd. | 2,000 | 7,464 | ||||||
Asahi Glass Co., Ltd. | 1,000 | 6,681 | ||||||
Asahi Group Holdings, Ltd. | 200 | 6,415 | ||||||
Asahi Kasei Corp. | 1,000 | 9,387 | ||||||
ASICS Corp. | 200 | 5,100 | ||||||
Astellas Pharma Inc. | 400 | 6,226 | ||||||
Bank of Kyoto, Ltd. (The) | 1,000 | 10,760 | ||||||
Bank of Yokohama, Ltd. (The) | 1,000 | 6,358 | ||||||
Benesse Holdings, Inc. | 200 | 6,263 | ||||||
Bridgestone Corp. | 200 | 8,357 | ||||||
Brother Industries, Ltd. | 400 | 6,369 | ||||||
Canon Inc. | 200 | 7,137 | ||||||
Casio Computer Co., Ltd. | 300 | 6,068 | ||||||
Chiba Bank, Ltd. (The) | 1,000 | 8,219 | ||||||
Chubu Electric Power Co., Inc. | 600 | 7,878 | ||||||
Chugai Pharmaceutical Co., Ltd. | 200 | 6,089 | ||||||
Chugoku Bank, Ltd. (The) | 400 | 6,421 | ||||||
Chugoku Electric Power Co., Inc. (The) | 600 | 8,757 | ||||||
Credit Saison Co., Ltd. | 300 | 5,672 | ||||||
Dai Nippon Printing Co., Ltd. | 1,000 | 10,348 | ||||||
Dai-ichi Life Insurance Co. Ltd. (The) | 400 | 6,551 | ||||||
Daihatsu Motor Co., Ltd. | 400 | 5,784 | ||||||
Daiichi Sankyo Co., Ltd. | 400 | 6,962 | ||||||
Daikin Industries, Ltd. | 100 | 6,732 | ||||||
Daito Trust Construction Co., Ltd. | 100 | 11,616 | ||||||
Daiwa House Industry Co., Ltd. | 300 | 6,679 | ||||||
Daiwa Securities Group Inc. | 1,000 | 8,281 | ||||||
Denso Corp. | 100 | 4,961 |
Shares | Value | |||||||
Japan–(continued) | ||||||||
Dentsu Inc. | 100 | $ | 4,635 | |||||
East Japan Railway Co. | 100 | 8,829 | ||||||
Eisai Co., Ltd. | 100 | 6,663 | ||||||
Electric Power Development Co., Ltd. | 200 | 6,740 | ||||||
FamilyMart Co., Ltd. | 200 | 8,598 | ||||||
Fuji Heavy Industries Ltd. | 200 | 6,670 | ||||||
Fuji Media Holdings, Inc. | 400 | 5,598 | ||||||
FUJIFILM Holdings Corp. | 200 | 7,555 | ||||||
Fujitsu Ltd. | 1,000 | 6,590 | ||||||
Fukuoka Financial Group, Inc. | 1,000 | 5,738 | ||||||
GungHo Online Entertainment, Inc. | 1,600 | 6,580 | ||||||
Gunma Bank, Ltd. (The) | 1,000 | 7,087 | ||||||
Hachijuni Bank, Ltd. (The) | 1,000 | 7,798 | ||||||
Hamamatsu Photonics K.K. | 200 | 5,845 | ||||||
Hankyu Hanshin Holdings, Inc. | 1,000 | 6,033 | ||||||
Hino Motors, Ltd. | 400 | 5,218 | ||||||
Hiroshima Bank, Ltd. (The) | 1,000 | 5,835 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 200 | 8,620 | ||||||
Hitachi, Ltd. | 1,000 | 6,815 | ||||||
Hokuhoku Financial Group, Inc. | 3,000 | 7,171 | ||||||
Hokuriku Electric Power Co. | 600 | 8,872 | ||||||
Honda Motor Co., Ltd. | 200 | 6,763 | ||||||
Hoya Corp. | 100 | 3,859 | ||||||
Hulic Co. Ltd. | 700 | 7,508 | ||||||
Idemitsu Kosan Co., Ltd. | 400 | 7,755 | ||||||
IHI Corp. | 1,000 | 4,587 | ||||||
INPEX Corp. | 700 | 8,766 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 500 | 8,090 | ||||||
Isuzu Motors Ltd. | 600 | 7,950 | ||||||
ITOCHU Corp. | 700 | 8,623 | ||||||
Iyo Bank, Ltd. (The) | 600 | 7,465 | ||||||
J. Front Retailing Co., Ltd. | 400 | 6,638 | ||||||
Japan Airlines Co. Ltd. | 200 | 6,670 | ||||||
Japan Exchange Group Inc. | 200 | 5,745 | ||||||
Japan Prime Realty Investment Corp. | 2 | 7,183 | ||||||
Japan Real Estate Investment Corp. | 1 | 4,727 | ||||||
Japan Retail Fund Investment Corp. | 3 | 6,376 | ||||||
Japan Tobacco, Inc. | 200 | 6,998 | ||||||
JFE Holdings, Inc. | 300 | 6,759 | ||||||
Joyo Bank, Ltd. (The) | 1,000 | 5,461 | ||||||
JSR Corp. | 500 | 8,525 | ||||||
JTEKT Corp. | 400 | 6,814 | ||||||
JX Holdings, Inc. | 1,700 | 7,403 | ||||||
Kajima Corp. | 1,000 | 4,777 | ||||||
Kansai Electric Power Co., Inc. (The)(a) | 800 | 8,046 | ||||||
Kao Corp. | 100 | 4,774 | ||||||
Kawasaki Heavy Industries, Ltd. | 1,000 | 5,134 | ||||||
KDDI Corp. | 300 | 7,089 | ||||||
Keikyu Corp. | 1,000 | 7,935 | ||||||
Keio Corp. | 1,000 | 7,708 | ||||||
Kintetsu Corp. | 2,000 | 7,089 | ||||||
Kirin Holdings Co., Ltd. | 600 | 7,927 | ||||||
Kobe Steel, Ltd. | 3,000 | 5,397 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Macro Long/Short Fund
Shares | Value | |||||||
Japan–(continued) | ||||||||
Komatsu Ltd. | 300 | $ | 6,025 | |||||
Konica Minolta Inc. | 700 | 7,694 | ||||||
Kuraray Co., Ltd. | 600 | 8,079 | ||||||
Kurita Water Industries Ltd. | 300 | 7,801 | ||||||
Kyocera Corp. | 100 | 5,220 | ||||||
Kyushu Electric Power Co. Inc.(a) | 800 | 8,505 | ||||||
Lawson, Inc. | 100 | 7,158 | ||||||
LIXIL Group Corp. | 300 | 6,234 | ||||||
Makita Corp. | 100 | 5,009 | ||||||
Marubeni Corp. | 1,200 | 7,445 | ||||||
Marui Group Co., Ltd. | 600 | 6,496 | ||||||
Mazda Motor Corp. | 300 | 5,859 | ||||||
Medipal Holdings Corp. | 600 | 8,153 | ||||||
MEIJI Holdings Co., Ltd. | 100 | 11,419 | ||||||
Mitsubishi Chemical Holdings Corp. | 1,100 | 6,792 | ||||||
Mitsubishi Corp. | 300 | 6,486 | ||||||
Mitsubishi Electric Corp. | 1,000 | 12,960 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 1,000 | 5,587 | ||||||
Mitsubishi Heavy Industries, Ltd. | 1,000 | 5,556 | ||||||
Mitsubishi Materials Corp. | 2,000 | 7,235 | ||||||
Mitsubishi Motors Corp. | 800 | 7,369 | ||||||
Mitsubishi Tanabe Pharma Corp. | 400 | 6,767 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 1,100 | 7,761 | ||||||
Mitsui & Co., Ltd. | 600 | 8,401 | ||||||
Mitsui Chemicals Inc. | 2,000 | 6,603 | ||||||
Mitsui O.S.K. Lines, Ltd. | 2,000 | 7,047 | ||||||
Mizuho Financial Group, Inc. | 3,900 | 7,442 | ||||||
MS&AD Insurance Group Holdings, Inc. | 200 | 5,727 | ||||||
Nagoya Railroad Co., Ltd. | 1,000 | 3,950 | ||||||
Namco Bandai Holdings Inc. | 300 | 6,150 | ||||||
NEC Corp. | 2,000 | 6,703 | ||||||
NGK Spark Plug Co., Ltd. | 200 | 5,575 | ||||||
Nidec Corp. | 100 | 7,456 | ||||||
Nikon Corp. | 600 | 8,487 | ||||||
Nippon Building Fund Inc. | 1 | 4,968 | ||||||
Nippon Express Co., Ltd. | 1,000 | 5,749 | ||||||
Nippon Paint Holdings Co., Ltd. | 200 | 6,695 | ||||||
Nippon Prologis REIT Inc. | 3 | 6,486 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 2,000 | 5,211 | ||||||
Nippon Telegraph & Telephone Corp. | 100 | 6,740 | ||||||
Nippon Television Holdings, Inc. | 400 | 6,824 | ||||||
Nippon Yusen Kabushiki Kaisha | 2,000 | 6,298 | ||||||
Nissan Motor Co., Ltd. | 700 | 7,250 | ||||||
Nisshin Seifun Group Inc. | 600 | 7,017 | ||||||
Nissin Foods Holdings Co., Ltd. | 100 | 4,777 | ||||||
Nitori Holdings Co., Ltd. | 100 | 7,655 | ||||||
Nitto Denko Corp. | 100 | 6,399 | ||||||
NKSJ Holdings, Inc. | 200 | 6,502 | ||||||
Nomura Holdings, Inc. | 1,100 | 7,144 | ||||||
Nomura Research Institute, Ltd. | 200 | 7,859 | ||||||
NSK Ltd. | 400 | 6,261 | ||||||
NTT Data Corp. | 100 | 4,453 | ||||||
NTT DoCoMo, Inc. | 300 | 5,331 |
Shares | Value | |||||||
Japan–(continued) | ||||||||
Obayashi Corp. | 1,000 | $ | 6,686 | |||||
Odakyu Electric Railway Co., Ltd. | 1,000 | 10,047 | ||||||
Oji Holdings Corp. | 2,000 | 8,893 | ||||||
Olympus Corp.(a) | 200 | 7,212 | ||||||
OMRON Corp. | 100 | 4,591 | ||||||
Ono Pharmaceutical Co. Ltd. | 100 | 10,789 | ||||||
Oriental Land Co., Ltd. | 100 | 6,738 | ||||||
ORIX Corp. | 400 | 6,117 | ||||||
Osaka Gas Co., Ltd. | 2,000 | 8,486 | ||||||
Otsuka Holdings Co., Ltd. | 200 | 6,302 | ||||||
Panasonic Corp. | 600 | 8,601 | ||||||
Rakuten Inc. | 300 | 5,236 | ||||||
Renesas Electronics Corp.(a) | 1,000 | 7,145 | ||||||
Resona Holdings, Inc. | 1,200 | 6,384 | ||||||
Ricoh Co., Ltd. | 700 | 7,269 | ||||||
Rinnai Corp. | 100 | 7,603 | ||||||
Rohm Co. Ltd. | 100 | 6,926 | ||||||
Santen Pharmaceutical Co., Ltd. | 600 | 7,945 | ||||||
SECOM Co., Ltd. | 100 | 7,070 | ||||||
Sega Sammy Holdings Inc. | 400 | 5,592 | ||||||
Seibu Holdings Inc. | 200 | 5,787 | ||||||
Seiko Epson Corp. | 300 | 5,230 | ||||||
Sekisui House, Ltd. | 400 | 6,222 | ||||||
Seven & i Holdings Co., Ltd. | 200 | 8,612 | ||||||
Sharp Corp.(a) | 3,000 | 6,492 | ||||||
Shikoku Electric Power Co. Inc. | 600 | 8,138 | ||||||
Shimadzu Corp. | 1,000 | 11,692 | ||||||
Shimamura Co., Ltd. | 100 | 9,929 | ||||||
Shimizu Corp. | 1,000 | 7,212 | ||||||
Shin-Etsu Chemical Co., Ltd. | 100 | 6,121 | ||||||
Shinsei Bank, Ltd. | 3,000 | 6,141 | ||||||
Shionogi & Co., Ltd. | 200 | 6,519 | ||||||
Shiseido Co., Ltd. | 300 | 5,406 | ||||||
Shizuoka Bank, Ltd. (The) | 1,000 | 11,014 | ||||||
SoftBank Corp. | 100 | 6,249 | ||||||
Sony Corp. | 200 | 6,041 | ||||||
Sony Financial Holdings Inc. | 400 | 7,167 | ||||||
Stanley Electric Co., Ltd. | 300 | 6,734 | ||||||
Sumitomo Chemical Co., Ltd. | 1,000 | 5,586 | ||||||
Sumitomo Corp. | 700 | 8,273 | ||||||
Sumitomo Electric Industries, Ltd. | 600 | 8,476 | ||||||
Sumitomo Heavy Industries, Ltd. | 1,000 | 6,211 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 200 | 8,722 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 1,000 | 4,391 | ||||||
Suntory Beverage & Food Ltd. | 200 | 8,517 | ||||||
Suruga Bank Ltd. | 300 | 6,614 | ||||||
Suzuken Co., Ltd. | 200 | 6,229 | ||||||
Suzuki Motor Corp. | 200 | 6,463 | ||||||
Sysmex Corp. | 100 | 5,525 | ||||||
T&D Holdings, Inc. | 600 | 8,604 | ||||||
Taiheiyo Cement Corp. | 2,000 | 6,307 | ||||||
Taisei Corp. | 1,000 | 5,792 | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. | 100 | 6,998 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Macro Long/Short Fund
Shares | Value | |||||||
Japan–(continued) | ||||||||
Takashimaya Co., Ltd. | 1,000 | $ | 9,335 | |||||
Takeda Pharmaceutical Co. Ltd. | 100 | 5,137 | ||||||
TDK Corp. | 100 | 7,179 | ||||||
Teijin Ltd. | 2,000 | 6,772 | ||||||
Terumo Corp. | 200 | 5,134 | ||||||
THK Co., Ltd. | 200 | 5,048 | ||||||
Tobu Railway Co., Ltd. | 1,000 | 4,762 | ||||||
Toho Co., Ltd. | 300 | 7,455 | ||||||
Toho Gas Co., Ltd. | 1,000 | 6,049 | ||||||
Tohoku Electric Power Co., Inc. | 600 | 7,527 | ||||||
Tokio Marine Holdings, Inc. | 200 | 8,154 | ||||||
Tokyo Electric Power Co. Inc.(a) | 1,600 | 6,533 | ||||||
Tokyo Electron Ltd. | 100 | 5,463 | ||||||
Tokyo Gas Co., Ltd. | 1,000 | 5,745 | ||||||
Tokyo Tatemono Co., Ltd. | 1,000 | 7,269 | ||||||
Tokyu Corp. | 1,000 | 6,658 | ||||||
Tokyu Fudosan Holdings, Corp. | 1,000 | 7,419 | ||||||
TonenGeneral Sekiyu K.K. | 1,000 | 9,583 | ||||||
Toppan Printing Co. Ltd. | 1,000 | 8,384 | ||||||
Toray Industries, Inc. | 1,000 | 8,655 | ||||||
Toshiba Corp. | 2,000 | 7,998 | ||||||
Toyo Seikan Group Holdings Ltd. | 400 | 6,320 | ||||||
Toyo Suisan Kaisha, Ltd. | 200 | 6,977 | ||||||
Toyota Industries Corp. | 100 | 5,665 | ||||||
Toyota Motor Corp. | 100 | 6,947 | ||||||
Toyota Tsusho Corp. | 200 | 5,140 | ||||||
Trend Micro Inc. | 200 | 6,770 | ||||||
Unicharm Corp. | 200 | 5,017 | ||||||
United Urban Investment Corp. | 4 | 6,353 | ||||||
West Japan Railway Co. | 100 | 5,537 | ||||||
Yahoo Japan Corp. | 1,700 | 6,961 | ||||||
Yakult Honsha Co., Ltd. | 100 | 6,269 | ||||||
Yamada Denki Co., Ltd. | 1,600 | 6,557 | ||||||
Yamaguchi Financial Group, Inc. | 1,000 | 12,499 | ||||||
Yamaha Motor Co., Ltd. | 300 | 7,045 | ||||||
Yamato Holdings Co., Ltd. | 300 | 6,691 | ||||||
Yaskawa Electric Corp. | 400 | 5,513 | ||||||
Yokogawa Electric Corp. | 700 | 8,154 | ||||||
1,594,461 | ||||||||
Luxembourg–0.10% | ||||||||
ArcelorMittal S.A. | 705 | 7,493 | ||||||
Tenaris S.A. | 480 | 7,393 | ||||||
14,886 | ||||||||
Macau–0.07% | ||||||||
Wynn Macau, Ltd. | 5,087 | 10,313 | ||||||
Malaysia–1.56% | ||||||||
AMMB Holdings Berhad | 6,623 | 12,030 | ||||||
Axiata Group Berhad | 7,368 | 13,937 | ||||||
British American Tobacco Malaysia Berhad | 412 | 7,686 | ||||||
CIMB Group Holdings Berhad | 3,731 | 6,170 | ||||||
DiGi.Com Berhad | 6,000 | 10,120 |
Shares | Value | |||||||
Malaysia–(continued) | ||||||||
Gamuda Berhad | 5,100 | $ | 7,486 | |||||
Genting Berhad | 3,631 | 8,916 | ||||||
Genting Malaysia Berhad | 6,100 | 7,350 | ||||||
Hong Leong Bank Berhad | 3,400 | 13,330 | ||||||
IHH Healthcare Berhad | 6,221 | 10,336 | ||||||
IJM Corp. Berhad | 5,079 | 10,448 | ||||||
IOI Corp. Berhad | 6,400 | 7,795 | ||||||
Kuala Lumpur Kepong Berhad | 1,100 | 6,835 | ||||||
Malayan Banking Berhad | 4,319 | 11,137 | ||||||
Maxis Berhad | 4,981 | 9,687 | ||||||
MISC Berhad | 2,924 | 7,481 | ||||||
Petronas Gas Berhad | 1,200 | 7,651 | ||||||
Public Bank Berhad | 2,285 | 12,492 | ||||||
RHB Capital Berhad | 3,600 | 7,981 | ||||||
Sime Darby Berhad | 4,205 | 10,680 | ||||||
Telekom Malaysia Berhad | 4,191 | 8,715 | ||||||
Tenaga Nasional Berhad | 2,022 | 8,135 | ||||||
UMW Holdings Berhad | 2,907 | 8,665 | ||||||
YTL Corp. Berhad | 15,532 | 7,279 | ||||||
222,342 | ||||||||
Mexico–0.53% | ||||||||
America Movil S.A.B. de C.V.–Series L | 6,240 | 6,541 | ||||||
Arca Continental S.A.B. de C.V. | 1,332 | 8,172 | ||||||
Coca-Cola Femsa, S.A.B. de C.V.–Series L | 900 | 7,199 | ||||||
El Puerto de Liverpool, S.A.B. de C.V.–Series C1(a) | 600 | 6,615 | ||||||
Fibra Uno Administracion S.A. de C.V. | 2,700 | 6,735 | ||||||
Fomento Economico Mexicano, S.A.B. de C.V.–Series BD(a)(c) | 800 | 7,240 | ||||||
Grupo Bimbo, S.A.B. de C.V.–Series A(a) | 2,200 | 5,899 | ||||||
Grupo Financiero Banorte S.A.B. de C.V.–Class O | 1,100 | 6,241 | ||||||
Grupo Lala, S.A.B. de C.V. | 3,700 | 7,454 | ||||||
Grupo Televisa S.A.B.–Series CPO(a)(d) | 1,000 | 7,282 | ||||||
Wal-Mart de México, S.A.B. de C.V.–Class V | 2,424 | 5,705 | ||||||
75,083 | ||||||||
Morocco–0.08% | ||||||||
Attijariwafa Bank | 306 | 11,429 | ||||||
Netherlands–0.61% | ||||||||
Aegon N.V. | 871 | 6,854 | ||||||
Akzo Nobel N.V. | 94 | 7,165 | ||||||
ASML Holding N.V. | 68 | 7,302 | ||||||
Gemalto N.V. | 82 | 7,619 | ||||||
Heineken Holding N.V. | 105 | 7,316 | ||||||
Heineken N.V. | 90 | 7,059 | ||||||
Koninklijke Ahold N.V. | 382 | 7,377 | ||||||
Koninklijke DSM N.V. | 129 | 7,334 | ||||||
Koninklijke KPN N.V. | 2,093 | 7,753 | ||||||
Koninklijke Philips N.V. | 248 | 7,084 | ||||||
Randstad Holding N.V. | 116 | 6,876 | ||||||
Wolters Kluwer N.V. | 221 | 7,136 | ||||||
86,875 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Macro Long/Short Fund
Shares | Value | |||||||
New Zealand–0.22% | ||||||||
Auckland International Airport Ltd. | 3,138 | $ | 11,028 | |||||
Fletcher Building Ltd. | 1,598 | 10,122 | ||||||
Spark New Zealand Ltd. | 4,438 | 10,052 | ||||||
31,202 | ||||||||
Norway–0.38% | ||||||||
DNB ASA | 628 | 11,157 | ||||||
Orkla ASA | 1,340 | 10,499 | ||||||
Statoil ASA | 529 | 11,203 | ||||||
Telenor ASA | 502 | 11,334 | ||||||
Yara International ASA | 191 | 9,780 | ||||||
53,973 | ||||||||
Philippines–0.70% | ||||||||
Aboitiz Power Corp. | 8,100 | 7,793 | ||||||
Ayala Corp. | 480 | 8,384 | ||||||
Bank of the Philippine Islands | 3,630 | 8,233 | ||||||
BDO Unibank, Inc. | 3,190 | 7,798 | ||||||
DMCI Holdings Inc. | 18,600 | 6,257 | ||||||
Energy Development Corp. | 33,600 | 6,092 | ||||||
GT Capital Holdings, Inc. | 240 | 6,760 | ||||||
International Container Terminal Services, Inc. | 3,420 | 8,437 | ||||||
Jollibee Foods Corp. | 1,240 | 5,534 | ||||||
Metropolitan Bank & Trust Co. | 3,720 | 7,759 | ||||||
Philippine Long Distance Telephone Co. | 105 | 6,514 | ||||||
SM Investments Corp. | 380 | 7,674 | ||||||
SM Prime Holdings Inc. | 13,900 | 5,817 | ||||||
Universal Robina Corp. | 1,380 | 6,741 | ||||||
99,793 | ||||||||
Poland–0.26% | ||||||||
Bank Pekao S.A. | 126 | 6,564 | ||||||
Energa S.A. | 1,057 | 7,339 | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 781 | 7,825 | ||||||
Powszechny Zaklad Ubezpieczen S.A. | 60 | 7,834 | ||||||
Tauron Polska Energia S.A. | 5,292 | 7,087 | ||||||
36,649 | ||||||||
Portugal–0.05% | ||||||||
Energias de Portugal, S.A. | 1,840 | 7,365 | ||||||
Qatar–0.04% | ||||||||
Commercial Bank of Qatar Q.S.C. (The) | 366 | 5,670 | ||||||
Russia–0.05% | ||||||||
Polyus Gold International Ltd. | 2,427 | 6,979 | ||||||
Singapore–1.78% | ||||||||
Ascendas REIT | 5,700 | 10,624 | ||||||
CapitaLand Ltd. | 4,200 | 11,690 | ||||||
CapitaMall Trust | 7,000 | 11,555 | ||||||
City Developments Ltd. | 1,500 | 12,072 | ||||||
ComfortDelGro Corp. Ltd. | 5,000 | 11,601 | ||||||
DBS Group Holdings Ltd. | 700 | 11,126 | ||||||
Genting Singapore PLC | 15,700 | 12,128 | ||||||
Global Logistic Properties Ltd. | 6,000 | 12,417 |
Shares | Value | |||||||
Singapore–(continued) | ||||||||
Jardine Cycle & Carriage Ltd. | 400 | $ | 12,232 | |||||
Keppel Corp. Ltd. | 1,700 | 11,149 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 1,400 | 11,275 | ||||||
SembCorp Industries Ltd. | 3,300 | 11,233 | ||||||
SembCorp Marine Ltd. | 5,000 | 11,175 | ||||||
Singapore Airlines Ltd. | 1,200 | 11,064 | ||||||
Singapore Exchange Ltd. | 1,900 | 12,211 | ||||||
Singapore Press Holdings Ltd. | 3,500 | 11,071 | ||||||
Singapore Technologies Engineering Ltd. | 4,300 | 11,744 | ||||||
Singapore Telecommunications Ltd. | 3,400 | 11,361 | ||||||
Suntec REIT | 8,000 | 10,674 | ||||||
United Overseas Bank Ltd. | 700 | 12,922 | ||||||
UOL Group Ltd. | 2,000 | 11,992 | ||||||
Wilmar International Ltd. | 4,500 | 11,044 | ||||||
254,360 | ||||||||
South Africa–1.13% | ||||||||
Barclays Africa Group Ltd. | 468 | 7,491 | ||||||
Barloworld Ltd. | 879 | 7,030 | ||||||
Bidvest Group Ltd. | 280 | 7,576 | ||||||
Discovery Ltd. | 646 | 7,151 | ||||||
FirstRand Ltd. | 1,585 | 7,566 | ||||||
Growthpoint Properties Ltd. | 3,438 | 8,052 | ||||||
Investec Ltd. | 755 | 7,164 | ||||||
Liberty Holdings Ltd. | 706 | 9,831 | ||||||
Life Healthcare Group Holdings Ltd. | 1,788 | 6,116 | ||||||
MMI Holdings Ltd. | 2,419 | 6,886 | ||||||
MTN Group Ltd. | 371 | 7,437 | ||||||
Nedbank Group Ltd. | 319 | 6,878 | ||||||
Netcare Ltd. | 1,806 | 6,313 | ||||||
Rand Merchant Insurance Holdings Ltd. | 2,040 | 8,017 | ||||||
Redefine Properties Ltd. | 8,527 | 8,636 | ||||||
Remgro Ltd. | 305 | 6,778 | ||||||
Sanlam Ltd. | 954 | 6,165 | ||||||
SPAR Group Ltd. (The) | 427 | 6,858 | ||||||
Standard Bank Group Ltd. | 526 | 7,714 | ||||||
Steinhoff International Holdings Ltd. | 1,181 | 7,499 | ||||||
Tsogo Sun Holdings Ltd. | 3,005 | 7,000 | ||||||
Vodacom Group Ltd. | 629 | 7,833 | ||||||
161,991 | ||||||||
South Korea–0.52% | ||||||||
GS Holdings | 203 | 9,450 | ||||||
Hana Financial Group Inc. | 252 | 7,424 | ||||||
Hankook Tire Co. Ltd. | 306 | 6,051 | ||||||
Hanwha Life Insurance Co., Ltd. | 1,000 | 7,383 | ||||||
Hyundai Marine & Fire Insurance Co., Ltd. | 346 | 9,229 | ||||||
KB Financial Group Inc. | 184 | 7,001 | ||||||
KT Corp.(a) | 252 | 7,440 | ||||||
Kumho Petrochemical Co., Ltd. | 92 | 7,359 | ||||||
LG Electronics Inc. | 118 | 6,632 | ||||||
LS Corp. | 135 | 6,779 | ||||||
74,748 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Macro Long/Short Fund
Shares | Value | |||||||
Spain–0.88% | ||||||||
Abertis Infraestructuras S.A. | 395 | $ | 7,281 | |||||
Amadeus IT Holding S.A.–Class A | 168 | 7,670 | ||||||
Banco Bilbao Vizcaya Argentaria, S.A. | 741 | 7,461 | ||||||
Banco de Sabadell S.A.(a) | 3,095 | 8,277 | ||||||
Banco Popular Espanol S.A. | 1,589 | 8,277 | ||||||
Banco Santander S.A. | 969 | 7,332 | ||||||
Bankia S.A.(a) | 4,677 | 6,515 | ||||||
CaixaBank S.A. | 1,560 | 7,813 | ||||||
Enagas S.A. | 230 | 7,087 | ||||||
Ferrovial S.A. | 338 | 7,684 | ||||||
Gas Natural SDG, S.A. | 308 | 7,560 | ||||||
Grifols S.A. | 163 | 6,945 | ||||||
Iberdrola S.A. | 1,041 | 6,963 | ||||||
Industria de Diseno Textil, S.A. | 233 | 7,468 | ||||||
Red Electrica Corp. S.A. | 88 | 7,385 | ||||||
Repsol S.A. | 368 | 7,568 | ||||||
Telefónica, S.A. | 464 | 7,077 | ||||||
126,363 | ||||||||
Sweden–1.19% | ||||||||
Assa Abloy AB–Class B | 167 | 9,654 | ||||||
Atlas Copco AB–Class A | 305 | 9,520 | ||||||
Hennes & Mauritz AB–Class B | 247 | 9,815 | ||||||
Hexagon AB–Class B | 287 | 10,633 | ||||||
Investor AB–Class B | 261 | 10,641 | ||||||
Nordea Bank AB | 829 | 10,483 | ||||||
Sandvik AB | 878 | 11,046 | ||||||
Skandinaviska Enskilda Banken AB–Class A | 780 | 9,856 | ||||||
Skanska AB–Class B | 442 | 9,832 | ||||||
SKF AB–Class B | 387 | 9,385 | ||||||
Svenska Cellulosa AB–Class B | 432 | 10,913 | ||||||
Svenska Handelsbanken AB–Class A | 202 | 9,293 | ||||||
Swedbank AB–Class A | 396 | 9,202 | ||||||
Swedish Match AB | 312 | 9,581 | ||||||
Telefonaktiebolaget LM Ericsson–Class B | 779 | 8,549 | ||||||
TeliaSonera AB | 1,572 | 9,778 | ||||||
Volvo AB–Class B | 838 | 11,507 | ||||||
169,688 | ||||||||
Switzerland–1.86% | ||||||||
ABB Ltd. | 449 | 9,834 | ||||||
Actelion Ltd. | 79 | 10,462 | ||||||
Adecco S.A | 118 | 9,676 | ||||||
Cie Financiere Richemont S.A. | 110 | 9,822 | ||||||
Credit Suisse Group AG | 370 | 9,805 | ||||||
Geberit AG | 26 | 9,265 | ||||||
Givaudan S.A. | 5 | 9,419 | ||||||
Glencore PLC | 7,325 | 34,886 | ||||||
Holcim Ltd. | 128 | 10,341 | ||||||
Julius Baer Group Ltd. | 195 | 10,288 | ||||||
Kuehne + Nagel International AG | 69 | 10,376 | ||||||
Nestle S.A. | 134 | 10,451 | ||||||
Novartis AG | 100 | 10,334 | ||||||
Roche Holding AG | 34 | 9,795 |
Shares | Value | |||||||
Switzerland–(continued) | ||||||||
Schindler Holding AG–Participation Ctfs. | 58 | $ | 9,874 | |||||
SGS S.A. | 5 | 9,731 | ||||||
Sika AG | 3 | 10,355 | ||||||
STMicroelectronics N.V. | 717 | 5,714 | ||||||
Swatch Group AG (The) | 22 | 9,874 | ||||||
Swiss Re AG | 103 | 9,157 | ||||||
Swisscom AG | 17 | 10,151 | ||||||
Syngenta AG | 29 | 9,750 | ||||||
TE Connectivity Ltd. | 87 | 5,790 | ||||||
UBS Group AG | 547 | 11,023 | ||||||
Zurich Insurance Group AG | 30 | 9,293 | ||||||
265,466 | ||||||||
Taiwan–3.14% | ||||||||
Asia Cement Corp. | 8,450 | 10,694 | ||||||
Asia Pacific Telecom Co., Ltd. | 13,000 | 5,604 | ||||||
Cathay Financial Holding Co., Ltd. | 4,758 | 8,315 | ||||||
Chailease Holding Co. Ltd. | 4,000 | 10,967 | ||||||
Chang Hwa Commercial Bank | 17,472 | 10,677 | ||||||
Cheng Shin Rubber Industry Co., Ltd. | 3,000 | 7,180 | ||||||
China Airlines Ltd.(a) | 14,000 | 7,452 | ||||||
China Development Financial Holding Corp. | 25,224 | 10,518 | ||||||
China Life Insurance Co., Ltd. | 9,498 | 10,052 | ||||||
China Steel Chemical Corp. | 1,400 | 6,801 | ||||||
China Steel Corp. | 15,409 | 12,943 | ||||||
Chunghwa Telecom Co., Ltd. | 6,551 | 21,162 | ||||||
CTBC Financial Holding Co. Ltd. | 13,420 | 10,446 | ||||||
E.Sun Financial Holding Co. Ltd. | 16,159 | 11,064 | ||||||
Far Eastern New Century Corp. | 9,521 | 10,455 | ||||||
Far EasTone Telecommunications Co., Ltd. | 3,267 | 7,792 | ||||||
First Financial Holding Co., Ltd. | 20,843 | 13,111 | ||||||
Formosa Chemicals & Fibre Corp. | 3,267 | 8,312 | ||||||
Formosa Petrochemical Corp. | 4,000 | 10,294 | ||||||
Formosa Plastics Corp. | 3,734 | 9,594 | ||||||
Foxconn Technology Co. Ltd. | 2,920 | 8,323 | ||||||
Fubon Financial Holding Co. Ltd. | 3,301 | 7,096 | ||||||
Highwealth Construction Corp. | 3,726 | 9,732 | ||||||
Hon Hai Precision Industry Co., Ltd. | 2,790 | 8,365 | ||||||
Hua Nan Financial Holdings Co., Ltd. | 19,000 | 11,672 | ||||||
Kenda Rubber Industrial Co., Ltd. | 4,000 | 7,823 | ||||||
Lite-On Technology Corp. | 5,000 | 6,310 | ||||||
Makalot Industrial Co., Ltd. | 1,000 | 7,815 | ||||||
Mega Financial Holding Co., Ltd. | 13,000 | 11,564 | ||||||
Nan Ya Plastics Corp. | 3,384 | 8,306 | ||||||
President Chain Store Corp. | 1,000 | 7,406 | ||||||
Ruentex Development Co., Ltd. | 5,000 | 8,882 | ||||||
Ruentex Industries Ltd. | 3,000 | 7,359 | ||||||
Shin Kong Financial Holding Co., Ltd. | 38,984 | 12,641 | ||||||
SinoPac Financial Holdings Co., Ltd. | 25,432 | 11,522 | ||||||
Synnex Technology International Corp. | 5,000 | 7,085 | ||||||
Taishin Financial Holding Co., Ltd. | 20,970 | 9,602 | ||||||
Taiwan Cement Corp. | 5,668 | 8,053 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 30,187 | 16,294 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Macro Long/Short Fund
Shares | Value | |||||||
Taiwan–(continued) | ||||||||
Taiwan Fertilizer Co., Ltd. | 5,718 | $ | 10,513 | |||||
Taiwan Mobile Co., Ltd. | 2,217 | 7,795 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,750 | 8,450 | ||||||
Tong Yang Industry Co., Ltd. | 5,000 | 5,928 | ||||||
Tripod Technology Corp. | 3,000 | 5,870 | ||||||
Uni-President Enterprises Corp. | 3,948 | 6,474 | ||||||
WPG Holdings Ltd. | 6,068 | 7,591 | ||||||
Yang Ming Marine Transport(a) | 12,000 | 6,271 | ||||||
Yuanta Financial Holding Co., Ltd. | 17,375 | 10,099 | ||||||
448,274 | ||||||||
Thailand–0.81% | ||||||||
Advanced Info Service PCL | 900 | 6,528 | ||||||
Bangkok Bank PCL | 1,600 | 8,947 | ||||||
Bangkok Dusit Medical Services PCL–Class F | 10,000 | 6,113 | ||||||
BTS Group Holdings PCL | 27,000 | 7,565 | ||||||
Central Pattana PCL | 4,800 | 6,106 | ||||||
CP ALL PCL | 6,200 | 7,876 | ||||||
Home Product Center PCL | 29,333 | 6,386 | ||||||
Intouch Holdings PCL | 3,600 | 8,390 | ||||||
Kasikornbank PCL | 1,000 | 6,341 | ||||||
Krungthai Bank PCL | 9,900 | 5,982 | ||||||
PTT Global Chemical PCL | 3,700 | 7,172 | ||||||
Siam Cement PCL (The) | 500 | 8,132 | ||||||
Siam Commercial Bank PCL (The) | 1,400 | 6,729 | ||||||
Thai Beverage PCL | 19,600 | 10,575 | ||||||
Thai Oil PCL | 4,200 | 7,426 | ||||||
Thai Union Frozen Products PCL | 9,900 | 6,117 | ||||||
116,385 | ||||||||
Turkey–0.23% | ||||||||
Aselsan Elektronik Sanayi Ve Ticaret A.S. | 1,374 | 7,157 | ||||||
BIM Birlesik Magazalar A.S. | 353 | 6,538 | ||||||
Koc Holding A.S. | 1,540 | 7,289 | ||||||
Turk Telekomunikasyon A.S. | 2,293 | 6,341 | ||||||
Turkcell Iletisim Hizmetleri A.S. | 1,257 | 5,597 | ||||||
32,922 | ||||||||
United Kingdom–11.04% | ||||||||
Anglo American PLC | 1,985 | 33,671 | ||||||
ARM Holdings PLC | 1,817 | 30,889 | ||||||
Associated British Foods PLC | 719 | 31,488 | ||||||
AstraZeneca PLC | 451 | 31,082 | ||||||
Aviva PLC | 3,842 | 31,003 | ||||||
BAE Systems PLC | 4,005 | 31,179 | ||||||
Barclays PLC | 8,557 | 33,502 | ||||||
BG Group PLC | 2,471 | 44,855 | ||||||
BP PLC | 4,844 | 34,957 | ||||||
British American Tobacco PLC | 597 | 32,838 | ||||||
BT Group PLC | 4,697 | 32,821 | ||||||
Burberry Group PLC | 1,173 | 31,339 | ||||||
Centrica PLC | 8,540 | 33,387 | ||||||
CNH Industrial N.V. | 826 | 7,273 | ||||||
Compass Group PLC | 1,816 | 32,195 |
Shares | Value | |||||||
United Kingdom–(continued) | ||||||||
Delphi Automotive PLC | 86 | $ | 7,138 | |||||
Diageo PLC | 1,136 | 31,554 | ||||||
Experian PLC | 1,911 | 34,168 | ||||||
Fiat Chrysler Automobiles N.V.(a) | 432 | 6,424 | ||||||
GlaxoSmithKline PLC | 1,336 | 30,910 | ||||||
HSBC Holdings PLC | 3,736 | 37,061 | ||||||
Imperial Tobacco Group PLC | 703 | 34,374 | ||||||
Kingfisher PLC | 5,865 | 31,577 | ||||||
Land Securities Group PLC | 1,712 | 32,751 | ||||||
Legal & General Group PLC | 7,449 | 29,630 | ||||||
Lloyds Banking Group PLC | 27,093 | 32,148 | ||||||
Marks & Spencer Group PLC | 4,065 | 34,436 | ||||||
National Grid PLC | 2,457 | 33,036 | ||||||
Next PLC | 295 | 33,232 | ||||||
Old Mutual PLC | 9,429 | 33,864 | ||||||
Pearson PLC | 1,464 | 29,593 | ||||||
Prudential PLC | 1,257 | 31,371 | ||||||
Reckitt Benckiser Group PLC | 367 | 32,773 | ||||||
Reed Elsevier N.V. | 301 | 7,235 | ||||||
Reed Elsevier PLC | 1,863 | 30,854 | ||||||
Rio Tinto Ltd. | 232 | 10,441 | ||||||
Rio Tinto PLC | 750 | 33,412 | ||||||
Rolls-Royce Holdings PLC–Preference Shares(a) | 307,944 | 473 | ||||||
Rolls-Royce Holdings PLC(a) | 2,184 | 34,999 | ||||||
Royal Bank of Scotland Group PLC(a) | 6,132 | 31,740 | ||||||
Royal Dutch Shell PLC–Class A | 1,059 | 33,359 | ||||||
SABMiller PLC | 589 | 31,209 | ||||||
Sky PLC | 2,139 | 35,305 | ||||||
Smith & Nephew PLC | 1,903 | 32,561 | ||||||
SSE PLC | 1,406 | 33,306 | ||||||
Standard Chartered PLC | 2,051 | 33,544 | ||||||
Standard Life PLC | 4,491 | 32,176 | ||||||
Tesco PLC | 8,922 | 30,150 | ||||||
Tullow Oil PLC | 4,475 | 28,433 | ||||||
Unilever PLC | 754 | 33,108 | ||||||
Vodafone Group PLC | 9,571 | 33,779 | ||||||
Wolseley PLC | 521 | 30,898 | ||||||
WPP PLC | 1,382 | 32,274 | ||||||
1,577,775 | ||||||||
United States–21.65% | ||||||||
3M Co. | 37 | 5,786 | ||||||
Abbott Laboratories | 135 | 6,267 | ||||||
AbbVie Inc. | 107 | 6,919 | ||||||
ABM Industries Inc. | 424 | 13,589 | ||||||
Acadia Realty Trust | 470 | 14,523 | ||||||
Accenture PLC–Class A | 69 | 6,393 | ||||||
ACE Ltd. | 54 | 5,777 | ||||||
Actavis PLC(a) | 20 | 5,657 | ||||||
Actuant Corp.–Class A | 465 | 11,076 | ||||||
Adobe Systems Inc.(a) | 84 | 6,389 | ||||||
Aerojet Rocketdyne Holdings, Inc.(a) | 584 | 11,481 | ||||||
Aetna Inc. | 59 | 6,305 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Macro Long/Short Fund
Shares | Value | |||||||
United States–(continued) | ||||||||
Aflac, Inc. | 101 | $ | 6,367 | |||||
Agilent Technologies, Inc. | 149 | 6,164 | ||||||
Agree Realty Corp. | 449 | 13,820 | ||||||
Air Products and Chemicals, Inc. | 45 | 6,454 | ||||||
Albany International Corp.–Class A | 296 | 11,603 | ||||||
Alexion Pharmaceuticals, Inc.(a) | 32 | 5,415 | ||||||
ALLETE, Inc. | 281 | 14,134 | ||||||
Allstate Corp. (The) | 88 | 6,130 | ||||||
Altria Group, Inc. | 122 | 6,106 | ||||||
Amazon.com, Inc.(a) | 17 | 7,170 | ||||||
American Airlines Group Inc. | 122 | 5,891 | ||||||
American Assets Trust Inc. | 370 | 14,726 | ||||||
American Electric Power Co., Inc. | 103 | 5,858 | ||||||
American Express Co. | 78 | 6,041 | ||||||
American International Group, Inc. | 111 | 6,248 | ||||||
American States Water Co. | 279 | 10,711 | ||||||
American Tower Corp. | 63 | 5,955 | ||||||
Ameriprise Financial, Inc. | 48 | 6,013 | ||||||
Amgen Inc. | 36 | 5,685 | ||||||
Anadarko Petroleum Corp. | 73 | 6,869 | ||||||
Analog Devices, Inc. | 106 | 6,555 | ||||||
Anthem, Inc. | 41 | 6,188 | ||||||
Aon PLC | 68 | 6,544 | ||||||
Apache Corp. | 108 | 7,387 | ||||||
Apple Inc. | 55 | 6,883 | ||||||
Applied Industrial Technologies, Inc. | 263 | 10,986 | ||||||
Applied Materials, Inc. | 249 | 4,928 | ||||||
Archer-Daniels-Midland Co. | 137 | 6,697 | ||||||
Associated Estates Realty Corp. | 537 | 15,304 | ||||||
Astoria Financial Corp. | 890 | 11,721 | ||||||
AT&T Inc. | 186 | 6,443 | ||||||
Automatic Data Processing, Inc. | 77 | 6,510 | ||||||
AutoZone, Inc.(a) | 10 | 6,727 | ||||||
Avista Corp. | 403 | 13,146 | ||||||
Baker Hughes Inc. | 108 | 7,394 | ||||||
Bank of America Corp. | 382 | 6,085 | ||||||
Bank of New York Mellon Corp. (The) | 163 | 6,901 | ||||||
Baxter International Inc. | 95 | 6,530 | ||||||
BB&T Corp. | 163 | 6,241 | ||||||
Becton, Dickinson and Co. | 44 | 6,198 | ||||||
Benchmark Electronics, Inc.(a) | 500 | 11,765 | ||||||
Berkshire Hathaway Inc.–Class B(a) | 41 | 5,790 | ||||||
Biogen Inc.(a) | 14 | 5,235 | ||||||
BlackRock, Inc. | 17 | 6,187 | ||||||
Boeing Co. (The) | 42 | 6,020 | ||||||
Boston Properties, Inc. | 45 | 5,954 | ||||||
Bristol-Myers Squibb Co. | 101 | 6,437 | ||||||
Broadcom Corp.–Class A | 145 | 6,410 | ||||||
Brookline Bancorp, Inc. | 1,312 | 14,130 | ||||||
CACI International Inc.–Class A(a) | 161 | 14,207 | ||||||
Capital One Financial Corp. | 74 | 5,983 | ||||||
Capstead Mortgage Corp. | 1,873 | 21,820 | ||||||
Cardinal Financial Corp. | 575 | 11,862 |
Shares | Value | |||||||
United States–(continued) | ||||||||
Cardinal Health, Inc. | 75 | $ | 6,325 | |||||
Carnival Corp. | 138 | 6,068 | ||||||
Casey’s General Stores, Inc. | 122 | 10,026 | ||||||
Caterpillar Inc. | 79 | 6,864 | ||||||
CBS Corp.–Class B | 102 | 6,337 | ||||||
Cedar Realty Trust Inc. | 1,708 | 11,939 | ||||||
Celgene Corp.(a) | 53 | 5,727 | ||||||
CenturyLink Inc. | 183 | 6,581 | ||||||
Charles Schwab Corp. (The) | 202 | 6,161 | ||||||
Chemed Corp. | 108 | 12,447 | ||||||
Chesapeake Energy Corp. | 404 | 6,371 | ||||||
Chesapeake Lodging Trust | 352 | 11,176 | ||||||
Chevron Corp. | 55 | 6,108 | ||||||
Chubb Corp. (The) | 60 | 5,901 | ||||||
Cigna Corp. | 50 | 6,232 | ||||||
Cisco Systems, Inc. | 223 | 6,429 | ||||||
Citigroup Inc. | 121 | 6,452 | ||||||
City Holding Co. | 250 | 11,492 | ||||||
CME Group Inc.–Class A | 69 | 6,273 | ||||||
Coca-Cola Co. (The) | 149 | 6,043 | ||||||
Cognizant Technology Solutions Corp.–Class A(a) | 101 | 5,913 | ||||||
Colgate-Palmolive Co. | 95 | 6,392 | ||||||
Comcast Corp.–Class A | 116 | 6,700 | ||||||
Community Bank System, Inc. | 330 | 11,533 | ||||||
ConocoPhillips | 101 | 6,860 | ||||||
Consolidated Edison, Inc. | 105 | 6,463 | ||||||
CoreSite Realty Corp. | 264 | 12,693 | ||||||
Corning Inc. | 273 | 5,714 | ||||||
Costco Wholesale Corp. | 43 | 6,151 | ||||||
Cousins Properties, Inc. | 1,258 | 12,253 | ||||||
Cracker Barrel Old Country Store, Inc. | 103 | 13,645 | ||||||
Crown Castle International Corp. | 74 | 6,181 | ||||||
CSG Systems International, Inc. | 381 | 11,095 | ||||||
CSX Corp. | 173 | 6,244 | ||||||
Cummins Inc. | 43 | 5,945 | ||||||
CVS Health Corp. | 65 | 6,454 | ||||||
Danaher Corp. | 77 | 6,305 | ||||||
Darling International Inc.(a) | 753 | 10,286 | ||||||
Deere & Co. | 69 | 6,246 | ||||||
Delta Air Lines, Inc. | 131 | 5,848 | ||||||
Devon Energy Corp. | 110 | 7,503 | ||||||
DiamondRock Hospitality Co. | 840 | 11,390 | ||||||
Dime Community Bancshares, Inc. | 862 | 13,723 | ||||||
DineEquity, Inc. | 113 | 10,897 | ||||||
DIRECTV(a) | 70 | 6,349 | ||||||
Discover Financial Services | 109 | 6,319 | ||||||
Dollar General Corp. | 85 | 6,180 | ||||||
Dominion Resources, Inc. | 82 | 5,878 | ||||||
Dow Chemical Co. (The) | 135 | 6,885 | ||||||
Duke Energy Corp. | 84 | 6,516 | ||||||
E. I. du Pont de Nemours and Co. | 86 | 6,295 | ||||||
EastGroup Properties, Inc. | 252 | 14,414 | ||||||
Eaton Corp. PLC | 89 | 6,117 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Macro Long/Short Fund
Shares | Value | |||||||
United States–(continued) | ||||||||
eBay Inc.(a) | 108 | $ | 6,292 | |||||
Ecolab Inc. | 60 | 6,719 | ||||||
Edison International | 95 | 5,789 | ||||||
Education Realty Trust, Inc. | 403 | 13,549 | ||||||
El Paso Electric Co. | 360 | 13,396 | ||||||
Eli Lilly and Co. | 86 | 6,181 | ||||||
EMC Corp. | 242 | 6,512 | ||||||
EMCOR Group, Inc. | 265 | 11,827 | ||||||
Emerson Electric Co. | 114 | 6,707 | ||||||
Encore Capital Group, Inc.(a) | 310 | 12,536 | ||||||
EnPro Industries, Inc. | 193 | 12,354 | ||||||
Entergy Corp. | 82 | 6,329 | ||||||
EOG Resources, Inc. | 71 | 7,025 | ||||||
EPR Properties | 216 | 12,457 | ||||||
Equity Residential | 79 | 5,835 | ||||||
ESCO Technologies Inc. | 357 | 13,102 | ||||||
Exelon Corp. | 194 | 6,600 | ||||||
Exponent, Inc. | 130 | 11,519 | ||||||
Express Scripts Holding Co.(a) | 82 | 7,085 | ||||||
Exxon Mobil Corp. | 76 | 6,640 | ||||||
F.N.B. Corp. | 924 | 12,261 | ||||||
Facebook Inc.–Class A(a) | 83 | 6,538 | ||||||
FedEx Corp. | 35 | 5,935 | ||||||
First Financial Bancorp. | 621 | 10,718 | ||||||
First Midwest Bancorp, Inc. | 639 | 10,927 | ||||||
FirstEnergy Corp. | 177 | 6,356 | ||||||
Ford Motor Co. | 425 | 6,715 | ||||||
Forrester Research, Inc. | 305 | 10,611 | ||||||
Forward Air Corp. | 226 | 11,384 | ||||||
Franklin Resources, Inc. | 121 | 6,239 | ||||||
Franklin Street Properties Corp. | 1,232 | 14,550 | ||||||
Freeport-McMoRan Inc. | 350 | 8,144 | ||||||
General Dynamics Corp. | 47 | 6,454 | ||||||
General Electric Co. | 250 | �� | 6,770 | |||||
General Mills, Inc. | 117 | 6,475 | ||||||
General Motors Co. | 166 | 5,820 | ||||||
Geo Group Inc. (The) | 318 | 12,402 | ||||||
Getty Realty Corp. | 844 | 14,660 | ||||||
Gilead Sciences, Inc.(a) | 61 | 6,131 | ||||||
Goldman Sachs Group, Inc. (The) | 33 | 6,482 | ||||||
Google Inc.–Class A(a) | 12 | 6,585 | ||||||
Government Properties Income Trust | 726 | 15,130 | ||||||
Greatbatch, Inc.(a) | 238 | 12,833 | ||||||
Halliburton Co. | 152 | 7,440 | ||||||
HCP, Inc. | 151 | 6,084 | ||||||
Health Care REIT, Inc. | 85 | 6,122 | ||||||
Healthcare Realty Trust, Inc. | 599 | 15,334 | ||||||
Healthcare Services Group, Inc. | 393 | 11,896 | ||||||
Hershey Co. (The) | 59 | 5,423 | ||||||
Hess Corp. | 94 | 7,229 | ||||||
Hewlett-Packard Co. | 194 | 6,396 | ||||||
Hillenbrand, Inc. | 359 | 10,551 | ||||||
Hilton Worldwide Holdings Inc.(a) | 236 | 6,835 |
Shares | Value | |||||||
United States–(continued) | ||||||||
Home Depot, Inc. (The) | 55 | $ | 5,884 | |||||
Honeywell International Inc. | 61 | 6,156 | ||||||
Horace Mann Educators Corp. | 438 | 14,879 | ||||||
Humana Inc. | 35 | 5,796 | ||||||
Iconix Brand Group, Inc.(a) | 311 | 8,182 | ||||||
Illinois Tool Works Inc. | 65 | 6,083 | ||||||
Illumina, Inc.(a) | 32 | 5,896 | ||||||
Independent Bank Corp. | 302 | 12,599 | ||||||
Infinity Property & Casualty Corp. | 170 | 12,605 | ||||||
Ingersoll-Rand PLC | 96 | 6,321 | ||||||
Inland Real Estate Corp. | 1,588 | 16,341 | ||||||
Integra LifeSciences Holdings Corp.(a) | 208 | 12,226 | ||||||
Intel Corp. | 206 | 6,705 | ||||||
Intercontinental Exchange, Inc. | 27 | 6,062 | ||||||
International Business Machines Corp. | 39 | 6,680 | ||||||
International Paper Co. | 115 | 6,178 | ||||||
Intuit Inc. | 64 | 6,421 | ||||||
Intuitive Surgical, Inc.(a) | 12 | 5,952 | ||||||
J & J Snack Foods Corp. | 112 | 11,685 | ||||||
Johnson & Johnson | 63 | 6,250 | ||||||
Johnson Controls, Inc. | 139 | 7,003 | ||||||
JPMorgan Chase & Co. | 108 | 6,832 | ||||||
Kaiser Aluminum Corp. | 220 | 17,681 | ||||||
Kaman Corp. | 342 | 14,265 | ||||||
Kellogg Co. | 101 | 6,396 | ||||||
Kimberly-Clark Corp. | 60 | 6,581 | ||||||
Kinder Morgan Inc. | 149 | 6,400 | ||||||
Kite Realty Group Trust | 502 | 13,152 | ||||||
Kraft Foods Group, Inc. | 104 | 8,814 | ||||||
Kroger Co. (The) | 84 | 5,788 | ||||||
Laclede Group, Inc. (The) | 329 | 17,085 | ||||||
Las Vegas Sands Corp. | 115 | 6,081 | ||||||
Lexington Realty Trust | 1,281 | 11,875 | ||||||
Littelfuse, Inc. | 105 | 10,289 | ||||||
Lockheed Martin Corp. | 32 | 5,971 | ||||||
Lorillard, Inc. | 102 | 7,126 | ||||||
Lowe’s Cos., Inc. | 92 | 6,335 | ||||||
LTC Properties, Inc. | 357 | 15,515 | ||||||
LyondellBasell Industries N.V.–Class A | 76 | 7,868 | ||||||
Macy’s, Inc. | 99 | 6,398 | ||||||
Magellan Health, Inc.(a) | 233 | 14,749 | ||||||
Marathon Oil Corp. | 246 | 7,651 | ||||||
Marathon Petroleum Corp. | 63 | 6,210 | ||||||
Marriott Vacations Worldwide Corp. | 151 | 12,414 | ||||||
Marsh & McLennan Cos., Inc. | 107 | 6,009 | ||||||
MasterCard, Inc.–Class A | 72 | 6,495 | ||||||
Matthews International Corp.–Class A | 274 | 13,297 | ||||||
McDonald’s Corp. | 69 | 6,662 | ||||||
McGraw Hill Financial, Inc. | 59 | 6,154 | ||||||
McKesson Corp. | 29 | 6,479 | ||||||
Mead Johnson Nutrition Co. | 66 | 6,331 | ||||||
Medical Properties Trust Inc. | 982 | 13,728 | ||||||
Medtronic PLC | 85 | 6,328 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Macro Long/Short Fund
Shares | Value | |||||||
United States–(continued) | ||||||||
Merck & Co., Inc. | 104 | $ | 6,194 | |||||
MetLife, Inc. | 119 | 6,104 | ||||||
Micron Technology, Inc.(a) | 225 | 6,329 | ||||||
Microsoft Corp. | 150 | 7,296 | ||||||
MKS Instruments, Inc. | 314 | 10,930 | ||||||
Mondelez International Inc.–Class A | 177 | 6,791 | ||||||
Monsanto Co. | 53 | 6,040 | ||||||
Morgan Stanley | 171 | 6,380 | ||||||
Mosaic Co. (The) | 127 | 5,588 | ||||||
Motorola Solutions, Inc. | 94 | 5,617 | ||||||
MTS Systems Corp. | 153 | 10,799 | ||||||
Mueller Industries, Inc. | 330 | 11,563 | ||||||
National Oilwell Varco Inc. | 130 | 7,073 | ||||||
National Penn Bancshares, Inc. | 1,105 | 11,492 | ||||||
Navigators Group, Inc. (The)(a) | 183 | 14,283 | ||||||
NBT Bancorp Inc. | 437 | 10,554 | ||||||
Netflix Inc.(a) | 15 | 8,347 | ||||||
New Jersey Resources Corp. | 376 | 11,472 | ||||||
NextEra Energy, Inc. | 58 | 5,854 | ||||||
NIKE, Inc.–Class B | 65 | 6,425 | ||||||
Noble Energy, Inc. | 135 | 6,847 | ||||||
Norfolk Southern Corp. | 57 | 5,748 | ||||||
Northern Trust Corp. | 93 | 6,803 | ||||||
Northrop Grumman Corp. | 41 | 6,316 | ||||||
Northwest Bancshares, Inc. | 1,158 | 14,255 | ||||||
Northwest Natural Gas Co. | 315 | 14,710 | ||||||
NorthWestern Corp. | 276 | 14,377 | ||||||
Nucor Corp. | 130 | 6,352 | ||||||
Occidental Petroleum Corp. | 89 | 7,129 | ||||||
Old National Bancorp | 736 | 10,054 | ||||||
Omnicom Group Inc. | 81 | 6,137 | ||||||
Oracle Corp. | 135 | 5,889 | ||||||
Oritani Financial Corp. | 1,029 | 15,332 | ||||||
PACCAR Inc. | 101 | 6,600 | ||||||
Parkway Properties, Inc. | 794 | 12,918 | ||||||
Pennsylvania Real Estate Investment Trust | 444 | 10,039 | ||||||
PepsiCo, Inc. | 69 | 6,563 | ||||||
Pfizer Inc. | 202 | 6,854 | ||||||
PG&E Corp. | 117 | 6,192 | ||||||
Philip Morris International Inc. | 76 | 6,344 | ||||||
Phillips 66 | 89 | 7,059 | ||||||
Piedmont Natural Gas Co., Inc. | 409 | 15,313 | ||||||
Pioneer Natural Resources Co. | 40 | 6,911 | ||||||
PNC Financial Services Group, Inc. (The) | 69 | 6,329 | ||||||
Pool Corp. | 182 | 11,810 | ||||||
Post Properties, Inc. | 291 | 16,636 | ||||||
PPG Industries, Inc. | 28 | 6,204 | ||||||
PPL Corp. | 172 | 5,853 | ||||||
Praxair, Inc. | 53 | 6,462 | ||||||
Precision Castparts Corp. | 31 | 6,407 | ||||||
Priceline Group Inc. (The)(a) | 5 | 6,189 | ||||||
ProAssurance Corp. | 341 | 15,328 | ||||||
Procter & Gamble Co. (The) | 72 | 5,725 |
Shares | Value | |||||||
United States–(continued) | ||||||||
Prologis, Inc. | 153 | $ | 6,151 | |||||
Provident Financial Services, Inc. | 617 | 11,106 | ||||||
Prudential Financial, Inc. | 78 | 6,365 | ||||||
PS Business Parks, Inc. | 188 | 14,354 | ||||||
Public Service Enterprise Group Inc. | 155 | 6,439 | ||||||
Public Storage | 32 | 6,013 | ||||||
QUALCOMM, Inc. | 92 | 6,256 | ||||||
Raytheon Co. | 59 | 6,136 | ||||||
Regeneron Pharmaceuticals, Inc.(a) | 13 | 5,947 | ||||||
Retail Opportunity Investments Corp. | 867 | 14,548 | ||||||
Reynolds American Inc. | 96 | 7,037 | ||||||
RLI Corp. | 262 | 13,011 | ||||||
Sabra Health Care REIT, Inc. | 415 | 12,400 | ||||||
Safety Insurance Group, Inc. | 221 | 12,851 | ||||||
salesforce.com, inc.(a) | 95 | 6,918 | ||||||
Samsonite International S.A. | 3,088 | 11,295 | ||||||
SanDisk Corp. | 74 | 4,954 | ||||||
Saul Centers, Inc. | 232 | 11,674 | ||||||
Schlumberger Ltd. | 78 | 7,380 | ||||||
Scholastic Corp. | 294 | 11,948 | ||||||
SEACOR Holdings Inc.(a) | 152 | 11,044 | ||||||
Selective Insurance Group, Inc. | 433 | 11,665 | ||||||
Sempra Energy | 59 | 6,264 | ||||||
Simon Property Group, Inc. | 34 | 6,171 | ||||||
Snyder’s-Lance, Inc. | 348 | 10,276 | ||||||
South Jersey Industries, Inc. | 271 | 14,295 | ||||||
Southern Co. (The) | 143 | 6,335 | ||||||
Southwest Airlines Co. | 139 | 5,638 | ||||||
Southwest Gas Corp. | 259 | 14,245 | ||||||
Sovran Self Storage, Inc. | 171 | 14,935 | ||||||
Spectra Energy Corp. | 167 | 6,221 | ||||||
St. Jude Medical, Inc. | 92 | 6,445 | ||||||
Starbucks Corp. | 132 | 6,545 | ||||||
State Street Corp. | 82 | 6,324 | ||||||
Stepan Co. | 276 | 14,057 | ||||||
Sterling Bancorp | 821 | 10,657 | ||||||
Stryker Corp. | 65 | 5,996 | ||||||
SunTrust Banks, Inc. | 158 | 6,557 | ||||||
Sysco Corp. | 161 | 5,962 | ||||||
T. Rowe Price Group Inc. | 72 | 5,845 | ||||||
Target Corp. | 84 | 6,622 | ||||||
Tetra Tech, Inc. | 437 | 11,847 | ||||||
Texas Instruments Inc. | 114 | 6,180 | ||||||
Texas Roadhouse, Inc. | 328 | 11,021 | ||||||
Thermo Fisher Scientific, Inc. | 47 | 5,907 | ||||||
Time Warner Cable Inc. | 40 | 6,221 | ||||||
Time Warner Inc. | 79 | 6,668 | ||||||
TJX Cos., Inc. (The) | 93 | 6,002 | ||||||
Tompkins Financial Corp. | 205 | 10,691 | ||||||
Toro Co. (The) | 206 | 13,810 | ||||||
Travelers Cos., Inc. (The) | 59 | 5,965 | ||||||
TrustCo Bank Corp NY | 1,559 | 10,399 | ||||||
Twenty-First Century Fox, Inc.–Class A | 183 | 6,237 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Macro Long/Short Fund
Shares | Value | |||||||
United States–(continued) | ||||||||
Tyco International PLC | 145 | $ | 5,710 | |||||
U.S. Bancorp | 137 | 5,873 | ||||||
UIL Holdings Corp. | 302 | 15,064 | ||||||
Union Pacific Corp. | 56 | 5,949 | ||||||
United Bankshares, Inc. | 297 | 11,161 | ||||||
United Parcel Service, Inc.–Class B | 64 | 6,434 | ||||||
United Technologies Corp. | 53 | 6,029 | ||||||
UnitedHealth Group Inc. | 54 | 6,016 | ||||||
Universal Health Realty Income Trust | 311 | 15,444 | ||||||
Urstadt Biddle Properties Inc.–Class A | 664 | 13,778 | ||||||
Valero Energy Corp. | 105 | 5,975 | ||||||
Ventas, Inc. | 91 | 6,270 | ||||||
Verizon Communications Inc. | 136 | 6,860 | ||||||
Vertex Pharmaceuticals Inc.(a) | 52 | 6,411 | ||||||
VF Corp. | 85 | 6,157 | ||||||
Viacom Inc.–Class B | 92 | 6,389 | ||||||
Visa Inc.–Class A | 96 | 6,341 | ||||||
Vornado Realty Trust | 58 | 6,002 | ||||||
Wal-Mart Stores, Inc. | 73 | 5,698 | ||||||
Walgreens Boots Alliance, Inc. | 73 | 6,054 | ||||||
Walt Disney Co. (The) | 60 | 6,523 | ||||||
Waste Management, Inc. | 122 | 6,043 | ||||||
WD-40 Co. | 137 | 11,092 | ||||||
Wells Fargo & Co. | 116 | 6,392 |
Shares | Value | |||||||
United States–(continued) | ||||||||
West Pharmaceutical Services, Inc. | 216 | $ | 11,508 | |||||
Westamerica Bancorp. | 284 | 12,368 | ||||||
Western Digital Corp. | 64 | 6,255 | ||||||
Weyerhaeuser Co. | 180 | 5,672 | ||||||
Whole Foods Market, Inc. | 127 | 6,066 | ||||||
Williams Cos., Inc. (The) | 135 | 6,911 | ||||||
Wintrust Financial Corp. | 261 | 12,721 | ||||||
Xcel Energy, Inc. | 175 | 5,934 | ||||||
Yahoo! Inc.(a) | 143 | 6,087 | ||||||
Yum! Brands, Inc. | 82 | 7,049 | ||||||
Zimmer Holdings, Inc. | 54 | 5,931 | ||||||
Zoetis Inc. | 143 | 6,352 | ||||||
3,092,941 | ||||||||
Total Common Stocks & Other Equity Interests (Cost $10,648,919) |
| 11,214,582 | ||||||
Money Market Funds–17.29% |
| |||||||
Liquid Assets Portfolio–Institutional Class(e) | 1,235,039 | 1,235,039 | ||||||
Premier Portfolio–Institutional Class(e) | 1,235,039 | 1,235,039 | ||||||
Total Money Market Funds |
| 2,470,078 | ||||||
TOTAL INVESTMENTS–95.79% |
| 13,684,660 | ||||||
OTHER ASSETS LESS LIABILITIES–4.21% |
| 601,582 | ||||||
NET ASSETS–100.00% |
| $ | 14,286,242 |
Investment Abbreviations:
ADR | – American Depositary Receipt | |
CPO | – Certificates of Ordinary Participation | |
Ctfs. | – Certificates | |
REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Each unit represents one common stock and four preferred stocks. |
(c) | Each unit represents one Series B share, two Series D-B shares and two Series D-L shares. |
(d) | Each CPO represents twenty-five A shares, twenty-two B shares, thirty-five L shares and thirty-five D shares. |
(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 April 30, 2015
Financials | 23.4 | % | ||
Industrials | 10.9 | |||
Consumer Discretionary | 9.7 | |||
Consumer Staples | 7.3 | |||
Materials | 5.7 | |||
Utilities | 5.2 | |||
Health Care | 5.1 | |||
Information Technology | 4.8 | |||
Energy | 3.7 | |||
Telecommunication Services | 2.7 | |||
Money Market Funds Plus Other Assets Less Liabilities | 21.5 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Macro Long/Short Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $10,648,919) | $ | 11,214,582 | ||
Investments in affiliated money market funds, at value and cost | 2,470,078 | |||
Total investments, at value (Cost $13,118,997) | 13,684,660 | |||
Foreign currencies, at value (Cost $60,496) | 62,003 | |||
Receivable for: | ||||
Deposits with brokers for open futures contracts | 685,000 | |||
Variation margin — futures | 21,468 | |||
Dividends | 38,127 | |||
Investment for trustee deferred compensation and retirement plans | 3,673 | |||
Other assets | 95,547 | |||
Total assets | 14,590,478 | |||
Liabilities: |
| |||
Payable for: | ||||
Fund shares reacquired | 75 | |||
Accrued fees to affiliates | 9,883 | |||
Accrued trustees’ and officers’ fees and benefits | 1,949 | |||
Accrued other operating expenses | 99,977 | |||
Trustee deferred compensation and retirement plans | 3,673 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 187,800 | |||
Unrealized depreciation on swap agreements — OTC | 879 | |||
Total liabilities | 304,236 | |||
Net assets applicable to shares outstanding | $ | 14,286,242 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 13,958,935 | ||
Undistributed net investment income | 9,780 | |||
Undistributed net realized gain (loss) | (19,656 | ) | ||
Net unrealized appreciation | 337,183 | |||
$ | 14,286,242 |
Net Assets: |
| |||
Class A | $ | 6,102,260 | ||
Class C | $ | 22,488 | ||
Class R | $ | 10,193 | ||
Class Y | $ | 6,756,741 | ||
Class R5 | $ | 663,888 | ||
Class R6 | $ | 730,672 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 598,560 | |||
Class C | 2,205 | |||
Class R | 1,001 | |||
Class Y | 661,997 | |||
Class R5 | 65,001 | |||
Class R6 | 71,582 | |||
Class A: | ||||
Net asset value per share | $ | 10.19 | ||
Maximum offering price per share | ||||
(Net asset value of $10.19 ¸ 94.50%) | $ | 10.78 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.20 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.18 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.21 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.21 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.21 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Macro Long/Short Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $7,665) | $ | 148,850 | ||
Dividends from affiliated money market funds | 527 | |||
Total investment income | 149,377 | |||
Expenses: | ||||
Advisory fees | 85,457 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 52,792 | |||
Distribution fees: | ||||
Class A | 7,372 | |||
Class C | 147 | |||
Class R | 25 | |||
Transfer agent fees — A, C, R and Y | 1,528 | |||
Transfer agent fees — R5 | 36 | |||
Transfer agent fees — R6 | 32 | |||
Trustees’ and officers’ fees and benefits | 9,876 | |||
Registration and filing fees | 57,542 | |||
Licensing Fees | 37,101 | |||
Professional services fees | 29,936 | |||
Other | 53,460 | |||
Total expenses | 360,099 | |||
Less: Fees waived and expenses reimbursed | (243,349 | ) | ||
Net expenses | 116,750 | |||
Net investment income | 32,627 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (net of foreign taxes of $551) | 59,256 | |||
Foreign currencies | (10,886 | ) | ||
Forward foreign currency contracts | 572,033 | |||
Futures contracts | (423,344 | ) | ||
Swap agreements | (6,643 | ) | ||
190,416 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities (net of foreign taxes on holdings of $347) | 290,889 | |||
Foreign currencies | 2,766 | |||
Forward foreign currency contracts | (212,916 | ) | ||
Futures contracts | 144,085 | |||
Swap agreements | 2 | |||
224,826 | ||||
Net realized and unrealized gain | 415,242 | |||
Net increase in net assets resulting from operations | $ | 447,869 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Macro Long/Short Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period December 17, 2013
(commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | December 17, 2013 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 32,627 | $ | 70,747 | ||||
Net realized gain (loss) | 190,416 | (187,807 | ) | |||||
Change in net unrealized appreciation | 224,826 | 112,357 | ||||||
Net increase (decrease) in net assets resulting from operations | 447,869 | (4,703 | ) | |||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (61,803 | ) | — | |||||
Class R | (82 | ) | — | |||||
Class Y | (73,701 | ) | — | |||||
Class R5 | (15,530 | ) | — | |||||
Class R6 | (9,070 | ) | — | |||||
Total distributions from net investment income | (160,186 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 54,002 | 5,931,843 | ||||||
Class C | (44,999 | ) | 67,324 | |||||
Class R | — | 10,010 | ||||||
Class Y | 773,498 | 5,837,544 | ||||||
Class R5 | (571,965 | ) | 1,229,957 | |||||
Class R6 | 27,726 | 688,322 | ||||||
Net increase in net assets resulting from share transactions | 238,262 | 13,765,000 | ||||||
Net increase in net assets | 525,945 | 13,760,297 | ||||||
Net assets: | ||||||||
Beginning of period | 13,760,297 | — | ||||||
End of period (includes undistributed net investment income of $9,780 and $137,339, respectively) | $ | 14,286,242 | $ | 13,760,297 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Macro Long/Short Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 a positive absolute return over a complete economic and market cycle.
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. |
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
19 Invesco Macro Long/Short Fund
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. |
20 Invesco Macro Long/Short 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. |
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 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 |
21 Invesco Macro Long/Short Fund
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. | 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”). 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. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and Counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the Counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements. A short position in a security possesses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
M. | 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. |
N. | 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 $10 billion | 1.25% | |||
Over $10 billion | 1.15% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.25%.
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, through at least February 29, 2016, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 1.87%, 2.62%, 2.12%, 1.62%, 1.62% and 1.62% 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
22 Invesco Macro Long/Short Fund
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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $241,753 and reimbursed class level expenses of $741, $4, $1, $782, $36 and $32 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 April 30, 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $56 in front-end sales commissions from the sale of Class A shares and $543 from Class C shares, for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 April 30, 2015, there were transfers from Level 1 to Level 2 of $665,239 and from Level 2 to Level 1 of $941,888, due to foreign fair value adjustments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | $ | 36,594 | $ | 643,151 | $ | — | $ | 679,745 | ||||||||
Austria | 8,586 | 15,845 | — | 24,431 | ||||||||||||
Belgium | — | 42,715 | — | 42,715 | ||||||||||||
Bermuda | 15,015 | — | — | 15,015 | ||||||||||||
Brazil | 30,698 | — | — | 30,698 | ||||||||||||
Chile | 80,579 | — | — | 80,579 |
23 Invesco Macro Long/Short Fund
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
China | $ | 210,351 | $ | 44,390 | $ | — | $ | 254,741 | ||||||||
Colombia | 27,406 | — | — | 27,406 | ||||||||||||
Czech Republic | 14,488 | — | — | 14,488 | ||||||||||||
Denmark | 10,955 | 53,806 | — | 64,761 | ||||||||||||
Egypt | 6,516 | — | — | 6,516 | ||||||||||||
Finland | — | 46,835 | — | 46,835 | ||||||||||||
France | 21,917 | 340,289 | — | 362,206 | ||||||||||||
Germany | 57,609 | 191,387 | — | 248,996 | ||||||||||||
Greece | 6,124 | — | — | 6,124 | ||||||||||||
Hong Kong | 323,408 | 180,788 | — | 504,196 | ||||||||||||
Hungary | 16,067 | — | — | 16,067 | ||||||||||||
India | 5,390 | — | — | 5,390 | ||||||||||||
Indonesia | 25,848 | 36,461 | — | 62,309 | ||||||||||||
Ireland | — | 45,575 | — | 45,575 | ||||||||||||
Italy | 8,712 | 89,144 | — | 97,856 | ||||||||||||
Japan | 7,945 | 1,586,516 | — | 1,594,461 | ||||||||||||
Luxembourg | — | 14,886 | — | 14,886 | ||||||||||||
Macau | — | 10,313 | — | 10,313 | ||||||||||||
Malaysia | 119,991 | 102,351 | — | 222,342 | ||||||||||||
Mexico | 75,083 | — | — | 75,083 | ||||||||||||
Morocco | — | 11,429 | — | 11,429 | ||||||||||||
Netherlands | — | 86,875 | — | 86,875 | ||||||||||||
New Zealand | — | 31,202 | — | 31,202 | ||||||||||||
Norway | — | 53,973 | — | 53,973 | ||||||||||||
Philippines | 62,777 | 37,016 | — | 99,793 | ||||||||||||
Poland | 21,485 | 15,164 | — | 36,649 | ||||||||||||
Portugal | — | 7,365 | — | 7,365 | ||||||||||||
Qatar | 5,670 | — | — | 5,670 | ||||||||||||
Russia | — | 6,979 | — | 6,979 | ||||||||||||
Singapore | 22,665 | 231,695 | — | 254,360 | ||||||||||||
South Africa | 27,774 | 134,217 | — | 161,991 | ||||||||||||
South Korea | 9,229 | 65,519 | — | 74,748 | ||||||||||||
Spain | — | 126,363 | — | 126,363 | ||||||||||||
Sweden | 8,549 | 161,139 | — | 169,688 | ||||||||||||
Switzerland | 50,827 | 214,639 | — | 265,466 | ||||||||||||
Taiwan | 13,056 | 435,218 | — | 448,274 | ||||||||||||
Thailand | 26,960 | 89,425 | — | 116,385 | ||||||||||||
Turkey | 25,765 | 7,157 | — | 32,922 | ||||||||||||
United Kingdom | 149,527 | 1,428,248 | — | 1,577,775 | ||||||||||||
United States | 5,563,019 | — | — | 5,563,019 | ||||||||||||
7,096,585 | 6,588,075 | — | 13,684,660 | |||||||||||||
Forward Foreign Currency Contracts* | — | (187,800 | ) | — | (187,800 | ) | ||||||||||
Futures Contracts* | (41,639 | ) | — | — | (41,639 | ) | ||||||||||
Swap Agreements* | — | (879 | ) | — | (879 | ) | ||||||||||
Total Investments | $ | 7,054,946 | $ | 6,399,396 | $ | — | $ | 13,454,342 |
* | Unrealized appreciation (depreciation). |
24 Invesco Macro Long/Short 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | — | $ | (187,800 | ) | |||
Equity risk: | ||||||||
Futures contracts(b) | 165,385 | (207,024 | ) | |||||
Swap contracts(c) | — | (879 | ) | |||||
Total | $ | 165,385 | $ | (395,703 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized depreciation on forward foreign currency contracts outstanding. |
(b) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
(c) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized depreciation on swap transactions — OTC. |
Effect of Derivative Investments for the six months ended April 30, 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) | ||||||||||||
Futures Contracts | Forward Foreign Currency Contracts | Swap Agreements | ||||||||||
Realized Gain (Loss): | ||||||||||||
Currency risk | $ | — | $ | 572,033 | $ | — | ||||||
Equity risk | (423,344 | ) | — | (6,643 | ) | |||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||
Currency risk | — | (212,916 | ) | — | ||||||||
Equity risk | 144,085 | — | 2 | |||||||||
Total | $ | (279,259 | ) | $ | 359,117 | $ | (6,641 | ) |
The table below summarizes the average notional value of futures contracts, forward foreign currency contracts, and swap agreements outstanding during the period.
Futures Contracts | Forward Foreign Currency Contracts | Swap Agreements | ||||||||||
Average notional value | $ | 11,305,299 | $ | 5,542,737 | $ | 185,925 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | AUD | 850,000 | USD | 652,120 | $ | 670,627 | $ | (18,507 | ) | ||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | CHF | 210,000 | USD | 215,539 | 225,520 | (9,981 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | EUR | 1,060,000 | USD | 1,131,126 | 1,190,947 | (59,821 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | GBP | 1,070,000 | USD | 1,574,612 | 1,642,068 | (67,456 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | JPY | 190,200,00 | USD | 1,580,654 | 1,593,730 | (13,076 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | NOK | 330,000 | USD | 40,626 | 43,769 | (3,143 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | NZD | 40,000 | USD | 30,000 | 30,395 | (395 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | SEK | 1,450,000 | USD | 165,716 | 174,173 | (8,457 | ) | ||||||||||||||||||
6/15/2015 | Canadian Imperial Bank of Commerce | SGD | 330,000 | USD | 257,315 | 264,279 | (6,964 | ) | ||||||||||||||||||
Total Forward Foreign Currency Contracts — Currency Risk | $ | (187,800 | ) |
Currency Abbreviations:
AUD | – Australian Dollar | |
CHF | – Swiss Franc | |
EUR | – Euro | |
GBP | – British Pound Sterling |
JPY | – Japanese Yen | |
NOK | – Norwegian Krone | |
NZD | – New Zealand Dollar |
SEK | – Swedish Krona | |
SGD | – Singapore Dollar | |
USD | – U.S. Dollar |
25 Invesco Macro Long/Short Fund
Open Futures Contracts(a) | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
Dow Jones EURO STOXX 50 Index | Long | 22 | June-2015 | $ | 881,431 | $ | (9,160 | ) | ||||||||||||
FTSE 100 Index | Long | 8 | June-2015 | 850,937 | 24,471 | |||||||||||||||
Hang Seng Index | Long | 5 | May-2015 | 906,554 | (1,801 | ) | ||||||||||||||
Mini MSCI Emerging Markets Asia Index | Long | 18 | June-2015 | 934,830 | 102,203 | |||||||||||||||
Russell 2000 Mini Index | Long | 3 | June-2015 | 364,920 | (1,658 | ) | ||||||||||||||
Tokyo Stock Price Index | Long | 6 | June-2015 | 798,241 | 29,255 | |||||||||||||||
Dow Jones EURO STOXX 50 Index | Short | 18 | June-2015 | (721,171 | ) | 395 | ||||||||||||||
E-Mini S&P 500 Index | Short | 9 | June-2015 | (935,505 | ) | (10,098 | ) | |||||||||||||
FTSE 100 Index | Short | 9 | June-2015 | (957,304 | ) | (28,983 | ) | |||||||||||||
Hang Seng Index | Short | 1 | May-2015 | (181,311 | ) | (1,158 | ) | |||||||||||||
Mini MSCI Emerging Markets Asia Index | Short | 18 | June-2015 | (934,830 | ) | (102,277 | ) | |||||||||||||
MSCI Singapore Index | Short | 2 | May-2015 | (119,105 | ) | 118 | ||||||||||||||
SPI 200 Index | Short | 5 | June-2015 | (569,295 | ) | 8,943 | ||||||||||||||
Russell 2000 Mini Index | Short | 7 | June-2015 | (851,480 | ) | (4,214 | ) | |||||||||||||
Tokyo Stock Price Index | Short | 6 | June-2015 | (931,281 | ) | (47,675 | ) | |||||||||||||
Total Futures Contracts — Equity Risk |
| $ | (41,639 | ) |
(a) | Futures collateralized by $685,000 cash held with Goldman, Sachs International, the futures commission merchant. |
Open Over-The-Counter Total Return Swap Agreements — Equity Risk | ||||||||||||||||||||||||
Swap Agreements | Type of Contract | Counterparty | Number of Contracts | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Receive a return equal to Swiss Market Index Futures multiplied by the Notional Value | Short | Goldman Sachs International | 2 | June-2015 | $ | (193,375 | ) | $ | (879 | ) |
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 April 30, 2015.
Liabilities: | ||||||||||||||||||||||||
Gross amounts presented in Statement of Assets & Liabilities | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of liabilities presented in the Statement of Assets and Liabilities | Collateral Pledged | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Canadian Imperial Bank of Commerce | $ | 187,800 | $ | — | $ | 187,800 | $ | — | $ | — | $ | 187,800 | ||||||||||||
Goldman Sachs International | 879 | — | 879 | — | — | 879 | ||||||||||||||||||
Total | $ | 188,679 | $ | — | $ | 188,679 | $ | — | $ | — | $ | 188,679 |
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. Obligations under the deferred compensation plan represent unsecured claims against the general assets of the Fund.
26 Invesco Macro Long/Short 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 had a capital loss carryforward as of October 31, 2014:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
Not subject to expiration | $ | 31,553 | $ | 124,744 | $ | 156,297 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $2,122,465 and $2,523,100, respectively. In a fund’s initial year of operations, the cost of investments for tax purposes will not reflect any tax adjustments until its fiscal year end reporting period.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 1,023,435 | ||
Aggregate unrealized (depreciation) of investment securities | (484,873 | ) | ||
Net unrealized appreciation of investment securities | $ | 538,562 |
Cost of investments for tax purposes is $13,146,098.
27 Invesco Macro Long/Short Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | December 17, 2013 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 5,412 | $ | 53,464 | 597,931 | $ | 5,981,144 | ||||||||||
Class C | 1,013 | 10,055 | 6,688 | 67,324 | ||||||||||||
Class R | — | — | 1,001 | 10,010 | ||||||||||||
Class Y | 85,470 | 848,088 | 592,645 | 5,926,023 | ||||||||||||
Class R5 | — | — | 123,628 | 1,235,815 | ||||||||||||
Class R6 | 5,355 | 53,683 | 68,888 | 688,322 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 73 | 710 | — | — | ||||||||||||
Class R5 | 753 | 7,327 | — | — | ||||||||||||
Class R6 | 89 | 866 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (17 | ) | (172 | ) | (4,839 | ) | (49,301 | ) | ||||||||
Class C | (5,496 | ) | (55,054 | ) | — | — | ||||||||||
Class Y | (7,474 | ) | (74,590 | ) | (8,644 | ) | (88,479 | ) | ||||||||
Class R5 | (58,811 | ) | (579,292 | ) | (569 | ) | (5,858 | ) | ||||||||
Class R6 | (2,750 | ) | (26,823 | ) | — | — | ||||||||||
Net increase in share activity | 23,617 | $ | 238,262 | 1,376,729 | $ | 13,765,000 |
(a) | 97% of the outstanding shares of the Fund are owned by the Adviser or an affiliate of the Adviser. |
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 9.98 | $ | 0.02 | $ | 0.29 | $ | 0.31 | $ | (0.10 | ) | $ | 10.19 | 3.20 | % | $ | 6,102 | 1.85 | %(e) | 5.41 | %(e) | 0.34 | %(e) | 19 | % | |||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.04 | (0.06 | ) | (0.02 | ) | — | 9.98 | (0.20 | ) | 5,921 | 1.85 | (f) | 5.82 | (f) | 0.45 | (f) | 44 | ||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 9.92 | (0.02 | ) | 0.30 | 0.28 | — | 10.20 | 2.82 | 22 | 2.60 | (e) | 6.16 | (e) | (0.41 | )(e) | 19 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | (0.03 | ) | (0.05 | ) | (0.08 | ) | — | 9.92 | (0.80 | ) | 66 | 2.60 | (f) | 6.57 | (f) | (0.30 | )(f) | 44 | |||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 9.96 | 0.00 | 0.30 | 0.30 | (0.08 | ) | 10.18 | 3.08 | 10 | 2.10 | (e) | 5.66 | (e) | 0.09 | (e) | 19 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.02 | (0.06 | ) | (0.04 | ) | — | 9.96 | (0.40 | ) | 10 | 2.10 | (f) | 6.07 | (f) | 0.20 | (f) | 44 | ||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.00 | 0.03 | 0.31 | 0.34 | (0.13 | ) | 10.21 | 3.42 | 6,757 | 1.60 | (e) | 5.16 | (e) | 0.59 | (e) | 19 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.06 | (0.06 | ) | 0.00 | — | 10.00 | 0.00 | 5,843 | 1.60 | (f) | 5.57 | (f) | 0.70 | (f) | 44 | ||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.01 | 0.03 | 0.30 | 0.33 | (0.13 | ) | 10.21 | 3.32 | 664 | 1.60 | (e) | 5.14 | (e) | 0.59 | (e) | 19 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.06 | (0.05 | ) | 0.01 | — | 10.01 | 0.10 | 1,231 | 1.60 | (f) | 5.54 | (f) | 0.70 | (f) | 44 | ||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.00 | 0.03 | 0.31 | 0.34 | (0.13 | ) | 10.21 | 3.42 | 731 | 1.60 | (e) | 5.14 | (e) | 0.59 | (e) | 19 | ||||||||||||||||||||||||||||||||
Year ended 10/31/14(d) | 10.00 | 0.06 | (0.06 | ) | 0.00 | — | 10.00 | 0.00 | 689 | 1.60 | (f) | 5.54 | (f) | 0.70 | (f) | 44 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(d) | Commencement date of December 17, 2013. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $5,947, $30, $10, $6,279, $814 and $707 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | Annualized. |
28 Invesco Macro Long/Short Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period 2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,032.00 | $ | 9.32 | $ | 1,015.62 | $ | 9.25 | 1.85 | % | ||||||||||||
C | 1,000.00 | 1,028.20 | 13.07 | 1,011.90 | 12.97 | 2.60 | ||||||||||||||||||
R | 1,000.00 | 1,030.80 | 10.57 | 1,014.38 | 10.49 | 2.10 | ||||||||||||||||||
Y | 1,000.00 | 1,034.20 | 8.07 | 1,016.86 | 8.00 | 1.60 | ||||||||||||||||||
R5 | 1,000.00 | 1,033.20 | 8.07 | 1,016.86 | 8.00 | 1.60 | ||||||||||||||||||
R6 | 1,000.00 | 1,034.20 | 8.07 | 1,016.86 | 8.00 | 1.60 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
29 Invesco Macro Long/Short 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: 811-05426 and 033-19338 | MLS-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco MLP Fund | ||||
Nasdaq: | ||||
A: ILPAX ¡ C: ILPCX ¡ R: ILPRX ¡ Y: ILPYX ¡ R5: ILPFX ¡ R6: ILPQX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
5 Financial Statements | ||||
7 Notes to Financial Statements | ||||
13 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, 10/31/14 to 4/30/15, 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 | –5.44 | % | |||||
Class C Shares | –5.82 | ||||||
Class R Shares | –5.57 | ||||||
Class Y Shares | –5.42 | ||||||
Class R5 Shares | –5.42 | ||||||
Class R6 Shares | –5.42 | ||||||
S&P 500 Index▼ (Broad Market Index) | 4.40 | ||||||
Alerian MLP Index▼ (Style-Specific Index) | –7.48 | ||||||
Lipper Energy MLP Funds Indexn (Peer Group Index) | –2.37 |
Source(s): ▼FactSet Research Systems Inc.; nLipper Inc.
The S&P 500® Index is an unmanaged index considered representative of the US stock market.
The Alerian MLP Index is a market-cap weighted, float-adjusted index created to provide a comprehensive benchmark for investors to track the performance of the energy MLP sector. The Index components are selected by Alerian, LLC.
The Lipper Energy MLP Funds Index is an unmanaged index considered representative of energy MLP funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
Cumulative Total Returns |
As of 4/30/15, including maximum applicable sales charges
Class A Shares | |||||
Inception (8/29/14) | –16.44 | % | |||
Class C Shares | |||||
Inception (8/29/14) | –12.91 | % | |||
Class R Shares | |||||
Inception (8/29/14) | –11.71 | % | |||
Class Y Shares | |||||
Inception (8/29/14) | –11.48 | % | |||
Class R5 Shares | |||||
Inception (8/29/14) | –11.48 | % | |||
Class R6 Shares | |||||
Inception (8/29/14) | –11.48 | % |
Cumulative Total Returns |
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
Class A Shares | |||||
Inception (8/29/14) | –20.87 | % | |||
Class C Shares | |||||
Inception (8/29/14) | –17.53 | % | |||
Class R Shares | |||||
Inception (8/29/14) | –16.38 | % | |||
Class Y Shares | |||||
Inception (8/29/14) | –16.17 | % | |||
Class R5 Shares | |||||
Inception (8/29/14) | –16.17 | % | |||
Class R6 Shares | |||||
Inception (8/29/14) | –16.17 | % |
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 4.33%, 5.08%, 4.58%, 4.08%, 4.08% and 4.08%, 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 10.06%, 10.81%, 10.31%, 9.81%, 9.70% and 9.65%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class 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 class shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco MLP 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 MLP Fund |
Schedule of Investments
April 30, 2015
(Unaudited)
Units | Value | |||||||
Master Limited Partnerships–86.25% |
| |||||||
Gathering & Processing MLP–16.13% | ||||||||
EnLink Midstream Partners L.P. | 2,606 | $ | 67,052 | |||||
EQT Midstream Partners L.P. | 2,736 | 241,315 | ||||||
MarkWest Energy Partners, L.P. | 3,710 | 250,276 | ||||||
Rice Midstream Partners L.P. | 1,733 | 26,255 | ||||||
Targa Resources Partners L.P. | 3,156 | 143,409 | ||||||
Western Gas Partners L.P. | 2,101 | 153,142 | ||||||
881,449 | ||||||||
General Partner (MLP)–4.20% | ||||||||
Energy Transfer Equity, L.P. | 3,442 | 229,444 | ||||||
Marine–0.78% | ||||||||
GasLog Partners L.P. (Monaco) | 1,504 | 42,894 | ||||||
Natural Gas Pipelines–0.78% | ||||||||
Tallgrass Energy Partners L.P. | 864 | 42,509 | ||||||
Pipelines & Midstream Diversified–41.30% | ||||||||
Enbridge Energy Partners, L.P. | 2,451 | 91,030 | ||||||
Energy Transfer Partners, L.P. | 10,164 | 587,254 | ||||||
Enterprise Products Partners L.P. | 24,445 | 837,241 | ||||||
Plains All American Pipeline, L.P. | 10,673 | 534,824 | ||||||
Williams Partners L.P. | 4,199 | 207,431 | ||||||
2,257,780 | ||||||||
Refined Products Pipelines & Terminals–22.54% | ||||||||
Buckeye Partners, L.P. | 1,456 | 118,781 | ||||||
Magellan Midstream Partners, L.P. | 5,338 | 445,723 | ||||||
MPLX L.P. | 287 | 22,314 | ||||||
NGL Energy Partners L.P. | 3,601 | 105,365 |
Units | Value | |||||||
Refined Products Pipelines & Terminals–(continued) | ||||||||
Rose Rock Midstream L.P. | 513 | $ | 26,589 | |||||
Sunoco Logistics Partners L.P. | 7,433 | 329,728 | ||||||
Tesoro Logistics L.P. | 2,705 | 151,561 | ||||||
Valero Energy Partners L.P. | 637 | 32,220 | ||||||
1,232,281 | ||||||||
Upstream MLP–0.52% | ||||||||
Memorial Production Partners L.P. | 1,575 | 28,224 | ||||||
Total Master Limited Partnerships |
| 4,714,581 | ||||||
Shares | ||||||||
Common Stocks–8.30% | ||||||||
General Partner (C-Corp.)–8.30% | ||||||||
Kinder Morgan Inc. | 3,512 | 150,840 | ||||||
Plains GP Holdings, L.P.–Class A | 907 | 26,666 | ||||||
Targa Resources Corp. | 801 | 84,081 | ||||||
Williams Cos., Inc. (The) | 3,758 | 192,372 | ||||||
Total Common Stocks |
| 453,959 | ||||||
Money Market Funds–1.23% | ||||||||
Liquid Assets Portfolio–Institutional Class(a) | 33,605 | 33,605 | ||||||
Premier Portfolio–Institutional Class(a) | 33,606 | 33,606 | ||||||
Total Money Market Funds |
| 67,211 | ||||||
TOTAL INVESTMENTS–95.78% |
| 5,235,751 | ||||||
OTHER ASSETS LESS LIABILITIES–4.22% |
| 230,659 | ||||||
NET ASSETS–100.00% |
| $ | 5,466,410 |
Notes to Schedule of Investments:
(a) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By MLP sector, based on Net Assets
as of April 30, 2015
Pipelines & Midstream Diversified | 41.3 | % | ||
Refined Products Pipelines & Terminals | 22.5 | |||
Gathering & Processing MLP | 16.1 | |||
General Partner (C-Corp.) | 8.3 | |||
General Partner (MLP) | 4.2 | |||
Marine | 0.8 | |||
Natural Gas Pipelines | 0.8 | |||
Upstream MLP | 0.5 | |||
Money Market Funds Plus Other Assets Less Liabilities | 5.5 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco MLP Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $5,258,115) | $ | 5,168,540 | ||
Investments in affiliated money market funds, at value and cost | 67,211 | |||
Total investments, at value (Cost $5,325,326) | 5,235,751 | |||
Receivable for: | ||||
Investments sold | 25,992 | |||
Fund shares sold | 205,420 | |||
Dividends | 30,473 | |||
Fund expenses absorbed | 658,483 | |||
Deferred tax asset, net | 0 | |||
Other assets | 50,454 | |||
Total assets | 6,206,573 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 25,985 | |||
Accrued fees to affiliates | 1,453 | |||
Accrued trustees’ and officers’ fees and benefits | 1,769 | |||
Accrued other operating expenses | 710,956 | |||
Total liabilities | 740,163 | |||
Net assets applicable to shares outstanding | $ | 5,466,410 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 6,200,369 | ||
Undistributed net investment income (loss), net of taxes | (116,762 | ) | ||
Undistributed net realized gain (loss), net of taxes | (527,622 | ) | ||
Net unrealized appreciation (depreciation), net of taxes | (89,575 | ) | ||
$ | 5,466,410 |
Net Assets: | ||||
Class A | $ | 2,739,031 | ||
Class C | $ | 237,665 | ||
Class R | $ | 28,311 | ||
Class Y | $ | 2,444,017 | ||
Class R5 | $ | 8,693 | ||
Class R6 | $ | 8,693 | ||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: | ||||
Class A | 315,549 | |||
Class C | 27,414 | |||
Class R | 3,262 | |||
Class Y | 281,407 | |||
Class R5 | 1,001 | |||
Class R6 | 1,001 | |||
Class A: | ||||
Net asset value per share | $ | 8.68 | ||
Maximum offering price per share | ||||
(Net asset value of $8.68 ¸ 94.50%) | $ | 9.19 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 8.67 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 8.68 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 8.68 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 8.68 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 8.68 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco MLP Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of return of capital distributions of $92,475) | $ | 10,195 | ||
Dividends from affiliated money market funds | 36 | |||
Total investment income | 10,231 | |||
Expenses: | ||||
Advisory fees | 24,047 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 5,279 | |||
Distribution fees: | ||||
Class A | 2,963 | |||
Class C | 3,255 | |||
Class R | 64 | |||
Transfer agent fees — A, C, R and Y | 2,661 | |||
Transfer agent fees — R5 | 4 | |||
Transfer agent fees — R6 | 4 | |||
Trustees’ and officers’ fees and benefits | 9,769 | |||
Registration and filing fees | 49,630 | |||
Professional services fees | 255,334 | |||
Other | 11,438 | |||
Total expenses, before waivers and taxes | 389,243 | |||
Less: Fees waived and expenses reimbursed | (353,029 | ) | ||
Net expenses, before taxes | 36,214 | |||
Net investment income (loss), before taxes | (25,983 | ) | ||
Net tax expense (benefit) | 0 | |||
Net investment income (loss), net of taxes | (25,983 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (498,964 | ) | ||
Net tax expense (benefit) | 0 | |||
Net realized gain (loss), net of taxes | (498,964 | ) | ||
Change in net unrealized appreciation of: | ||||
Investment securities | 205,311 | |||
Net tax expense (benefit) | 0 | |||
Net change in unrealized appreciation, net of taxes | 205,311 | |||
Net realized and unrealized gain (loss), net of taxes | (293,653 | ) | ||
Net increase (decrease) in net assets resulting from operations | $ | (319,636 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco MLP Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period August 29, 2014 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | August 29, 2014 (commencement date) through October 31, 2014 | |||||||
Operations: | ||||||||
Net investment income (loss), net of taxes | $ | (25,983 | ) | $ | (4,599 | ) | ||
Net realized gain (loss), net of taxes | (498,964 | ) | (28,658 | ) | ||||
Change in net unrealized appreciation (depreciation), net of taxes | 205,311 | (294,886 | ) | |||||
Net increase (decrease) in net assets resulting from operations | (319,636 | ) | (328,143 | ) | ||||
Return of Capital: | ||||||||
Class A | (39,095 | ) | — | |||||
Class C | (6,780 | ) | — | |||||
Class R | (384 | ) | — | |||||
Class Y | (34,658 | ) | — | |||||
Class R5 | (161 | ) | — | |||||
Class R6 | (161 | ) | — | |||||
Total Return of Capital | (81,239 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 936,667 | 2,054,278 | ||||||
Class C | (1,291,579 | ) | 1,815,276 | |||||
Class R | 8,299 | 22,010 | ||||||
Class Y | 901,373 | 1,729,084 | ||||||
Class R5 | — | 10,010 | ||||||
Class R6 | — | 10,010 | ||||||
Net increase in net assets resulting from share transactions | 554,760 | 5,640,668 | ||||||
Net increase in net assets | 153,885 | 5,312,525 | ||||||
Net assets: | ||||||||
Beginning of period | 5,312,525 | — | ||||||
End of period (includes undistributed net investment income (loss), net of taxes, of $(116,762) and $(9,540), respectively) | $ | 5,466,410 | $ | 5,312,525 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco MLP Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 capital appreciation and, secondarily, 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. |
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.
7 Invesco MLP Fund
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. |
8 Invesco MLP Fund
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. | Master Limited Partnerships — The Fund primarily invests in Master Limited Partnerships (MLPs). MLPs are publicly traded partnerships and limited liability companies taxed as partnerships under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The Fund principally invests in MLPs that derive their revenue primarily from businesses involved in the gathering, transporting, processing, treating, storing, refining, distributing, mining or marketing of natural gas, natural gas liquids, crude oil, refined products or coal (energy infrastructure MLPs). The Fund is a partner in each MLP; accordingly, the Fund is required to take into account the Fund’s allocable share of income, gains, losses, deductions, expenses, and tax credits recognized by each MLP. |
The Fund is non-diversified and will concentrate its investments in the energy sector. Energy infrastructure MLPs are subject to a variety of industry specific risk factors that may adversely affect their business or operations, including a decrease in production or reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing; changes in energy commodity prices; a sustained reduced demand for crude oil, natural gas and refined petroleum products; depletion of natural gas reserves or other commodities if not replaced; natural disasters, extreme weather and environmental hazards; rising interest rates, how facilities are constructed, maintained and operated, environmental and safety controls, and the prices they may charge for products and services. In addition, taxes, government regulation, international politics, price, and supply fluctuations, volatile interest rates and energy conservation may cause difficulties for energy infrastructure MLPs.
MLP’s may be less liquid and subject to more abrupt or erratic price movements than conventional publicly traded securities.
F. | Return of Capital — Distributions received from the Fund’s investments in MLPs generally are comprised of income and return of capital. The Fund records investment income and return of capital based on estimates made at the time such distributions are received. The return of capital portion of the distribution is a reduction to investment income that results in an equivalent reduction in the cost basis of the associated investments and increases net realized gains (losses) and change in unrealized appreciation (depreciation). Such estimates are based on historical information available from each MLP and other industry sources. These estimates will subsequently be revised and may materially differ primarily based on information received from the MLPs after their tax reporting periods are concluded. |
G. | Federal Income Taxes — The Fund does not intend to qualify as a regulated investment company pursuant to Subchapter M of the Internal Revenue Code. The Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes and generally is subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations. In addition, as a regular corporation, the Fund may be subject to state and local taxes in jurisdictions in which the MLPs operate. The estimate state tax rate is based on a periodic analysis of the Fund’s holdings. The Fund may also be subject to a federal alternative minimum tax on its alternative minimum taxable income to the extent that the alternative minimum tax exceeds the Fund’s regular federal income tax liability. |
Taxes include current and deferred taxes. Current taxes reflect the estimated tax liability of the Fund as of a measurement date based on taxable income. Deferred taxes reflect estimates of (i) taxes on net unrealized gains (losses), which are attributable to the difference between fair market value and tax basis, (ii) the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes, and (iii) the net tax benefit of accumulated net operating losses, capital loss carryforwards and other tax attributes.
The Fund’s deferred tax asset (DTA) and/or liability balances are estimated using estimates of effective tax rates expected to apply to taxable income in the years such balances are realized. A DTA will be recognized for temporary book/tax differences, net of unrealized losses, and carryforwards (net operating losses, capital loss carryforward, or tax credits). To the extent the Fund has a DTA, the Fund will assess whether a valuation allowance is required to offset the value of a portion, or all, of the DTA. Prior year ordinary income or capital gains (carrybacks), unrealized net gains, future reversals of existing taxable timing differences, forecast of future profitability (based on historical evidence), potential tax planning strategies, unsettled circumstances, and other evidence will be used in determining the valuation allowance. The valuation allowance is reviewed periodically and the Fund may modify its estimates or assumptions regarding the net deferred tax asset or liability balances and any applicable valuation allowance.
The Fund recognizes interest and penalties associated with underpayment of federal and state income taxes, if any, in tax expense.
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.
H. | 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. |
I. | 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. |
J. | 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 |
9 Invesco MLP 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. |
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 $1.0 billion | 1.00% | |||
Next $1.5 billion | 0.95% | |||
Next $2.0 billion | 0.93% | |||
Next $3.5 billion | 0.91% | |||
Over $8 billion | 0.90% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 1.00%.
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, through at least February 29, 2016, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.50%, 2.25%, 1.75%, 1.25%, 1.25% and 1.25%, respectively, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $350,359 and reimbursed class level expenses of $1,317, $362, $14, $969, $4 and $4 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 April 30, 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $1,345 in front-end sales commissions from the sale of Class A shares and $33 from Class C shares for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
10 Invesco MLP 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. |
As of April 30, 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—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.
NOTE 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 6—Taxes and Distributions to Shareholders
Total taxes have been computed by applying the federal statutory tax rate of 34% plus a blended state and other tax rate of 2.73%. The Fund applied this rate to net investment income (loss) and realized and unrealized gains (losses) on investments before taxes in computing its total tax expense (benefit).
The provision for taxes differs from the amount derived from applying the statutory tax rate to net investment income (loss) and realized and unrealized gains (losses) before taxes at period-end as follows:
Provision at statutory rates | $ | (108,677 | ) | 34.00 | % | |||
State and other taxes, net of federal tax benefit | (5,878 | ) | 1.84 | |||||
Permanent differences, current period | (2,380 | ) | 0.74 | |||||
Valuation Allowance | 116,935 | (36.58 | ) | |||||
Total | $ | 0 | 0.00 | % |
Components of the Fund’s Net Deferred Tax Asset at Period-End:
Deferred Tax Assets: | ||||
Net operating loss carryforward | $ | 69,720 | ||
Capital loss carryforward | 68,958 | |||
Unrealized gains/losses on investment securities | 97,499 | |||
Total Deferred Tax Assets | 236,177 | |||
Valuation Allowance | (236,177 | ) | ||
Deferred Tax Asset, net | $ | 0 |
The Fund had a capital loss carryforward as of October 31, 2014, of $2,155. Capital losses may be carried forward for 5 years and accordingly, would begin to expire as of October 31, 2019.
The Fund had a federal net operating loss carryforward as of October 31, 2014, of $9,540, which expires in 2034. As of October 31, 2014, the Fund had state net operating losses of approximately $9,540. If not utilized, these net operating losses will expire in various years through October 31, 2034. The amount of deferred tax asset for net operating losses and capital loss carryforwards at April 30, 2015 includes amounts for the period from November 1, 2014 through April 30, 2015.
At April 30, 2015, based on the net unrealized losses on the Fund’s investment securities the Fund has recorded a valuation allowance to offset the DTA as the Fund has determined at April 30, 2015 based on historical evidence it is unlikely the DTA will be realized.
11 Invesco MLP Fund
Tax Character of Distributions to Shareholders Paid During the Six Months Ended April 30, 2015 and the Period August 29, 2014 (commencement date) through October 31, 2014:
2015 | 2014 | |||||||
Return of Capital | $ | 81,239 | $ | — |
NOTE 7—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $2,957,465 and $2,602,207, 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 | $ | 105,814 | ||
Aggregate unrealized (depreciation) of investment securities | (468,954 | ) | ||
Net unrealized appreciation (depreciation) of investment securities | $ | (363,140 | ) |
Cost of investments for tax purposes is $5,598,891.
NOTE 8—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | August 29, 2014 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 143,558 | $ | 1,231,195 | 211,398 | $ | 2,100,737 | ||||||||||
Class C | 28,135 | 245,619 | 191,620 | 1,891,027 | ||||||||||||
Class R | 943 | 8,054 | 2,289 | 22,010 | ||||||||||||
Class Y | 107,658 | 903,295 | 174,543 | 1,734,597 | ||||||||||||
Class R5 | — | — | 1,001 | 10,010 | ||||||||||||
Class R6 | — | — | 1,001 | 10,010 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 1,954 | 15,809 | — | — | ||||||||||||
Class C | 767 | 6,227 | — | — | ||||||||||||
Class R | 30 | 245 | — | — | ||||||||||||
Class Y | 911 | 7,373 | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (36,467 | ) | (310,337 | ) | (4,894 | ) | (46,459 | ) | ||||||||
Class C | (185,008 | ) | (1,543,425 | ) | (8,100 | ) | (75,751 | ) | ||||||||
Class Y | (1,119 | ) | (9,295 | ) | (586 | ) | (5,513 | ) | ||||||||
Net increase in share activity | 61,362 | $ | 554,760 | 568,272 | $ | 5,640,668 |
(a) | 56% of the outstanding shares of the Fund are owned by Adviser. |
12 Invesco MLP Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Class A | ||||||||
Six months ended April 30, 2015 | Year ended October 31, 2014(a) | |||||||
Net asset value, beginning of period | $ | 9.35 | $ | 10.00 | ||||
Net investment income (loss)(b) | (0.05 | ) | (0.01 | ) | ||||
Net gains (losses) on securities (both realized and unrealized) | (0.47 | ) | (0.64 | ) | ||||
Total from investment operations | (0.52 | ) | (0.65 | ) | ||||
Less: | ||||||||
Return of capital | (0.15 | ) | — | |||||
Net asset value, end of period | $ | 8.68 | $ | 9.35 | ||||
Total return(c) | (5.44 | )% | (6.50 | )% | ||||
Net assets, end of period (000’s omitted) | $ | 2,739 | $ | 1,931 | ||||
Portfolio turnover rate(d) | 53 | % | 5 | % | ||||
Ratios/supplemental data based on average net assets: |
| |||||||
Ratio of expenses: | ||||||||
With fee waivers and/or expense reimbursements, before taxes | 1.49 | %(e) | 1.49 | %(f) | ||||
Tax expense (benefit)(g) | 0.00 | %(e) | 0.00 | %(f) | ||||
With fee waivers and/or expense reimbursements, after taxes(g) | 1.49 | %(e) | 1.49 | %(f) | ||||
Without fee waivers and/or expense reimbursements, after taxes(g) | 16.17 | %(e) | 72.56 | %(f) | ||||
Ratio of net investment income (loss), before taxes | (1.06 | )%(e) | (0.54 | )%(f) | ||||
Ratio of net investment income (loss), after taxes(h) | (1.06 | )%(e) | (0.54 | )%(f) |
(a) | Commencement date of August 29, 2014. |
(b) | Calculated using average shares outstanding. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | 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 $2,390. |
(f) | Annualized. |
(g) | Ratio includes tax expense derived from net investment income (loss) and realized and unrealized gains (losses). |
(h) | Ratio includes tax expense derived from net investment income (loss) only. |
13 Invesco MLP Fund
NOTE 9—Financial Highlights—(continued)
Class C | ||||||||
Six months ended April 30, 2015 | Year ended October 31, 2014(a) | |||||||
Net asset value, beginning of period | $ | 9.34 | $ | 10.00 | ||||
Net investment income (loss)(b) | (0.08 | ) | (0.02 | ) | ||||
Net gains (losses) on securities (both realized and unrealized) | (0.47 | ) | (0.64 | ) | ||||
Total from investment operations | (0.55 | ) | (0.66 | ) | ||||
Less: | ||||||||
Return of capital | (0.12 | ) | — | |||||
Net asset value, end of period | $ | 8.67 | $ | 9.34 | ||||
Total return(c) | (5.82 | )% | (6.60 | )% | ||||
Net assets, end of period (000’s omitted) | $ | 238 | $ | 1,713 | ||||
Portfolio turnover rate(d) | 53 | % | 5 | % | ||||
Ratios/supplemental data based on average net assets: |
| |||||||
Ratio of expenses: | ||||||||
With fee waivers and/or expense reimbursements, before taxes | 2.24 | %(e) | 2.24 | %(f) | ||||
Tax expense (benefit)(g) | 0.00 | %(e) | 0.00 | %(f) | ||||
With fee waivers and/or expense reimbursements, after taxes(g) | 2.24 | %(e) | 2.24 | %(f) | ||||
Without fee waivers and/or expense reimbursements, after taxes(g) | 16.92 | %(e) | 73.31 | %(f) | ||||
Ratio of net investment income (loss), before taxes | (1.81 | )%(e) | (1.29 | )%(f) | ||||
Ratio of net investment income (loss), after taxes(h) | (1.81 | )%(e) | (1.29 | )%(f) |
(a) | Commencement date of August 29, 2014. |
(b) | Calculated using average shares outstanding. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | 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 $656. |
(f) | Annualized. |
(g) | Ratio includes tax expense derived from net investment income (loss) and realized and unrealized gains (losses). |
(h) | Ratio includes tax expense derived from net investment income (loss) only. |
14 Invesco MLP Fund
NOTE 9—Financial Highlights—(continued)
Class R | ||||||||
Six months ended April 30, 2015 | Year ended October 31, 2014(a) | |||||||
Net asset value, beginning of period | $ | 9.35 | $ | 10.00 | ||||
Net investment income (loss)(b) | (0.06 | ) | (0.01 | ) | ||||
Net gains (losses) on securities (both realized and unrealized) | (0.47 | ) | (0.64 | ) | ||||
Total from investment operations | (0.53 | ) | (0.65 | ) | ||||
Less: | ||||||||
Return of capital | (0.14 | ) | — | |||||
Net asset value, end of period | $ | 8.68 | $ | 9.35 | ||||
Total return(c) | (5.57 | )% | (6.50 | )% | ||||
Net assets, end of period (000’s omitted) | $ | 28 | $ | 21 | ||||
Portfolio turnover rate(d) | 53 | % | 5 | % | ||||
Ratios/supplemental data based on average net assets: |
| |||||||
Ratio of expenses: | ||||||||
With fee waivers and/or expense reimbursements, before taxes | 1.74 | %(e) | 1.74 | %(f) | ||||
Tax expense (benefit)(g) | 0.00 | %(e) | 0.00 | %(f) | ||||
With fee waivers and/or expense reimbursements, after taxes(g) | 1.74 | %(e) | 1.74 | %(f) | ||||
Without fee waivers and/or expense reimbursements, after taxes(g) | 16.42 | %(e) | 72.80 | %(f) | ||||
Ratio of net investment income (loss), before taxes | (1.31 | )%(e) | (0.79 | )%(f) | ||||
Ratio of net investment income (loss), after taxes(h) | (1.31 | )%(e) | (0.79 | )%(f) |
(a) | Commencement date of August 29, 2014. |
(b) | Calculated using average shares outstanding. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | 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 $26. |
(f) | Annualized. |
(g) | Ratio includes tax expense derived from net investment income (loss) and realized and unrealized gains (losses). |
(h) | Ratio includes tax expense derived from net investment income (loss) only. |
15 Invesco MLP Fund
NOTE 9—Financial Highlights—(continued)
Class Y | ||||||||
Six months ended April 30, 2015 | Year ended October 31, 2014(a) | |||||||
Net asset value, beginning of period | $ | 9.36 | $ | 10.00 | ||||
Net investment income (loss)(b) | (0.04 | ) | (0.01 | ) | ||||
Net gains (losses) on securities (both realized and unrealized) | (0.48 | ) | (0.63 | ) | ||||
Total from investment operations | (0.52 | ) | (0.64 | ) | ||||
Less: | ||||||||
Return of capital | (0.16 | ) | — | |||||
Net asset value, end of period | $ | 8.68 | $ | 9.36 | ||||
Total return(c) | (5.42 | )% | (6.40 | )% | ||||
Net assets, end of period (000’s omitted) | $ | 2,444 | $ | 1,628 | ||||
Portfolio turnover rate(d) | 53 | % | 5 | % | ||||
Ratios/supplemental data based on average net assets: |
| |||||||
Ratio of expenses: | ||||||||
With fee waivers and/or expense reimbursements, before taxes | 1.24 | %(e) | 1.24 | %(f) | ||||
Tax expense (benefit)(g) | 0.00 | %(e) | 0.00 | %(f) | ||||
With fee waivers and/or expense reimbursements, after taxes(g) | 1.24 | %(e) | 1.24 | %(f) | ||||
Without fee waivers and/or expense reimbursements, after taxes(g) | 15.92 | %(e) | 72.31 | %(f) | ||||
Ratio of net investment income (loss), before taxes | (0.81 | )%(e) | (0.29 | )%(f) | ||||
Ratio of net investment income (loss), after taxes(h) | (0.81 | )%(e) | (0.29 | )%(f) |
(a) | Commencement date of August 29, 2014. |
(b) | Calculated using average shares outstanding. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $1,760. |
(f) | Annualized. |
(g) | Ratio includes tax expense derived from net investment income (loss) and realized and unrealized gains (losses). |
(h) | Ratio includes tax expense derived from net investment income (loss) only. |
16 Invesco MLP Fund
NOTE 9—Financial Highlights—(continued)
Class R5 | ||||||||
Six months ended April 30, 2015 | Year ended October 31, 2014(a) | |||||||
Net asset value, beginning of period | $ | 9.36 | $ | 10.00 | ||||
Net investment income (loss)(b) | (0.04 | ) | (0.01 | ) | ||||
Net gains (losses) on securities (both realized and unrealized) | (0.48 | ) | (0.63 | ) | ||||
Total from investment operations | (0.52 | ) | (0.64 | ) | ||||
Less: | ||||||||
Return of capital | (0.16 | ) | — | |||||
Net asset value, end of period | $ | 8.68 | $ | 9.36 | ||||
Total return(c) | (5.42 | )% | (6.40 | )% | ||||
Net assets, end of period (000’s omitted) | $ | 9 | $ | 9 | ||||
Portfolio turnover rate(d) | 53 | % | 5 | % | ||||
Ratios/supplemental data based on average net assets: |
| |||||||
Ratio of expenses: | ||||||||
With fee waivers and/or expense reimbursements, before taxes | 1.24 | %(e) | 1.24 | %(f) | ||||
Tax expense (benefit)(g) | 0.00 | %(e) | 0.00 | %(f) | ||||
With fee waivers and/or expense reimbursements, after taxes(g) | 1.24 | %(e) | 1.24 | %(f) | ||||
Without fee waivers and/or expense reimbursements, after taxes(g) | 15.91 | %(e) | 72.28 | %(f) | ||||
Ratio of net investment income (loss), before taxes | (0.81 | )%(e) | (0.29 | )%(f) | ||||
Ratio of net investment income (loss), after taxes(h) | (0.81 | )%(e) | (0.29 | )%(f) |
(a) | Commencement date of August 29, 2014. |
(b) | Calculated using average shares outstanding. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | 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 $9. |
(f) | Annualized. |
(g) | Ratio includes tax expense derived from net investment income (loss) and realized and unrealized gains (losses). |
(h) | Ratio includes tax expense derived from net investment income (loss) only. |
17 Invesco MLP Fund
NOTE 9—Financial Highlights—(continued)
Class R6 | ||||||||
Six months ended April 30, 2015 | Year ended October 31, 2014(a) | |||||||
Net asset value, beginning of period | $ | 9.36 | $ | 10.00 | ||||
Net investment income (loss)(b) | (0.04 | ) | (0.01 | ) | ||||
Net gains (losses) on securities (both realized and unrealized) | (0.48 | ) | (0.63 | ) | ||||
Total from investment operations | (0.52 | ) | (0.64 | ) | ||||
Less: | ||||||||
Return of capital | (0.16 | ) | — | |||||
Net asset value, end of period | $ | 8.68 | $ | 9.36 | ||||
Total return(c) | (5.42 | )% | (6.40 | )% | ||||
Net assets, end of period (000’s omitted) | $ | 9 | $ | 9 | ||||
Portfolio turnover rate(d) | 53 | % | 5 | % | ||||
Ratios/supplemental data based on average net assets: |
| |||||||
Ratio of expenses: | ||||||||
With fee waivers and/or expense reimbursements, before taxes | 1.24 | %(e) | 1.24 | %(f) | ||||
Tax expense (benefit)(g) | 0.00 | %(e) | 0.00 | %(f) | ||||
With fee waivers and/or expense reimbursements, after taxes(g) | 1.24 | %(e) | 1.24 | %(f) | ||||
Without fee waivers and/or expense reimbursements, after taxes(g) | 15.91 | %(e) | 72.23 | %(f) | ||||
Ratio of net investment income (loss), before taxes | (0.81 | )%(e) | (0.29 | )%(f) | ||||
Ratio of net investment income (loss), after taxes(h) | (0.81 | )%(e) | (0.29 | )%(f) |
(a) | Commencement date of August 29, 2014. |
(b) | Calculated using average shares outstanding. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | 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 $9. |
(f) | Annualized. |
(g) | Ratio includes tax expense derived from net investment income (loss) and realized and unrealized gains (losses). |
(h) | Ratio includes tax expense derived from net investment income (loss) only. |
18 Invesco MLP Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 945.60 | $ | 7.19 | $ | 1,017.41 | $ | 7.45 | 1.49 | % | ||||||||||||
C | 1,000.00 | 941.80 | 10.78 | 1,013.69 | 11.18 | 2.24 | ||||||||||||||||||
R | 1,000.00 | 944.30 | 8.39 | 1,016.17 | 8.70 | 1.74 | ||||||||||||||||||
Y | 1,000.00 | 945.80 | 5.98 | 1,018.65 | 6.21 | 1.24 | ||||||||||||||||||
R5 | 1,000.00 | 945.80 | 5.98 | 1,018.65 | 6.21 | 1.24 | ||||||||||||||||||
R6 | 1,000.00 | 945.80 | 5.98 | 1,018.65 | 6.21 | 1.24 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 MLP 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: 811-05426 and 033-19338 | MLP-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Pacific Growth Fund | ||||
Nasdaq: | ||||
A: TGRAX ¡ B: TGRBX ¡ C: TGRCX ¡ R: TGRRX ¡ Y: TGRDX ¡ R5: TGRSX | ||||
| ||||
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, 10/31/14 to 4/30/15, 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 | 4.82 | % | ||||
Class B Shares | 4.42 | |||||
Class C Shares | 4.46 | |||||
Class R Shares | 4.68 | |||||
Class Y Shares | 4.94 | |||||
Class R5 Shares | 5.03 | |||||
MSCI EAFE Index‚ (Broad Market Index) | 6.81 | |||||
MSCI All Country Asia Pacific Index‚ (Style-Specific Index) | 9.15 | |||||
Lipper Pacific Region Funds Indexn (Peer Group Index) | 6.75 | |||||
Source(s): ‚FactSet Research Systems, Inc.; nLipper Inc. | ||||||
The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. The index is computed using the net return, which withholds applicable taxes for non-resident investors. | ||||||
The MSCI All Country Asia Pacific Index is an unmanaged index considered representative of Pacific region stock markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. | ||||||
The Lipper Pacific Region Funds Index is an unmanaged index considered representative of Pacific region funds tracked by Lipper. | ||||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). | ||||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
2 | Invesco Pacific Growth Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (7/28/97) | 1.92 | % | |||||
10 Years | 6.11 | ||||||
5 Years | 3.44 | ||||||
1 Year | 6.29 | ||||||
Class B Shares | |||||||
Inception (11/30/90) | 4.90 | % | |||||
10 Years | 6.08 | ||||||
5 Years | 3.48 | ||||||
1 Year | 6.58 | ||||||
Class C Shares | |||||||
Inception (7/28/97) | 1.51 | % | |||||
10 Years | 5.94 | ||||||
5 Years | 3.87 | ||||||
1 Year | 10.61 | ||||||
Class R Shares | |||||||
Inception (3/31/08) | 1.82 | % | |||||
5 Years | 4.35 | ||||||
1 Year | 12.15 | ||||||
Class Y Shares | |||||||
Inception (7/28/97) | 2.50 | % | |||||
10 Years | 6.98 | ||||||
5 Years | 4.88 | ||||||
1 Year | 12.72 | ||||||
Class R5 Shares | |||||||
10 Years | 6.88 | % | |||||
5 Years | 4.95 | ||||||
1 Year | 12.91 |
Effective June 1, 2010, Class A, Class B, Class C, Class R, Class W and Class I shares of the predecessor fund, Morgan Stanley Pacific Growth Fund Inc., 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 Pacific Growth 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 Pacific Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 23, 2011. 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.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (7/28/97) | 1.74 | % | |||||
10 Years | 5.65 | ||||||
5 Years | 2.73 | ||||||
1 Year | 2.68 | ||||||
Class B Shares | |||||||
Inception (11/30/90) | 4.78 | % | |||||
10 Years | 5.61 | ||||||
5 Years | 2.76 | ||||||
1 Year | 2.86 | ||||||
Class C Shares | |||||||
Inception (7/28/97) | 1.34 | % | |||||
10 Years | 5.49 | ||||||
5 Years | 3.14 | ||||||
1 Year | 6.85 | ||||||
Class R Shares | |||||||
Inception (3/31/08) | 1.38 | % | |||||
5 Years | 3.62 | ||||||
1 Year | 8.39 | ||||||
Class Y Shares | |||||||
Inception (7/28/97) | 2.32 | % | |||||
10 Years | 6.53 | ||||||
5 Years | 4.16 | ||||||
1 Year | 8.94 | ||||||
Class R5 Shares | |||||||
10 Years | 6.41 | % | |||||
5 Years | 4.22 | ||||||
1 Year | 9.08 |
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 R5 shares was 1.78%, 2.54%, 2.54%, 2.04%, 1.54% and 1.38%, 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 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.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
3 | Invesco Pacific Growth 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 Pacific Growth Fund |
Schedule of Investments
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–96.64% |
| |||||||
Australia–10.75% | ||||||||
Alumina Ltd. | 157,411 | $ | 190,954 | |||||
Amcor Ltd. | 20,846 | 221,764 | ||||||
AMP Ltd. | 28,121 | 142,556 | ||||||
Aurizon Holdings Ltd. | 65,417 | 250,211 | ||||||
Australia and New Zealand Banking Group Ltd. | 31,907 | 855,158 | ||||||
Bank of Queensland Ltd. | 10,843 | 111,297 | ||||||
BHP Billiton Ltd. | 24,421 | 626,574 | ||||||
Brambles Ltd. | 16,539 | 141,257 | ||||||
Caltex Australia Ltd. | 7,462 | 208,169 | ||||||
Cochlear Ltd. | 3,183 | 210,012 | ||||||
Commonwealth Bank of Australia | 17,365 | 1,216,849 | ||||||
CSL Ltd. | 3,104 | 222,744 | ||||||
CSR Ltd. | 50,367 | 144,802 | ||||||
Echo Entertainment Group Ltd. | 48,942 | 174,868 | ||||||
Independence Group NL | 31,077 | 144,236 | ||||||
Insurance Australia Group Ltd. | 43,838 | 200,656 | ||||||
Macquarie Group Ltd. | 5,831 | 356,883 | ||||||
National Australia Bank Ltd. | 15,836 | 459,170 | ||||||
Qantas Airways Ltd.(a) | 81,177 | 217,703 | ||||||
Ramsay Health Care Ltd. | 4,957 | 244,122 | ||||||
Slater & Gordon Ltd. | 26,549 | 132,793 | ||||||
Suncorp Group Ltd. | 16,250 | 168,057 | ||||||
Tassal Group Ltd. | 11,650 | 29,791 | ||||||
Telstra Corp. Ltd. | 75,737 | 372,312 | ||||||
Wesfarmers Ltd. | 5,958 | 205,525 | ||||||
Western Areas Ltd. | 44,439 | 128,900 | ||||||
Westpac Banking Corp. | 34,814 | 1,000,631 | ||||||
Woodside Petroleum Ltd. | 12,542 | 346,020 | ||||||
Woolworths Ltd. | 12,617 | 292,875 | ||||||
9,016,889 | ||||||||
China–11.16% | ||||||||
BAIC Motor Corp., Ltd.–Class H(a)(b) | 396,000 | 587,575 | ||||||
Bank of China Ltd.–Class H | 2,145,000 | 1,475,111 | ||||||
Beijing Capital International Airport Co. Ltd.–Class H | 444,000 | 471,887 | ||||||
China Animal Healthcare Ltd. | 349,000 | 234,153 | ||||||
China Mobile Ltd. | 57,000 | 814,128 | ||||||
China Resources Land Ltd. | 314,666 | 1,146,934 | ||||||
CNOOC Ltd. | 525,000 | 894,884 | ||||||
Guangdong Investment Ltd. | 380,000 | 567,757 | ||||||
Industrial & Commercial Bank of China Ltd.–Class H | 1,616,000 | 1,405,308 | ||||||
Ping An Insurance (Group) Co. of China Ltd.–Class H | 34,500 | 495,878 | ||||||
Tencent Holdings Ltd. | 61,600 | 1,272,199 | ||||||
9,365,814 |
Shares | Value | |||||||
Hong Kong–5.95% | ||||||||
AIA Group Ltd. | 187,400 | $ | 1,252,477 | |||||
Chow Tai Fook Jewellery Group Ltd. | 535,600 | 649,589 | ||||||
Henderson Land Development Co. Ltd. | 105,000 | 844,010 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 21,800 | 831,551 | ||||||
Sands China Ltd. | 196,001 | 802,917 | ||||||
Television Broadcasts Ltd. | 94,500 | 616,344 | ||||||
4,996,888 | ||||||||
India–6.75% | ||||||||
Axis Bank Ltd. | 179,018 | 1,599,551 | ||||||
Bharat Forge Ltd. | 65,175 | 1,289,421 | ||||||
HCL Technologies Ltd. | 41,315 | 573,612 | ||||||
IndusInd Bank Ltd. | 55,471 | 718,316 | ||||||
Lupin Ltd. | 28,047 | 782,404 | ||||||
Maruti Suzuki India Ltd. | 11,939 | 699,876 | ||||||
5,663,180 | ||||||||
Indonesia–1.90% | ||||||||
PT Matahari Department Store Tbk | 614,400 | 829,438 | ||||||
PT Telekomunikasi Indonesia Persero Tbk | 3,766,900 | 764,268 | ||||||
1,593,706 | ||||||||
Japan–34.96% | ||||||||
Amada Co., Ltd. | 39,900 | 403,475 | ||||||
AOKI Holdings Inc. | 19,700 | 273,131 | ||||||
Astellas Pharma Inc. | 61,500 | 957,288 | ||||||
Canon Inc. | 14,300 | 510,294 | ||||||
Casio Computer Co., Ltd. | 8,600 | 173,958 | ||||||
Chiba Bank, Ltd. (The) | 34,000 | 279,437 | ||||||
Daicel Corp. | 64,000 | 769,400 | ||||||
Daifuku Co., Ltd. | 26,800 | 358,255 | ||||||
Daikin Industries, Ltd. | 9,900 | 666,478 | ||||||
Daito Trust Construction Co., Ltd. | 5,400 | 627,278 | ||||||
Daiwa House Industry Co., Ltd. | 29,900 | 665,640 | ||||||
East Japan Railway Co. | 8,400 | 741,622 | ||||||
Fukushima Industries Corp. | 16,400 | 274,856 | ||||||
Gulliver International Co., Ltd.(c) | 65,600 | 509,983 | ||||||
Hitachi Capital Corp. | 27,200 | 617,068 | ||||||
Hitachi High–Technologies Corp. | 17,800 | 514,770 | ||||||
Hitachi, Ltd. | 138,000 | 940,453 | ||||||
Honda Motor Co., Ltd. | 19,700 | 666,115 | ||||||
JGC Corp. | 4,000 | 83,379 | ||||||
K’s Holdings Corp. | 9,900 | 330,619 | ||||||
Komatsu Ltd. | 21,800 | 437,830 | ||||||
Konoike Transport Co., Ltd. | 9,700 | 103,684 | ||||||
Maeda Road Construction Co., Ltd. | 21,000 | 346,085 | ||||||
Marubeni Corp. | 30,300 | 187,984 | ||||||
Mitsubishi Corp. | 25,400 | 549,124 | ||||||
Mitsubishi Estate Co. Ltd. | 21,000 | 493,671 | ||||||
Mitsubishi Heavy Industries, Ltd. | 112,000 | 622,225 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Pacific Growth Fund
Shares | Value | |||||||
Japan–(continued) | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 195,300 | $ | 1,378,012 | |||||
Nidec Corp. | 12,200 | 909,616 | ||||||
Nifco Inc. | 13,100 | 464,257 | ||||||
Obayashi Corp. | 36,000 | 240,710 | ||||||
Ono Pharmaceutical Co. Ltd. | 4,900 | 528,669 | ||||||
ORIX Corp. | 68,500 | 1,047,526 | ||||||
Otsuka Corp. | 10,600 | 489,619 | ||||||
Relo Holdings, Inc. | 6,400 | 525,884 | ||||||
Resorttrust, Inc. | 27,500 | 718,056 | ||||||
Ricoh Co., Ltd. | 34,800 | 361,380 | ||||||
Sanwa Holdings Corp. | 65,000 | 489,861 | ||||||
SATO Holdings Corp. | 14,400 | 332,367 | ||||||
Sekisui Chemical Co., Ltd. | 58,000 | 775,632 | ||||||
Seven & i Holdings Co., Ltd. | 27,900 | 1,201,401 | ||||||
Shimamura Co., Ltd. | 4,600 | 456,746 | ||||||
Sumitomo Metal Mining Co., Ltd. | 21,000 | 308,635 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 16,700 | 728,265 | ||||||
Suzuki Motor Corp. | 12,900 | 416,862 | ||||||
Tokyu Fudosan Holdings, Corp. | 45,700 | 339,069 | ||||||
Toshiba Corp. | 123,000 | 491,887 | ||||||
Toyo Ink SC Holdings Co., Ltd. | 63,000 | 299,604 | ||||||
Toyoda Gosei Co., Ltd. | 9,100 | 210,710 | ||||||
Toyota Motor Corp. | 21,300 | 1,479,630 | ||||||
Tsubakimoto Chain Co. | 67,000 | 548,233 | ||||||
Yamaha Motor Co., Ltd. | 26,500 | 622,325 | ||||||
Yaskawa Electric Corp. | 41,200 | 567,803 | ||||||
Yellow Hat Ltd. | 13,400 | 296,220 | ||||||
29,333,081 | ||||||||
Malaysia–2.37% | ||||||||
Petronas Gas Berhad | 166,600 | 1,062,260 | ||||||
Silverlake Axis Ltd. | 962,400 | 923,706 | ||||||
1,985,966 | ||||||||
Philippines–2.11% | ||||||||
Ayala Corp. | 41,800 | 730,110 | ||||||
Ayala Land, Inc. | 1,202,100 | 1,040,608 | ||||||
1,770,718 | ||||||||
Singapore–1.18% | ||||||||
Singapore Post Ltd. | 685,800 | 988,789 | ||||||
South Korea–10.13% | ||||||||
AMOREPACIFIC Corp. | 55 | 199,218 | ||||||
AMOREPACIFIC Group | 431 | 655,168 | ||||||
Coway Co., Ltd. | 7,193 | 605,739 | ||||||
Grand Korea Leisure Co., Ltd. | 16,300 | 586,003 | ||||||
Green Cross Corp. | 4,219 | 693,756 | ||||||
Hana Tour Service Inc. | 5,069 | 601,834 | ||||||
Hanssem Co., Ltd. | 4,667 | 861,640 | ||||||
KEPCO Plant Service & Engineering Co., Ltd. | 6,776 | 614,857 | ||||||
Nongshim Co., Ltd. | 2,561 | 585,145 | ||||||
Orion Corp. | 501 | 585,432 |
Shares | Value | |||||||
South Korea–(continued) | ||||||||
Ottogi Corp. | 957 | $ | 626,080 | |||||
Samchully Co., Ltd. | 4,524 | 542,143 | ||||||
Samsung Electronics Co., Ltd. | 370 | 485,129 | ||||||
Samsung Fire & Marine Insurance Co., Ltd. | 1,362 | 358,826 | ||||||
SK Telecom Co., Ltd. | 1,879 | 502,917 | ||||||
8,503,887 | ||||||||
Taiwan–5.05% | ||||||||
China Development Financial Holding Corp. | 944,000 | 393,647 | ||||||
Grand Ocean Retail Group Ltd. | 87,000 | 160,100 | ||||||
Hiwin Technologies Corp. | 19,930 | 151,977 | ||||||
Hon Hai Precision Industry Co., Ltd. | 173,800 | 521,080 | ||||||
Iron Force Industrial Co., Ltd. | 36,000 | 154,003 | ||||||
Largan Precision Co., Ltd. | 4,000 | 400,226 | ||||||
Makalot Industrial Co., Ltd. | 30,000 | 234,451 | ||||||
Nan Ya Plastics Corp. | 114,000 | 279,828 | ||||||
Rechi Precision Co., Ltd. | 135,000 | 146,295 | ||||||
San Shing Fastech Corp. | 80,940 | 206,163 | ||||||
Synnex Technology International Corp. | 174,000 | 246,558 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 162,143 | 782,869 | ||||||
Tong Hsing Electronic Industries, Ltd. | 74,000 | 236,997 | ||||||
Yungtay Engineering Co., Ltd. | 142,000 | 326,460 | ||||||
4,240,654 | ||||||||
Thailand–2.80% | ||||||||
Bumrungrad Hospital PCL–NVDR | 59,400 | 287,934 | ||||||
Central Pattana PCL | 800,800 | 1,018,737 | ||||||
Siam Cement PCL (The)–NVDR | 64,300 | 1,045,745 | ||||||
2,352,416 | ||||||||
United Kingdom–1.53% | ||||||||
HSBC Holdings PLC | 129,200 | 1,277,953 | ||||||
Rio Tinto Ltd. | 201 | 9,046 | ||||||
1,286,999 | ||||||||
Total Common Stocks & Other Equity Interests |
| 81,098,987 | ||||||
Money Market Funds–5.11% |
| |||||||
Liquid Assets Portfolio–Institutional Class(d) | 2,145,009 | 2,145,009 | ||||||
Premier Portfolio–Institutional Class(d) | 2,145,008 | 2,145,008 | ||||||
Total Money Market Funds |
| 4,290,017 | ||||||
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–101.75% |
| 85,389,004 | ||||||
Investments Purchased with Cash Collateral from Securities on Loan |
| |||||||
Money Market Funds–0.15% |
| |||||||
Liquid Assets Portfolio–Institutional Class | 124,650 | 124,650 | ||||||
TOTAL INVESTMENTS–101.90% |
| 85,513,654 | ||||||
OTHER ASSETS LESS LIABILITIES–(1.90)% |
| (1,593,952 | ) | |||||
NET ASSETS–100.00% |
| $ | 83,919,702 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Pacific Growth Fund
Investment Abbreviations:
NVDR | – Non-Voting Depositary Receipt |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at April 30, 2015 represented less than 1% of the Fund’s Net Assets. |
(c) | All or a portion of this security was out on loan at April 30, 2015. |
(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 April 30, 2015. |
Counterparty | Gross Amount of Securities on Loan at Value | Cash Collateral Received for Securities Loaned* | Net Amount | |||||||||
Brown Brothers Harriman | $ | 116,931 | $ | (116,931 | ) | $ | — |
* | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2015
Financials | 30.7 | % | ||
Consumer Discretionary | 19.5 | |||
Industrials | 13.1 | |||
Information Technology | 11.1 | |||
Consumer Staples | 5.2 | |||
Health Care | 5.0 | |||
Materials | 4.8 | |||
Telecommunication Services | 2.9 | |||
Utilities | 2.6 | |||
Energy | 1.7 | |||
Money Market Funds Plus Other Assets Less Liabilities | 3.4 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Pacific Growth Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $68,419,871)* | $ | 81,098,987 | ||
Investments in affiliated money market funds, at value and cost | 4,414,667 | |||
Total investments, at value (Cost $72,834,538) | 85,513,654 | |||
Foreign currencies, at value (Cost $735,424) | 721,369 | |||
Receivable for: | ||||
Investments sold | 869,072 | |||
Fund shares sold | 46,070 | |||
Dividends | 433,424 | |||
Investment for trustee deferred compensation and retirement plans | 39,682 | |||
Other assets | 39,091 | |||
Total assets | 87,662,362 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 2,895,353 | |||
Fund shares reacquired | 302,592 | |||
Collateral upon return of securities loaned | 124,650 | |||
Accrued foreign taxes | 124,060 | |||
Accrued fees to affiliates | 104,746 | |||
Accrued trustees’ and officers’ fees and benefits | 1,850 | |||
Accrued other operating expenses | 91,469 | |||
Trustee deferred compensation and retirement plans | 97,940 | |||
Total liabilities | 3,742,660 | |||
Net assets applicable to shares outstanding | $ | 83,919,702 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 89,387,103 | ||
Undistributed net investment income | (446,267 | ) | ||
Undistributed net realized gain (loss) | (17,703,301 | ) | ||
Net unrealized appreciation | 12,682,167 | |||
$ | 83,919,702 |
Net Assets: |
| |||
Class A | $ | 73,023,998 | ||
Class B | $ | 354,543 | ||
Class C | $ | 5,690,410 | ||
Class R | $ | 324,063 | ||
Class Y | $ | 4,513,076 | ||
Class R5 | $ | 13,612 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 2,845,691 | |||
Class B | 14,728 | |||
Class C | 235,937 | |||
Class R | 12,722 | |||
Class Y | 173,350 | |||
Class R5 | 523 | |||
Class A: | ||||
Net asset value per share | $ | 25.66 | ||
Maximum offering price per share | ||||
(Net asset value of $25.66 ¸ 94.50%) | $ | 27.15 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 24.07 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 24.12 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 25.47 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 26.03 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 26.03 |
* | At April 30, 2015, securities with an aggregate value of $116,931 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Pacific Growth Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $61,174) | $ | 731,484 | ||
Dividends from affiliated money market funds (includes securities lending income of $369) | 729 | |||
Total investment income | 732,213 | |||
Expenses: | ||||
Advisory fees | 339,929 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 43,450 | |||
Distribution fees: | ||||
Class A | 84,823 | |||
Class B | 1,993 | |||
Class C | 22,658 | |||
Class R | 830 | |||
Transfer agent fees — A, B, C, R and Y | 92,771 | |||
Transfer agent fees — R5 | 4 | |||
Trustees’ and officers’ fees and benefits | 12,222 | |||
Registration and filing fees | 35,791 | |||
Other | 44,793 | |||
Total expenses | 704,059 | |||
Less: Fees waived and expense offset arrangement(s) | (893 | ) | ||
Net expenses | 703,166 | |||
Net investment income | 29,047 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (net of foreign taxes of $31,226) | 117,374 | |||
Foreign currencies | (290,935 | ) | ||
(173,561 | ) | |||
Change in net unrealized appreciation of: | ||||
Investment securities (net of foreign taxes on holdings of $28,240) | 3,690,466 | |||
Foreign currencies | 117,472 | |||
3,807,938 | ||||
Net realized and unrealized gain | 3,634,377 | |||
Net increase in net assets resulting from operations | $ | 3,663,424 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Pacific Growth Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 29,047 | $ | 469,064 | ||||
Net realized gain (loss) | (173,561 | ) | 6,523,096 | |||||
Change in net unrealized appreciation (depreciation) | 3,807,938 | (3,830,874 | ) | |||||
Net increase in net assets resulting from operations | 3,663,424 | 3,161,286 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (82,200 | ) | (1,136,339 | ) | ||||
Class B | — | (6,423 | ) | |||||
Class C | — | (37,052 | ) | |||||
Class R | — | (3,682 | ) | |||||
Class Y | (11,222 | ) | (57,092 | ) | ||||
Class R5 | (67 | ) | (228 | ) | ||||
Total distributions from net investment income | (93,489 | ) | (1,240,816 | ) | ||||
Share transactions–net: | ||||||||
Class A | (3,626,917 | ) | (7,943,838 | ) | ||||
Class B | (139,443 | ) | (411,438 | ) | ||||
Class C | 855,838 | (506,174 | ) | |||||
Class R | (33,953 | ) | 44,765 | |||||
Class Y | 1,417,823 | (435,625 | ) | |||||
Class R5 | — | — | ||||||
Net increase (decrease) in net assets resulting from share transactions | (1,526,652 | ) | (9,252,310 | ) | ||||
Net increase (decrease) in net assets | 2,043,283 | (7,331,840 | ) | |||||
Net assets: | ||||||||
Beginning of period | 81,876,419 | 89,208,259 | ||||||
End of period (includes undistributed net investment income of $(446,267) and $(381,825), respectively) | $ | 83,919,702 | $ | 81,876,419 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Pacific Growth Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Class R5. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will 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
10 Invesco Pacific Growth 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.
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, |
11 Invesco Pacific Growth Fund
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 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | 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
12 Invesco Pacific Growth 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.
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 | 0.87% | |||
Next $1 billion | 0.82% | |||
Over $2 billion | 0.77% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.87%.
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, 2016, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Class R5 shares to 2.25%, 3.00%, 3.00%, 2.50%, 2.00% and 2.00%, respectively, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $784.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 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 April 30, 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 April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $1,293 in front-end sales commissions from the sale of Class A shares and $192 and $20 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.
13 Invesco Pacific Growth Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 April 30, 2015, there were transfers from Level 1 to Level 2 of $718,316 and from Level 2 to Level 1 of $17,107,788, due to foreign fair value adjustments, additionally, there were transfers from Level 2 to Level 3 of $234,153, due to security low volume trading.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Australia | $ | 217,703 | $ | 8,799,186 | $ | — | $ | 9,016,889 | ||||||||
China | 6,492,691 | 2,638,970 | 234,153 | 9,365,814 | ||||||||||||
Hong Kong | 4,165,337 | 831,551 | — | 4,996,888 | ||||||||||||
India | 1,863,033 | 3,800,147 | — | 5,663,180 | ||||||||||||
Indonesia | 829,438 | 764,268 | — | 1,593,706 | ||||||||||||
Japan | — | 29,333,081 | — | 29,333,081 | ||||||||||||
Malaysia | 1,985,966 | — | — | 1,985,966 | ||||||||||||
Philippines | — | 1,770,718 | — | 1,770,718 | ||||||||||||
Singapore | — | 988,789 | — | 988,789 | ||||||||||||
South Korea | 4,580,280 | 3,923,607 | — | 8,503,887 | ||||||||||||
Taiwan | 360,166 | 3,880,488 | — | 4,240,654 | ||||||||||||
Thailand | 1,018,737 | 1,333,679 | — | 2,352,416 | ||||||||||||
United Kingdom | — | 1,286,999 | — | 1,286,999 | ||||||||||||
United States | 4,414,667 | — | — | 4,414,667 | ||||||||||||
Total Investments | $ | 25,928,018 | $ | 59,351,483 | $ | 234,153 | $ | 85,513,654 |
NOTE 4—Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $109.
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.
14 Invesco Pacific Growth Fund
NOTE 7—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
October 31, 2015 | $ | 45,180 | $ | — | $ | 45,180 | ||||||
October 31, 2016 | 1,247,693 | — | 1,247,693 | |||||||||
October 31, 2017 | 15,965,093 | — | 15,965,093 | |||||||||
Total capital loss carryforward | $ | 17,257,966 | $ | — | $ | 17,257,966 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $32,869,672 and $31,070,907, 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 | $ | 14,501,184 | ||
Aggregate unrealized (depreciation) of investment securities | (2,473,470 | ) | ||
Net unrealized appreciation of investment securities | $ | 12,027,714 |
Cost of investments for tax purposes is $73,485,940.
15 Invesco Pacific Growth Fund
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 138,736 | $ | 3,423,030 | 133,449 | $ | 3,122,847 | ||||||||||
Class B | 34 | 826 | 922 | 20,231 | ||||||||||||
Class C | 55,009 | 1,306,081 | 14,602 | 327,536 | ||||||||||||
Class R | 3,896 | 97,345 | 12,584 | 306,742 | ||||||||||||
Class Y | 95,721 | 2,408,309 | 107,353 | 2,570,104 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 3,049 | 70,381 | 43,353 | 991,482 | ||||||||||||
Class B | — | — | 261 | 5,649 | ||||||||||||
Class C | — | — | 1,529 | 33,187 | ||||||||||||
Class R | — | — | 153 | 3,472 | ||||||||||||
Class Y | 451 | 10,535 | 2,362 | 54,770 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 3,977 | 96,252 | 12,179 | 283,842 | ||||||||||||
Class B | (4,232 | ) | (96,252 | ) | (12,895 | ) | (283,842 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (297,301 | ) | (7,216,580 | ) | (524,772 | ) | (12,342,009 | ) | ||||||||
Class B | (1,906 | ) | (44,017 | ) | (7,007 | ) | (153,476 | ) | ||||||||
Class C | (19,886 | ) | (450,243 | ) | (39,409 | ) | (866,897 | ) | ||||||||
Class R | (5,310 | ) | (131,298 | ) | (11,043 | ) | (265,449 | ) | ||||||||
Class Y | (41,077 | ) | (1,001,021 | ) | (126,963 | ) | (3,060,499 | ) | ||||||||
Net increase (decrease) in share activity | (68,839 | ) | $ | (1,526,652 | ) | (393,342 | ) | $ | (9,252,310 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 67% 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 Pacific Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period | Net investment income (loss)(a) | Net gains unrealized) | Total from investment operations | Dividends from net investment income | Net asset value, end of period(b) | Total return(c) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income (loss) to average net assets | Rebate from Morgan Stanley Affiliate | Portfolio turnover(d) | ||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 24.51 | $ | 0.01 | $ | 1.17 | $ | 1.18 | $ | (0.03 | ) | $ | 25.66 | 4.82 | %(h) | $ | 73,024 | 1.76 | %(e)(h) | 1.76 | %(e)(h) | 0.11 | %(e)(h) | N/A | 40 | % | ||||||||||||||||||||||||||
Year ended 10/31/14 | 23.90 | 0.14 | 0.82 | 0.96 | (0.35 | ) | 24.51 | 4.10 | (h) | 73,457 | 1.77 | (h) | 1.77 | (h) | 0.60 | (h) | N/A | 63 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 20.05 | 0.12 | 3.83 | 3.95 | (0.10 | ) | 23.90 | 19.76 | 79,672 | 1.81 | 1.81 | 0.56 | N/A | 87 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 20.05 | 0.15 | 0.20 | 0.35 | (0.35 | ) | 20.05 | 1.81 | 74,319 | 1.79 | 1.79 | 0.76 | N/A | 101 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.21 | 0.23 | (2.20 | ) | (1.97 | ) | (0.19 | ) | 20.05 | (8.95 | ) | 83,779 | 1.68 | 1.68 | 1.03 | N/A | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 19.48 | 0.06 | 2.72 | 2.78 | (0.05 | ) | 22.21 | 14.29 | 105,428 | 1.78 | (f) | 1.78 | (f) | 0.31 | (f) | 0.00 | %(g) | 76 | ||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 23.05 | (0.07 | ) | 1.09 | 1.02 | — | 24.07 | 4.43 | 355 | 2.52 | (e) | 2.52 | (e) | (0.65 | )(e) | N/A | 40 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 22.49 | (0.04 | ) | 0.77 | 0.73 | (0.17 | ) | 23.05 | 3.28 | 480 | 2.53 | 2.53 | (0.16 | ) | N/A | 63 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 18.92 | (0.04 | ) | 3.61 | 3.57 | — | 22.49 | 18.87 | 889 | 2.56 | 2.56 | (0.19 | ) | N/A | 87 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 18.91 | (0.00 | ) | 0.20 | 0.20 | (0.19 | ) | 18.92 | 1.09 | 1,847 | 2.55 | 2.55 | (0.00 | ) | N/A | 101 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 20.97 | 0.06 | (2.08 | ) | (2.02 | ) | (0.04 | ) | 18.91 | (9.68 | ) | 4,376 | 2.43 | 2.43 | 0.28 | N/A | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 18.49 | (0.09 | ) | 2.57 | 2.48 | — | 20.97 | 13.41 | 8,279 | 2.53 | (f) | 2.53 | (f) | (0.44 | )(f) | 0.00 | (g) | 76 | ||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 23.09 | (0.07 | ) | 1.10 | 1.03 | — | 24.12 | 4.46 | 5,690 | 2.52 | (e) | 2.52 | (e) | (0.65 | )(e) | N/A | 40 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 22.53 | (0.03 | ) | 0.76 | 0.73 | (0.17 | ) | 23.09 | 3.28 | (h) | 4,638 | 2.52 | (h) | 2.52 | (h) | (0.15 | )(h) | N/A | 63 | |||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 18.95 | (0.04 | ) | 3.62 | 3.58 | — | 22.53 | 18.89 | 5,049 | 2.56 | 2.56 | (0.19 | ) | N/A | 87 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 18.94 | 0.02 | 0.19 | 0.21 | (0.20 | ) | 18.95 | 1.15 | (h) | 4,624 | 2.46 | (h) | 2.46 | (h) | 0.09 | (h) | N/A | 101 | ||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 20.99 | 0.07 | (2.08 | ) | (2.01 | ) | (0.04 | ) | 18.94 | (9.62 | )(h) | 5,572 | 2.39 | (h) | 2.39 | (h) | 0.32 | (h) | N/A | 109 | ||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 18.51 | (0.09 | ) | 2.57 | 2.48 | — | 20.99 | 13.40 | 5,951 | 2.53 | (f) | 2.53 | (f) | (0.44 | )(f) | 0.00 | (g) | 76 | ||||||||||||||||||||||||||||||||||
Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 24.33 | (0.02 | ) | 1.16 | 1.14 | — | 25.47 | 4.69 | 324 | 2.02 | (e) | 2.02 | (e) | (0.15 | )(e) | N/A | 40 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 23.74 | 0.08 | 0.80 | 0.88 | (0.29 | ) | 24.33 | 3.78 | 344 | 2.03 | 2.03 | 0.34 | N/A | 63 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 19.93 | 0.07 | 3.80 | 3.87 | (0.06 | ) | 23.74 | 19.44 | 295 | 2.06 | 2.06 | 0.31 | N/A | 87 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 19.95 | 0.10 | 0.20 | 0.30 | (0.32 | ) | 19.93 | 1.59 | 236 | 2.05 | 2.05 | 0.50 | N/A | 101 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.11 | 0.17 | (2.19 | ) | (2.02 | ) | (0.14 | ) | 19.95 | (9.21 | ) | 129 | 1.93 | 1.93 | 0.78 | N/A | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 19.41 | 0.01 | 2.70 | 2.71 | (0.01 | ) | 22.11 | 13.97 | 37 | 2.03 | (f) | 2.03 | (f) | 0.06 | (f) | 0.00 | (g) | 76 | ||||||||||||||||||||||||||||||||||
Class Y(i) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 24.90 | 0.04 | 1.18 | 1.22 | (0.09 | ) | 26.03 | 4.94 | 4,513 | 1.52 | (e) | 1.52 | (e) | 0.35 | (e) | N/A | 40 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 24.28 | 0.20 | 0.82 | 1.02 | (0.40 | ) | 24.90 | 4.34 | 2,944 | 1.53 | 1.53 | 0.84 | N/A | 63 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 20.37 | 0.18 | 3.88 | 4.06 | (0.15 | ) | 24.28 | 20.03 | 3,291 | 1.56 | 1.56 | 0.81 | N/A | 87 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 20.37 | 0.20 | 0.21 | 0.41 | (0.41 | ) | 20.37 | 2.10 | 5,240 | 1.55 | 1.55 | 1.00 | N/A | 101 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 22.57 | 0.29 | (2.24 | ) | (1.95 | ) | (0.25 | ) | 20.37 | (8.77 | ) | 7,998 | 1.43 | 1.43 | 1.28 | N/A | 109 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 19.77 | 0.12 | 2.77 | 2.89 | (0.09 | ) | 22.57 | 14.67 | 9,553 | 1.53 | (f) | 1.53 | (f) | 0.56 | (f) | 0.00 | (g) | 76 | ||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 24.92 | 0.06 | 1.18 | 1.24 | (0.13 | ) | 26.03 | 5.03 | 14 | 1.35 | (e) | 1.35 | (e) | 0.52 | (e) | N/A | 40 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 24.30 | 0.24 | 0.82 | 1.06 | (0.44 | ) | 24.92 | 4.48 | 13 | 1.37 | 1.37 | 1.00 | N/A | 63 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 20.39 | 0.21 | 3.89 | 4.10 | (0.19 | ) | 24.30 | 20.23 | 13 | 1.43 | 1.43 | 0.94 | N/A | 87 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 20.39 | 0.24 | 0.20 | 0.44 | (0.44 | ) | 20.39 | 2.24 | 11 | 1.37 | 1.37 | 1.18 | N/A | 101 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11(j) | 23.52 | 0.35 | (3.48 | ) | (3.13 | ) | — | 20.39 | (13.31 | ) | 11 | 1.22 | (k) | 1.22 | (k) | 1.49 | (k) | N/A | 109 |
(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 years ended October 31, 2012 and October 31, 2011. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended October 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $5,980,249 and sold of $4,944,271 in effect to realign the Fund’s portfolio holdings after the reorganization of Invesco Japan Fund into the Fund. |
(e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $70,391, $402, $4,569, $335, $3,082 and $13 for Class A, Class B, Class C, Class R, Class Y and Class R5 shares, respectively. |
(f) | The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from Morgan Stanley affiliate”. |
(g) | Amount is less than 0.005%. |
(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 0.24% for Class A shares for the six months ended April, 30, 2015 and for the year ended on October 31, 2014 and 0.99%, 0.90% and 0.95% for Class C shares for the years ended October 31, 2014, 2012, and 2011, respectively. |
(i) | On June 1, 2010, Morgan Stanley Pacific Growth Funds Inc.’s former Class I shares were reorganized into Class Y shares. |
(j) | Commencement date of May 23, 2011 for Class R5 shares. |
(k) | Annualized. |
17 Invesco Pacific Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | |||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | Annualized Expense Ratio | ||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,048.20 | $ | 8.94 | $ | 1,016.07 | $ | 8.80 | 1.76 | % | ||||||||||||
B | 1,000.00 | 1,044.20 | 12.77 | 1,012.30 | 12.57 | 2.52 | ||||||||||||||||||
C | 1,000.00 | 1,044.60 | 12.78 | 1,012.30 | 12.57 | 2.52 | ||||||||||||||||||
R | 1,000.00 | 1,046.80 | 10.25 | 1,014.78 | 10.09 | 2.02 | ||||||||||||||||||
Y | 1,000.00 | 1,049.40 | 7.72 | 1,017.26 | 7.60 | 1.52 | ||||||||||||||||||
R5 | 1,000.00 | 1,050.30 | 6.86 | 1,018.10 | 6.76 | 1.35 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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 Pacific Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov.
The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-05426 and 033-19338 | MS-PGRO-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Premium Income Fund | ||||
Nasdaq: | ||||
A: PIAFX ¡ C: PICFX ¡ R: PIRFX ¡ Y: PIYFX ¡ R5: IPNFX ¡ R6: PIFFX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
20 Financial Statements | ||||
22 Notes to Financial Statements | ||||
32 Financial Highlights | ||||
33 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, 10/31/14 to 4/30/15, 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 | 3.70 | % | ||||
Class C Shares | 3.31 | |||||
Class R Shares | 3.57 | |||||
Class Y Shares | 3.83 | |||||
Class R5 Shares | 3.93 | |||||
Class R6 Shares | 3.93 | |||||
Barclays U.S. Aggregate Index‚ (Broad Market Index) | 2.06 | |||||
Custom Premium Income Indexn (Style-Specific Index) | 3.29 | |||||
Lipper Mixed-Asset Target Allocation Conservative Funds Index¿ (Peer Group Index) | 1.94 | |||||
Source(s): ‚FactSet Research Systems Inc.; nInvesco, FactSet Research Systems Inc.; ¿Lipper Inc. | ||||||
The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market. | ||||||
The Custom Premium Income Index, created by Invesco to serve as a benchmark for Invesco Premium Income Fund, comprises the following indexes: the S&P 500 Index (50%) and the Barclays U.S. Universal Index (50%). | ||||||
The Lipper Mixed-Asset Target Allocation Conservative Funds Index is an unmanaged index considered representative of mixed-asset target allocation conservative funds tracked by Lipper. The S&P 500® Index is an unmanaged index considered representative of the US stock market. The Barclays U.S. Universal Index is an unmanaged index comprising US dollar-denominated, taxable bonds that are rated investment grade or below investment grade. | ||||||
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.
|
2 | Invesco Premium Income Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (12/14/11) | 5.28 | % | |||||
1 Year | 1.38 | ||||||
Class C Shares | |||||||
Inception (12/14/11) | 6.25 | % | |||||
1 Year | 5.50 | ||||||
Class R Shares | |||||||
Inception (12/14/11) | 6.76 | % | |||||
1 Year | 7.04 | ||||||
Class Y Shares | |||||||
Inception (12/14/11) | 7.31 | % | |||||
1 Year | 7.57 | ||||||
Class R5 Shares | |||||||
Inception (12/14/11) | 7.34 | % | |||||
1 Year | 7.67 | ||||||
Class R6 Shares | |||||||
Inception | 7.29 | % | |||||
1 Year | 7.67 |
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.
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 1.05%, 1.80%, 1.30%, 0.80%, 0.80% and 0.80%, respectively.1,2 The total annual Fund operating expense ratio set forth in the most recent Fund
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (12/14/11) | 5.18 | % | |||||
1 Year | 2.06 | ||||||
Class C Shares | |||||||
Inception (12/14/11) | 6.18 | % | |||||
1 Year | 6.18 | ||||||
Class R Shares | |||||||
Inception (12/14/11) | 6.73 | % | |||||
1 Year | 7.82 | ||||||
Class Y Shares | |||||||
Inception (12/14/11) | 7.24 | % | |||||
1 Year | 8.15 | ||||||
Class R5 Shares | |||||||
Inception (12/14/11) | 7.27 | % | |||||
1 Year | 8.25 | ||||||
Class R6 Shares | |||||||
Inception | 7.22 | % | |||||
1 Year | 8.25 |
prospectus as of the date of this report for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares was 1.29%, 2.04%, 1.54%, 1.04%, 0.91% and 0.91%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
3 | Invesco Premium 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 Premium Income Fund |
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Principal Amount | Value | |||||||
U.S. Dollar Denominated Bonds and Notes–57.87% |
| |||||||
Aerospace & Defense–0.79% | ||||||||
Bombardier Inc. (Canada), | ||||||||
Sr. Unsec. Notes, 7.50%, 03/15/18(b) | $ | 105,000 | $ | 113,006 | ||||
7.50%, 03/15/25(b) | 336,000 | 333,480 | ||||||
7.75%, 03/15/20(b) | 136,000 | 144,670 | ||||||
Unsec. Notes, 5.50%, 09/15/18(b) | 50,000 | 50,625 | ||||||
DigitalGlobe Inc., Sr. Unsec. Gtd. Bonds, 5.25%, 02/01/21(b) | 85,000 | 86,275 | ||||||
Aerojet Rocketdyne Holdings, Inc., Sec. Gtd. Global Notes, 7.13%, 03/15/21 | 165,000 | 177,788 | ||||||
Moog Inc., Sr. Unsec. Gtd. Notes, 5.25%, 12/01/22(b) | 130,000 | 135,525 | ||||||
TransDigm Inc., Sr. Unsec. Gtd. Sub. Global Notes, 5.50%, 10/15/20 | 117,000 | 116,415 | ||||||
1,157,784 | ||||||||
Agricultural & Farm Machinery–0.07% | ||||||||
Titan International Inc., Sr. Sec. Gtd. Global Notes, 6.88%, 10/01/20 | 114,000 | 104,168 | ||||||
Agricultural Products–0.06% | ||||||||
Darling Ingredients, Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 01/15/22 | 86,000 | 88,473 | ||||||
Airlines–0.12% | ||||||||
Air Canada (Canada), | ||||||||
Sec. Gtd. Notes, 8.75%, 04/01/20(b) | 35,000 | 39,389 | ||||||
Sr. Unsec. Gtd. Notes, 7.75%, 04/15/21(b) | 120,000 | 130,584 | ||||||
169,973 | ||||||||
Alternative Carriers–0.47% | ||||||||
Level 3 Communications, Inc., Sr. Unsec. Global Notes, 5.75%, 12/01/22 | 415,000 | 426,931 | ||||||
Level 3 Financing, Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 08/15/22 | 250,000 | 256,875 | ||||||
683,806 | ||||||||
Apparel Retail–0.50% | ||||||||
Hot Topic, Inc., Sr. Sec. Gtd. Notes, 9.25%, 06/15/21(b) | 253,000 | 276,086 | ||||||
L Brands, Inc., | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.63%, 02/15/22 | 109,000 | 119,491 | ||||||
Sr. Unsec. Gtd. Notes, 6.63%, 04/01/21 | 52,000 | 59,605 | ||||||
Men’s Wearhouse Inc. (The), Sr. Unsec. Gtd. Notes, 7.00%, 07/01/22(b) | 224,000 | 238,840 | ||||||
Neiman Marcus Group Ltd. LLC, Sr. Unsec. Gtd. Notes, 8.00%, 10/15/21(b) | 44,000 | 47,465 | ||||||
741,487 |
Principal Amount | Value | |||||||
Apparel, Accessories & Luxury Goods–0.04% | ||||||||
William Carter Co. (The), Sr. Unsec. Gtd. Global Notes, 5.25%, 08/15/21 | $ | 59,000 | $ | 61,434 | ||||
Application Software–0.05% | ||||||||
Nuance Communications Inc., Sr. Unsec. Gtd. Notes, 5.38%, 08/15/20(b) | 75,000 | 76,313 | ||||||
Asset Management & Custody Banks–0.24% | ||||||||
Alphabet Holding Co., Inc., Sr. Unsec. PIK Global Notes, 8.50%,11/01/17(c) | 185,000 | 185,000 | ||||||
DJO Finance LLC/Corp., Sec. Second Lien Notes, 8.13%, 06/15/21(b) | 160,000 | 162,800 | ||||||
347,800 | ||||||||
Auto Parts & Equipment–0.68% | ||||||||
CTP Transportation Products LLC/CTP Finance Inc., Sr. Sec. Notes, 8.25%, 12/15/19(b) | 174,000 | 185,745 | ||||||
Dana Holding Corp., Sr. Unsec. Notes, | 142,000 | 148,212 | ||||||
5.50%, 12/15/24 | 34,000 | 35,105 | ||||||
Stackpole International Intermediate Co. S.A./Stackpole International Powder Metal (Canada), Sr. Sec. Gtd. Notes, 7.75%, 10/15/21(b) | 280,000 | 280,350 | ||||||
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 12/15/24 | 136,000 | 143,140 | ||||||
ZF North America Capital, Inc. (Germany), Sr. Unsec. Gtd. Notes, | 200,000 | 201,750 | ||||||
994,302 | ||||||||
Automobile Manufacturers–0.14% | ||||||||
Fiat Chrysler Automobiles N.V. (United Kingdom), Sr. Unsec. Notes, 5.25%, 04/15/23(b) | 201,000 | 204,769 | ||||||
Automotive Retail–0.08% | ||||||||
CST Brands, Inc., Sr. Unsec. Gtd. Global Notes, 5.00%, 05/01/23 | 112,000 | 115,780 | ||||||
Broadcasting–0.51% | ||||||||
Clear Channel Worldwide Holdings Inc., Series B, Sr. Unsec. Gtd. Global Notes, 6.50%, 11/15/22 | 98,000 | 104,125 | ||||||
iHeartCommunications, Inc., | ||||||||
Sr. Sec. Gtd. Global Notes, | 70,000 | 67,725 | ||||||
Sr. Sec. Gtd. Notes, | 250,000 | 255,000 | ||||||
Sr. Unsec. Global Notes, | 74,000 | 65,120 | ||||||
Sinclair Television Group Inc., Sr. Unsec. Gtd. Notes, 5.63%, 08/01/24(b) | 250,000 | 255,000 | ||||||
Starz LLC/Starz Finance Corp., Sr. Unsec. Gtd. Global Notes, 5.00%, 09/15/19 | 8,000 | 8,260 | ||||||
755,230 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Building Products–0.82% | ||||||||
Builders FirstSource Inc., Sr. Sec. Notes, 7.63%, 06/01/21(b) | $ | 255,000 | $ | 266,794 | ||||
Building Materials Holding Corp., Sr. Sec. Notes, 9.00%, 09/15/18(b) | 150,000 | 162,562 | ||||||
Gibraltar Industries Inc., Sr. Unsec. Gtd. Sub. Global Notes, 6.25%, 02/01/21 | 190,000 | 193,800 | ||||||
Hardwoods Acquisition, Inc., Sr. Sec. Notes, 7.50%, 08/01/21(b) | 45,000 | 43,425 | ||||||
Masonite International Corp., Sr. Unsec. Gtd. Notes, 5.63%, 03/15/23(b) | 15,000 | 15,750 | ||||||
NCI Building Systems, Inc., Sr. Unsec. Gtd. Notes, 8.25%, 01/15/23(b) | 30,000 | 31,950 | ||||||
Norbord Inc. (Canada), Sr. Sec. Gtd. | ||||||||
First Lien Notes, 6.25%, 04/15/23(b) | 75,000 | 75,516 | ||||||
Sr. Sec. First Lien Notes, 5.38%, 12/01/20(b) | 103,000 | 103,154 | ||||||
Nortek Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 04/15/21 | 266,000 | 289,275 | ||||||
USG Corp., Sr. Unsec. Gtd. Notes, 5.88%, 11/01/21(b) | 24,000 | 25,860 | ||||||
1,208,086 | ||||||||
Cable & Satellite–2.41% | ||||||||
Altice S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 7.75%, 05/15/22(b) | 650,000 | 662,187 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp., | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.25%, 09/30/22 | 50,000 | 50,000 | ||||||
Sr. Unsec. Gtd. Notes, 5.13%, 05/01/23(b) | 225,000 | 223,313 | ||||||
DISH DBS Corp., Sr. Unsec. Gtd. Global Notes, | 424,000 | 430,360 | ||||||
5.88%, 11/15/24 | 100,000 | 98,750 | ||||||
Hughes Satellite Systems Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 06/15/21 | 42,000 | 47,040 | ||||||
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Global Bonds, 5.50%, 08/01/23 | 370,000 | 355,200 | ||||||
Intelsat Luxembourg S.A. (Luxembourg), | ||||||||
Sr. Unsec. Gtd. Global Bonds, 7.75%, 06/01/21 | 130,000 | 120,250 | ||||||
8.13%, 06/01/23 | 139,000 | 128,575 | ||||||
Numericable-SFR S.A. (France), Sr. Sec. Gtd. Bonds, 6.00%, 05/15/22(b) | 600,000 | 616,200 | ||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH (Germany), Sr. Sec. Gtd. Bonds, 5.00%, 01/15/25(b) | 200,000 | 202,000 | ||||||
VTR Finance B.V. (Chile), | 200,000 | 207,876 | ||||||
REGS, Sr. Sec. Euro Notes, 6.88%, 01/15/24(b) | 385,000 | 399,322 | ||||||
3,541,073 |
Principal Amount | Value | |||||||
Casinos & Gaming–0.28% | ||||||||
Boyd Gaming Corp., Sr. Unsec. Gtd. Global Notes, 9.00%, 07/01/20 | $ | 75,000 | $ | 81,000 | ||||
Isle of Capri Casinos, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 03/15/21(b) | 59,000 | 60,844 | ||||||
MGM Resorts International, | ||||||||
Sr. Unsec. Gtd. Global Notes, 6.63%, 12/15/21 | 45,000 | 48,487 | ||||||
Sr. Unsec. Gtd. Notes, 6.00%, 03/15/23 | 160,000 | 166,600 | ||||||
7.75%, 03/15/22 | 53,000 | 60,089 | ||||||
417,020 | ||||||||
Coal & Consumable Fuels–0.21% | ||||||||
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes, 5.88%, 04/15/22 | 335,000 | 309,875 | ||||||
Commercial Printing–0.15% | ||||||||
Multi-Color Corp., Sr. Unsec. Gtd. Notes, 6.13%, 12/01/22(b) | 204,000 | 213,180 | ||||||
Commodity Chemicals–0.30% | ||||||||
Braskem Finance Ltd. (Brazil), REGS, | ||||||||
Sr. Unsec. Gtd. Euro Notes, 5.38%, 05/02/22(b) | 200,000 | 193,900 | ||||||
5.75%, 04/15/21(b) | 250,000 | 251,800 | ||||||
445,700 | ||||||||
Communications Equipment–0.09% | ||||||||
Avaya Inc., Sr. Sec. Gtd. Notes, 9.00%, 04/01/19(b) | 126,000 | 130,883 | ||||||
Computer & Electronics Retail–0.09% | ||||||||
Rent-A-Center, Inc., Sr. Unsec. Gtd. Global Notes, 4.75%, 05/01/21 | 151,000 | 134,956 | ||||||
Construction & Engineering–0.30% | ||||||||
AECOM, Sr. Unsec. Gtd. Notes, 5.75%, 10/15/22(b) | 70,000 | 72,749 | ||||||
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 01/15/21 | 140,000 | 147,700 | ||||||
Odebrecht Finance Ltd. (Brazil), Sr. Unsec. Gtd. Notes, | 250,000 | 218,750 | ||||||
439,199 | ||||||||
Construction Machinery & Heavy Trucks–0.74% | ||||||||
Allied Specialty Vehicles, Inc., Sr. Sec. Notes, 8.50%, 11/01/19(b) | 135,000 | 144,112 | ||||||
Commercial Vehicle Group Inc., Sec. Gtd. Global Notes, 7.88%, 04/15/19 | 245,000 | 255,106 | ||||||
Meritor Inc., Sr. Unsec. Gtd. Notes, | 13,000 | 13,293 | ||||||
6.75%, 06/15/21 | 110,000 | 115,225 | ||||||
Navistar International Corp., | ||||||||
Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21 | 225,000 | 224,156 | ||||||
Sr. Unsec. Sub. Conv. Bonds, 4.75%, 04/15/19 | 95,000 | 88,825 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Construction Machinery & Heavy Trucks–(continued) | ||||||||
Oshkosh Corp., | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.38%, 03/01/22 | $ | 199,000 | $ | 208,950 | ||||
Sr. Unsec. Gtd. Notes, 5.38%, 03/01/25(b) | 35,000 | 36,619 | ||||||
1,086,286 | ||||||||
Construction Materials–1.27% | ||||||||
Building Materials Corp. of America, Sr. Unsec. Notes, 5.38%, 11/15/24(b) | 315,000 | 324,647 | ||||||
Cemex S.A.B. de C.V. (Mexico), | ||||||||
Sr. Sec. Gtd. Notes, | 235,000 | 237,937 | ||||||
5.88%, 03/25/19(b) | 200,000 | 206,850 | ||||||
REGS, Sr. Sec. Gtd. Euro Notes, 5.70%, 01/11/25(b) | 620,000 | 622,914 | ||||||
CPG Merger Sub LLC, Sr. Unsec. Gtd. Notes, 8.00%, 10/01/21(b) | 31,000 | 32,550 | ||||||
Shea Homes L.P./Shea Homes Funding Corp., Sr. Unsec. Notes, 5.88%, 04/01/23(b) | 30,000 | 30,975 | ||||||
Unifrax I LLC/Unifrax Holding Co., | ||||||||
Sr. Unsec. Gtd. Notes, 7.50%, 02/15/19(b) | 115,000 | 118,881 | ||||||
7.50%, 02/15/19(b) | 102,000 | 105,443 | ||||||
US Concrete, Inc., Sr. Sec. Gtd. Global Notes, 8.50%, 12/01/18 | 170,000 | 181,050 | ||||||
1,861,247 | ||||||||
Consumer Finance–0.46% | ||||||||
Ally Financial Inc., Sr. Unsec. Global Notes, | 300,000 | 299,250 | ||||||
5.13%, 09/30/24 | 286,000 | 295,295 | ||||||
Credit Acceptance Corp., Sr. Unsec. Gtd. Notes, 7.38%, 03/15/23(b) | 78,000 | 77,610 | ||||||
672,155 | ||||||||
Data Processing & Outsourced Services–0.53% | ||||||||
CoreLogic, Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/01/21 | 60,000 | 64,275 | ||||||
First Data Corp., Sr. Unsec. Gtd. Sub. Global Notes, 11.75%, 08/15/21 | 622,000 | 716,855 | ||||||
781,130 | ||||||||
Department Stores–1.01% | ||||||||
1011778 BC ULC/ New Red Finance, Inc. (Canada), Sec. Notes, 6.00%, 04/01/22(b) | 516,000 | 535,995 | ||||||
El Puerto de Liverpool, S.A.B. de C.V. (Mexico), REGS, Sr. Unsec. Gtd. Euro Notes, 3.95%, 10/02/24(b) | 200,000 | 201,500 | ||||||
Golden Eagle Retail Group Ltd. (China), REGS, Sr. Unsec. Euro Notes, 4.63%, 05/21/23(b) | 260,000 | 221,025 | ||||||
SACI Falabella (Chile), Sr. Unsec. Notes, 4.38%, 01/27/25(b) | 500,000 | 523,848 | ||||||
1,482,368 |
Principal Amount | Value | |||||||
Distillers & Vintners–0.04% | ||||||||
Constellation Brands Inc., Sr. Unsec. Gtd. Notes, 4.75%, 11/15/24 | $ | 55,000 | $ | 58,575 | ||||
Diversified Banks–3.71% | ||||||||
Akbank TAS (Turkey), Sr. Unsec. Notes, 4.00%, 01/24/20(b) | 200,000 | 194,549 | ||||||
Banco Inbursa S.A. Institucion de Banca Multiple (Mexico), Sr. Unsec. Notes, 4.13%, 06/06/24(b) | 500,000 | 500,408 | ||||||
Banco Santander Mexico S.A. Institucion de Banca Multiple Grupo Financiero Santander (Mexico), Unsec. Sub. Notes, 5.95%, 01/30/24(b) | 300,000 | 320,062 | ||||||
Bancolombia S.A. (Colombia), Unsec. Sub. Global Notes, 5.13%, 09/11/22 | 300,000 | 308,981 | ||||||
Bank of China Ltd. (China), Unsec. Sub. Notes, 5.00%, 11/13/24(b) | 470,000 | 494,215 | ||||||
BBVA Bancomer S.A. (Mexico), Unsec. Sub. Notes, 6.75%, 09/30/22(b) | 150,000 | 171,714 | ||||||
BBVA Colombia S.A. (Colombia), Unsec. Sub. Notes, 4.88%, 04/21/25(b) | 478,000 | 480,286 | ||||||
Emirates NBD Tier 1 Ltd. (United Arab Emirates), Jr. Unsec. Gtd. Sub. Euro Bonds, 5.75%(d) | 500,000 | 500,100 | ||||||
Global Bank Corp. (Panama), Sr. Unsec. Notes, 5.13%, 10/30/19(b) | 200,000 | 206,875 | ||||||
ICICI Bank Ltd. (India), | ||||||||
Jr. Unsec. Sub. Bonds, 6.38%, 04/30/22(b) | 300,000 | 313,500 | ||||||
REGS, Jr. Unsec. Sub. Euro Bonds, 6.38%, 04/30/22(b) | 400,000 | 419,000 | ||||||
Industrial & Commercial Bank of China Ltd. (China), Jr. Unsec. Sub. Notes, 6.00%(b)(d) | 290,000 | 303,250 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Unsec. Sub. Yankee Notes, 6.13%, 12/15/22 | 88,000 | 97,972 | ||||||
Russian Agricultural Bank OJSC Via RSHB Capital S.A. (Russia), REGS, Sr. Unsec. Euro Notes, 5.10%, 07/25/18(b) | 200,000 | 189,250 | ||||||
Sberbank of Russia Via SB Capital S.A. (Russia), REGS, Sr. Unsec. Euro Notes, 6.13%, 02/07/22(b) | 450,000 | 438,525 | ||||||
Turkiye Is Bankasi A.S. (Turkey), REGS, Unsec. Sub. Euro Notes, 6.00%, 10/24/22(b) | 300,000 | 298,875 | ||||||
Türkiye Sise Ve Cam Fabrikalari A.S. (Turkey), REGS, Sr. Unsec. Euro Notes, 4.25%, 05/09/20(b) | 220,000 | 216,700 | ||||||
5,454,262 | ||||||||
Diversified Chemicals–0.34% | ||||||||
Evolution Escrow Issuer LLC, Sr. Unsec. Gtd. Notes, 7.50%, 03/15/22(b) | 39,000 | 39,780 | ||||||
OCP S.A. (Morocco), Sr. Unsec. Notes, 4.50%, 10/22/25(b) | 476,000 | 463,505 | ||||||
503,285 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Diversified Metals & Mining–0.05% | ||||||||
Compass Minerals International, Inc., Sr. Unsec. Gtd. Notes, | $ | 74,000 | $ | 75,110 | ||||
Diversified Real Estate Activities–0.14% | ||||||||
Wanda Properties Overseas Ltd. (China), REGS, Sr. Unsec. Gtd. Euro Bonds, 4.88%, 11/21/18(b) | 200,000 | 205,600 | ||||||
Diversified REIT’s–0.15% | ||||||||
China Overseas Finance Cayman III Ltd. (China), REGS, Sr. Unsec. Gtd. Euro Bonds, 6.38%, 10/29/43(b) | 200,000 | 220,694 | ||||||
Electric Utilities–0.54% | ||||||||
Lamar Funding Ltd. (Oman), Sr. Unsec. Gtd. Bonds, 3.96%, 05/07/25(b) | 450,000 | 453,150 | ||||||
Majapahit Holding B.V. (Indonesia), Sr. Unsec. Gtd. Notes, | 100,000 | 117,499 | ||||||
PT Perusahaan Listrik Negara (Indonesia), REGS, Sr. Unsec. Euro Notes, 5.50%, 11/22/21(b) | 200,000 | 218,000 | ||||||
788,649 | ||||||||
Electrical Components & Equipment–0.25% | ||||||||
EnerSys, Sr. Unsec. Gtd. Notes, 5.00%, 04/30/23(b) | 224,000 | 227,640 | ||||||
Sensata Technologies B.V. (Netherlands), | ||||||||
Sr. Unsec. Gtd. Notes, | 55,000 | 57,338 | ||||||
5.00%,10/01/25(b) | 75,000 | 77,812 | ||||||
362,790 | ||||||||
Environmental & Facilities Services–0.04% | ||||||||
ADS Waste Holdings, Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 10/01/20 | 58,000 | 61,480 | ||||||
Fertilizers & Agricultural Chemicals–0.28% | ||||||||
Israel Chemicals Ltd. (Israel), Sr. Unsec. Notes, 4.50%, 12/02/24(b) | 400,000 | 417,040 | ||||||
Gas Utilities–0.17% | ||||||||
Ferrellgas L.P./Ferrellgas Finance Corp., | ||||||||
Sr. Unsec. Global Notes, 6.50%,05/01/21 | 175,000 | 178,500 | ||||||
6.75%,01/15/22 | 30,000 | 30,975 | ||||||
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Global Notes, 7.38%, 08/01/21 | 44,000 | 47,520 | ||||||
256,995 | ||||||||
General Merchandise Stores–0.36% | ||||||||
Family Tree Escrow LLC, Sr. Sec. Notes, 5.75%, 03/01/23(b) | 504,000 | 531,720 | ||||||
Health Care Equipment–0.03% | ||||||||
Universal Hospital Services Inc., Sec. Gtd. Global Notes, 7.63%, 08/15/20 | 44,000 | 38,720 |
Principal Amount | Value | |||||||
Health Care Facilities–1.02% | ||||||||
Acadia Healthcare Co., Inc., Sr. Unsec. Gtd. Notes, 5.63%, 02/15/23(b) | $ | 26,000 | $ | 26,715 | ||||
Community Health Systems, Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 02/01/22 | 122,470 | 131,043 | ||||||
HCA Holdings, Inc., Sr. Unsec. Notes, 6.25%, 02/15/21 | 347,000 | 380,832 | ||||||
HCA, Inc., | ||||||||
Sr. Sec. Gtd. Global Notes, 5.88%,03/15/22 | 199,000 | 223,067 | ||||||
Sr. Sec. Gtd. Notes, 5.25%, 04/15/25 | 60,000 | 65,250 | ||||||
Sr. Unsec. Gtd. Global Notes, 7.50%, 02/15/22 | 141,000 | 165,675 | ||||||
Sr. Unsec. Gtd. Notes, 5.38%, 02/01/25 | 61,000 | 64,355 | ||||||
Surgical Care Affiliates, Inc., Sr. Unsec. Gtd. Notes, 6.00%, 04/01/23(b) | 150,000 | 154,500 | ||||||
Tenet Healthcare Corp., | ||||||||
Sr. Sec. Gtd. Global Notes, 6.00%,10/01/20 | 71,000 | 76,147 | ||||||
Sr. Unsec. Global Notes, 6.75%,02/01/20 | 25,000 | 26,500 | ||||||
8.13%,04/01/22 | 168,000 | 184,590 | ||||||
1,498,674 | ||||||||
Health Care Services–0.26% | ||||||||
ExamWorks Group, Inc., Sr. Unsec. Gtd. Notes, 5.63%, 04/15/23 | 93,000 | 96,837 | ||||||
MPH Acquisition Holdings LLC, Sr. Unsec. Gtd. Notes, 6.63%, 04/01/22(b) | 210,000 | 221,550 | ||||||
Omnicare Inc., Sr. Unsec. Gtd. Notes, 5.00%, 12/01/24 | 55,000 | 60,706 | ||||||
379,093 | ||||||||
Home Improvement Retail–0.24% | ||||||||
Hillman Group Inc. (The), Sr. Unsec. Notes, 6.38%, 07/15/22(b) | 355,000 | 357,663 | ||||||
Homebuilding–1.00% | ||||||||
Ashton Woods USA LLC/Ashton Woods Finance Co., Sr. Unsec. Notes, 6.88%, 02/15/21(b) | 313,000 | 297,741 | ||||||
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/21 | 319,000 | 318,601 | ||||||
K. Hovnanian Enterprises Inc., | ||||||||
Sr. Sec. Gtd. Notes, 7.25%,10/15/20(b) | 61,000 | 64,050 | ||||||
Sr. Unsec. Gtd. Notes, 7.00%,01/15/19(b) | 109,000 | 105,185 | ||||||
8.00%,11/01/19(b) | 315,000 | 308,700 | ||||||
KB Home, | ||||||||
Sr. Unsec. Gtd. Notes, 7.00%,12/15/21 | 38,000 | 39,853 | ||||||
7.50%,09/15/22 | 23,000 | 24,236 | ||||||
Meritage Homes Corp., Sr. Unsec. Gtd. Global Notes, 7.15%, 04/15/20 | 20,000 | 21,800 | ||||||
Ryland Group Inc. (The), Sr. Unsec. Gtd. Notes, 5.38%, 10/01/22 | 201,000 | 206,025 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Homebuilding–(continued) | ||||||||
Taylor Morrison Communities Inc./ Monarch Communities Inc., Sr. Unsec. Gtd. Notes, 5.88%, 04/15/23(b) | $ | 80,000 | $ | 81,800 | ||||
1,467,991 | ||||||||
Hotels, Resorts & Cruise Lines–0.05% | ||||||||
Interval Acquisition Corp., Sr. Unsec. Gtd. Notes, 5.63%, 04/15/23(b) | 65,000 | 66,463 | ||||||
Household Products–0.71% | ||||||||
Kimberly-Clark de Mexico, S.A.B. de C.V. (Mexico), Sr. Unsec. Notes, 3.25%, 03/12/25(b) | 300,000 | 298,896 | ||||||
Reynolds Group Issuer Inc./LLC (New Zealand), | ||||||||
Sr. Sec. Gtd. Global Notes, 5.75%,10/15/20 | 146,000 | 152,935 | ||||||
Sr. Unsec. Gtd. Global Notes, 8.25%,02/15/21 | 550,000 | 587,125 | ||||||
1,038,956 | ||||||||
Hypermarkets & Super Centers–0.21% | ||||||||
Cencosud S.A. (Chile), REGS, Sr. Unsec. Gtd. Euro Notes, 4.88%, 01/20/23(b) | 300,000 | 306,638 | ||||||
Independent Power Producers & Energy Traders–0.86% | ||||||||
AES Corp. (The), |
| |||||||
Sr. Unsec. Global Notes, 7.38%, 07/01/21 | 102,000 | 114,750 | ||||||
Sr. Unsec. Notes, 5.50%, 04/15/25 | 315,000 | 311,850 | ||||||
Calpine Corp., | ||||||||
Sr. Sec. Gtd. Notes, 5.88%,01/15/24(b) | 15,000 | 16,106 | ||||||
Sr. Unsec. Global Notes, 5.38%,01/15/23 | 296,000 | 300,070 | ||||||
5.50%,02/01/24 | 74,000 | 74,370 | ||||||
Israel Electric Corp. Ltd. (The) (Israel), Sr. Sec. Euro Bonds, | 280,000 | 298,550 | ||||||
NRG Energy Inc., Sr. Unsec. Gtd. Global Notes, 6.25%, 07/15/22 | 144,000 | 150,840 | ||||||
1,266,536 | ||||||||
Industrial Conglomerates–0.11% | ||||||||
Hutchison Whampoa International (10) Ltd. (Hong Kong), Unsec. Gtd. Sub. Notes, 6.00%(b)(d) | 159,000 | 162,776 | ||||||
Industrial Machinery–0.21% | ||||||||
Optimas OE Solutions Holding, LLC/ Optimas OE Solutions, Inc., Sr. Sec. Notes, 8.63%, 06/01/21(b) | 124,000 | 127,255 | ||||||
Waterjet Holdings, Inc., Sr. Sec. Gtd. Notes, 7.63%, 02/01/20(b) | 168,000 | 178,080 | ||||||
305,335 | ||||||||
Integrated Oil & Gas–2.35% | ||||||||
California Resources Corp., Sr. Unsec. Gtd. Global Notes, 5.50%, 09/15/21 | 406,000 | 386,715 |
Principal Amount | Value | |||||||
Integrated Oil & Gas–(continued) | ||||||||
Gazprom Neft OAO Via GPN Capital S.A. (Russia), REGS, Sr. Unsec. Euro Notes, 4.38%, 09/19/22(b) | $ | 360,000 | $ | 306,900 | ||||
Gazprom OAO Via Gaz Capital S.A. (Russia), Sr. Unsec. Bonds, 4.30%, 11/12/15(b) | 250,000 | 250,612 | ||||||
KazMunayGas National Co. JSC (Kazakhstan), REGS, | ||||||||
Sr. Unsec. Medium-Term Euro Notes, 4.40%,04/30/23(b) | 400,000 | 380,000 | ||||||
Unsec. Euro Notes, 4.88%,05/07/25(b) | 400,000 | 379,800 | ||||||
Lukoil International Finance B.V. (Russia), REGS, Sr. Unsec. Gtd. Euro Notes, 4.56%, 04/24/23(b) | 250,000 | 223,750 | ||||||
Petrobras Global Finance B.V. (Brazil), Sr. Unsec. Gtd. Global Notes, 5.38%, 01/27/21 | 920,000 | 886,650 | ||||||
Petroleos de Venezuela S.A. (Venezuela), | ||||||||
Sr. Unsec. Gtd. Notes, 8.50%,11/02/17(b) | 106,000 | 82,415 | ||||||
REGS, Sr. Unsec. Gtd. Euro Bonds, 6.00%,05/16/24(b) | 447,644 | 191,368 | ||||||
Sr. Unsec. Gtd. Euro Notes, 8.50%,11/02/17(b) | 290,000 | 225,040 | ||||||
9.00%,11/17/21(b) | 265,000 | 130,486 | ||||||
3,443,736 | ||||||||
Integrated Telecommunication Services–0.74% | ||||||||
Colombia Telecomunicaciones S.A. E.S.P. (Colombia), REGS, Sr. Unsec. Euro Notes, 5.38%, 09/27/22(b) | 390,000 | 398,658 | ||||||
Communications Sales & Leasing, Inc., Sr. Sec. Gtd. First Lien Notes, 6.00%, 04/15/23(b) | 20,000 | 20,225 | ||||||
Digicel Group Ltd. (Jamaica), REGS, Sr. Unsec. Euro Notes, 7.13%, 04/01/22(b) | 250,000 | 237,344 | ||||||
Telecom Italia S.p.A. (Italy), Sr. Unsec. Notes, 5.30%, 05/30/24(b) | 400,000 | 423,480 | ||||||
1,079,707 | ||||||||
Internet Software & Services–0.38% | ||||||||
CyrusOne L.P./CyrusOne Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 11/15/22 | 241,000 | 254,857 | ||||||
EarthLink Holdings Corp., | ||||||||
Sr. Sec. Gtd. Global Notes, 7.38%, 06/01/20 | 155,000 | 161,781 | ||||||
Sr. Unsec. Gtd. Global Notes, 8.88%, 05/15/19 | 38,000 | 39,283 | ||||||
Equinix Inc., Sr. Unsec. Notes, 5.38%, 01/01/22 | 97,000 | 101,365 | ||||||
557,286 | ||||||||
Marine–0.50% | ||||||||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc., Sr. Sec. Gtd. Mortgage Notes, | 280,000 | 287,000 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Marine–(continued) | ||||||||
PT Pelabuhan Indonesia II (Indonesia), Sr. Unsec. Bonds, 4.25%, 05/05/25(b) | $ | 450,000 | $ | 443,813 | ||||
730,813 | ||||||||
Metal & Glass Containers–0.47% | ||||||||
Berry Plastics Corp., Sec. Gtd. Notes, 5.50%, 05/15/22 | 427,000 | 445,681 | ||||||
Coveris Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 7.88%, 11/01/19(b) | 200,000 | 203,500 | ||||||
Owens-Brockway Glass Container Inc., Sr. Unsec. Notes, 5.00%, 01/15/22(b) | 40,000 | 41,250 | ||||||
690,431 | ||||||||
Movies & Entertainment–0.15% | ||||||||
AMC Entertainment Inc., Sr. Unsec. Gtd. Sub. Global Notes, 5.88%, 02/15/22 | 45,000 | 46,969 | ||||||
DreamWorks Animation SKG, Inc., Sr. Unsec. Gtd. Notes, 6.88%, 08/15/20(b) | 101,000 | 101,379 | ||||||
LIN Television Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 01/15/21 | 75,000 | 78,375 | ||||||
226,723 | ||||||||
Multi-Sector Holdings–0.22% | ||||||||
SUAM Finance B.V. (Colombia), Sr. Unsec. Gtd. Notes, 4.88%, 04/17/24(b) | 300,000 | 316,957 | ||||||
Oil & Gas Drilling–0.06% | ||||||||
Pioneer Energy Services Corp., Sr. Unsec. Gtd. Global Notes, 6.13%, 03/15/22 | 105,000 | 81,113 | ||||||
Oil & Gas Equipment & Services–0.82% | ||||||||
Bristow Group, Inc., Sr. Unsec. Gtd. Notes, 6.25%, 10/15/22 | 121,000 | 119,790 | ||||||
Exterran Partners, L.P./EXLP Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 04/01/21 | 209,000 | 203,775 | ||||||
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes, 6.75%, 03/01/21 | 133,000 | 89,110 | ||||||
Odebrecht Oil & Gas Finance Ltd. (Brazil), | ||||||||
Sr. Unsec. Gtd. Notes, 7.00%(b)(d) | 200,000 | 154,000 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.00%(b)(d) | 850,000 | 636,437 | ||||||
1,203,112 | ||||||||
Oil & Gas Exploration & Production–3.61% | ||||||||
Antero Resources Corp., Sr. Unsec. Gtd. Global Notes, | 161,000 | 163,415 | ||||||
6.00 %, 12/01/20 | 342,000 | 352,260 | ||||||
Approach Resources Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 06/15/21 | 104,000 | 94,120 | ||||||
Carrizo Oil & Gas, Inc., | ||||||||
Sr. Unsec. Gtd. Global Notes, 6.25%, 04/15/23 | 255,000 | 259,781 | ||||||
Sr. Unsec. Gtd. Notes, 7.50%, 09/15/20 | 22,000 | 23,320 |
Principal Amount | Value | |||||||
Oil & Gas Exploration & Production–(continued) | ||||||||
Chaparral Energy, Inc., Sr. Unsec. Gtd. Global Notes, | $ | 85,000 | $ | 69,275 | ||||
9.88%, 10/01/20 | 140,000 | 121,100 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 6.63%, 08/15/20 | 334,000 | 345,690 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 4.38%, 06/01/24 | 88,000 | 89,540 | ||||||
Concho Resources Inc., Sr. Unsec. Gtd. Global Notes, | 24,000 | 24,570 | ||||||
5.50%, 04/01/23 | 110,000 | 112,612 | ||||||
Denbury Resources Inc., Sr. Unsec. Gtd. Sub. Notes, 5.50%, 05/01/22 | 90,000 | 86,175 | ||||||
Diamondback Energy, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 10/01/21 | 117,000 | 127,237 | ||||||
Halcón Resources Corp., Sec. Gtd. Second Lien Notes, 8.63%, 02/01/20(b) | 250,000 | 261,250 | ||||||
Laredo Petroleum, Inc., | ||||||||
Sr. Unsec. Gtd. Global Notes, 7.38%, 05/01/22 | 88,000 | 94,160 | ||||||
Sr. Unsec. Gtd. Notes, 6.25%, 03/15/23 | 320,000 | 332,000 | ||||||
Pertamina Persero PT (Indonesia), | ||||||||
REGS, Sr. Unsec. Medium-Term Euro Notes, | 500,000 | 498,750 | ||||||
5.63 %,05/20/43(b) | 500,000 | 485,650 | ||||||
Petroleos Mexicanos (Mexico), | ||||||||
Sr. Unsec. Gtd. Global Notes, 3.50%, 01/30/23 | 318,000 | 308,508 | ||||||
6.50%, 06/02/41 | 159,000 | 177,739 | ||||||
Sr. Unsec. Gtd. Notes, 3.50%, 07/23/20(b) | 260,000 | 266,795 | ||||||
4.50 %,01/23/26(b) | 160,000 | 163,216 | ||||||
QEP Resources Inc., | ||||||||
Sr. Unsec. Global Notes, 5.25%, 05/01/23 | 73,000 | 73,730 | ||||||
Sr. Unsec. Notes, 5.38%, 10/01/22 | 19,000 | 19,285 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 5.00%, 08/15/22 | 60,000 | 60,900 | ||||||
Rice Energy Inc., Sr. Unsec. Gtd. Notes, 7.25%, 05/01/23(b) | 224,000 | 234,080 | ||||||
Rosetta Resources, Inc., Sr. Unsec. Gtd. Global Notes, 5.63%, 05/01/21 | 143,000 | 143,894 | ||||||
SandRidge Energy, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 03/15/21 | 105,000 | 72,450 | ||||||
SM Energy Co., | ||||||||
Sr. Unsec. Global Notes, 6.50%, 01/01/23 | 30,000 | 31,650 | ||||||
Sr. Unsec. Notes, 6.13%, 11/15/22(b) | 175,000 | 184,625 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Notes, 5.75%, 03/15/21 | 26,000 | 26,747 | ||||||
5,304,524 | ||||||||
Oil & Gas Refining & Marketing–0.27% | ||||||||
Reliance Industries Ltd. (India), Sr. Unsec. Notes, 4.13%, 01/28/25(b) | 387,000 | 391,354 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Oil & Gas Storage & Transportation–1.53% | ||||||||
Williams Partners L.P./ACMP Finance Corp., Sr. Unsec. Global Notes, 4.88%, 05/15/23 | $ | 101,000 | $ | 102,704 | ||||
Crestwood Midstream Partners L.P./Crestwood Midstream Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.00%, 12/15/20 | 143,000 | 147,290 | ||||||
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20 | 410,000 | 465,350 | ||||||
GNL Quintero S.A. (Chile), Sr. Unsec. Notes, 4.63%, 07/31/29(b) | 200,000 | 210,539 | ||||||
MarkWest Energy Partners, L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, | 155,000 | 163,137 | ||||||
6.50 %, 08/15/21 | 63,000 | 66,308 | ||||||
NGL Energy Partners L.P./NGL Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 10/15/21 | 96,000 | 101,280 | ||||||
Sabine Pass Liquefaction LLC, Sr. Sec. Global Notes, 5.63%, 04/15/23 | 200,000 | 204,000 | ||||||
Teekay Corp. (Bermuda), Sr. Unsec. Global Notes, 8.50%, 01/15/20 | 60,000 | 67,350 | ||||||
Teekay Offshore Partners L.P./Teekay Offshore Finance Corp. (Bermuda), Sr. Unsec. Global Notes, 6.00%, 07/30/19 | 104,000 | 94,770 | ||||||
Tesoro Logistics L.P./Tesoro Logistics Finance Corp., | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.88%, 10/01/20 | 223,000 | 233,035 | ||||||
Sr. Unsec. Gtd. Notes, 6.25%, 10/15/22(b) | 14,000 | 14,928 | ||||||
Transportadora de Gas Internacional S.A. E.S.P. (Colombia), REGS, Sr. Unsec. Euro Notes, 5.70%, 03/20/22(b) | 350,000 | 372,750 | ||||||
2,243,441 | ||||||||
Other Diversified Financial Services–0.49% | ||||||||
Corp Financiera de Desarrollo S.A. (Peru), Unsec. Sub. Notes, 5.25%, 07/15/29(b) | 300,000 | 316,500 | ||||||
Power Sector Assets & Liabilities Management Corp. (Philippines), Sr. Unsec. Gtd. Bonds, 7.39%, 12/02/24(b) | 300,000 | 406,500 | ||||||
723,000 | ||||||||
Packaged Foods & Meats–1.40% | ||||||||
Diamond Foods Inc., Sr. Unsec. Gtd. Notes, 7.00%, 03/15/19(b) | 395,000 | 411,787 | ||||||
JBS Investments GmbH (Brazil), | ||||||||
Sr. Unsec. Gtd. Notes, 7.25%, 04/03/24(b) | 200,000 | 208,000 | ||||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.25%, 04/03/24(b) | 400,000 | 418,200 | ||||||
Marfrig Overseas Ltd. (Brazil), REGS, Sr. Unsec. Gtd. Euro Notes, 9.50%, 05/04/20(b) | 200,000 | 197,500 |
Principal Amount | Value | |||||||
Packaged Foods & Meats–(continued) | ||||||||
Minerva Luxembourg S.A. (Brazil), | ||||||||
Sr. Unsec. Gtd. Notes, 7.75%, 01/31/23(b) | $ | 350,000 | $ | 349,125 | ||||
REGS, Sr. Unsec. Gtd. Euro Notes, 7.75%, 01/31/23(b) | 200,000 | 200,000 | ||||||
Post Holdings Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 02/15/22 | 62,000 | 64,790 | ||||||
Smithfield Foods Inc., Sr. Unsec. Notes, | 29,000 | 30,450 | ||||||
6.63%, 08/15/22 | 74,000 | 79,920 | ||||||
WhiteWave Foods Co. (The), Sr. Unsec. Gtd. Notes, 5.38%, 10/01/22 | 92,000 | 99,360 | ||||||
2,059,132 | ||||||||
Paper Packaging–0.12% | ||||||||
Graphic Packaging International Inc., | ||||||||
Sr. Unsec. Gtd. Notes, 4.75%, 04/15/21 | 6,000 | 6,270 | ||||||
4.88%, 11/15/22 | 163,000 | 169,520 | ||||||
175,790 | ||||||||
Paper Products–0.16% | ||||||||
Mercer International Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 12/01/19 | 60,000 | 63,300 | ||||||
PH Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 5.38%, 10/15/20 | 165,000 | 169,125 | ||||||
232,425 | ||||||||
Personal Products–0.06% | ||||||||
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18 | 78,000 | 81,998 | ||||||
Pharmaceuticals–1.07% | ||||||||
Concordia Healthcare Corp. (Canada), Sr. Unsec. Gtd. Notes, 7.00%, 04/15/23(b) | 343,000 | 349,860 | ||||||
Endo Finance LLC/ Endo Ltd./Endo Finco Inc., Sr. Unsec. Gtd. Notes, 6.00%, 02/01/25(b) | 200,000 | 206,500 | ||||||
Salix Pharmaceuticals Ltd., Sr. Unsec. Gtd. Notes, 6.50%, 01/15/21(b) | 21,000 | 23,835 | ||||||
Valeant Pharmaceuticals International, Inc., | ||||||||
Sr. Unsec. Gtd. Notes, 5.50%, 03/01/23(b) | 130,000 | 131,950 | ||||||
5.63%, 12/01/21(b) | 140,000 | 144,375 | ||||||
5.88%, 05/15/23(b) | 42,000 | 43,207 | ||||||
6.38%, 10/15/20(b) | 113,000 | 119,639 | ||||||
7.50%, 07/15/21(b) | 32,000 | 34,840 | ||||||
Sr. Unsec. Notes, 6.13%, 04/15/25(b) | 503,000 | 523,120 | ||||||
1,577,326 | ||||||||
Railroads–0.51% | ||||||||
Transnet SOC Ltd. (South Africa), | ||||||||
Sr. Unsec. Notes, 4.00%, 07/26/22(b) | 300,000 | 290,250 | ||||||
REGS, Sr. Unsec. Euro Notes, 4.00%, 07/26/22(b) | 476,000 | 461,282 | ||||||
751,532 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Real Estate Development–0.47% | ||||||||
AV Homes, Inc., Sr. Unsec. Notes, 8.50%, 07/01/19(b) | $ | 60,000 | $ | 57,900 | ||||
Country Garden Holdings Co. Ltd. (China), REGS, Sr. Unsec. Gtd. Euro Notes, 7.50%, 01/10/23(b) | 220,000 | 226,050 | ||||||
Longfor Porperties Co. Ltd. (China), Sr. Unsec. Gtd. Euro Notes, 6.75%, 01/29/23 | 200,000 | 201,962 | ||||||
Shimao Property Holdings Ltd. (Hong Kong), REGS, Sr. Unsec. Gtd. Euro Bonds, 8.38%, 02/10/22(b) | 200,000 | 208,130 | ||||||
694,042 | ||||||||
Real Estate Services–0.04% | ||||||||
Kennedy-Wilson Inc., Sr. Unsec. Gtd. Notes, 5.88%, 04/01/24 | 58,000 | 59,015 | ||||||
Regional Banks–0.34% | ||||||||
Banco Internacional del Peru SAA (Peru), Unsec. Sub. Notes, 6.63%, 03/19/29(b) | 300,000 | 327,225 | ||||||
Synovus Financial Corp., Sr. Unsec. Global Notes, 7.88%, 02/15/19 | 147,000 | 166,294 | ||||||
493,519 | ||||||||
Renewable Electricity–0.06% | ||||||||
TerraForm Power Operating, LLC, Sr. Unsec. Gtd. Notes, | 89,000 | 93,895 | ||||||
Restaurants–0.11% | ||||||||
Carrols Restaurant Group, Inc., Sec. Second Lien Notes, 8.00%, 05/01/22(b) | 156,000 | 163,800 | ||||||
Security & Alarm Services–0.06% | ||||||||
ADT Corp. (The), Sr. Unsec. Global Notes, 6.25%, 10/15/21 | 75,000 | 81,375 | ||||||
Semiconductor Equipment–0.23% | ||||||||
Amkor Technology Inc., Sr. Unsec. Global Notes, 6.38%, 10/01/22 | 236,000 | 243,080 | ||||||
Entegris Inc., Sr. Unsec. Gtd. Notes, 6.00%, 04/01/22(b) | 96,000 | 101,280 | ||||||
344,360 | ||||||||
Semiconductors–0.28% | ||||||||
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 6.00%, 01/15/22(b) | 93,000 | 101,138 | ||||||
Micron Technology, Inc., | ||||||||
Sr. Unsec. Global Bonds, 5.88%, 02/15/22 | 122,000 | 129,015 | ||||||
Sr. Unsec. Notes, 5.25%, 08/01/23(b) | 70,000 | 70,700 | ||||||
5.50%, 02/01/25(b) | 105,000 | 106,050 | ||||||
406,903 | ||||||||
Soft Drinks–0.35% | ||||||||
Corp. Lindley S.A. (Peru), REGS, Sr. Unsec. Euro Notes, 4.63%, 04/12/23(b) | 530,000 | 518,075 |
Principal Amount | Value | |||||||
Sovereign Debt–11.41% | ||||||||
Argentina Boden Bonds (Argentina), Sr. Unsec. Bonds, 7.00%, 10/03/15 | $ | 383,000 | $ | 378,021 | ||||
Argentina Bonar Bonds (Argentina), Series X, Sr. Unsec. Bonds, 7.00%, 04/17/17 | 770,000 | 741,510 | ||||||
Banque Centrale de Tunisie SA (Tunisia), Sr. Unsec. Notes, 5.75%, 01/30/25(b) | 200,000 | 208,000 | ||||||
Brazilian Government International Bond (Brazil), Sr. Unsec. Global Notes, 4.25%, 01/07/25 | 210,000 | 207,345 | ||||||
Chile Government International Bond (Chile), Sr. Unsec. Global Notes, 3.13%, 03/27/25 | 280,000 | 292,600 | ||||||
Costa Rica Government International Bond (Costa Rica), REGS, Sr. Unsec. Euro Notes, 4.38%, 04/30/25(b) | 430,000 | 403,125 | ||||||
Dominican Republic International Bond (Dominican Repubic), Sr. Unsec. Notes, | ||||||||
5.50%, 01/27/25(b) | 666,000 | 690,975 | ||||||
9.04%, 01/23/18(b) | 164,396 | 178,780 | ||||||
El Salvador Government International Bond (El Salvador), Unsec. Notes, 6.38%, 01/18/27(b) | 172,000 | 175,870 | ||||||
Guatemala Government Bond (Guatemala), Sr. Unsec. Bonds, 8.13%, 10/06/19(b)(e) | 359,000 | 476,572 | ||||||
Honduras Government International Bond (Honduras), REGS, Sr. Unsec. Euro Notes, 7.50%, 03/15/24(b) | 400,000 | 436,500 | ||||||
Hungary Government International Bond (Hungary), Sr. Unsec. Global Notes, | 200,000 | 225,220 | ||||||
7.63%, 03/29/41 | 186,000 | 268,305 | ||||||
Indonesia Government International Bond (Indonesia), Sr. Unsec. Notes, 4.13%, 01/15/25(b) | 400,000 | 409,500 | ||||||
Ivory Coast Government International Bond (Ivory Coast), Sr. Unsec. Notes, 6.38%, 03/03/28(b) | 382,000 | 383,910 | ||||||
Jamaica Government International Bond (Jamaica), Sr. Unsec. Global Notes, 7.63%, 07/09/25 | 500,000 | 560,000 | ||||||
Kazakhstan Government International Bond (Kazakhstan), REGS, Sr. Unsec. Euro Bonds, 3.88%, 10/14/24(b) | 420,000 | 408,450 | ||||||
Kenya Government International Bond (Kenya), REGS, Sr. Unsec. Euro Notes, 6.88%, 06/24/24(b) | 370,000 | 392,200 | ||||||
Lebanon Government International Bond (Lebanon), REGS, Sr. Unsec. Euro Bonds, 6.00%, 01/27/23(b) | 500,000 | 510,725 | ||||||
Magyar Export-Import Bank Zrt. (Hungary), Sr. Unsec. Gtd. Bonds, 4.00%, 01/30/20(b) | 200,000 | 204,920 | ||||||
Malaysia Sovereign Sukuk Berhad (Malaysia), Unsec. Notes, 3.04%, 04/22/25(b) | 426,000 | 424,935 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Sovereign Debt–(continued) | ||||||||
Mexico Government International Bond (Mexico), Sr. Unsec. Global Notes, | $ | 138,000 | $ | 144,061 | ||||
4.60%, 01/23/46 | 200,000 | 200,250 | ||||||
Pakistan Government International Bond (Pakistan), | ||||||||
Sr. Unsec. Bonds, | 400,000 | 423,766 | ||||||
Unsec. Bonds, 6.75%, 12/03/19(b) | 238,000 | 247,520 | ||||||
REGS, Sr. Unsec. Euro Bonds, 7.25%, 04/15/19(b) | 210,000 | 222,477 | ||||||
Panama Government International Bond (Panama), Sr. Unsec. Global Bonds, | 200,000 | 203,500 | ||||||
4.00%, 09/22/24 | 930,000 | 967,200 | ||||||
Perusahaan Penerbit SBSN Indonesia III (Indonesia), REGS, Sr. Unsec. Euro Notes, 4.35%, 09/10/24(b) | 770,000 | 794,655 | ||||||
Peruvian Government International Bond (Peru), Sr. Unsec. Global Bonds, 8.75%, 11/21/33 | 212,000 | 335,490 | ||||||
Philippine Government International Bond (Philippines), Sr. Unsec. Global Bonds, 4.20%, 01/21/24 | 400,000 | 449,000 | ||||||
Poland Government International Bond (Poland), Sr. Unsec. Global Notes, | 106,000 | 108,025 | ||||||
4.00%, 01/22/24 | 400,000 | 437,212 | ||||||
5.00%, 03/23/22 | 146,000 | 166,915 | ||||||
Republic of Angola Via Northern Lights III B.V. (Angola), REGS, Sr. Unsec. Euro Notes, 7.00%, 08/16/19(b) | 318,000 | 331,235 | ||||||
Republic of Serbia (Serbia), Sr. Unsec. Bonds, 4.88%, 02/25/20(b) | 250,000 | 256,875 | ||||||
Romanian Government International Bond (Romania), Sr. Unsec. Notes, 4.88%, 01/22/24(b) | 106,000 | 116,998 | ||||||
Russian Foreign Bond (Russia), REGS, Sr. Unsec. Euro Bonds, 4.88%, 09/16/23(b) | 800,000 | 788,000 | ||||||
Sri Lanka Government International Bond (Sri Lanka), REGS, Sr. Unsec. Euro Notes, 5.88%, 07/25/22(b) | 500,000 | 513,500 | ||||||
Turkey Government International Bond (Turkey), | ||||||||
5.75%, 03/22/24 | 400,000 | 442,816 | ||||||
Sr. Unsec. Global Notes, 5.13%, 03/25/22 | 400,000 | 424,500 | ||||||
Ukraine Government International Bond (Ukraine), REGS, Sr. Unsec. Euro Notes, | 305,000 | 143,731 | ||||||
9.25%, 07/24/17(b) | 300,000 | 139,875 | ||||||
Uruguay Government International Bond (Uruguay), Sr. Unsec. Bonds, 5.10%, 06/18/50 | 760,000 | 775,582 |
Principal Amount | Value | |||||||
Sovereign Debt–(continued) | ||||||||
Venezuela Government International Bond (Venezuela), REGS, Sr. Unsec. Euro Bonds, | $ | 116,500 | $ | 50,095 | ||||
11.95%, 08/05/31(b) | 169,600 | 86,496 | ||||||
16,747,237 | ||||||||
Specialized Consumer Services–0.18% | ||||||||
ServiceMaster Co., LLC (The), |
| |||||||
Sr. Unsec. Gtd. Global Notes, 7.00%, 08/15/20 | 70,000 | 74,900 | ||||||
Sr. Unsec. Notes, 7.45%, 08/15/27 | 179,000 | 183,475 | ||||||
258,375 | ||||||||
Specialized Finance–0.77% | ||||||||
Aircastle Ltd., | ||||||||
Sr. Unsec. Global Notes, 7.63%, 04/15/20 | 127,000 | 148,749 | ||||||
Sr. Unsec. Notes, | 85,000 | 89,462 | ||||||
5.50%, 02/15/22 | 45,000 | 48,150 | ||||||
CIT Group Inc., Sr. Unsec. Global Notes, 5.00%, 08/15/22 | 204,000 | 211,140 | ||||||
Fly Leasing Ltd. (Ireland), Sr. Unsec. Global Notes, 6.75%, 12/15/20 | 200,000 | 207,000 | ||||||
International Lease Finance Corp., | ||||||||
Sr. Unsec. Global Notes, 5.88%, 08/15/22 | 138,000 | 156,630 | ||||||
Sr. Unsec. Notes, 8.25%, 12/15/20 | 114,000 | 140,220 | ||||||
MSCI Inc., Sr. Unsec. Gtd. Notes., 5.25%, 11/15/24(b) | 130,000 | 135,525 | ||||||
1,136,876 | ||||||||
Specialized REIT’s–0.31% | ||||||||
Crown Castle International Corp., | ||||||||
Sr. Unsec. Global Notes, 5.25%, 01/15/23 | 400,000 | 425,000 | ||||||
Sr. Unsec. Notes, 4.88%, 04/15/22 | 36,000 | 37,710 | ||||||
462,710 | ||||||||
Specialty Chemicals–0.18% | ||||||||
PolyOne Corp., Sr. Unsec. Global Notes, 5.25%, 03/15/23 | 250,000 | 262,500 | ||||||
Specialty Stores–0.30% | ||||||||
Michaels Stores Inc., Sr. Unsec. Gtd. Sub. Notes, 5.88%, 12/15/20(b) | 427,000 | 444,080 | ||||||
Steel–0.63% | ||||||||
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 10/01/21 | 41,000 | 34,030 | ||||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Notes, | 80,000 | 84,800 | ||||||
7.00%, 02/25/22 | 57,000 | 62,391 | ||||||
Cliffs Natural Resources Inc., Sec. Gtd. Sub. Notes, 7.75%, 03/31/20(b) | 48,000 | 34,680 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Premium Income Fund
Principal Amount | Value | |||||||
Steel–(continued) | ||||||||
FMG Resources August 2006 Pty. Ltd. (Australia), Sr. Unsec. Gtd. Notes, | $ | 116,000 | $ | 87,580 | ||||
8.25%, 11/01/19(b) | 157,000 | 137,768 | ||||||
Steel Dynamics, Inc., Sr. Unsec. Gtd. Notes, | 120,000 | 122,100 | ||||||
5.50%, 10/01/24(b) | 81,000 | 84,240 | ||||||
SunCoke Energy Partners L.P./SunCoke Energy Partners Finance Corp., | ||||||||
Sr. Unsec. Gtd. Notes, | 242,000 | 248,957 | ||||||
7.38%, 02/01/20(b) | 35,000 | 36,006 | ||||||
932,552 | ||||||||
Trading Companies & Distributors–0.30% | ||||||||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust (Netherlands), Sr. Unsec. Gtd. Notes, 5.00%, 10/01/21(b) | 150,000 | 161,625 | ||||||
HD Supply, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 07/15/20 | 40,000 | 42,950 | ||||||
United Rentals North America Inc., | ||||||||
Sr. Unsec. Gtd. Global Notes, 5.50%, 07/15/25 | 88,000 | 89,870 | ||||||
Sr. Unsec. Gtd. Notes, 6.13%, 06/15/23 | 140,000 | 148,050 | ||||||
442,495 | ||||||||
Trucking–0.28% | ||||||||
CAR Inc. (China), Sr. Unsec. Gtd. Notes, 6.13%, 02/04/20(b) | 390,000 | 407,550 | ||||||
Wireless Telecommunication Services–3.48% | ||||||||
Comcel Trust via Comunicaciones Celulares S.A. (Guatemala), REGS, Sr. Unsec. Gtd. Euro Bonds, 6.88%, 02/06/24(b) | 267,000 | 287,025 | ||||||
Digicel Ltd. (Jamaica), | ||||||||
Sr. Unsec. Gtd. Notes, | 200,000 | 198,000 | ||||||
Sr. Unsec. Notes, 6.00%, 04/15/21(b) | 400,000 | 388,500 | ||||||
Mobile Telesystems OJSC via MTS International Funding Ltd. (Russia), REGS, Sr. Unsec. Euro Notes, | 200,000 | 180,100 | ||||||
8.63%, 06/22/20(b) | 290,000 | 316,460 | ||||||
MTN Mauritius Investments Ltd. (South Africa), Sr. Unsec. Gtd. Notes, 4.76%, 11/11/24(b) | 550,000 | 567,875 | ||||||
SBA Communications Corp., Sr. Unsec. Notes, 4.88%, 07/15/22(b) | 380,000 | 377,150 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/28 | 410,000 | 375,150 | ||||||
Sprint Communications Inc., Sr. Unsec. Global Notes, 6.00%, 11/15/22 | 121,000 | 114,648 | ||||||
Sprint Corp., Sr. Unsec. Gtd. Global Notes, | 415,000 | 411,887 | ||||||
7.88%, 09/15/23 | 268,000 | 270,680 |
Principal Amount | Value | |||||||
Wireless Telecommunication Services–(continued) | ||||||||
T-Mobile USA, Inc., | ||||||||
Sr. Unsec. Gtd. Global Bonds, 6.38%, 03/01/25 | $ | 269,000 | $ | 278,415 | ||||
6.84%, 04/28/23 | 183,000 | 194,666 | ||||||
Sr. Unsec. Gtd. Global Notes, 6.63%, 04/01/23 | 60,000 | 62,925 | ||||||
VimpelCom Holdings B.V. (Russia), REGS, Sr. Unsec. Gtd. Euro Notes, 5.95%, 02/13/23(b) | 450,000 | 414,000 | ||||||
Wind Acquisition Finance S.A. (Italy), Sec. Gtd. Notes, 7.38%, 04/23/21(b) | 650,000 | 667,875 | ||||||
5,105,356 | ||||||||
Total U.S. Dollar Denominated Bonds and Notes (Cost $83,965,985) |
| 84,974,637 | ||||||
Shares | ||||||||
Preferred Stocks–25.70% |
| |||||||
Asset Management & Custody Banks–0.63% | ||||||||
Affiliated Managers Group Inc., 6.38% Sr. Unsec. Pfd. | 3,100 | 81,375 | ||||||
Apollo Investment Corp., 6.88% Sr. Unsec. Pfd. | 2,700 | 69,822 | ||||||
Bank of New York Mellon Corp. (The), 5.20% Pfd. | 6,400 | 159,360 | ||||||
Northern Trust Corp., Series C, 5.85% Pfd. | 4,400 | 113,080 | ||||||
State Street Corp., Series C, 5.25% Pfd. | 4,900 | 121,324 | ||||||
State Street Corp., Series D, 5.90% Pfd. | 5,800 | 156,194 | ||||||
State Street Corp., Series E, 6.00% Pfd. | 8,900 | 226,950 | ||||||
928,105 | ||||||||
Cable & Satellite–0.05% | ||||||||
Comcast Corp., 5.00% Sr. Unsec. Gtd. Pfd. | 2,600 | 67,002 | ||||||
Consumer Finance–0.70% | ||||||||
Ally Financial Inc., Series A, 8.50% Pfd. | 10,300 | 272,950 | ||||||
Capital One Financial Corp., Series B, 6.00% Pfd. | 8,600 | 216,548 | ||||||
Capital One Financial Corp., Series C, 6.25% Pfd. | 5,500 | 141,240 | ||||||
Capital One Financial Corp., Series D, 6.70% Pfd. | 3,900 | 104,754 | ||||||
Discover Financial Services, Series B, 6.50% Pfd. | 6,400 | 164,864 | ||||||
Navient Corp., 6.00% Sr. Unsec. Pfd. | 5,600 | 126,448 | ||||||
1,026,804 | ||||||||
Diversified Banks–9.72% | ||||||||
BAC Capital Trust VIII, 6.00% Jr. Unsec. Sub. Gtd. Pfd. | 6,600 | 169,158 | ||||||
Bank of America Corp., Series 3, 6.38% Pfd. | 15,800 | 404,954 | ||||||
Bank of America Corp., Series D, 6.20% Pfd. | 13,800 | 353,280 | ||||||
Bank of America Corp., Series I, 6.63% Pfd. | 20,351 | 534,621 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Premium Income Fund
Shares | Value | |||||||
Diversified Banks–(continued) | ||||||||
Bank of America Corp., Series W, 6.63% Pfd. | 29,700 | $ | 771,606 | |||||
Bank of America Corp., Series Y, 6.50% Pfd. | 17,600 | 454,080 | ||||||
Barclays Bank PLC (United Kingdom), Series 4, 7.75% Pfd. | 25,800 | 672,606 | ||||||
Barclays Bank PLC (United Kingdom), Series 5, 8.13% Pfd. | 31,000 | 810,340 | ||||||
Citigroup Inc., Series J, 7.13% Pfd. | 9,800 | 271,852 | ||||||
Citigroup Inc., Series K, 6.88% Pfd. | 17,000 | 462,740 | ||||||
Citigroup Inc., Series L, 6.88% Pfd. | 8,800 | 234,696 | ||||||
Countrywide Capital V, 7.00% Jr. Unsec. Gtd. Sub. Pfd. | 8,400 | 215,292 | ||||||
HSBC Holdings PLC (United Kingdom), Series 2, 8.00% Jr. Unsec. Sub. Pfd. | 85,800 | 2,253,108 | ||||||
JPMorgan Chase & Co., Series O, 5.50% Pfd. | 6,900 | 169,740 | ||||||
JPMorgan Chase & Co., Series P, 5.45% Pfd. | 14,300 | 349,635 | ||||||
JPMorgan Chase & Co., Series T, 6.70% Pfd. | 6,900 | 185,265 | ||||||
JPMorgan Chase & Co., Series W, 6.30% Pfd. | 10,800 | 278,856 | ||||||
JPMorgan Chase & Co., Series Y, 6.13% Pfd. | 16,500 | 416,295 | ||||||
Lloyds Banking Group PLC (United Kingdom), 7.75% Sr. Unsec. Pfd. | 8,500 | 216,155 | ||||||
RBS Capital Funding Trust VII (Netherlands), Series G, 6.08% Jr. Unsec. Sub. Gtd. Pfd. | 22,002 | 547,630 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Series L, 5.75% Jr. Unsec. Sub. Pfd. | 23,101 | 565,050 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Series R, 6.13% Jr. Unsec. Sub. Pfd. | 12,800 | 316,032 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Series S, 6.60% Jr. Unsec. Sub. Pfd. | 20,900 | 523,127 | ||||||
Royal Bank of Scotland Group PLC (The) (United Kingdom), Series T, 7.25% Jr. Unsec. Sub. Pfd. | 9,800 | 249,116 | ||||||
Santander Finance Preferred SAU (Spain), 6.50% Jr. Unsec. Gtd. Sub. Pfd. | 1,700 | 45,101 | ||||||
US Bancorp, Series F, 6.50% Pfd. | 26,100 | 777,258 | ||||||
Wells Fargo & Co., 5.20% Pfd. | 16,500 | 403,095 | ||||||
Wells Fargo & Co., 5.85% Pfd. | 8,900 | 234,159 | ||||||
Wells Fargo & Co., 6.63% Pfd. | 7,900 | 222,148 | ||||||
Wells Fargo & Co., Series J, 8.00% Pfd. | 6,500 | 188,305 | ||||||
Wells Fargo & Co., Series O, 5.13% Pfd. | 18,700 | 456,280 | ||||||
Wells Fargo & Co., Series P, 5.25% Pfd. | 5,400 | 133,380 | ||||||
Wells Fargo & Co., Series T, 6.00% Pfd. | 15,000 | 383,550 | ||||||
14,268,510 | ||||||||
Diversified Capital Markets–0.95% | ||||||||
Deutsche Bank Contingent Capital Trust III (Germany), 7.60% Jr. Unsec. Sub. Gtd. Pfd. | 16,700 | 469,270 |
Shares | Value | |||||||
Diversified Capital Markets–(continued) | ||||||||
Deutsche Bank Contingent Capital Trust V (Germany), 8.05% Jr. Unsec. Sub. Gtd. Pfd. | 24,200 | $ | 694,056 | |||||
KKR Financial Holdings LLC, 8.38% Sr. Unsec. Pfd. | 4,200 | 115,332 | ||||||
KKR Financial Holdings LLC, Series A, 7.38% Pfd. | 4,500 | 116,910 | ||||||
1,395,568 | ||||||||
Diversified REIT’s–0.21% | ||||||||
PS Business Parks, Inc., Series S, 6.45% Pfd. | 9,100 | 235,144 | ||||||
Wells Fargo Real Estate Investment Corp., 6.38% Pfd. | 2,900 | 76,183 | ||||||
311,327 | ||||||||
Electric Utilities–1.15% | ||||||||
Alabama Power Co., 5.63% Pfd. | 4,600 | 115,862 | ||||||
BGE Capital Trust II, 6.20% Jr. Unsec. Sub. Gtd. Pfd. | 2,300 | 58,535 | ||||||
Duke Energy Corp., 5.13% Jr. Unsec. Sub. Pfd. | 5,500 | 138,050 | ||||||
Entergy Louisiana LLC, 5.25% Sr. Sec. First Mortgage Pfd. | 3,300 | 83,028 | ||||||
Entergy Mississippi Inc., 6.00% Sr. Sec. First Mortgage Pfd. | 5,500 | 143,440 | ||||||
Entergy Texas Inc., 5.63% Sr. Sec. First Mortgage Pfd. | 5,600 | 146,216 | ||||||
Interstate Power & Light Co., Series D, 5.10% Pfd. | 1,800 | 45,486 | ||||||
NextEra Energy Capital Holdings Inc., 5.00% Jr. Unsec. Sub. Gtd. Pfd. | 6,900 | 166,083 | ||||||
NextEra Energy Capital Holdings Inc., Series G, 5.70% Jr. Unsec. Sub. Gtd. Pfd. | 4,800 | 121,632 | ||||||
NextEra Energy Capital Holdings Inc., Series H, 5.63% Jr. Unsec. Sub. Gtd. Pfd. | 8,800 | 222,376 | ||||||
Pacific Gas & Electric Co., Series A, 6.00% Pfd. | 1,000 | 29,140 | ||||||
PPL Capital Funding, Inc., Series B, 5.90% Jr. Unsec. Sub. Gtd. Pfd. | 5,400 | 135,702 | ||||||
SCE Trust I, 5.63% Jr. Unsec. Sub. Pfd. | 9,600 | 242,304 | ||||||
SCE Trust III, 5.75% Jr. Unsec. Sub. Pfd. | 1,300 | 35,295 | ||||||
1,683,149 | ||||||||
Health Care REIT’s–0.14% | ||||||||
Health Care REIT, Inc., Series J, 6.50% Pfd. | 2,600 | 67,210 | ||||||
Senior Housing Properties Trust, 5.63% Sr. Unsec. Pfd. | 3,200 | 78,880 | ||||||
Ventas Realty L.P. / Ventas Capital Corp., 5.45% Sr. Unsec. Gtd. Pfd. | 2,300 | 57,523 | ||||||
203,613 | ||||||||
Hotel and Resort REIT’s–0.05% | ||||||||
Hospitality Properties Trust, Series D, 7.13% Pfd. | 2,600 | 67,106 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Premium Income Fund
Shares | Value | |||||||
Industrial Conglomerates–0.39% | ||||||||
General Electric Capital Corp., 4.70% Sr. Unsec. Pfd. | 6,600 | $ | 169,422 | |||||
General Electric Capital Corp., 4.88% Sr. Unsec. Pfd. | 8,900 | 227,929 | ||||||
General Electric Capital Corp., 4.88% Sr. Unsec. Pfd. | 6,700 | 172,592 | ||||||
569,943 | ||||||||
Industrial Machinery–0.14% | ||||||||
Stanley Black & Decker Inc., 5.75% Jr. Unsec. Sub. Pfd. | 8,300 | 210,073 | ||||||
Integrated Telecommunication Services–0.72% | ||||||||
Qwest Corp., 6.13% Sr. Unsec. Pfd. | 5,000 | 126,350 | ||||||
Qwest Corp., 6.88% Sr. Unsec. Pfd. | 4,900 | 130,536 | ||||||
Qwest Corp., 7.00% Sr. Unsec. Pfd. | 6,700 | 176,277 | ||||||
Qwest Corp., 7.00% Sr. Unsec. Pfd. | 4,800 | 125,952 | ||||||
Qwest Corp., 7.38% Sr. Unsec. Pfd. | 8,300 | 217,626 | ||||||
Qwest Corp., 7.50% Sr. Unsec. Pfd. | 4,900 | 130,340 | ||||||
Verizon Communications Inc., 5.90% Sr. Unsec. Pfd. | 5,500 | 147,455 | ||||||
1,054,536 | ||||||||
Investment Banking & Brokerage–2.59% | ||||||||
BGC Partners Inc., 8.13% Sr. Unsec. Pfd. | 1,000 | 27,010 | ||||||
Charles Schwab Corp. (The), Series B, 6.00% Pfd. | 5,400 | 143,154 | ||||||
Goldman Sachs Group, Inc. (The), 6.50% Sr. Unsec. Pfd. | 5,400 | 143,046 | ||||||
Goldman Sachs Group, Inc. (The), Series I, 5.95% Pfd. | 15,800 | 398,634 | ||||||
Goldman Sachs Group, Inc. (The), Series J, 5.50% Pfd. | 16,500 | 409,860 | ||||||
Goldman Sachs Group, Inc. (The), Series K, 6.38% Pfd. | 15,400 | 403,480 | ||||||
Morgan Stanley, Series E, 7.13% Pfd. | 19,800 | 561,330 | ||||||
Morgan Stanley, Series G, 6.63% Pfd. | 7,900 | 206,190 | ||||||
Morgan Stanley, Series I, 6.38% Pfd. | 27,500 | 717,750 | ||||||
Morgan Stanley,Series F, 6.88% Pfd. | 17,000 | 465,800 | ||||||
Morgan Stanley Capital Trust VI, 6.60% Jr. Unsec. Sub. Gtd. Pfd. | 6,800 | 170,612 | ||||||
Raymond James Financial Inc., 6.90% Sr. Unsec. Pfd. | 4,200 | 113,316 | ||||||
Stifel Financial Corp., 5.38% Sr. Unsec. Sub. Pfd. | 1,900 | 48,925 | ||||||
3,809,107 | ||||||||
Life & Health Insurance–1.20% | ||||||||
Aegon N.V. (Netherlands), 6.38% Jr. Unsec. Sub. Pfd. | 7,500 | 190,800 | ||||||
Aegon N.V. (Netherlands), 8.00% Unsec. Sub. Pfd. | 11,800 | 330,636 | ||||||
Aflac Inc., 5.50% Jr. Unsec. Sub. Pfd. | 5,500 | 138,545 | ||||||
MetLife Inc., Series B, 6.50% Pfd. | 15,400 | 395,472 | ||||||
Principal Financial Group Inc., Series B, 6.52% Pfd. | 2,300 | 58,466 |
Shares | Value | |||||||
Life & Health Insurance–(continued) | ||||||||
Protective Life Corp., 6.25% Sr. Unsec. Sub. Pfd. | 4,300 | $ | 111,155 | |||||
Prudential Financial Inc., 5.70% Jr. Unsec. Sub. Pfd. | 7,200 | 184,032 | ||||||
Prudential Financial Inc., 5.75% Jr. Unsec. Sub. Pfd. | 6,600 | 168,564 | ||||||
Prudential PLC (United Kingdom), 6.75% Jr. Unsec. Sub. Pfd. | 6,100 | 158,722 | ||||||
Torchmark Corp., 5.88% Jr. Unsec. Sub. Pfd. | 1,100 | 28,490 | ||||||
1,764,882 | ||||||||
Multi-Line Insurance–0.35% | ||||||||
American Financial Group Inc., 6.38% Sr. Unsec. Pfd. | 6,300 | 167,706 | ||||||
Aviva PLC (United Kingdom), 8.25% Sr. Unsec. Sub. Pfd. | 4,800 | 132,672 | ||||||
Hartford Financial Services Group Inc. (The), 7.88% Jr. Sub. Pfd. | 5,900 | 184,552 | ||||||
Kemper Corp., 7.38% Unsec. Sub. Pfd. | 1,200 | 31,824 | ||||||
516,754 | ||||||||
Multi-Utilities–0.19% | ||||||||
DTE Energy Co., 6.50% Jr. Unsec. Sub. Pfd. | 5,300 | 141,139 | ||||||
Integrys Energy Group, Inc., 6.00% Jr. Unsec. Sub. Pfd. | 4,800 | 131,376 | ||||||
272,515 | ||||||||
Office REIT’s–0.63% | ||||||||
Alexandria Real Estate Equities Inc., Series E, 6.45% Pfd. | 1,200 | 31,284 | ||||||
Boston Properties, Inc., 5.25% Pfd. | 1,800 | 44,640 | ||||||
Digital Realty Trust, Inc., Series F, 6.63% Pfd. | 3,300 | 87,219 | ||||||
Digital Realty Trust, Inc., Series G, 5.88% Pfd. | 4,500 | 110,025 | ||||||
Digital Realty Trust, Inc., Series H, 7.38% Pfd. | 4,400 | 119,592 | ||||||
Equity Commonwealth, 5.75% Sr. Unsec. Pfd. | 5,400 | 131,058 | ||||||
Kilroy Realty Corp., Series G, 6.88% Pfd. | 900 | 23,796 | ||||||
Kilroy Realty Corp., Series H, 6.38% Pfd. | 900 | 22,824 | ||||||
SL Green Realty Corp., Series I, 6.50% Pfd. | 2,100 | 54,936 | ||||||
Vornado Realty Trust, Series J, 6.88% Pfd. | 11,300 | 292,094 | ||||||
917,468 | ||||||||
Office Services & Supplies–0.09% | ||||||||
Pitney Bowes Inc., 5.25% Sr. Unsec. Pfd. | 800 | 20,456 | ||||||
Pitney Bowes Inc., 6.70% Sr. Unsec. Pfd. | 4,400 | 116,072 | ||||||
136,528 | ||||||||
Oil & Gas Refining & Marketing–0.09% | ||||||||
NuStar Logistics L.P., 7.63% Jr. Unsec. Sub. Gtd. Pfd. | 4,800 | 125,376 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Premium Income Fund
Shares | Value | |||||||
Other Diversified Financial Services–1.00% | ||||||||
ING Groep NV (Netherlands), 6.38% Jr. Unsec. Sub. Pfd. | 41,200 | $ | 1,048,128 | |||||
ING Groep NV (Netherlands), 7.38% Jr. Unsec. Sub. Pfd. | 16,500 | 422,070 | ||||||
1,470,198 | ||||||||
Property & Casualty Insurance–0.91% | ||||||||
Allstate Corp. (The), 5.10% Unsec. Sub. Pfd. | 4,300 | 112,445 | ||||||
Allstate Corp. (The), 5.63% Pfd. | 2,800 | 71,708 | ||||||
Allstate Corp. (The), Series C, 6.75% Pfd. | 3,000 | 81,210 | ||||||
Allstate Corp. (The), Series E, 6.63% Pfd. | 8,900 | 241,012 | ||||||
Allstate Corp. (The), Series F, 6.25% Pfd. | 3,600 | 94,500 | ||||||
Arch Capital Group Ltd., Series C, 6.75% Pfd. | 3,900 | 105,339 | ||||||
Argo Group U.S. Inc., 6.50% Sr. Unsec. Gtd. Pfd. | 1,300 | 33,098 | ||||||
Aspen Insurance Holdings Ltd., 5.95% Pfd. | 2,300 | 59,179 | ||||||
Aspen Insurance Holdings Ltd., 7.25% Pfd. | 2,900 | 76,966 | ||||||
Assured Guaranty Municipal Holdings Inc., 6.25% Sr. Unsec. Gtd. Pfd. | 5,100 | 129,540 | ||||||
Axis Capital Holdings Ltd., Series C, 6.88% Pfd. | 6,600 | 176,550 | ||||||
Hanover Insurance Group, Inc. (The), 6.35% Jr. Unsec. Sub. Pfd. | 1,600 | 40,528 | ||||||
Selective Insurance Group, Inc., 5.88% Sr. Unsec. Pfd. | 1,600 | 40,960 | ||||||
W. R. Berkley Corp., 5.63% Jr. Unsec. Sub. Pfd. | 3,200 | 79,680 | ||||||
1,342,715 | ||||||||
Regional Banks–1.77% | ||||||||
BB&T Corp., 5.85% Pfd. | 7,900 | 199,870 | ||||||
BB&T Corp., Series E, 5.63% Pfd. | 18,700 | 462,077 | ||||||
City National Corp., Series C, 5.50% Pfd. | 2,500 | 61,650 | ||||||
Commerce Bancshares Inc., Series B, 6.00% Pfd. | 1,600 | 41,632 | ||||||
Cullen/Frost Bankers, Inc., 5.38% Pfd. | 1,400 | 35,700 | ||||||
Fifth Third Bancorp, Series I, 6.63% Pfd. | 4,400 | 123,772 | ||||||
First Horizon National Corp., Series A, 6.20% Pfd. | 900 | 22,455 | ||||||
First Niagara Financial Group Inc., Series B, 8.63% Pfd. | 4,200 | 116,130 | ||||||
First Republic Bank, 5.50% Pfd. | 3,000 | 73,560 | ||||||
First Republic Bank, 7.00% Pfd. | 1,800 | 49,518 | ||||||
First Republic Bank, Series A, 6.70% Pfd. | 2,100 | 54,894 | ||||||
First Republic Bank, Series B, 6.20% Pfd. | 2,200 | 56,364 | ||||||
FirstMerit Corp., Series A, 5.88% Pfd. | 900 | 22,419 | ||||||
FNB Corp., 7.25% Pfd. | 1,000 | 27,960 | ||||||
Hancock Holding Co., 5.95% Unsec. Sub. Pfd. | 1,800 | 44,460 | ||||||
PNC Financial Services Group, Inc. (The), Series P, 6.13% Pfd. | 19,800 | 555,588 | ||||||
Regions Financial Corp., Series A, 6.38% Pfd. | 5,500 | 138,600 | ||||||
Regions Financial Corp., Series B, 6.38% Pfd. | 5,600 | 146,720 |
Shares | Value | |||||||
Regional Banks–(continued) | ||||||||
SunTrust Banks Inc., Series E, 5.88% Pfd. | 5,400 | $ | 135,324 | |||||
TCF Financial Corp., 7.50% Pfd. | 1,200 | 32,952 | ||||||
TCF Financial Corp., Series B, 6.45% Pfd. | 1,200 | 30,468 | ||||||
Texas Capital Bancshares, Inc., Series A, 6.50% Pfd. | 2,400 | 60,912 | ||||||
Webster Financial Corp., Series E, 6.40% Pfd. | 1,100 | 28,193 | ||||||
Zions Bancorp., Series F, 7.90% Pfd. | 2,872 | 79,985 | ||||||
2,601,203 | ||||||||
Reinsurance–0.52% | ||||||||
Endurance Specialty Holdings Ltd., Series A, 7.75% Pfd. | 1,800 | 46,926 | ||||||
Endurance Specialty Holdings Ltd., Series B, 7.50% Pfd. | 2,100 | 55,524 | ||||||
Maiden Holdings Ltd., Series A, 8.25% Pfd. | 5,600 | 149,464 | ||||||
Montpelier Re Holdings Ltd. (Bermuda), Series A, 8.88% Pfd. | 1,400 | 36,526 | ||||||
PartnerRe Ltd., Series E, 7.25% Pfd. | 8,400 | 222,600 | ||||||
Reinsurance Group of America, Inc., 6.20% Sr. Unsec. Sub. Pfd. | 4,800 | 137,616 | ||||||
RenaissanceRe Holdings Ltd., Series E, 5.38% Pfd. | 4,800 | 117,840 | ||||||
766,496 | ||||||||
Retail REIT’s–0.48% | ||||||||
DDR Corp., Class J, 6.50% Pfd. | 3,200 | 81,728 | ||||||
Kimco Realty Corp., Series I, 6.00% Pfd. | 9,600 | 243,360 | ||||||
National Retail Properties Inc., Series D, 6.63% Pfd. | 6,400 | 167,360 | ||||||
Realty Income Corp., Series F, 6.63% Pfd. | 4,900 | 128,674 | ||||||
Regency Centers Corp., Series 6, 6.63% Pfd. | 2,300 | 59,524 | ||||||
WP Glimcher Inc., Series I, 6.88% Pfd. | 1,000 | 25,760 | ||||||
706,406 | ||||||||
Specialized REIT’s–0.75% | ||||||||
EPR Properties, Series F, 6.63% Pfd. | 1,100 | 28,435 | ||||||
Public Storage, Series A, 5.88% Pfd. | 7,800 | 199,875 | ||||||
Public Storage, Series Q, 6.50% Pfd. | 17,700 | 458,607 | ||||||
Public Storage, Series Y, 6.38% Pfd. | 15,400 | 411,180 | ||||||
1,098,097 | ||||||||
Thrifts & Mortgage Finance–0.02% | ||||||||
Astoria Financial Corp., Series C, 6.50% Pfd. | 1,200 | 30,264 | ||||||
Wireless Telecommunication Services–0.26% | ||||||||
Telephone & Data Systems Inc., 7.00% Sr. Unsec. Pfd. | 9,200 | 237,360 | ||||||
United States Cellular Corp., 6.95% Sr. Unsec. Pfd. | 3,100 | 79,670 | ||||||
United States Cellular Corp., 7.25% Sr. Unsec. Pfd. | 2,800 | 70,980 | ||||||
388,010 | ||||||||
Total Preferred Stocks |
| 37,731,755 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Premium Income Fund
Principal Amount | Value | |||||||
U.S. Treasury Securities–6.22% |
| |||||||
U.S. Treasury Bills–0.17% | ||||||||
0.00%, 08/20/15(f)(g) | $ | 140,000 | $ | 139,993 | ||||
0.05%, 08/20/15(f)(g) | 5,000 | 5,000 | ||||||
0.08%, 08/20/15(f)(g) | 50,000 | 49,998 | ||||||
0.09%, 08/20/15(f)(g) | 45,000 | 44,998 | ||||||
0.12%, 08/20/15(f)(g) | 5,000 | 5,000 | ||||||
244,989 | ||||||||
U.S. Treasury STRIPS–6.05% | ||||||||
2.59%, 02/15/43(f)(h) | 600,000 | 271,547 | ||||||
2.68%, 02/15/43(f)(h) | 2,550,000 | 1,154,074 | ||||||
2.74%, 02/15/43(f)(h) | 1,000,000 | 452,578 | ||||||
3.98%, 02/15/43(f)(h) | 10,800,000 | 4,887,844 | ||||||
4.11%, 02/15/43(f)(h) | 4,700,000 | 2,127,117 | ||||||
8,893,160 | ||||||||
Total U.S. Treasury Securities |
| 9,138,149 | ||||||
Non-U.S. Dollar Denominated Bonds & Notes–1.48%(i) |
| |||||||
Aerospace & Defense–0.08% | ||||||||
TA MFG. Ltd., Sr. Unsec. Gtd. Notes, 3.63%, 04/15/23(b) | EUR | 100,000 | 112,680 | |||||
Auto Parts & Equipment–0.10% | ||||||||
Autodis S.A. (France), Sr. Sec. Gtd. Notes, 6.50%, 02/01/19(b) | EUR | 126,000 | 148,571 | |||||
Automobile Manufacturers–0.08% | ||||||||
Hydra Dutch Holdings 2 B.V. (Netherlands), Sr. Sec. Gtd. Notes, 8.00%, 04/15/19(b) | EUR | 100,000 | 115,097 | |||||
Construction & Engineering–0.16% | ||||||||
Abengoa Finance S.A.U. (Spain), Sr. Unsec. Gtd. Bonds, 7.00%, 04/15/20(b) | EUR | 100,000 | 109,022 | |||||
REGS, Sr. Unsec. Gtd. Medium-Term Euro Notes, 8.88%, 02/05/18(b) | EUR | 100,000 | 118,516 | |||||
227,538 | ||||||||
Home Furnishings–0.08% | ||||||||
Magnolia BC S.A. (Luxembourg), REGS, Sr. Sec. Gtd. Medium-Term Euro Notes, 9.00%, 08/01/20(b) | EUR | 100,000 | 120,714 | |||||
Hotels, Resorts & Cruise Lines–0.15% | ||||||||
Thomas Cook Finance PLC (United Kingdom), Sr. Unsec. Gtd. Bonds, 6.75%, 06/15/21(b) | EUR | 100,000 | 120,431 | |||||
Thomas Cook Group PLC (United Kingdom), Sr. Unsec. Gtd. Medium-Term Euro Notes, 7.75%, 06/22/17 | GBP | 57,000 | 94,566 | |||||
214,997 |
Principal Amount | Value | |||||||
Integrated Telecommunication Services–0.10% | ||||||||
Virgin Media Secured Finance PLC (United Kingdom), Sr. Sec. Gtd. Notes, 4.88%, 01/15/27(b) | GBP | 100,000 | $ | 151,990 | ||||
Internet Software & Services–0.08% | ||||||||
United Group B.V. (Serbia), REGS, Sr. Sec. Gtd. Euro Notes, 7.88%, 11/15/20(b) | EUR | 100,000 | 120,543 | |||||
Multi-Sector Holdings–0.24% | ||||||||
Novalis S.A.S. (France), Sr. Unsec. Gtd. Bonds, 3.00%, 04/30/22(b) | EUR | 100,000 | 112,402 | |||||
Odeon & UCI Finco PLC (United Kingdom), REGS, Sr. Sec. Gtd. Medium-Term Euro Notes, 9.00%, 08/01/18(b) | GBP | 150,000 | 236,598 | |||||
349,000 | ||||||||
Other Diversified Financial Services–0.31% | ||||||||
Cabot Financial Luxembourg S.A. (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 10.38%, 10/01/19(b) | GBP | 100,000 | 169,245 | |||||
Financiere Gaillon 8 SAS (France), Sr. Sec. Notes, 7.00%, 09/30/19(b) | EUR | 100,000 | 116,220 | |||||
Lowell Group Financing PLC (United Kingdom), REGS, Sr. Sec. Gtd. Euro Notes, 10.75%, 04/01/19(b) | GBP | 100,000 | 166,175 | |||||
451,640 | ||||||||
Packaged Foods & Meats–0.10% | ||||||||
Moy Park (Bondco) PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 6.25%, 05/29/21(b) | GBP | 100,000 | 151,299 | |||||
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $2,240,317) |
| 2,164,069 | ||||||
Shares | ||||||||
Money Market Funds–7.53% |
| |||||||
Liquid Assets Portfolio–Institutional Class(j) | 5,528,777 | 5,528,777 | ||||||
Premier Portfolio–Institutional Class(j) | 5,528,778 | 5,528,778 | ||||||
Total Money Market Funds |
| 11,057,555 | ||||||
TOTAL INVESTMENTS–98.80% |
| 145,066,165 | ||||||
OTHER ASSETS LESS LIABILITIES–1.20% |
| 1,765,786 | ||||||
NET ASSETS–100.00% |
| $ | 146,831,951 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Premium Income Fund
Investment Abbreviations:
Conv. | – Convertible | |
EUR | – Euro | |
GBP | – British Pound | |
Gtd. | – Guaranteed | |
Jr. | – Junior | |
Pfd. | – Preferred | |
PIK | – Payment in Kind | |
REGS | – Regulation S | |
REIT | – Real Estate Investment Trust | |
Sec. | – Secured | |
Sr. | – Senior | |
STRIPS | – Separately Traded Registered Interest and Principal Security | |
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) | 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 April 30, 2015 was $53,687,156, which represented 36.56% 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, | 7.75 | % | 8.50 | % |
(d) | Perpetual bond with no specified maturity date. |
(e) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. |
(f) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(g) | All or a portion of the value was pledged as collateral to cover margin requirements for swap agreements. See Note 1L and Note 4. |
(h) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4. |
(i) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(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 April 30, 2015
U.S. Dollar Denominated Bonds and Notes | 57.9 | % | ||
Preferred Stocks | 25.7 | |||
U.S. Treasury Securities | 6.2 | |||
Non U.S. Dollar Denominated Bonds and Notes | 1.5 | |||
Money Market Funds Plus Other Assets Less Liabilities | 8.7 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco Premium Income Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $129,310,534) | $ | 134,008,610 | ||
Investments in affiliated money market funds, at value and cost | 11,057,555 | |||
Total investments, at value (Cost $140,368,089) | 145,066,165 | |||
Cash | 675,282 | |||
Foreign currencies, at value (Cost $6,929) | 6,951 | |||
Receivable for: | ||||
Investments sold | 1,311,445 | |||
Fund shares sold | 834,309 | |||
Dividends and interest | 1,267,567 | |||
Fund expenses absorbed | 10,403 | |||
Investment for trustee deferred compensation and retirement plans | 23,078 | |||
Unrealized appreciation on forward foreign currency contracts outstanding | 3,705 | |||
Other assets | 40,233 | |||
Total assets | 149,239,138 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 1,770,945 | |||
Fund shares reacquired | 217,257 | |||
Variation margin — futures | 160,448 | |||
Variation margin — centrally cleared swap agreements | 2,471 | |||
Accrued fees to affiliates | 45,012 | |||
Accrued trustees’ and officers’ fees and benefits | 1,893 | |||
Accrued other operating expenses | 115,972 | |||
Trustee deferred compensation and retirement plans | 25,360 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 67,829 | |||
Total liabilities | 2,407,187 | |||
Net assets applicable to shares outstanding | $ | 146,831,951 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 148,014,033 | ||
Undistributed net investment income | (265,161 | ) | ||
Undistributed net realized gain (loss) | (5,582,027 | ) | ||
Net unrealized appreciation | 4,665,106 | |||
$ | 146,831,951 |
Net Assets: |
| |||
Class A | $ | 51,352,876 | ||
Class C | $ | 16,987,905 | ||
Class R | $ | 167,720 | ||
Class Y | $ | 16,220,781 | ||
Class R5 | $ | 10,515 | ||
Class R6 | $ | 62,092,154 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 4,892,074 | |||
Class C | 1,619,828 | |||
Class R | 15,983 | |||
Class Y | 1,544,538 | |||
Class R5 | 1,001 | |||
Class R6 | 5,910,909 | |||
Class A: | ||||
Net asset value per share | $ | 10.50 | ||
Maximum offering price per share | ||||
(Net asset value of $10.50 ¸ 94.50%) | $ | 11.11 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.49 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.49 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.50 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.50 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.50 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Premium Income Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Interest | $ | 2,325,049 | ||
Dividends (net of foreign withholding taxes of $1,201) | 1,175,306 | |||
Dividends from affiliated money market funds | 2,703 | |||
Total investment income | 3,503,058 | |||
Expenses: | ||||
Advisory fees | 412,217 | |||
Administrative services fees | 24,794 | |||
Custodian fees | 11,035 | |||
Distribution fees: | ||||
Class A | 55,141 | |||
Class C | 76,928 | |||
Class R | 375 | |||
Transfer agent fees — A, C, R and Y | 46,445 | |||
Transfer agent fees — R6 | 112 | |||
Trustees’ and officers’ fees and benefits | 10,523 | |||
Registration and filing fees | 38,763 | |||
Other | 82,180 | |||
Total expenses | 758,513 | |||
Less: Fees waived and expenses reimbursed | (191,143 | ) | ||
Net expenses | 567,370 | |||
Net investment income | 2,935,688 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (includes net gains from securities sold to affiliates of $1,211) | (250,437 | ) | ||
Foreign currencies | (58,795 | ) | ||
Forward foreign currency contracts | 207,241 | |||
Futures contracts | 924,794 | |||
Swap agreements | (39,016 | ) | ||
783,787 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 1,058,939 | |||
Foreign currencies | 1,934 | |||
Forward foreign currency contracts | (119,441 | ) | ||
Futures contracts | (19,340 | ) | ||
Swap agreements | 70,955 | |||
993,047 | ||||
Net realized and unrealized gain | 1,776,834 | |||
Net increase in net assets resulting from operations | $ | 4,712,522 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco Premium Income Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 2,935,688 | $ | 6,899,924 | ||||
Net realized gain | 783,787 | 1,242,323 | ||||||
Change in net unrealized appreciation | 993,047 | 3,867,728 | ||||||
Net increase in net assets resulting from operations | 4,712,522 | 12,009,975 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (1,061,392 | ) | (1,808,084 | ) | ||||
Class C | (311,527 | ) | (638,928 | ) | ||||
Class R | (3,415 | ) | (4,535 | ) | ||||
Class Y | (305,273 | ) | (339,729 | ) | ||||
Class R5 | (261 | ) | (543 | ) | ||||
Class R6 | (1,406,067 | ) | (4,760,854 | ) | ||||
Total distributions from net investment income | (3,087,935 | ) | (7,552,673 | ) | ||||
Share transactions-net: | ||||||||
Class A | 8,716,669 | 560,935 | ||||||
Class C | 1,944,249 | (2,185,049 | ) | |||||
Class R | 24,337 | 87,569 | ||||||
Class Y | 9,358,876 | (920,949 | ) | |||||
Class R6 | 10,271,809 | (122,825,649 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | 30,315,940 | (125,283,143 | ) | |||||
Net increase (decrease) in net assets | 31,940,527 | (120,825,841 | ) | |||||
Net assets: | ||||||||
Beginning of period | 114,891,424 | 235,717,265 | ||||||
End of period (includes undistributed net investment income of $(265,161) and $(112,914), respectively) | $ | 146,831,951 | $ | 114,891,424 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Premium Income Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 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 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
22 Invesco Premium Income Fund
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 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. |
23 Invesco Premium Income Fund
D. | Distributions — Distributions from net investment income, if any, are declared and paid monthly. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | 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.
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. | 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 |
24 Invesco Premium Income Fund
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. | 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 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,
25 Invesco Premium Income 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 April 30, 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.
M. | Other Risks — The Fund may invest in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claim. |
N. | 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. |
O. | 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 | 0.65% | |||
Next $500 million | 0.60% | |||
Next $500 million | 0.55% | |||
Over $1.5 billion | 0.54% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.65%.
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).
Effective March 1, 2015, the Adviser has contractually agreed, through at least February 29, 2016, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.05%, 1.80%, 1.30%, 0.80%, 0.80% and 0.80% of average daily net assets, respectively. Prior to March 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 C, Class R, Class Y, Class R5 and Class R6 shares to 0.89%, 1.64%, 1.14%, 0.64%, 0.64% and 0.64% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $144,586 and reimbursed class level expenses of $28,798, $10,044, $98, $7,505 and $112 of Class A, Class C, Class R, Class Y 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 April 30, 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 April 30, 2015, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
26 Invesco Premium 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 C, Class R, Class Y, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class C and Class R shares (collectively the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $13,766 in front-end sales commissions from the sale of Class A shares and $1,475 and $78 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 April 30, 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 | $ | 48,673,448 | $ | 115,862 | $ | — | $ | 48,789,310 | ||||||||
U.S. Treasury Securities | — | 9,138,149 | — | 9,138,149 | ||||||||||||
Corporate Debt Securities | — | 68,227,400 | — | 68,227,400 | ||||||||||||
Foreign Debt Securities | — | 2,164,069 | — | 2,164,069 | ||||||||||||
Foreign Sovereign Debt Securities | — | 16,747,237 | — | 16,747,237 | ||||||||||||
48,673,448 | 96,392,717 | — | 145,066,165 | |||||||||||||
Forward Foreign Currency Contracts* | — | (64,124 | ) | — | (64,124 | ) | ||||||||||
Futures Contracts* | 422 | — | — | 422 | ||||||||||||
Swap Agreements* | — | 30,111 | — | 30,111 | ||||||||||||
Total Investments | $ | 48,673,870 | $ | 96,358,704 | $ | — | $ | 145,032,574 |
* | Unrealized appreciation (depreciation). |
27 Invesco Premium Income Fund
NOTE 4—Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Credit risk: | ||||||||
Swap agreements(a) | $ | 30,111 | $ | — | ||||
Currency risk: | ||||||||
Forward foreign currency contracts(b) | 4,937 | (69,061 | ) | |||||
Interest rate risk: | ||||||||
Futures contracts(c) | — | (159,681 | ) | |||||
Equity risk: | ||||||||
Futures contracts(c) | 200,312 | (40,209 | ) | |||||
Total | $ | 235,360 | $ | (268,951 | ) |
(a) | Includes cumulative appreciation of centrally cleared swap agreements. Only current day’s variation margin receivable is reported within the Statement of Assets and Liabilities. |
(b) | Values are disclosed on the Statement of Assets and Liabilities under the captions Unrealized appreciation on forward foreign currency contracts outstanding and Unrealized depreciation on forward foreign currency contracts outstanding. |
(c) | 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 April 30, 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 | Swap Agreements | ||||||||||
Realized Gain (Loss): | ||||||||||||
Credit risk | $ | — | $ | — | $ | (39,016 | ) | |||||
Currency risk | 207,241 | — | — | |||||||||
Interest rate risk | — | 848,462 | — | |||||||||
Equity risk | — | 76,332 | — | |||||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||
Credit risk | — | — | 70,955 | |||||||||
Currency risk | (119,441 | ) | — | — | ||||||||
Interest rate risk | — | (415,216 | ) | — | ||||||||
Equity risk | — | 395,876 | — | |||||||||
Total | $ | 87,800 | $ | 905,454 | $ | 31,939 |
The table below summarizes the average notional value of forward foreign currency contracts, futures contracts and swap agreements outstanding during the period.
Forward Foreign Currency Contracts | Futures Contracts | Swap Agreements | ||||||||||
Average notional value | $ | 1,901,308 | $ | 22,081,975 | $ | 1,445,080 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement Date | Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
06/12/15 | Citigroup Global Markets Inc. | EUR | 1,013,200 | USD | 1,096,498 | $ | 1,138,318 | $ | (41,820 | ) | ||||||||||||||||
06/12/15 | Citigroup Global Markets Inc. | GBP | 690,230 | USD | 1,036,239 | 1,059,278 | (23,039 | ) | ||||||||||||||||||
06/12/15 | Goldman Sachs International | EUR | 100,058 | USD | 108,212 | 112,414 | (4,202 | ) | ||||||||||||||||||
06/12/15 | Goldman Sachs International | USD | 156,142 | GBP | 102,546 | 157,374 | 1,232 | |||||||||||||||||||
06/12/15 | State Street Bank and Trust Co. | USD | 106,549 | EUR | 98,136 | 110,254 | 3,705 | |||||||||||||||||||
Total Open Forward Foreign Currency Contracts — Currency Risk | $ | (64,124 | ) |
Currency Abbreviations:
EUR | – Euro | |
GBP | – British Pound Sterling | |
USD | – U.S. Dollar |
28 Invesco Premium Income Fund
Open Futures Contracts | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
Australia 10 Year Bonds | Long | 7 | June-2015 | $ | 715,802 | $ | (19,979 | ) | ||||||||||||
Euro Bonds | Long | 4 | June-2015 | 703,834 | (10,590 | ) | ||||||||||||||
Long Gilt | Long | 15 | June-2015 | 2,719,890 | (55,630 | ) | ||||||||||||||
U.S. Treasury Long Bonds | Long | 14 | June-2015 | 2,234,313 | (73,482 | ) | ||||||||||||||
Subtotal — Interest Rate Risk |
| $ | (159,681 | ) | ||||||||||||||||
Dow Jones Euro STOXX 50 Index | Long | 63 | June-2015 | $ | 2,524,100 | $ | (26,142 | ) | ||||||||||||
E-Mini S&P 500 Index | Long | 21 | June-2015 | 2,182,845 | 37,370 | |||||||||||||||
FTSE 100 Index | Long | 21 | June-2015 | 2,233,709 | 67,020 | |||||||||||||||
Hang Seng Index | Long | 12 | May-2015 | 2,175,731 | (3,449 | ) | ||||||||||||||
Russell 2000 Mini Index | Long | 18 | June-2015 | 2,189,520 | (10,618 | ) | ||||||||||||||
Tokyo Stock Price Index | Long | 19 | June-2015 | 2,527,764 | 95,922 | |||||||||||||||
Subtotal — Equity Risk |
| $ | 160,103 | |||||||||||||||||
Total Futures Contracts |
| $ | 422 |
Open Centrally Cleared Credit Default Swap Agreements — Credit Risk | ||||||||||||||||||||||||||||||
Counterparty/ Clearinghouse | Reference Entity | Buy/Sell Protection | (Pay)/Receive Fixed Rate | Expiration Date | Implied Credit Spread(a) | Notional Value | Upfront Payments | Unrealized Appreciation | ||||||||||||||||||||||
Credit Suisse Securities (USA) LLC/ICE | Markit CDX North America, High Yield Index, Series 23 | Sell | 5.00 | % | 12/20/19 | 3.03 | % | $ | 1,360,240 | $ | (82,022 | ) | $ | 30,111 |
Abbreviations:
ICE | – Intercontinental Exchange |
(a) | Implied credit spreads represent the current level as of April 30, 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. |
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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of assets Statement of Assets & Liabilities | Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Credit Suisse Securities (USA) LLC/CME(a) | $ | 30,111 | $ | (30,111 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Goldman Sachs International(b) | 1,232 | (1,232 | ) | — | — | — | — | |||||||||||||||||
State Street Bank and Trust Co.(b) | 3,705 | — | 3,705 | — | — | 3,705 | ||||||||||||||||||
Total | $ | 35,048 | $ | (31,343 | ) | $ | 3,705 | $ | — | $ | — | $ | 3,705 |
29 Invesco Premium Income Fund
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized | 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 | |||||||||||||||||||||
Credit Suisse Securities (USA) LLC/CME(a) | $ | 82,022 | $ | (30,111 | ) | $ | 51,911 | $ | (51,911 | ) | $ | — | $ | — | ||||||||||
Goldman Sachs International(b) | 4,202 | (1,232 | ) | 2,970 | — | — | 2,970 | |||||||||||||||||
Citigroup Global Markets Inc.(b) | 64,859 | — | 64,859 | — | — | 64,859 | ||||||||||||||||||
Total | $ | 151,083 | $ | (31,343 | ) | $ | 119,740 | $ | (51,911 | ) | $ | — | $ | 67,829 |
(a) | Includes upfront payments and cumulative appreciation of centrally cleared swap agreements. |
(b) | 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 April 30, 2015, the Fund engaged in securities sales of $234,253, which resulted in net realized gains of $1,211.
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 October 31, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
Not subject to expiration | $ | 3,990,533 | $ | 2,190,466 | $ | 6,180,999 |
* | 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. |
30 Invesco Premium Income Fund
NOTE 9—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2015 was $79,649,527 and $51,886,790, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $2,603,566 and $2,202,779, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities | $ | 5,590,407 | ||
Aggregate unrealized (depreciation) of investment securities | (1,262,152 | ) | ||
Net unrealized appreciation of investment securities | $ | 4,328,255 |
Cost of investments for tax purposes is $140,737,910.
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 1,881,194 | $ | 19,585,841 | 1,674,041 | $ | 17,271,491 | ||||||||||
Class C | 366,979 | 3,819,878 | 395,527 | 4,043,695 | ||||||||||||
Class R | 2,676 | 27,767 | 8,385 | 85,861 | ||||||||||||
Class Y | 1,275,109 | 13,261,991 | 999,906 | 10,319,807 | ||||||||||||
Class R6 | 879,187 | 9,131,869 | 1,318,479 | 13,484,561 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 67,254 | 695,451 | 121,004 | 1,228,961 | ||||||||||||
Class C | 20,550 | 212,220 | 44,317 | 449,554 | ||||||||||||
Class R | 308 | 3,180 | 395 | 4,044 | ||||||||||||
Class Y | 18,721 | 193,858 | 27,683 | 281,703 | ||||||||||||
Class R6 | 135,938 | 1,406,067 | 473,502 | 4,760,854 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (1,117,541 | ) | (11,564,623 | ) | (1,769,874 | ) | (17,939,517 | ) | ||||||||
Class C | (201,860 | ) | (2,087,849 | ) | (660,296 | ) | (6,678,298 | ) | ||||||||
Class R | (643 | ) | (6,610 | ) | (223 | ) | (2,336 | ) | ||||||||
Class Y | (397,636 | ) | (4,096,973 | ) | (1,116,824 | ) | (11,522,459 | ) | ||||||||
Class R6 | (25,427 | ) | (266,127 | ) | (13,919,440 | ) | (141,071,064 | ) | ||||||||
Net increase (decrease) in share activity | 2,904,809 | $ | 30,315,940 | (12,403,418 | ) | $ | (125,283,143 | ) |
(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. |
In addition, 42% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco. |
31 Invesco Premium 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(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.37 | $ | 0.24 | $ | 0.14 | $ | 0.38 | $ | (0.25 | ) | $ | — | $ | (0.25 | ) | $ | 10.50 | 3.70 | % | $ | 51,353 | 0.93 | %(d) | 1.29 | %(d) | 4.59 | %(d) | 46 | % | ||||||||||||||||||||||||||
Year ended 10/31/14 | 10.04 | 0.48 | 0.37 | 0.85 | (0.52 | ) | — | (0.52 | ) | 10.37 | 8.66 | 42,104 | 0.88 | 1.28 | 4.69 | 89 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.83 | 0.50 | (0.58 | ) | (0.08 | ) | (0.55 | ) | (0.16 | ) | (0.71 | ) | 10.04 | (0.83 | ) | 40,515 | 0.88 | 1.22 | 4.83 | 86 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.03 | 0.43 | 0.81 | 1.24 | (0.44 | ) | — | (0.44 | ) | 10.83 | 12.64 | 24,388 | 0.88 | (f) | 1.18 | (f) | 4.54 | (f) | 79 | |||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.36 | 0.20 | 0.14 | 0.34 | (0.21 | ) | — | (0.21 | ) | 10.49 | 3.31 | 16,988 | 1.68 | (d) | 2.04 | (d) | 3.84 | (d) | 46 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.03 | 0.40 | 0.37 | 0.77 | (0.44 | ) | — | (0.44 | ) | 10.36 | 7.85 | 14,854 | 1.63 | 2.03 | 3.94 | 89 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.82 | 0.42 | (0.58 | ) | (0.16 | ) | (0.47 | ) | (0.16 | ) | (0.63 | ) | 10.03 | (1.58 | ) | 16,592 | 1.63 | 1.97 | 4.08 | 86 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.03 | 0.36 | 0.81 | 1.17 | (0.38 | ) | — | (0.38 | ) | 10.82 | 11.91 | 10,469 | 1.63 | (f) | 1.93 | (f) | 3.79 | (f) | 79 | |||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.36 | 0.22 | 0.14 | 0.36 | (0.23 | ) | — | (0.23 | ) | 10.49 | 3.57 | 168 | 1.18 | (d) | 1.54 | (d) | 4.34 | (d) | 46 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.03 | 0.46 | 0.36 | 0.82 | (0.49 | ) | — | (0.49 | ) | 10.36 | 8.39 | 141 | 1.13 | 1.53 | 4.44 | 89 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.83 | 0.47 | (0.59 | ) | (0.12 | ) | (0.52 | ) | (0.16 | ) | (0.68 | ) | 10.03 | (1.17 | ) | 51 | 1.13 | 1.47 | 4.58 | 86 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.03 | 0.40 | 0.82 | 1.22 | (0.42 | ) | — | (0.42 | ) | 10.83 | 12.43 | 50 | 1.13 | (f) | 1.43 | (f) | 4.29 | (f) | 79 | |||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.37 | 0.25 | 0.14 | 0.39 | (0.26 | ) | — | (0.26 | ) | 10.50 | 3.83 | 16,221 | 0.68 | (d) | 1.04 | (d) | 4.84 | (d) | 46 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.05 | 0.51 | 0.35 | 0.86 | (0.54 | ) | — | (0.54 | ) | 10.37 | 8.82 | 6,725 | 0.63 | 1.03 | 4.94 | 89 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.84 | 0.53 | (0.58 | ) | (0.05 | ) | (0.58 | ) | (0.16 | ) | (0.74 | ) | 10.05 | (0.57 | ) | 7,409 | 0.63 | 0.97 | 5.08 | 86 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.03 | 0.45 | 0.82 | 1.27 | (0.46 | ) | — | (0.46 | ) | 10.84 | 12.96 | 4,482 | 0.63 | (f) | 0.93 | (f) | 4.79 | (f) | 79 | |||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.37 | 0.25 | 0.14 | 0.39 | (0.26 | ) | — | (0.26 | ) | 10.50 | 3.83 | 11 | 0.68 | (d) | 0.91 | (d) | 4.84 | (d) | 46 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.05 | 0.50 | 0.36 | 0.86 | (0.54 | ) | — | (0.54 | ) | 10.37 | 8.82 | 10 | 0.63 | 0.90 | 4.94 | 89 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.84 | 0.54 | (0.59 | ) | (0.05 | ) | (0.58 | ) | (0.16 | ) | (0.74 | ) | 10.05 | (0.57 | ) | 10 | 0.63 | 0.90 | 5.08 | 86 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.03 | 0.44 | 0.83 | 1.27 | (0.46 | ) | — | (0.46 | ) | 10.84 | 12.96 | 766 | 0.63 | (f) | 0.85 | (f) | 4.79 | (f) | 79 | |||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.37 | 0.25 | 0.14 | 0.39 | (0.26 | ) | — | (0.26 | ) | 10.50 | 3.83 | 62,092 | 0.68 | (d) | 0.91 | (d) | 4.84 | (d) | 46 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 10.04 | 0.50 | 0.37 | 0.87 | (0.54 | ) | — | (0.54 | ) | 10.37 | 8.93 | 51,057 | 0.63 | 0.90 | 4.94 | 89 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 10.84 | 0.53 | (0.59 | ) | (0.06 | ) | (0.58 | ) | (0.16 | ) | (0.74 | ) | 10.04 | (0.67 | ) | 171,140 | 0.63 | 0.85 | 5.08 | 86 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/12(e) | 10.75 | 0.05 | 0.09 | 0.14 | (0.05 | ) | — | (0.05 | ) | 10.84 | 1.31 | 138,779 | 0.63 | (f) | 0.82 | (f) | 4.79 | (f) | 79 |
(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 $44,478, $15,513, $151, $11,591, $10 and $56,143 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of December 14, 2011 for Class A, Class C, Class R, Class Y and Class R5 shares and September 24, 2012 for Class R6 shares. |
(f) | Annualized. |
32 Invesco Premium Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio2 | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period3 | Ending Account Value (04/30/15) | Expenses Paid During Period4 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,037.00 | $ | 4.70 | $ | 1,020.18 | $ | 4.66 | 0.93 | % | ||||||||||||
C | 1,000.00 | 1,033.10 | 8.47 | 1,016.46 | 8.40 | 1.68 | ||||||||||||||||||
R | 1,000.00 | 1,035.70 | 5.96 | 1,018.94 | 5.91 | 1.18 | ||||||||||||||||||
Y | 1,000.00 | 1,038.30 | 3.44 | 1,021.42 | 3.41 | 0.68 | ||||||||||||||||||
R5 | 1,000.00 | 1,039.30 | 3.44 | 1,021.42 | 3.41 | 0.68 | ||||||||||||||||||
R6 | 1,000.00 | 1,039.30 | 3.44 | 1,021.42 | 3.41 | 0.68 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. Effective March 1, 2015, the Fund’s adviser has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expense of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.05%, 1.80%, 1.30%, 0.80%, 0.80% and 0.80% of average daily net assets, respectively. The annualized expense ratios restated as if these agreements had been in effect throughout the entire most recent fiscal half year are 1.04%, 1.79%, 1.29%, 0.79%, 0.79% and 0.79% for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
3 | The actual expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $5.25, $9.02, $6.51, $3.99, $3.99 and $3.99 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
4 | The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $5.21, $8.95, $6.46, $3.96, $3.96 and $3.96 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
33 Invesco Premium 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: 811-05426 and 033-19338 | PIN-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Select Companies Fund | ||||
Nasdaq: | ||||
A: ATIAX ¡ B: ATIBX ¡ C: ATICX ¡ R: ATIRX ¡ Y: ATIYX ¡ R5: ATIIX | ||||
| ||||
2 Fund Performance | ||||
4 Letters to Shareholders | ||||
5 Schedule of Investments | ||||
7 Financial Statements | ||||
9 Notes to Financial Statements | ||||
16 Financial Highlights | ||||
17 Fund Expenses | ||||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||||||
Fund vs. Indexes | ||||||
Cumulative total returns, 10/31/14 to 4/30/15, 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 | 0.42 | % | ||||
Class B Shares | 0.04 | |||||
Class C Shares | 0.00 | |||||
Class R Shares | 0.26 | |||||
Class Y Shares | 0.54 | |||||
Class R5 Shares | 0.57 | |||||
S&P 500 Index‚ (Broad Market Index) | 4.40 | |||||
Russell 2000 Index‚ (Style-Specific Index) | 4.65 | |||||
Lipper Small-Cap Core Funds Indexn (Peer Group Index) | 3.88 | |||||
Source(s): ‚FactSet Research Systems Inc.; nLipper Inc. | ||||||
The S&P 500® Index is an unmanaged index considered representative of the US stock market. | ||||||
The Russell 2000® Index is an unmanaged index considered representative of small-cap stocks. The Russell 2000 Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co. | ||||||
The Lipper Small-Cap Core Funds Index is an unmanaged index considered representative of small-cap core funds tracked by Lipper. | ||||||
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). | ||||||
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
2 | Invesco Select Companies Fund |
Average Annual Total Returns | |||||||
As of 4/30/15, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (11/4/03) | 10.75 | % | |||||
10 Years | 9.86 | ||||||
5 Years | 12.16 | ||||||
1 Year | 0.58 | ||||||
Class B Shares | |||||||
Inception (11/4/03) | 10.73 | % | |||||
10 Years | 9.82 | ||||||
5 Years | 12.32 | ||||||
1 Year | 0.89 | ||||||
Class C Shares | |||||||
Inception (11/4/03) | 10.48 | % | |||||
10 Years | 9.65 | ||||||
5 Years | 12.56 | ||||||
1 Year | 4.67 | ||||||
Class R Shares | |||||||
Inception (4/30/04) | 11.01 | % | |||||
10 Years | 10.21 | ||||||
5 Years | 13.14 | ||||||
1 Year | 6.15 | ||||||
Class Y Shares | |||||||
10 Years | 10.66 | % | |||||
5 Years | 13.72 | ||||||
1 Year | 6.69 | ||||||
Class R5 Shares | |||||||
Inception (4/30/04) | 11.74 | % | |||||
10 Years | 10.94 | ||||||
5 Years | 13.82 | ||||||
1 Year | 6.76 |
Average Annual Total Returns | |||||||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges | |||||||
Class A Shares | |||||||
Inception (11/4/03) | 11.04 | % | |||||
10 Years | 9.61 | ||||||
5 Years | 13.22 | ||||||
1 Year | 1.30 | ||||||
Class B Shares | |||||||
Inception (11/4/03) | 11.02 | % | |||||
10 Years | 9.57 | ||||||
5 Years | 13.41 | ||||||
1 Year | 1.70 | ||||||
Class C Shares | |||||||
Inception (11/4/03) | 10.78 | % | |||||
10 Years | 9.41 | ||||||
5 Years | 13.65 | ||||||
1 Year | 5.45 | ||||||
Class R Shares | |||||||
Inception (4/30/04) | 11.32 | % | |||||
10 Years | 9.97 | ||||||
5 Years | 14.22 | ||||||
1 Year | 6.93 | ||||||
Class Y Shares | |||||||
10 Years | 10.41 | % | |||||
5 Years | 14.79 | ||||||
1 Year | 7.47 | ||||||
Class R5 Shares | |||||||
Inception (4/30/04) | 12.05 | % | |||||
10 Years | 10.70 | ||||||
5 Years | 14.91 | ||||||
1 Year | 7.57 |
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 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.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information. 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, 2017. See current prospectus for more information. |
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.
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y and Class R5 shares was 1.20%, 1.95%, 1.95%, 1.45%, 0.95% and 0.88%, respectively.1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C, Class R, Class Y and Class R5 shares was 1.24%, 1.99%, 1.99%, 1.49%, 0.99% and 0.92%, 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.
3 | Invesco Select Companies 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 Select Companies Fund |
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Shares | Value | |||||||
Common Stocks & Other Equity Interests–81.85% |
| |||||||
Aerospace & Defense–4.15% | ||||||||
Cubic Corp. | 1,033,123 | $ | 51,222,238 | |||||
Aluminum–0.00% | ||||||||
Cymat Technologies Ltd. (Canada)(b) | 249,750 | 33,123 | ||||||
Apparel, Accessories & Luxury Goods–0.02% | ||||||||
Hampshire Group, Ltd.(b)(c) | 592,824 | 198,596 | ||||||
Automotive Retail–3.92% | ||||||||
America’s Car-Mart, Inc.(b)(c) | 942,136 | 48,369,262 | ||||||
Commodity Chemicals–1.51% | ||||||||
Chemtrade Logistics Income Fund (Canada) | 1,045,784 | 18,594,220 | ||||||
Communications Equipment–3.50% | ||||||||
Mitel Networks Corp.(b) | 4,649,544 | 43,194,264 | ||||||
Consumer Finance–5.23% | ||||||||
Encore Capital Group, Inc.(b)(c) | 1,597,305 | 64,595,014 | ||||||
Data Processing & Outsourced Services–9.21% | ||||||||
Alliance Data Systems Corp.(b) | 149,537 | 44,458,845 | ||||||
Global Payments Inc. | 691,427 | 69,336,300 | ||||||
113,795,145 | ||||||||
Diversified Support Services–1.33% | ||||||||
Performant Financial Corp.(b)(c) | 5,527,196 | 16,415,772 | ||||||
Education Services–2.82% | ||||||||
American Public Education Inc.(b)(c) | 1,250,051 | 34,863,923 | ||||||
Electrical Components & Equipment–3.89% | ||||||||
Regal-Beloit Corp. | 614,559 | 48,058,514 | ||||||
Health Care Supplies–8.71% | ||||||||
Alere, Inc.(b) | 1,530,895 | 72,686,895 | ||||||
Cooper Cos., Inc. (The) | 196,102 | 34,919,883 | ||||||
107,606,778 | ||||||||
IT Consulting & Other Services–5.56% | ||||||||
Booz Allen Hamilton Holding Corp. | 2,497,610 | 68,684,275 |
Shares | Value | |||||||
Life Sciences Tools & Services–4.28% | ||||||||
Charles River Laboratories International, Inc.(b) | 764,660 | $ | 52,883,886 | |||||
Oil & Gas Equipment & Services–2.60% | ||||||||
ION Geophysical Corp.(b)(c) | 14,077,289 | 32,096,219 | ||||||
Oil & Gas Exploration & Production–5.31% | ||||||||
Ultra Petroleum Corp.(b) | 3,851,035 | 65,583,126 | ||||||
Other Diversified Financial Services–0.00% | ||||||||
Brompton Corp. (Canada)(b) | 69,374 | 0 | ||||||
Publishing–4.68% | ||||||||
John Wiley & Sons, Inc.–Class A | 1,015,664 | 57,770,968 | ||||||
Real Estate Services–3.59% | ||||||||
FirstService Corp. (Canada) | 676,466 | 44,286,542 | ||||||
Semiconductors–5.43% | ||||||||
Microsemi Corp.(b) | 2,009,806 | 67,047,128 | ||||||
Systems Software–4.28% | ||||||||
Rovi Corp.(b) | 2,856,087 | 52,866,171 | ||||||
Trucking–1.83% | ||||||||
Con-way Inc. | 550,873 | 22,640,880 | ||||||
Total Common Stocks & Other Equity Interests |
| 1,010,806,044 | ||||||
Money Market Funds–18.39% |
| |||||||
Liquid Assets Portfolio–Institutional Class(d) | 113,555,515 | 113,555,515 | ||||||
Premier Portfolio–Institutional Class(d) | 113,555,515 | 113,555,515 | ||||||
Total Money Market Funds | 227,111,030 | |||||||
TOTAL INVESTMENTS–100.24% | 1,237,917,074 | |||||||
OTHER ASSETS LESS LIABILITIES–(0.24)% |
| (2,998,747 | ) | |||||
NET ASSETS–100.00% | $ | 1,234,918,327 |
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) | Affiliated company during the period. The Investment Company Act of 1940 defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the Investment Company Act of 1940) of that issuer. The aggregate value of these securities as of April 30, 2015 was $196,538,786, which represented 15.92% of the Fund’s Net Assets. See Note 4. |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Select Companies Fund
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2015
Information Technology | 28.0 | % | ||
Health Care | 13.0 | |||
Consumer Discretionary | 11.4 | |||
Industrials | 11.2 | |||
Financials | 8.8 | |||
Energy | 7.9 | |||
Materials | 1.5 | |||
Money Market Funds Plus Other Assets Less Liabilities | 18.2 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Select Companies Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $486,753,794) | $ | 814,267,258 | ||
Investments in affiliates, at value (Cost $506,651,465) | 423,649,816 | |||
Total investments, at value (Cost $993,405,259) | 1,237,917,074 | |||
Receivable for: | ||||
Fund shares sold | 242,424 | |||
Dividends | 86,961 | |||
Investment for trustee deferred compensation and retirement plans | 146,754 | |||
Other assets | 49,493 | |||
Total assets | 1,238,442,706 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares reacquired | 2,278,033 | |||
Accrued fees to affiliates | 919,711 | |||
Accrued trustees’ and officers’ fees and benefits | 9,712 | |||
Accrued other operating expenses | 149,904 | |||
Trustee deferred compensation and retirement plans | 167,019 | |||
Total liabilities | 3,524,379 | |||
Net assets applicable to shares outstanding | $ | 1,234,918,327 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 953,115,860 | ||
Undistributed net investment income (loss) | (11,444,624 | ) | ||
Undistributed net realized gain | 48,735,043 | |||
Net unrealized appreciation | 244,512,048 | |||
$ | 1,234,918,327 |
Net Assets: | ||||
Class A | $ | 672,583,836 | ||
Class B | $ | 6,978,126 | ||
Class C | $ | 168,369,463 | ||
Class R | $ | 60,706,082 | ||
Class Y | $ | 259,560,003 | ||
Class R5 | $ | 66,720,817 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 29,232,434 | |||
Class B | 332,224 | |||
Class C | 8,027,376 | |||
Class R | 2,712,063 | |||
Class Y | 11,151,631 | |||
Class R5 | 2,784,542 | |||
Class A: | ||||
Net asset value per share | $ | 23.01 | ||
Maximum offering price per share | ||||
(Net asset value of $23.01 ¸ 94.50%) | $ | 24.35 | ||
Class B: | ||||
Net asset value and offering price per share | $ | 21.00 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 20.97 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 22.38 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 23.28 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 23.96 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Select Companies Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $103,959) | $ | 1,123,538 | ||
Dividends from affiliates | 71,699 | |||
Interest | 8,700 | |||
Total investment income | 1,203,937 | |||
Expenses: | ||||
Advisory fees | 4,713,627 | |||
Administrative services fees | 162,997 | |||
Custodian fees | 18,047 | |||
Distribution fees: | ||||
Class A | 889,777 | |||
Class B | 41,568 | |||
Class C | 875,245 | |||
Class R | 164,519 | |||
Transfer agent fees — A, B, C, R and Y | 1,018,397 | |||
Transfer agent fees — R5 | 33,010 | |||
Trustees’ and officers’ fees and benefits | 28,710 | |||
Other | 166,979 | |||
Total expenses | 8,112,876 | |||
Less: Fees waived and expense offset arrangement(s) | (228,274 | ) | ||
Net expenses | 7,884,602 | |||
Net investment income (loss) | (6,680,665 | ) | ||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities (includes net gains from securities sold to affiliates of $868,030) | 52,252,467 | |||
Foreign currencies | (3,170,156 | ) | ||
49,082,311 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | (37,146,488 | ) | ||
Foreign currencies | 753,151 | |||
(36,393,337 | ) | |||
Net realized and unrealized gain | 12,688,974 | |||
Net increase in net assets resulting from operations | $ | 6,008,309 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Select Companies Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the year ended October 31, 2014
(Unaudited)
April 30, 2015 | October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income (loss) | $ | (6,680,665 | ) | $ | (4,716,720 | ) | ||
Net realized gain | 49,082,311 | 136,727,123 | ||||||
Change in net unrealized appreciation (depreciation) | (36,393,337 | ) | 35,296,385 | |||||
Net increase in net assets resulting from operations | 6,008,309 | 167,306,788 | ||||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (71,199,854 | ) | (41,356,017 | ) | ||||
Class B | (916,858 | ) | (565,193 | ) | ||||
Class C | (18,752,500 | ) | (9,079,104 | ) | ||||
Class R | (6,758,426 | ) | (3,610,155 | ) | ||||
Class Y | (28,688,490 | ) | (17,699,816 | ) | ||||
Class R5 | (6,188,617 | ) | (3,696,664 | ) | ||||
Total distributions from net realized gains | (132,504,745 | ) | (76,006,949 | ) | ||||
Share transactions–net: | ||||||||
Class A | (14,006,195 | ) | (180,545,095 | ) | ||||
Class B | (1,172,664 | ) | (2,998,780 | ) | ||||
Class C | 6,113,482 | (10,931,159 | ) | |||||
Class R | (3,019,374 | ) | (10,410,262 | ) | ||||
Class Y | (18,063,916 | ) | (88,773,706 | ) | ||||
Class R5 | 6,513,288 | (19,977,867 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions | (23,635,379 | ) | (313,636,869 | ) | ||||
Net increase (decrease) in net assets | (150,131,815 | ) | (222,337,030 | ) | ||||
Net assets: | ||||||||
Beginning of period | 1,385,050,142 | 1,607,387,172 | ||||||
End of period (includes undistributed net investment income (loss) of $(11,444,624) and $(4,763,959), respectively) | $ | 1,234,918,327 | $ | 1,385,050,142 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Select Companies Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Class R5. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will 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.
As of the end of business on March 15, 2012, the Fund has limited public sales of its shares to certain investors.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible 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
9 Invesco Select Companies 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.
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.
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 |
10 Invesco Select Companies Fund
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 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. 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 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.
11 Invesco Select Companies Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $250 million | 0 | .745% | ||||
Next $250 million | 0 | .73% | ||||
Next $500 million | 0 | .715% | ||||
Next $1.5 billion | 0 | .70% | ||||
Next $2.5 billion | 0 | .685% | ||||
Next $2.5 billion | 0 | .67% | ||||
Next $2.5 billion | 0 | .655% | ||||
Over $10 billion | 0 | .64% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.72%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc., 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, through at least June 30, 2016, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses after fee waivers and/or expense reimbursements (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Class R5 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 total annual fund operating expenses after fee waivers and/or expense reimbursements 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, 2016. 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, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $227,412.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 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 April 30, 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 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 and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $1,117 in front-end sales commissions from the sale of Class A shares and $17,644, $1,654 and $649 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
12 Invesco Select Companies Fund
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — Prices | are determined using quoted prices in an active market for identical assets. |
Level 2 — Prices | are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 — Prices | are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 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 | $ | 1,237,917,074 | $ | — | $ | 0 | $ | 1,237,917,074 |
NOTE 4—Investments in Other Affiliates
The 1940 Act defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the 1940 Act) of that issuer. The following is a summary of the investments in other affiliates for the six months ended April 30, 2015.
Value 10/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain (Loss) | Value 04/30/15 | Dividend Income | ||||||||||||||||||||||
America’s Car Mart, Inc. | $ | 43,319,413 | $ | — | $ | — | $ | 5,049,849 | $ | — | $ | 48,369,262 | $ | — | ||||||||||||||
American Public Education, Inc. | 44,098,925 | — | (5,933,600 | ) | (2,694,021 | ) | (607,381 | ) | 34,863,923 | — | ||||||||||||||||||
Encore Capital Group, Inc. | 50,744,469 | 20,676,989 | — | (6,826,444 | ) | — | 64,595,014 | — | ||||||||||||||||||||
Hampshire Group, Ltd. | 1,487,988 | — | — | (1,289,392 | ) | — | 198,596 | — | ||||||||||||||||||||
ION Geophysical Corp. | 39,416,409 | — | — | (7,320,190 | ) | — | 32,096,219 | — | ||||||||||||||||||||
Performant Financial Corp. | 28,744,105 | 14,640,846 | (20,900 | ) | (26,922,767 | ) | (25,512 | ) | 16,415,772 | — | ||||||||||||||||||
Total | $ | 207,811,309 | $ | 35,317,835 | $ | (5,954,500 | ) | $ | (40,002,965 | ) | $ | (632,893 | ) | $ | 196,538,786 | $ | — |
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 April 30, 2015, the Fund engaged in securities sales of $3,107,936, which resulted in net realized gains of $868,030.
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 April 30, 2015, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $862.
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.
13 Invesco Select Companies 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 October 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 April 30, 2015 was $103,382,510 and $120,917,470, 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 | $ | 344,835,812 | ||
Aggregate unrealized (depreciation) of investment securities | (100,664,793 | ) | ||
Net unrealized appreciation of investment securities | $ | 244,171,019 |
Cost of investments for tax purposes is $993,746,055.
14 Invesco Select Companies Fund
NOTE 11—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | Year ended October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 783,979 | $ | 18,559,487 | 3,644,392 | $ | 86,862,251 | ||||||||||
Class B | 578 | 12,440 | 13,561 | 301,065 | ||||||||||||
Class C | 69,414 | 1,503,321 | 333,846 | 7,383,566 | ||||||||||||
Class R | 291,877 | 6,694,785 | 669,277 | 15,849,454 | ||||||||||||
Class Y | 405,763 | 9,701,907 | 4,809,060 | 116,897,383 | ||||||||||||
Class R5 | 264,023 | 6,514,749 | 613,241 | 15,312,739 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 3,010,749 | 66,718,192 | 1,721,956 | 38,847,334 | ||||||||||||
Class B | 42,091 | 854,027 | 24,878 | 522,441 | ||||||||||||
Class C | 881,605 | 17,861,315 | 411,569 | 8,634,710 | ||||||||||||
Class R | 313,180 | 6,758,426 | 163,418 | 3,608,270 | ||||||||||||
Class Y | 1,152,785 | 25,822,392 | 623,137 | 14,157,670 | ||||||||||||
Class R5 | 264,206 | 6,089,938 | 133,694 | 3,115,068 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: | ||||||||||||||||
Class A | 64,093 | 1,511,075 | 78,001 | 1,886,904 | ||||||||||||
Class B | (70,073 | ) | (1,511,075 | ) | (84,013 | ) | (1,886,904 | ) | ||||||||
Reacquired: | ||||||||||||||||
Class A | (4,241,096 | ) | (100,794,949 | ) | (12,693,542 | ) | (308,141,584 | ) | ||||||||
Class B | (24,132 | ) | (528,056 | ) | (86,383 | ) | (1,935,382 | ) | ||||||||
Class C | (611,260 | ) | (13,251,154 | ) | (1,203,216 | ) | (26,949,435 | ) | ||||||||
Class R | (713,943 | ) | (16,472,585 | ) | (1,265,120 | ) | (29,867,986 | ) | ||||||||
Class Y | (2,256,840 | ) | (53,588,215 | ) | (9,038,247 | ) | (219,828,759 | ) | ||||||||
Class R5 | (247,011 | ) | (6,091,399 | ) | (1,544,955 | ) | (38,405,674 | ) | ||||||||
Net increase (decrease) in share activity | (620,012 | ) | $ | (23,635,379 | ) | (12,675,446 | ) | $ | (313,636,869 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 41% 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 Select Companies 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 (loss)(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 (loss) to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 25.47 | $ | (0.12 | ) | $ | 0.13 | $ | 0.01 | $ | — | $ | (2.47 | ) | $ | (2.47 | ) | $ | 23.01 | 0.42 | % | $ | 672,584 | 1.16 | %(d) | 1.19 | %(d) | (0.97 | )%(d) | 10 | % | |||||||||||||||||||||||||
Year ended 10/31/14 | 23.95 | (0.06 | ) | 2.71 | 2.65 | — | (1.13 | ) | (1.13 | ) | 25.47 | 11.66 | 754,310 | 1.16 | 1.20 | (0.28 | ) | 10 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 20.57 | (0.12 | ) | 4.95 | 4.83 | (0.23 | ) | (1.22 | ) | (1.45 | ) | 23.95 | 25.11 | 883,072 | 1.16 | 1.20 | (0.55 | ) | 19 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 18.97 | (0.07 | ) | 1.67 | (e) | 1.60 | — | — | — | 20.57 | 8.43 | 725,950 | 1.18 | 1.23 | (0.34 | ) | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 15.50 | (0.12 | ) | 3.59 | 3.47 | — | — | — | 18.97 | 22.39 | 485,609 | 1.24 | 1.27 | (0.64 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.09 | (0.02 | ) | 3.44 | 3.42 | (0.01 | ) | — | (0.01 | ) | 15.50 | 28.28 | 275,777 | 1.31 | 1.33 | (0.18 | ) | 50 | ||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 23.55 | (0.19 | ) | 0.11 | (0.08 | ) | — | (2.47 | ) | (2.47 | ) | 21.00 | 0.04 | 6,978 | 1.91 | (d) | 1.94 | (d) | (1.72 | )(d) | 10 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 22.40 | (0.23 | ) | 2.51 | 2.28 | — | (1.13 | ) | (1.13 | ) | 23.55 | 10.77 | 9,039 | 1.91 | 1.95 | (1.03 | ) | 10 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 19.32 | (0.26 | ) | 4.65 | 4.39 | (0.09 | ) | (1.22 | ) | (1.31 | ) | 22.40 | 24.22 | 11,551 | 1.91 | 1.95 | (1.30 | ) | 19 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.95 | (0.21 | ) | 1.58 | (e) | 1.37 | — | — | — | 19.32 | 7.63 | 13,251 | 1.93 | 1.98 | (1.09 | ) | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.78 | (0.24 | ) | 3.41 | 3.17 | — | — | — | 17.95 | 21.45 | 15,478 | 1.99 | 2.02 | (1.39 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.61 | (0.13 | ) | 3.30 | 3.17 | — | — | — | 14.78 | 27.30 | 13,952 | 2.06 | 2.08 | (0.93 | ) | 50 | ||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 23.53 | (0.19 | ) | 0.10 | (0.09 | ) | — | (2.47 | ) | (2.47 | ) | 20.97 | 0.00 | 168,369 | 1.91 | (d) | 1.94 | (d) | (1.72 | )(d) | 10 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 22.37 | (0.23 | ) | 2.52 | 2.29 | — | (1.13 | ) | (1.13 | ) | 23.53 | 10.83 | 180,853 | 1.91 | 1.95 | (1.03 | ) | 10 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 19.30 | (0.26 | ) | 4.64 | 4.38 | (0.09 | ) | (1.22 | ) | (1.31 | ) | 22.37 | 24.19 | 182,221 | 1.91 | 1.95 | (1.30 | ) | 19 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 17.93 | (0.21 | ) | 1.58 | (e) | 1.37 | — | — | — | 19.30 | 7.64 | 160,090 | 1.93 | 1.98 | (1.09 | ) | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 14.76 | (0.24 | ) | 3.41 | 3.17 | — | — | — | 17.93 | 21.48 | 123,286 | 1.99 | 2.02 | (1.39 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.60 | (0.13 | ) | 3.29 | 3.16 | — | — | — | 14.76 | 27.24 | 86,591 | 2.06 | 2.08 | (0.93 | ) | 50 | ||||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 24.88 | (0.14 | ) | 0.11 | (0.03 | ) | — | (2.47 | ) | (2.47 | ) | 22.38 | 0.26 | 60,706 | 1.41 | (d) | 1.44 | (d) | (1.22 | )(d) | 10 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 23.48 | (0.12 | ) | 2.65 | 2.53 | — | (1.13 | ) | (1.13 | ) | 24.88 | 11.37 | 70,177 | 1.41 | 1.45 | (0.53 | ) | 10 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 20.19 | (0.17 | ) | 4.86 | 4.69 | (0.18 | ) | (1.22 | ) | (1.40 | ) | 23.48 | 24.83 | 76,385 | 1.41 | 1.45 | (0.80 | ) | 19 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 18.66 | (0.12 | ) | 1.65 | (e) | 1.53 | — | — | — | 20.19 | 8.20 | 71,040 | 1.43 | 1.48 | (0.59 | ) | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 15.29 | (0.16 | ) | 3.53 | 3.37 | — | — | — | 18.66 | 22.04 | 62,112 | 1.49 | 1.52 | (0.89 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 11.95 | (0.06 | ) | 3.40 | 3.34 | (0.00 | ) | — | (0.00 | ) | 15.29 | 27.97 | 32,270 | 1.56 | 1.58 | (0.43 | ) | 50 | ||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 25.71 | (0.09 | ) | 0.13 | 0.04 | — | (2.47 | ) | (2.47 | ) | 23.28 | 0.54 | 259,560 | 0.91 | (d) | 0.94 | (d) | (0.72 | )(d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 24.11 | (0.01 | ) | 2.74 | 2.73 | — | (1.13 | ) | (1.13 | ) | 25.71 | 11.92 | 304,629 | 0.91 | 0.95 | (0.03 | ) | 10 | ||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 20.69 | (0.06 | ) | 4.98 | 4.92 | (0.28 | ) | (1.22 | ) | (1.50 | ) | 24.11 | 25.47 | 372,632 | 0.91 | 0.95 | (0.30 | ) | 19 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 19.03 | (0.02 | ) | 1.68 | (e) | 1.66 | — | — | — | 20.69 | 8.72 | 235,268 | 0.93 | 0.98 | (0.09 | ) | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 15.51 | (0.07 | ) | 3.59 | 3.52 | — | — | — | 19.03 | 22.70 | 41,476 | 0.99 | 1.02 | (0.39 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.07 | 0.01 | 3.44 | 3.45 | (0.01 | ) | — | (0.01 | ) | 15.51 | 28.62 | 12,735 | 1.06 | 1.08 | 0.07 | 50 | ||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 26.38 | (0.08 | ) | 0.13 | 0.05 | — | (2.47 | ) | (2.47 | ) | 23.96 | 0.57 | 66,721 | 0.84 | (d) | 0.87 | (d) | (0.65 | )(d) | 10 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14 | 24.69 | 0.01 | 2.81 | 2.82 | — | (1.13 | ) | (1.13 | ) | 26.38 | 12.01 | 66,042 | 0.84 | 0.88 | 0.04 | 10 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/13 | 21.16 | (0.05 | ) | 5.10 | 5.05 | (0.30 | ) | (1.22 | ) | (1.52 | ) | 24.69 | 25.53 | 81,527 | 0.83 | 0.87 | (0.22 | ) | 19 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/12 | 19.45 | (0.00 | ) | 1.71 | (e) | 1.71 | — | — | — | 21.16 | 8.79 | 71,138 | 0.84 | 0.89 | (0.00 | ) | 37 | |||||||||||||||||||||||||||||||||||||||
Year ended 10/31/11 | 15.82 | (0.04 | ) | 3.67 | 3.63 | — | — | — | 19.45 | 22.95 | 70,652 | 0.83 | 0.86 | (0.23 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/10 | 12.30 | 0.04 | 3.50 | 3.54 | (0.02 | ) | — | (0.02 | ) | 15.82 | 28.79 | 29,499 | 0.86 | 0.88 | 0.27 | 50 |
(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 $717,720, $8,383, $176,500, $66,353, $284,707 and $66,749 for Class A, Class B, Class C, Class R, Class Y and Class R5 shares, respectively. |
(e) | Net gains (losses) on securities (both realized and unrealized) include capital gains realized on distributions from Booz Allen Hamilton Holding Corp. on June 7, 2012 and Generac Holdings, Inc. on July 2, 2012. Net gains (losses) on securities (both realized and unrealized) excluding the capital gains are $1.55, $1.46, $1.46, $1.53, $1.56 and $1.59 for Class A, Class B, Class C, Class R, Class Y and Class R5, respectively. |
16 Invesco Select Companies Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,004.20 | $ | 5.76 | $ | 1,019.04 | $ | 5.81 | 1.16 | % | ||||||||||||
B | 1,000.00 | 1,000.40 | 9.47 | 1,015.32 | 9.54 | 1.91 | ||||||||||||||||||
C | 1,000.00 | 1,000.00 | 9.47 | 1,015.32 | 9.54 | 1.91 | ||||||||||||||||||
R | 1,000.00 | 1,002.60 | 7.00 | 1,017.80 | 7.05 | 1.41 | ||||||||||||||||||
Y | 1,000.00 | 1,005.40 | 4.52 | 1,020.28 | 4.56 | 0.91 | ||||||||||||||||||
R5 | 1,000.00 | 1,005.70 | 4.18 | 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 November 1, 2014 through April 30, 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 Select Companies 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: 811-05426 and 033-19338 | SCO-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Strategic Income Fund
| ||||
Nasdaq: | ||||
A: SIZAX ¡ C: SIZCX ¡ R: SIZRX ¡ Y: SIZYX ¡ R5: SIZFX ¡ R6: SIZSX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
10 Financial Statements | ||||
12 Notes to Financial Statements | ||||
24 Financial Highlights | ||||
25 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, 10/31/14 to 4/30/15, 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
| 1.57%
| |
Class C Shares
| 1.19
| |
Class R Shares
| 1.45
| |
Class Y Shares
| 1.80
| |
Class R5 Shares
| 1.80
| |
Class R6 Shares
| 1.80
| |
Barclays U.S. Aggregate Indexq (Broad Market/Style-Specific Index)
| 2.06
| |
Lipper Multi-Sector Income Funds Indexn (Peer Group Index)
| 0.98
| |
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 Multi-Sector Income Funds Index is an unmanaged index considered representative of multi-sector income funds tracked by Lipper. The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
|
| ||
Cumulative Total Returns | ||
As of 4/30/15, including maximum applicable
| ||
Class A Shares | ||
Inception (5/2/14) | –0.58% | |
Class C Shares | ||
Inception (5/2/14) | 2.09% | |
Class R Shares | ||
Inception (5/2/14) | 3.56% | |
Class Y Shares | ||
Inception (5/2/14) | 4.14% | |
Class R5 Shares | ||
Inception (5/2/14) | 4.14% | |
Class R6 Shares | ||
Inception (5/2/14) | 4.14% |
| ||
Cumulative Total Returns | ||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
| ||
Class A Shares | ||
Inception (5/2/14) | –0.76% | |
Class C Shares | ||
Inception (5/2/14) | 1.86% | |
Class R Shares | ||
Inception (5/2/14) | 3.40% | |
Class Y Shares | ||
Inception (5/2/14) | 3.82% | |
Class R5 Shares | ||
Inception (5/2/14) | 3.82% | |
Class R6 Shares | ||
Inception (5/2/14) | 3.82% |
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 0.94%, 1.69%, 1.19%, 0.69%, 0.69% and 0.69%, respectively.1,2,3 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 2.31%, 3.06%, 2.56%, 2.06%, 2.13% and 2.13%, 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 C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
3 | The expense ratio includes acquired fund fees and expenses of the underlying funds in which the Fund invests of 0.14%. |
2 Invesco Strategic 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.
3 Invesco Strategic Income Fund
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Principal Amount | Value | |||||||
Asset-Backed Securities–55.42% |
| |||||||
Avenue CLO III Ltd., Series 2006-3A, Class B1L, Floating Rate Pass Through Ctfs., 1.93%, 07/20/18(b)(c) | $ | 200,000 | $ | 200,200 | ||||
Babson Euro CLO 2014-2 B.V. (Netherlands), Series 2014-2A, Class D, Floating Rate Pass Through Ctfs., | EUR | 250,000 | 273,988 | |||||
Babson Mid-Market CLO Inc. 2007-II (Cayman Islands), Series 2007-2A, Class E, Floating Rate Pass Through Ctfs., 3.93%, 04/15/21(c) | 500,000 | 492,900 | ||||||
BAMLL Commercial Mortgage Securities Trust, Series 2014-ICTS, Class C, Floating Rate Pass Through Ctfs., 1.58%, 06/15/28(b)(c) | 200,000 | 199,147 | ||||||
Banc of America Commercial Mortgage Trust, Series 2006-2, Class AJ, Variable Rate Pass Through Ctfs., 5.76%, 05/10/45(c) | 540,000 | 561,884 | ||||||
Banc of America Funding Trust, Series 2006-3, Class 5A5, Pass Through Ctfs., 5.50%, 03/25/36 | 194,011 | 183,192 | ||||||
Banc of America Mortgage Trust, Series 2005-H, Class 2A1, Floating Rate Pass Through Ctfs., 2.67%, 09/25/35(c) | 300,056 | 277,027 | ||||||
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class AJ, Variable Rate Pass Through Ctfs., 4.99%, 09/11/42(c) | 500,000 | 506,027 | ||||||
Series 2007-T28, Class AJ, Variable Rate Pass Through Ctfs., 6.14%, 09/11/42(c) | 105,000 | 113,771 | ||||||
Cent CLO Ltd. (Cayman Islands), Series 2013-19A, Class C, Floating Rate Pass Through Ctfs., 3.55%, 10/29/25(b)(c) | 250,000 | 240,850 | ||||||
Chase Mortgage Finance Trust, Series 2005-A1, Class 3A1, Floating Rate Pass Through Ctfs., 2.45%, 12/25/35(c) | 181,705 | 166,090 | ||||||
Series 2007-A1, Class 13A1, Floating Rate Pass Through Ctfs., 5.08%, 03/25/37(c) | 284,469 | 269,621 | ||||||
Citigroup Mortgage Loan Trust Inc., Series 2006-AR2, Class 1A2, Floating Rate Pass Through Ctfs., 2.60%, 03/25/36(c) | 196,599 | 188,325 | ||||||
Series 2005-11, Class A2A, Floating Rate Pass Through Ctfs., 2.51%, 10/25/35(c) | 91,951 | 91,337 | ||||||
Dryden XI-Leveraged Loan CDO, Series 2006-11A, Class A3, Floating Rate Pass Through Ctfs., 0.65%, 04/12/20(b)(c)(e) | 500,000 | 490,300 |
Principal Amount | Value | |||||||
Eaton Vance CDO VIII Ltd. (Cayman Islands), Series 2006-8A, Class D, Floating Rate Pass Through Ctfs., 3.68%, 08/15/22(b)(c) | $ | 400,000 | $ | 386,000 | ||||
Foothill CLO Ltd. (Cayman Islands), Series 2007-1A, Class C, Floating Rate Pass Through Ctfs., 0.97%, 02/22/21(b)(c) | 250,000 | 246,750 | ||||||
Gallatin CLO III Ltd., Series 2007-1A, Class A2L, Floating Rate Pass Through Ctfs., 0.60%, 05/15/21(b)(c)(e) | 200,000 | 196,940 | ||||||
GMACM Mortgage Loan Trust, Series 2006-AR1, Class 1A1, Floating Rate Pass Through Ctfs., 2.98%, 04/19/36(c) | 230,684 | 206,318 | ||||||
GSAA Home Equity Trust, Series 2007-7, Class A4, Floating Rate Pass Through Ctfs., 0.45%, 07/25/37(c) | 239,895 | 204,418 | ||||||
GSR Mortgage Loan Trust, Series 2006 1F, Class 1A11, Pass Through Ctfs., 5.50%, 02/25/36 | 298,464 | 287,891 | ||||||
Hamlet II Ltd. (Cayman Islands), Series 2006-2A, Class A2B, Floating Rate Pass Through Ctfs., 0.59%, 05/11/21(b)(c)(e) | 500,000 | 486,400 | ||||||
Highbridge Loan Management Ltd. (Cayman Islands), Series 2015-6A, Class D, Floating Rate Pass Through Ctfs. 1.27%, 05/05/27 (Acquired 03/17/15; Cost $240,954)(b)(c) | 250,000 | 240,950 | ||||||
JP Morgan Chase Commercial Mortgage Securities Trust, | 250,000 | 256,748 | ||||||
Series 2014-FL5, Class B, Floating Rate Pass Through Ctfs., | 250,000 | 251,150 | ||||||
JP Morgan Mortgage Trust, Series 2005-A1, Class IB2, Floating Rate Pass Through Ctfs., 2.55%, 02/25/35(c) | 178,114 | 156,425 | ||||||
Series 2005-A3, Class 7CA1, Floating Rate Pass Through Ctfs., 2.53%, 06/25/35(c) | 168,922 | 160,066 | ||||||
Series 2006-A2, Class 1A1, Floating Rate Pass Through Ctfs., 2.71%, 04/25/36(c) | 118,624 | 107,800 | ||||||
Series 2007-A4, Class 3A1, Floating Rate Pass Through Ctfs., 5.17%, 06/25/37(c) | 239,017 | 220,389 | ||||||
KKR CLO Ltd. (Cayman Islands), Series 11, Class B, Floating Rate Pass Through Ctfs., 2.42%, 04/15/27(b)(c) | 540,000 | 536,610 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Strategic Income Fund
Principal Amount | Value | |||||||
LSTAR Commercial Mortgage Trust, Series 2014-2, Class A2, Pass Through Ctfs., 2.77%, 01/20/41(b) | $ | 425,000 | $ | 433,759 | ||||
Merrill Lynch Mortgage Investors Trust, Series 2005-A9, Class 2A1C, Floating Rate Pass Through Ctfs., 2.51%, 12/25/35(c) | 200,000 | 192,605 | ||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C18, Class B, Variable Rate Pass Through Ctfs., 4.60%, 10/15/47(c) | 250,000 | 271,875 | ||||||
Morgan Stanley Mortgage Loan Trust, Series 2005-10, Class 1A1, Floating Rate Pass Through Ctfs., 0.88%, 12/25/35(c) | 305,712 | 250,789 | ||||||
Series 2005-3AR, Class 3A, Floating Rate Pass Through Ctfs., 2.54%, 07/25/35(c) | 302,121 | 265,200 | ||||||
Neuberger Berman CLO XV (Cayman Islands), Series 2013-15A, Class D, Floating Rate Pass Through Ctfs., 3.53%, 10/15/25(b)(c) | 250,000 | 238,200 | ||||||
Northwoods Capital X Ltd. (Cayman Islands), Series 2013-10A, Class D, Floating Rate Pass Through Ctfs., 3.85%, 11/04/25(b)(c) | 250,000 | 234,975 | ||||||
Octagon Investment Partners XVI Ltd. (Cayman Islands), Series 2013-1A, Class B1, Floating Rate Pass Through Ctfs., 1.87%, 07/17/25(b)(c) | 250,000 | 244,600 | ||||||
Octagon Investment Partners XXI Ltd. (Cayman Islands), Series 2014-1A, Class C, Floating Rate Pass Through Ctfs., 3.90%, 11/14/26(b)(c) | 500,000 | 487,850 | ||||||
Series 2014-1A, Class D, Floating Rate Pass Through Ctfs., | 250,000 | 251,850 | ||||||
Seneca Park CLO Ltd. (Cayman Islands), Series 2014-1A, Class B2, Pass Through Ctfs., 4.35%, 07/17/26(b) | 600,000 | 609,780 | ||||||
Series 2014-1A, Class E, Floating Rate Pass Through Ctfs., | 250,000 | 225,375 | ||||||
Slater Mill Loan Fund L.P. (Cayman Islands), Series 2012-1A, Class B, Floating Rate Pass Through Ctfs., 2.91%, 08/17/22(b)(c) | 350,000 | 352,590 | ||||||
Stone Tower CLO VII Ltd. (Cayman Islands), Series 2007-7A, Class B, Floating Rate Pass Through Ctfs., 4.47%, 08/30/21(b)(c) | 250,000 | 248,225 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-20, Class 3A1, Floating Rate Pass Through Ctfs., 2.49%, 01/25/35(c) | 276,488 | 266,416 | ||||||
Structured Asset Securities Corp., Series 2002-21A, Class B1II, Floating Rate Pass Through Ctfs., 2.47%, 11/25/32(c) | 161,769 | 147,131 |
Principal Amount | Value | |||||||
Symphony CLO XI Ltd. (Cayman Islands), Series 2013-11A, Class D, Floating Rate Pass Through Ctfs., 4.27%, 01/17/25(b)(c) | $ | 250,000 | $ | 250,625 | ||||
Symphony CLO XIV Ltd. (Cayman Islands), Series 2014-14A, Class E, Floating Rate Pass Through Ctfs., 4.87%, 07/14/26(b)(c) | 250,000 | 223,825 | ||||||
Thornburg Mortgage Securities Trust, Series 2007-2, Class A2A, 1.96%, 06/25/37(c) | 357,827 | 343,084 | ||||||
WaMu Mortgage Pass-Through Ctfs. Trust, | 216,369 | 201,049 | ||||||
Series 2006-AR18, Class 1A1, Floating Rate Pass Through Ctfs., 1.78%, 01/25/37(c) | 166,510 | 142,458 | ||||||
Series 2005-AR12, Class 1A8, Floating Rate Pass Through Ctfs., 2.33%, 10/25/35(c) | 255,152 | 246,944 | ||||||
Wells Fargo Alternative Loan Trust, Series 2007-PA5, Class 1A1, Pass Through Ctfs., 6.25%, 11/25/37 | 225,264 | 220,648 | ||||||
Wells Fargo Mortgage Backed Securities Trust, | 200,716 | 199,899 | ||||||
Series 2005-AR14, Class A1, Floating Rate Pass Through Ctfs., 5.35%, 08/25/35(c) | 164,607 | 163,754 | ||||||
Series 2005-AR2, Class 2A2, Floating Rate Pass Through Ctfs., 2.62%, 03/25/35(c) | 266,708 | 272,135 | ||||||
Series 2005-AR7, Class 1A1, Floating Rate Pass Through Ctfs., 3.11%, 05/25/35(c) | 180,747 | 181,458 | ||||||
Series 2006-AR10, Class 4A1, Floating Rate Pass Through Ctfs., 2.61%, 07/25/36(c) | 230,864 | 219,335 | ||||||
Series 2006-AR8, Class 2A3, Floating Rate Pass Through Ctfs., 2.60%, 04/25/36(c) | 224,460 | 220,404 | ||||||
Series 2007-7, Class A1, Pass Through Ctfs., 6.00%, 06/25/37 | 170,367 | 172,975 | ||||||
Series 2005-AR10, Class 2A4M, Floating Rate Pass Through Ctfs., 2.63%, 06/25/35(c) | 324,418 | 327,430 | ||||||
Series 2005-AR8, Class 3A3MT, Floating Rate Pass Through Ctfs., 2.63%, 06/25/35(c) | 367,182 | 357,253 | ||||||
WFRBS Commercial Mortgage Trust, Series 2014-C24, Class B, Variable Rate Pass Through Ctfs., 4.20%, 11/15/47(c) | 250,000 | 266,676 | ||||||
Total Asset-Backed Securities |
| 16,930,686 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Strategic Income Fund
Principal Amount | Value | |||||||
U.S. Dollar Denominated Bonds & Notes–20.51% |
| |||||||
Agricultural Products–0.13% | ||||||||
Darling Ingredients, Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 01/15/22 | $ | 40,000 | $ | 41,150 | ||||
Building Products–0.05% | ||||||||
Builders FirstSource Inc., Sr. Sec. First Lien Notes, 7.63%, 06/01/21(b) | 15,000 | 15,694 | ||||||
Cable & Satellite–0.80% | ||||||||
DISH DBS Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 05/01/20 | 165,000 | 167,475 | ||||||
Intelsat Luxembourg S.A. (Luxembourg), Sr. Unsec. Gtd. Global Bonds, 7.75%, 06/01/21 | 82,000 | 75,850 | ||||||
243,325 | ||||||||
Casinos & Gaming–0.34% | ||||||||
MGM Resorts International, Sr. Unsec. Gtd. Global Notes, 6.75%, 10/01/20 | 96,000 | 103,800 | ||||||
Communications Equipment–0.40% | ||||||||
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b) | 120,000 | 121,350 | ||||||
Consumer Finance–2.49% | ||||||||
Ally Financial Inc., | 500,000 | 503,750 | ||||||
Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/20 | 88,000 | 103,400 | ||||||
Navient Corp., Sr. Unsec. Medium-Term Notes, 4.88%, 06/17/19 | 152,000 | 152,380 | ||||||
759,530 | ||||||||
Diversified Banks–2.35% | ||||||||
Erste Group Bank AG (Austria), REGS, Unsec. Sub. Medium-Term Euro Notes, 6.38%, 03/28/23(b) | 200,000 | 208,337 | ||||||
Industrial & Commercial Bank of China Ltd. (China), Jr. Unsec. Sub. Notes, 6.00%(b)(f) | 200,000 | 209,138 | ||||||
JPMorgan Chase & Co., Series Z, Jr. Unsec. Sub. Global Notes, 5.30%(f) | 300,000 | 301,875 | ||||||
719,350 | ||||||||
Independent Power Producers & Energy Traders–0.31% | ||||||||
AES Corp., Sr. Unsec. Global Notes, 7.38%, 07/01/21 | 40,000 | 45,000 | ||||||
Calpine Corp., Sr. Unsec. Global Notes, 5.38%, 01/15/23 | 48,000 | 48,660 | ||||||
93,660 | ||||||||
Integrated Oil & Gas–0.25% | ||||||||
Ecopetrol S.A. (Colombia), Sr. Unsec. Global Bonds, 4.13%, 01/16/25 | 78,000 | 75,465 | ||||||
Internet Software & Services–0.49% | ||||||||
Equinix Inc., Sr. Unsec. Notes, 5.38%, 01/01/22 | 142,000 | 148,390 |
Principal Amount | Value | |||||||
Marine–0.64% | ||||||||
PT Pelabuhan Indonesia II (Indonesia), Sr. Unsec. Bonds, 4.25%, 05/05/25(b) | $ | 200,000 | $ | 197,250 | ||||
Oil & Gas Exploration & Production–3.47% | ||||||||
Antero Resources Corp., Sr. Unsec. Gtd. Global Notes, 5.38%, 11/01/21 | 105,000 | 106,575 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Sub. Notes, 4.88%, 04/15/22 | 110,000 | 102,300 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 4.38%, 06/01/24 | 140,000 | 142,450 | ||||||
EXCO Resources, Inc., Sr. Unsec. Gtd. Notes, 8.50%, 04/15/22 | 200,000 | 120,500 | ||||||
Halcón Resources Corp., Sec. Gtd. Second Lien Notes, 8.63%, 02/01/20(b) | 283,000 | 295,735 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Global Notes, 5.00%, 03/15/23 | 60,000 | 61,200 | ||||||
SandRidge Energy, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 02/15/23 | 181,000 | 121,270 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Notes, 6.25%, 04/01/23(b) | 105,000 | 109,069 | ||||||
1,059,099 | ||||||||
Oil & Gas Storage & Transportation–0.50% | ||||||||
MarkWest Energy Partners, L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 4.88%, 12/01/24 | 146,000 | 152,935 | ||||||
Regional Banks–2.11% | ||||||||
Fifth Third Bancorp, Series J, Jr. Unsec. Sub. Bonds, 4.90%(f) | 200,000 | 194,000 | ||||||
Synovus Financial Corp., Unsec. Sub. Global Notes, 5.13%, 06/15/17 | 440,000 | 451,550 | ||||||
645,550 | ||||||||
Semiconductors–0.88% | ||||||||
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 6.00%, 01/15/22(b) | 125,000 | 135,937 | ||||||
NXP B.V./NXP Funding LLC (Netherlands), Sr. Unsec. Gtd. Notes, 5.75%, 02/15/21(b) | 125,000 | 133,884 | ||||||
269,821 | ||||||||
Specialized Finance–3.30% | ||||||||
CIT Group Inc., | 101,000 | 104,535 | ||||||
Sr. Unsec. Notes, 5.00%, 05/15/17 | 290,000 | 301,600 | ||||||
International Lease Finance Corp., Sr. Unsec. Global Notes, 5.75%, 05/15/16 | 290,000 | 300,512 | ||||||
Sr. Unsec. Notes, 8.25%, 12/15/20 | 245,000 | 301,350 | ||||||
1,007,997 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Strategic Income Fund
Principal Amount | Value | |||||||
Trading Companies & Distributors–1.46% | ||||||||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust (Netherlands), Sr. Unsec. Gtd. Notes, 2.75%, 05/15/17(b) | $ | 150,000 | $ | 149,250 | ||||
Air Lease Corp., Sr. Unsec. Global Notes, 4.50%, 01/15/16 | 290,000 | 296,344 | ||||||
445,594 | ||||||||
Wireless Telecommunication Services–0.54% | ||||||||
Sprint Corp., Sr. Unsec. Gtd. Global Notes, 7.88%, 09/15/23 | 165,000 | 166,650 | ||||||
Total U.S. Dollar Denominated Bonds & Notes (Cost $6,264,920) |
| 6,266,610 | ||||||
Non-U.S. Dollar Denominated Bonds & |
| |||||||
Diversified Banks–1.55% | ||||||||
Standard Chartered Bank (United Kingdom), Sr. Unsec. Medium-Term Euro Notes, 7.83%, 04/13/18(b) | INR | 30,000,000 | 473,709 | |||||
Life & Health Insurance–0.48% | ||||||||
Delta Lloyd Levensverzekering N.V. (Netherlands), Unsec. Sub. Euro Notes, 9.00%, 08/29/42 | EUR | 100,000 | 145,486 | |||||
Sovereign Debt–9.42% | ||||||||
Australian Government (Australia), Series 126, Sr. Unsec. Bonds, 4.50%, 04/15/20 | AUD | 1,600,000 | 1,408,154 | |||||
Mexican Bonos (Mexico), | MXN | 11,640,000 | 867,057 | |||||
Series M 10, Sr. Unsec. Bonds, 8.00%, 12/17/15 | MXN | 2,130,000 | 143,119 | |||||
Portugal Obrigacoes do Tesouro (Portugal), Unsec. Euro Bonds, 3.88%, 02/15/30(b) | EUR | 350,000 | 458,958 | |||||
2,877,288 | ||||||||
Total Non-U.S. Dollar Denominated Bonds & Notes |
| 3,496,483 | ||||||
U.S. Treasury Securities–5.74% |
| |||||||
U.S. Treasury Bills–0.59%(g) | ||||||||
0.00%, 08/20/15(h) | $ | 15,000 | 14,999 | |||||
0.05%, 08/20/15(h) | 5,000 | 5,000 | ||||||
0.07%, 08/20/15(h) | 20,000 | 20,000 | ||||||
0.08%, 08/20/15(h) | 95,000 | 94,995 | ||||||
0.16%, 08/20/15(h) | 30,000 | 29,998 | ||||||
0.17%, 08/20/15(h) | 15,000 | 14,999 | ||||||
179,991 | ||||||||
U.S. Treasury Notes–5.15% | ||||||||
1.63%, 06/30/19 | 1,550,000 | 1,571,955 | ||||||
Total U.S. Treasury Securities |
| 1,751,946 |
Principal Amount | Value | |||||||
Structured Agency Credit Risk Notes (STACR)–2.06% | ||||||||
Freddie Mac, Series 2014-DN1, Class M2, Floating Rate STACR® Debt Notes, 2.38%, 02/25/24(c)(i) | $ | 250,000 | $ | 252,407 | ||||
Series 2014-HQ2, Class M2, Floating Rate STACR® Debt Notes, 2.38%, 09/25/24(c)(i) | 375,000 | 377,663 | ||||||
Total Structured Agency Credit Risk Notes | 630,070 | |||||||
Municipal Obligations–1.93% | ||||||||
Houston (City of), Texas (United Airlines, Inc., Terminal E); Series 2014, Ref. Airport System Special Facilities RB, 5.00%, 07/01/29 (j) | 250,000 | 266,095 | ||||||
Iowa (State of) Finance Authority (Iowa Fertilizer Co.); Series 2013, Midwestern Disaster Area RB, 5.25%, 12/01/25 | 250,000 | 279,835 | ||||||
Puerto Rico (Commonwealth of) Government Development Bank; Series 2014 B-1A, Sr. Transportation RN, 7.75%, 06/30/15 | 44,445 | 43,778 | ||||||
Total Municipal Obligations |
| 589,708 | ||||||
U.S. Government Sponsored Agency Mortgage-Backed Securities–0.32% |
| |||||||
Collateralized Mortgage Obligations–0.32% | ||||||||
Fannie Mae REMICs, 3.00%, 06/25/27, IO (Cost $97,057) | 937,939 | 98,265 | ||||||
Shares | ||||||||
Money Market Funds–8.53% |
| |||||||
Liquid Assets Portfolio–Institutional Class(k) | 1,303,141 | 1,303,141 | ||||||
Premier Portfolio–Institutional Class(k) | 1,303,141 | 1,303,141 | ||||||
Total Money Market Funds (Cost $2,606,282) | 2,606,282 | |||||||
Options Purchased–0.46% |
| |||||||
(Cost $138,641)(l) | 139,620 | |||||||
TOTAL INVESTMENTS–106.42% |
| 32,509,670 | ||||||
OTHER ASSETS LESS LIABILITIES–(6.42)% |
| (1,960,949 | ) | |||||
NET ASSETS–100.00% |
| $ | 30,548,721 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Strategic Income Fund
Investment Abbreviations:
AUD | – Australian Dollar | |
CDO | – Collateralized Debt Obligation | |
CLO | – Collateralized Loan Obligation | |
Ctfs. | – Certificates | |
EUR | – Euro | |
Gtd. | – Guaranteed | |
INR | – Indian Rupee | |
IO | – Interest Only | |
Jr. | – Junior | |
MXN | – Mexican Peso | |
RB | – Revenue Bonds | |
REGS | – Regulation S | |
REMICs | – Real Estate Investment Conduits | |
RN | – Revenue Notes | |
Sec. | – Secured | |
Sr. | – Senior | |
STACR® | – Structured Agency Credit Risk | |
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) | 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 April 30, 2015 was $10,059,250, which represented 32.93% of the Fund’s Net Assets. |
(c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on April 30, 2015. |
(d) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(e) | All or a portion of the security is pledged as collateral for open reverse repurchase agreements. See Note 7. The following table presents the Fund’s collateral pledged as of April 30, 2015. |
Counterparty | Reverse Repurchase Agreements | Value of Non-cash Collateral Pledged* | Net Amount | |||||||||
Royal Bank of Canada | $ | 980,378 | $ | (980,378 | ) | $ | — |
* | Amount does not include excess collateral pledged. |
(f) | Perpetual bond with no specified maturity date. |
(g) | Security may be traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(h) | All or a portion of the value was pledged and/or designated as collateral to cover margin requirements for open futures contracts and swap agreements. See Note 1K, 1N and Note 4. |
(i) | Principal payments are determined by the delinquency and principal payment experience on the STACR® reference pool. Freddie Mac transfers credit risk from the mortgages in the reference pool to credit investors who invest in the STACR® debt notes. |
(j) | Security subject to the alternative minimum tax. |
(k) | The money market fund and the Fund are affiliated by having the same investment adviser. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Strategic Income Fund
(l) | The table below details options purchased: |
Open Over-The-Counter Foreign Currency Options Purchased — Currency Risk | ||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Notional Value | Value | ||||||||||||||||||||||||
USD versus CNH | Call | Bank of America, N.A. | 06/16/15 | CNH | 6.345 | USD | 850,000 | $ | 797 |
Open Over-The-Counter Interest Rate Swaptions Purchased | ||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Exercise Rate | Pay/Receive Exercise Rate | Floating Rate Index | Expiration Date | Notional Value | Value | ||||||||||||||||||||||||
2 Year Interest Rate Swap | Put | | Morgan Stanley & Co. International PLC | | 1.45 | % | Pay | 3 Month USD LIBOR | 10/14/15 | $ | 14,100,000 | $ | 19,736 | |||||||||||||||||||
2 Year Interest Rate Swap | Put | | Morgan Stanley & Co. International PLC | | 1.45 | Pay | 3 Month USD LIBOR | 10/15/15 | 18,900,000 | 27,364 | ||||||||||||||||||||||
5 Year Interest Rate Swap | Put | | Morgan Stanley & Co. International PLC | | 2.05 | Pay | 3 Month USD LIBOR | 10/15/15 | 15,900,000 | 91,420 | ||||||||||||||||||||||
10 Year Interest Rate Swap | Call | Deutche Bank Securities Inc. | 1.90 | Receive | 3 Month USD LIBOR | 05/11/15 | 1,300,000 | 303 | ||||||||||||||||||||||||
Subtotal Swaptions Purchased — Interest Rate Risk |
| $ | 138,823 | |||||||||||||||||||||||||||||
Total Options Purchased (Cost $138,641) |
| $ | 139,620 |
Abbreviations:
CNH | – Chinese Yuan | |
LIBOR | – London Interbank Offered Rate | |
USD | – U.S. Dollar |
Portfolio Composition
By security type, based on Net Assets
as of April 30, 2015
Asset-Backed Securities | 55.4 | % | ||
U.S. Dollar Denominated Bonds and Notes | 20.5 | |||
Non-U.S. Dollar Denominated Bonds & Notes | 11.5 | |||
U.S. Treasury Securities | 5.7 | |||
U.S. Government Sponsored Agency Mortgage-Backed Securities | 2.4 | |||
Municipal Obligations | 1.9 | |||
Options Purchased | 0.5 | |||
Money Market Funds Plus Other Assets Less Liabilities | 2.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Strategic Income Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: | ||||
Investments, at value (Cost $29,826,891) | $ | 29,903,388 | ||
Investments in affiliated money market funds, at value and cost | 2,606,282 | |||
Total investments, at value (Cost $32,433,173) | 32,509,670 | |||
Cash | 6,075 | |||
Foreign currencies, at value (Cost $19,603) | 20,833 | |||
Receivable for: | ||||
Variation margin — centrally cleared swap agreements | 3,329 | |||
Fund shares sold | 80,349 | |||
Dividends and interest | 222,089 | |||
Fund expenses absorbed | 9,989 | |||
Principal paydowns | 163 | |||
Swaps | 1,746 | |||
Investment for trustee deferred compensation and retirement plans | 2,596 | |||
Unrealized appreciation on forward foreign currency contracts outstanding | 47,114 | |||
Other assets | 48,803 | |||
Total assets | 32,952,756 | |||
Liabilities: | ||||
Payable for: | ||||
Investments purchased | 1,156,095 | |||
Fund shares reacquired | 133,019 | |||
Options written, at value (premiums received $2,448) | 101 | |||
Reverse repurchase arrangements | 975,000 | |||
Swaps | 1,940 | |||
Variation margin — futures | 504 | |||
Accrued fees to affiliates | 6,180 | |||
Accrued trustees’ and officers’ fees and benefits | 1,805 | |||
Accrued other operating expenses | 71,698 | |||
Trustee deferred compensation and retirement plans | 2,596 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 51,154 | |||
Unrealized depreciation on swap agreements — OTC | 3,943 | |||
Total liabilities | 2,404,035 | |||
Net assets applicable to shares outstanding | $ | 30,548,721 | ||
Net assets consist of: | ||||
Shares of beneficial interest | $ | 30,750,769 | ||
Undistributed net investment income | (134,289 | ) | ||
Undistributed net realized gain (loss) | (144,209 | ) | ||
Net unrealized appreciation | 76,450 | |||
$ | 30,548,721 |
Net Assets: | ||||
Class A | $ | 16,208,411 | ||
Class C | $ | 1,503,956 | ||
Class R | $ | 67,988 | ||
Class Y | $ | 12,748,494 | ||
Class R5 | $ | 9,936 | ||
Class R6 | $ | 9,936 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 1,633,283 | |||
Class C | 151,592 | |||
Class R | 6,851 | |||
Class Y | 1,284,384 | |||
Class R5 | 1,001 | |||
Class R6 | 1,001 | |||
Class A: | ||||
Net asset value per share | $ | 9.92 | ||
Maximum offering price per share | ||||
(Net asset value of $9.92 ¸ 95.75%) | $ | 10.36 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 9.92 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 9.92 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 9.93 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 9.93 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 9.93 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Strategic Income Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: | ||||
Interest | $ | 411,496 | ||
Dividends from affiliates | 107,931 | |||
Total investment income | 519,427 | |||
Expenses: | ||||
Advisory fees | 86,684 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 5,895 | |||
Distribution fees: | ||||
Class A | 18,747 | |||
Class C | 5,588 | |||
Class R | 123 | |||
Transfer agent fees — A, C, R and Y | 6,247 | |||
Transfer agent fees — R5 | 5 | |||
Transfer agent fees — R6 | 5 | |||
Trustees’ and officers’ fees and benefits | 9,579 | |||
Registration and filing fees | 63,502 | |||
Professional services fees | 27,523 | |||
Other | 29,109 | |||
Total expenses | 277,802 | |||
Less: Fees waived and expenses reimbursed | (181,292 | ) | ||
Net expenses | 96,510 | |||
Net investment income | 422,917 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | (159,436 | ) | ||
Foreign currencies | (43,099 | ) | ||
Forward foreign currency contracts | 337,685 | |||
Futures contracts | (135,925 | ) | ||
Option contracts written | (8,667 | ) | ||
Swap agreements | 7,331 | |||
(2,111 | ) | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 167,810 | |||
Foreign currencies | 1,924 | |||
Forward foreign currency contracts | (79,238 | ) | ||
Futures contracts | (49,600 | ) | ||
Option contracts written | 2,347 | |||
Swap agreements | 15,052 | |||
58,295 | ||||
Net realized and unrealized gain | 56,184 | |||
Net increase in net assets resulting from operations | $ | 479,101 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Strategic Income Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period May 2, 2014 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | May 2, 2014 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 422,917 | $ | 422,489 | ||||
Net realized gain (loss) | (2,111 | ) | 128,619 | |||||
Change in net unrealized appreciation | 58,295 | 18,155 | ||||||
Net increase in net assets resulting from operations | 479,101 | 569,263 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (278,210 | ) | (220,329 | ) | ||||
Class C | (16,586 | ) | (3,292 | ) | ||||
Class R | (886 | ) | (181 | ) | ||||
Class Y | (251,658 | ) | (225,541 | ) | ||||
Class R5 | (196 | ) | (179 | ) | ||||
Class R6 | (196 | ) | (179 | ) | ||||
Total distributions from net investment income | (547,732 | ) | (449,701 | ) | ||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (147,461 | ) | — | |||||
Class C | (8,651 | ) | — | |||||
Class R | (275 | ) | — | |||||
Class Y | (128,682 | ) | — | |||||
Class R5 | (101 | ) | — | |||||
Class R6 | (101 | ) | — | |||||
Total distributions from net realized gains | (285,271 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 2,143,596 | 14,190,714 | ||||||
Class C | 702,707 | 814,539 | ||||||
Class R | 55,391 | 12,833 | ||||||
Class Y | 98,846 | 12,744,415 | ||||||
Class R5 | — | 10,010 | ||||||
Class R6 | — | 10,010 | ||||||
Net increase in net assets resulting from share transactions | 3,000,540 | 27,782,521 | ||||||
Net increase in net assets | 2,646,638 | 27,902,083 | ||||||
Net assets: | ||||||||
Beginning of period | 27,902,083 | — | ||||||
End of period (includes undistributed net investment income of $(134,289) and $(9,474), respectively) | $ | 30,548,721 | $ | 27,902,083 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Strategic Income Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 primary investment objective is to seek to provide current income and, secondarily, long-term growth of capital.
12 Invesco Strategic Income Fund
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. |
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.
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. 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
13 Invesco Strategic 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 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 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. | 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
14 Invesco Strategic 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. | 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. | 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.
M. | 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. |
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.
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.
15 Invesco Strategic Income Fund
N. | Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, volatility, variance, index, currency and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, equity, currency or credit risk. Such transactions are agreements between Counterparties. 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, volatility, variance, 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.
A total return swap is an agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income generated and capital gains, if any. The unrealized appreciation (depreciation) on total return swaps includes dividends on the underlying equity securities and financing rate payable from the Counterparty. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return.
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and Counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the Counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements
O. | Reverse Repurchase Agreements — The Fund may enter into reverse repurchase agreements. Reverse repurchase agreements involve the sale of securities held by the Fund, with an agreement that the Fund will repurchase such securities at an agreed upon price and date. The Fund will use the proceeds of a reverse repurchase agreement (which are considered to be borrowings under the 1940 Act) to purchase other permitted securities either maturing, or under an agreement to resell, at a date simultaneous with or prior to the expiration of the reverse repurchase agreement. The agreements are collateralized by the underlying securities and are carried at the amount at which the securities subsequently will be repurchased as specified in the agreements. |
P. | 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. |
Q. | 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 | 0.60% | |||
Next $3.5 billion | 0.55% | |||
Over $4.5 billion | 0.45% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.60%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc., 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, through at least February 29, 2016, 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 0.82%, 1.57%, 1.07%, 0.57%, 0.57% and 0.57%, 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
16 Invesco Strategic Income Fund
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 a Fund directly, but are fees and expenses, including management fees of the investment companies in which a Fund invests. As a result, the total annual fund operating expenses after expense reimbursement may exceed the expense limits above. Unless Invesco continues the fee waiver agreement, it will terminate on February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees and reimbursed fund level expenses of $175,035 and reimbursed class level expenses of $3,245, $242, $10, $2,750, $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 April 30, 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 April 30, 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 daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $3,144 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. |
17 Invesco Strategic Income Fund
The following is a summary of the tiered valuation input levels, as of April 30, 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 | $ | 2,606,282 | $ | — | $ | — | $ | 2,606,282 | ||||||||
U.S. Treasury Securities | — | 1,751,946 | — | 1,751,946 | ||||||||||||
U.S. Government Sponsored Agency Securities | — | 98,265 | — | 98,265 | ||||||||||||
Structured Agency Credit Risk Notes | — | 630,070 | — | 630,070 | ||||||||||||
Asset-Backed Securities | — | 16,930,686 | — | 16,930,686 | ||||||||||||
Corporate Debt Securities | — | 6,266,610 | — | 6,266,610 | ||||||||||||
Foreign Debt Securities | — | 619,195 | — | 619,195 | ||||||||||||
Foreign Sovereign Debt Securities | — | 2,877,288 | — | 2,877,288 | ||||||||||||
Municipal Obligations | — | 589,708 | — | 589,708 | ||||||||||||
Options Purchased | — | 139,620 | — | 139,620 | ||||||||||||
2,606,282 | 29,903,388 | — | 32,509,670 | |||||||||||||
Forward Foreign Currency Contracts* | — | (4,040 | ) | — | (4,040 | ) | ||||||||||
Futures Contracts* | (2,165 | ) | — | — | (2,165 | ) | ||||||||||
Options Written* | — | (101 | ) | — | (101 | ) | ||||||||||
Swap Agreements* | — | 5,005 | — | 5,005 | ||||||||||||
Total Investments | $ | 2,604,117 | $ | 29,904,252 | $ | — | $ | 32,508,369 |
* | Forward foreign currency contracts, futures contracts and swap agreements are valued at unrealized appreciation (depreciation). Options written are shown at value. |
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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: | ||||||||
Forward foreign currency contracts(a) | $ | 131,787 | $ | (135,827 | ) | |||
Options purchased(b) | 797 | — | ||||||
Options written(c) | — | (101 | ) | |||||
Interest rate risk: | ||||||||
Futures contracts(d) | 1,277 | (3,442 | ) | |||||
Options purchased(b) | 138,823 | — | ||||||
Swap agreements(e)(f) | 10,038 | (4,855 | ) | |||||
Credit risk: | ||||||||
Swap agreements(e) | — | (178 | ) | |||||
Total | $ | 282,722 | $ | (144,403 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the captions Unrealized appreciation on forward foreign currency contracts outstanding and Unrealized depreciation on forward foreign currency contracts outstanding. |
(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) | Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
(e) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized depreciation on swap agreements — OTC. |
(f) | Includes cumulative appreciation (depreciation) of centrally cleared swap agreements. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
18 Invesco Strategic Income Fund
Effect of Derivative Investments for the six months ended April 30, 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) | Options Written | Swap Agreements | ||||||||||||||||
Realized Gain (Loss): | ||||||||||||||||||||
Credit risk | $ | — | $ | — | $ | — | $ | — | $ | 70,526 | ||||||||||
Currency risk | 337,685 | — | 34,203 | (8,667 | ) | — | ||||||||||||||
Interest rate risk | — | (135,925 | ) | — | — | (63,195 | ) | |||||||||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||||||
Credit risk | — | — | — | — | (2,231 | ) | ||||||||||||||
Currency risk | (79,238 | ) | — | (12,892 | ) | 2,347 | — | |||||||||||||
Interest rate risk | — | (49,600 | ) | 8,860 | — | 17,283 | ||||||||||||||
Total | $ | 258,447 | $ | (185,525 | ) | $ | 30,171 | $ | (6,320 | ) | $ | 22,383 |
(a) | Options purchased are included in the net realized gain (loss) from investment securities and the change in net unrealized appreciation (depreciation) of investment securities. |
The table below summarizes the six month average notional value of forward foreign currency contracts, futures contracts and swap agreements; the three month average notional value of options written and the five month average notional value of options purchased.
Forward Foreign Currency Contracts | Futures Contracts | Options Written | Options Purchased | Swap Agreements | ||||||||||||||||
Average notional value | $ | 6,511,272 | $ | 13,983,629 | $ | 3,119,373 | $ | 13,737,664 | $ | 6,500,793 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement Date
| Counterparty | Contract to | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
05/07/15 | Barclays Bank PLC | JPY | 17,109,750 | USD | 145,848 | $ | 143,306 | $ | 2,542 | |||||||||||||||||
05/07/15 | Citigroup Global Markets Inc. | USD | 142,430 | JPY | 17,109,750 | 143,306 | 876 | |||||||||||||||||||
05/18/15 | Deutsche Bank Securities Inc. | EUR | 260,153 | USD | 295,000 | 292,186 | 2,814 | |||||||||||||||||||
05/18/15 | Morgan Stanley & Co. | USD | 365,421 | EUR | 345,000 | 387,481 | 22,060 | |||||||||||||||||||
06/11/15 | Deutsche Bank Securities Inc. | TWD | 18,900,000 | USD | 597,563 | 617,336 | (19,773 | ) | ||||||||||||||||||
06/11/15 | Deutsche Bank Securities Inc. | USD | 607,176 | TWD | 18,900,000 | 617,336 | 10,160 | |||||||||||||||||||
06/12/15 | Barclays Bank PLC | EUR | 300,000 | USD | 327,937 | 337,047 | (9,110 | ) | ||||||||||||||||||
06/12/15 | Barclays Bank PLC | USD | 252,117 | EUR | 226,000 | 253,909 | 1,792 | |||||||||||||||||||
06/12/15 | Citigroup Global Markets Inc. | EUR | 1,099,927 | USD | 1,191,863 | 1,235,755 | (43,892 | ) | ||||||||||||||||||
06/12/15 | Citigroup Global Markets Inc. | SGD | 1,013,000 | USD | 731,963 | 764,927 | (32,964 | ) | ||||||||||||||||||
06/12/15 | Citigroup Global Markets Inc. | USD | 687,895 | EUR | 650,000 | 730,267 | 42,372 | |||||||||||||||||||
06/12/15 | Citigroup Global Markets Inc. | USD | 742,603 | SGD | 1,013,000 | 764,926 | 22,323 | |||||||||||||||||||
06/12/15 | Goldman Sachs International | EUR | 246,035 | USD | 264,251 | 276,417 | (12,166 | ) | ||||||||||||||||||
06/12/15 | J.P. Morgan Securities LLC | EUR | 105,000 | USD | 117,482 | 117,966 | (484 | ) | ||||||||||||||||||
07/08/15 | Citigroup Global Markets Inc. | USD | 302,389 | MXN | 4,681,882 | 303,699 | 1,310 | |||||||||||||||||||
07/08/15 | J.P. Morgan Securities LLC | MXN | 13,749,036 | USD | 917,393 | 891,855 | 25,538 | |||||||||||||||||||
07/29/15 | Bank of America Merrill Lynch | AUD | 1,787,840 | USD | 1,389,762 | 1,407,200 | (17,438 | ) | ||||||||||||||||||
Total Open Forward Foreign Currency Contracts — Currency Risk | $ | (4,040 | ) |
Currency Abbreviations:
AUD | – Australian Dollar | |
EUR | – Euro | |
JPY | – Japanese Yen | |
MXN | – Mexican Peso | |
NZD | – New Zealand Dollar | |
SGD | – Singapore Dollar | |
TWD | – Taiwan Dollar | |
USD | – U.S. Dollar |
19 Invesco Strategic Income Fund
Open Futures Contracts | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
U.S. Treasury 5 Year Notes | Short | 2 | June-2015 | $ | (240,266 | ) | $ | (504 | ) | |||||||||||
U.S. Treasury 10 Year Notes | Short | 2 | June-2015 | (256,750 | ) | 1,277 | ||||||||||||||
U.S. Treasury 30 Year Notes | Long | 1 | June-2015 | 159,594 | (2,938 | ) | ||||||||||||||
Total Futures Contracts — Interest Rate Risk | $ | (2,165 | ) |
Open Foreign Currency Options Written — Currency Risk | ||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Number of Contracts | Strike Price | Premiums Received | Notional Value | Value | Unrealized Appreciation | |||||||||||||||||||||||||
USD versus CNH | Call | Bank of America, N.A. | 06/16/15 | 850 | CNH 6.625 | $ | (2,448 | ) | USD 850,000 | $ | (101 | ) | $ | 2,347 |
Currency Abbreviations:
CNH | – Chinese Yuan | |
USD | – U.S. Dollar |
Options Written Transactions | ||||||||||||||||||||||||||||||||
Call Options | Put Options | |||||||||||||||||||||||||||||||
Number of Contracts | Notional Value | Premiums Received | Number of Contracts | Notional Value | Premiums Received | |||||||||||||||||||||||||||
Beginning of period | — | — | $ | — | — | — | $ | — | ||||||||||||||||||||||||
Written | 2,620 | USD | 2,620,000 | 7,271 | 3,700 | EUR | 3,685,000 | 17,441 | ||||||||||||||||||||||||
Closed | (1,770 | ) | USD | (1,770,000 | ) | (4,823 | ) | (3,700 | ) | EUR | (3,685,000 | ) | (17,441 | ) | ||||||||||||||||||
End of period | 850 | USD | 850,000 | $ | 2,448 | — | EUR | — | $ | — |
Currency Abbreviations:
EUR | – Euro | |
USD | – U.S. Dollar |
Open Centrally Cleared Interest Rate Swap Agreements | ||||||||||||||||||||||||
Counterparty/Clearinghouse | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Pay | 3 Month USD LIBOR | 1.125 | % | 10/16/17 | USD 3,525,000 | $ | 96 | ||||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Receive | 3 Month USD LIBOR | 2.140 | 02/12/25 | USD 450,000 | (1,090 | ) | |||||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Receive | 6 Month EURIBOR | 0.661 | 04/24/30 | EUR 250,000 | 9,206 | ||||||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Receive | 6 Month EURIBOR | 0.845 | 04/24/30 | EUR 100,000 | 736 | ||||||||||||||||||
Total Centrally Cleared Interest Rate Swap Agreements — Interest Rate Risk |
| $ | 8,948 |
Abbreviations:
CME | – Chicago Mercantile Exchange | |
EUR | – Euro | |
EURIBOR | – Euro Interbank Offered Rate | |
LIBOR | – London Interbank Offered Rate | |
USD | – U.S. Dollar |
Open Over-The-Counter Interest Rate Swap Agreements — Interest Rate Risk | ||||||||||||||||||||||||
Counterparty | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized (Depreciation) | ||||||||||||||||||
J.P. Morgan Chase Bank, N.A. | Pay | 1 Day INR MIBOR | 6.78 | % | 04/09/20 | INR 27,100,000 | $ | (3,765 | ) |
Currency Abbreviations:
INR | – Indian Rupee | |
MIBOR | – Mumbai Interbank Offered Rate |
20 Invesco Strategic Income Fund
Open Over-The-Counter Total Return Swap Agreements | ||||||||||||||||||||
Description | Type of Contract | Counterparty | Number of Contracts | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Receive a return equal to the Markit iBoxx $ Liquid High Yield Index and pay a floating rate equal to the 3 Month USD LIBOR. | Long | J.P. Morgan Chase Bank, NA | 6,000 | 06/22/15 | $ | 600,000 | $ | (9 | ) | |||||||||||
Receive a return equal to the Markit iBoxx $ Liquid High Yield Index and pay a floating rate equal to the 3 Month USD LIBOR. | Long | J.P. Morgan Chase Bank, NA | 9,250 | 06/20/15 | 925,000 | (169 | ) | |||||||||||||
Total Return Swap Agreements — Credit Risk | $ | (178 | ) |
Abbreviations:
LIBOR | – London Interbank Offered Rate | |
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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Gross amounts of Recognized Assets | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of Assets presented in the Statement of Assets & Liabilities | Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Barclays Bank PLC | $ | 4,334 | $ | (4,334 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Citigroup Global Markets Inc. | 66,881 | (66,881 | ) | — | — | — | — | |||||||||||||||||
Credit Suisse Securities (USA) LLC(a) | 9,981 | (1,090 | ) | 8,891 | — | — | 8,891 | |||||||||||||||||
Deutsche Bank Securities Inc. | 12,974 | (12,974 | ) | — | — | — | — | |||||||||||||||||
J.P. Morgan Securities LLC | 25,538 | (484 | ) | 25,054 | — | — | 25,054 | |||||||||||||||||
J.P. Morgan Chase Bank, N.A. | 1,746 | (1,746 | ) | — | — | — | — | |||||||||||||||||
Morgan Stanley & Co. | 22,060 | — | 22,060 | — | — | 22,060 | ||||||||||||||||||
Total | $ | 143,514 | $ | (87,509 | ) | $ | 56,005 | $ | — | $ | — | $ | 56,005 | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Gross amounts of Recognized Liabilities | Gross amounts offset in Statement of Assets & Liabilities | Net amounts of Liabilities presented in the Statement of Assets & Liabilities | Collateral Pledged | |||||||||||||||||||||
Counterparty | Financial Instruments | Cash | Net Amount | |||||||||||||||||||||
Bank of America Merrill Lynch | $ | 17,438 | $ | — | $ | 17,438 | $ | — | $ | — | $ | 17,438 | ||||||||||||
Barclays Bank PLC | 9,110 | (4,334 | ) | 4,776 | — | — | 4,776 | |||||||||||||||||
Citigroup Global Markets Inc. | 76,856 | (66,881 | ) | 9,975 | — | — | 9,975 | |||||||||||||||||
Credit Suisse Securities (USA) LLC(a) | 1,090 | (1,090 | ) | — | — | — | — | |||||||||||||||||
Deutsche Bank Securities Inc. | 19,773 | (12,974 | ) | 6,799 | — | — | 6,799 | |||||||||||||||||
Goldman Sachs International | 12,166 | — | 12,166 | — | — | 12,166 | ||||||||||||||||||
J.P. Morgan Securities LLC | 484 | (484 | ) | — | — | — | — | |||||||||||||||||
J.P. Morgan Chase Bank, N.A. | 5,883 | (1,746 | ) | 4,137 | — | — | 4,137 | |||||||||||||||||
Total | $ | 142,800 | $ | (87,509 | ) | $ | 55,291 | $ | — | $ | — | $ | 55,291 |
(a) | Includes cumulative appreciation (depreciation) of centrally cleared swap agreements. |
21 Invesco Strategic Income Fund
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 April 30, 2015.
Value 10/31/14 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain (Loss) | Value 04/30/15 | Dividend Income | ||||||||||||||||||||||
Invesco Floating Rate Fund | $ | 5,948,846 | $ | 126,515 | $ | (5,981,815 | ) | $ | 22,947 | $ | (116,493 | ) | $ | — | $ | 107,039 |
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. Obligations under the deferred compensation plan represent unsecured claims against the general assets of the Fund.
NOTE 7—Cash Balances and Borrowings
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
Reverse repurchase agreements outstanding as of October 31, 2014 were as follows:
Counterparty | Interest Rate | Maturity Date | Face Value | Face Value Including Accrued Interest | ||||||||||||
Royal Bank of Canada | 1.15 | % | October 16, 2015 | $ | 91,000 | $ | 91,534 | |||||||||
Royal Bank of Canada | 1.00 | October 16, 2015 | 454,000 | 456,319 | ||||||||||||
Royal Bank of Canada | 1.15 | October 16, 2015 | 430,000 | 432,525 | ||||||||||||
Total | $ | 975,000 | $ | 980,378 |
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 October 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 April 30, 2015 was $20,221,150 and $17,684,983, 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 | $ | 307,008 | ||
Aggregate unrealized (depreciation) of investment securities | (258,421 | ) | ||
Net unrealized appreciation of investment securities | $ | 48,587 |
Cost of investments for tax purposes is $32,461,083.
22 Invesco Strategic Income Fund
NOTE 10—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | May 2, 2014 (commencement date) through October 30, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 228,865 | $ | 2,277,481 | 1,417,557 | $ | 14,188,309 | ||||||||||
Class C | 91,217 | 906,091 | 82,697 | 833,074 | ||||||||||||
Class R | 5,712 | 56,803 | 1,279 | 12,810 | ||||||||||||
Class Y | 49,300 | 488,943 | 1,283,979 | 12,842,642 | ||||||||||||
Class R5 | — | — | 1,001 | 10,010 | ||||||||||||
Class R6 | — | — | 1,001 | 10,010 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 6,693 | 66,298 | 1,058 | 10,624 | ||||||||||||
Class C | 2,222 | 22,006 | 315 | 3,156 | ||||||||||||
Class R | 90 | 889 | 2 | 23 | ||||||||||||
Class Y | 939 | 9,309 | 276 | 2,773 | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (20,073 | ) | (200,183 | ) | (817 | ) | (8,219 | ) | ||||||||
Class C | (22,703 | ) | (225,390 | ) | (2,156 | ) | (21,691 | ) | ||||||||
Class R | (232 | ) | (2,301 | ) | — | — | ||||||||||
Class Y | (40,061 | ) | (399,406 | ) | (10,049 | ) | (101,000 | ) | ||||||||
Net increase in share activity | 301,969 | $ | 3,000,540 | 2,776,143 | $ | 27,782,521 |
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and in the aggregate own 10% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. |
In addition, 81% of the outstanding shares of the Fund are owned by the Adviser. |
23 Invesco Strategic 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 on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions from net realized gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of expenses to average net assets with fee waivers and/or expenses absorbed | Ratio of expenses to average net assets without fee waivers and/or expenses absorbed | Ratio of net investment income to average net assets | Portfolio turnover(c) | |||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.05 | $ | 0.14 | $ | 0.01 | $ | 0.15 | $ | (0.18 | ) | $ | (0.10 | ) | $ | (0.28 | ) | $ | 9.92 | 1.57 | % | $ | 16,208 | 0.74 | %(d) | 2.00 | %(d) | 2.85 | %(d) | 65 | % | |||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.16 | 0.06 | 0.22 | (0.17 | ) | — | (0.17 | ) | 10.05 | 2.19 | 14,248 | 0.71 | (f)(g) | 2.08 | (g) | 3.12 | (g) | 57 | |||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | 0.11 | 0.01 | 0.12 | (0.15 | ) | (0.10 | ) | (0.25 | ) | 9.92 | 1.19 | 1,504 | 1.49 | (d) | 2.75 | (d) | 2.10 | (d) | 65 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.12 | 0.07 | 0.19 | (0.14 | ) | — | (0.14 | ) | 10.05 | 1.86 | 812 | 1.46 | (f)(g) | 2.83 | (g) | 2.37 | (g) | 57 | |||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | 0.13 | 0.01 | 0.14 | (0.17 | ) | (0.10 | ) | (0.27 | ) | 9.92 | 1.45 | 68 | 0.99 | (d) | 2.25 | (d) | 2.60 | (d) | 65 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.15 | 0.06 | 0.21 | (0.16 | ) | — | (0.16 | ) | 10.05 | 2.08 | 13 | 0.96 | (f)(g) | 2.33 | (g) | 2.87 | (g) | 57 | |||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | 0.15 | 0.03 | 0.18 | (0.20 | ) | (0.10 | ) | (0.30 | ) | 9.93 | 1.80 | 12,748 | 0.49 | (d) | 1.75 | (d) | 3.10 | (d) | 65 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.17 | 0.06 | 0.23 | (0.18 | ) | — | (0.18 | ) | 10.05 | 2.29 | 12,808 | 0.46 | (f)(g) | 1.83 | (g) | 3.37 | (g) | 57 | |||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | 0.09 | 0.09 | 0.18 | (0.20 | ) | (0.10 | ) | (0.30 | ) | 9.93 | 1.80 | 10 | 0.49 | (d) | 1.81 | (d) | 3.10 | (d) | 65 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.17 | 0.06 | 0.23 | (0.18 | ) | — | (0.18 | ) | 10.05 | 2.29 | 10 | 0.46 | (f)(g) | 1.90 | (g) | 3.37 | (g) | 57 | |||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.05 | 0.09 | 0.09 | 0.18 | (0.20 | ) | (0.10 | ) | (0.30 | ) | 9.93 | 1.80 | 10 | 0.49 | (d) | 1.81 | (d) | 3.10 | (d) | 65 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(e) | 10.00 | 0.17 | 0.06 | 0.23 | (0.18 | ) | — | (0.18 | ) | 10.05 | 2.29 | 10 | 0.46 | (f)(g) | 1.90 | (g) | 3.37 | (g) | 57 |
(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 $15,122, $1,127, $50, $12,816, $10 and $10 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Commencement date of May 2, 2014. |
(f) | 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 0.14% and 0.14% for the six months ended April 30, 2015 and the period ended October 31, 2014. |
(g) | Annualized. |
24 Invesco Strategic 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 November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,015.70 | $ | 3.70 | $ | 1,021.12 | $ | 3.71 | 0.74 | % | ||||||||||||
C | 1,000.00 | 1,011.90 | 7.43 | 1,017.41 | 7.45 | 1.49 | ||||||||||||||||||
R | 1,000.00 | 1,014.50 | 4.94 | 1,019.89 | 4.96 | 0.99 | ||||||||||||||||||
Y | 1,000.00 | 1,018.00 | 2.45 | 1,022.36 | 2.46 | 0.49 | ||||||||||||||||||
R5 | 1,000.00 | 1,018.00 | 2.45 | 1,022.36 | 2.46 | 0.49 | ||||||||||||||||||
R6 | 1,000.00 | 1,018.00 | 2.45 | 1,022.36 | 2.46 | 0.49 |
1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2014 through April 30, 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. |
25 Invesco Strategic 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: 811-05426 and 033-19338 | STI-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
| April 30, 2015 | |||
| ||||
Invesco Unconstrained Bond Fund
| ||||
Nasdaq: | ||||
A: IUBAX ¡ C: IUBCX ¡ R: IUBRX ¡ Y: IUBYX ¡ R5: IUBFX ¡ R6: IUBZX | ||||
| ||||
2 Fund Performance | ||||
3 Letters to Shareholders | ||||
4 Schedule of Investments | ||||
9 Financial Statements | ||||
11 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. | ||||
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NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
| ||
Fund vs. Indexes | ||
Cumulative total returns, 10/31/14 to 4/30/15, 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
| 1.57%
| |
Class C Shares
| 1.15
| |
Class R Shares
| 1.47
| |
Class Y Shares
| 1.78
| |
Class R5 Shares
| 1.78
| |
Class R6 Shares
| 1.78
| |
3-Month USD Libor Indexq (Broad Market/ Style-Specific Index)
| 0.12
| |
Lipper Alternative Credit Focus Funds Indexn (Peer Group Index)
| 0.55
| |
Source(s): qBloomberg L.P.; nLipper Inc. | ||
The 3-Month USD Libor Index is unmanaged index considered representative of the average interest rate at which a selection of banks in London are prepared to lend to one another in American dollars with a maturity of three months. The Lipper Alternative Credit Focus Funds Index invests in a wide-range of credit-structured vehicles by using either fundamental credit research analysis or quantitative credit portfolio modelling trying to benefit from any changes in credit quality, credit spreads, and market liquidity. 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 4/30/15, including maximum applicable
| ||
Class A Shares | ||
Inception (10/14/14) | –2.32% | |
Class C Shares | ||
Inception (10/14/14) | 5.66% | |
Class R Shares | ||
Inception (10/14/14) | 1.87% | |
Class Y Shares | ||
Inception (10/14/14) | 2.19% | |
Class R5 Shares | ||
Inception (10/14/14) | 2.19% | |
Class R6 Shares | ||
Inception (10/14/14) | 2.19% |
| ||
Cumulative Total Returns | ||
As of 3/31/15, the most recent calendar quarter end, including maximum applicable sales charges
| ||
Class A Shares | ||
Inception (10/14/14) | –2.55% | |
Class C Shares | ||
Inception (10/14/14) | 0.39% | |
Class R Shares | ||
Inception (10/14/14) | 1.66% | |
Class Y Shares | ||
Inception (10/14/14) | 1.83% | |
Class R5 Shares | ||
Inception (10/14/14) | 1.83% | |
Class R6 Shares | ||
Inception (10/14/14) | 1.83% |
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 fligures 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 1.09%, 1.84%, 1.34%, 0.84%, 0.84% and 0.84%, 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 2.09%, 2.84%, 2.34%, 1.84%, 1.93% and 1.88%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
Class A share performance reflects the maximum 4.25% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.
The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.
Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.
1 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least February 29, 2016. See current prospectus for more information. |
2 | Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2017. See current prospectus for more information. |
2 Invesco Unconstrained Bond 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 Unconstrained Bond Fund
Schedule of Investments(a)
April 30, 2015
(Unaudited)
Principal Amount | Value | |||||||
Asset-Backed Securities–57.11% |
| |||||||
Apidos CLO XIX (Cayman Islands), Series 2014-19A, Class C, Floating Rate Pass Through Ctfs., 3.56%, 10/17/26(b)(c) | $ | 500,000 | $ | 502,550 | ||||
Avenue CLO III Ltd., Series 2006-3A, Class B1L, Floating Rate Pass Through Ctfs., | 550,000 | 550,550 | ||||||
Banc of America Funding Trust, Series 2005-D, Class A1, Floating Rate Pass Through Ctfs., 2.66%, 05/25/35(c) | 163,472 | 166,878 | ||||||
Banc of America Mortgage Trust, Series 2005-H, Class 2A1, Floating Rate Pass Through Ctfs., 2.67%, 09/25/35(c) | 300,056 | 277,027 | ||||||
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR8, Class AJ, Pass Through Ctfs., 4.75%, 06/11/41 | 250,000 | 250,629 | ||||||
CDGJ Commercial Mortgage Trust, Series 2014-BXCH, Class A, Floating Rate Pass Through Ctfs., 1.57%, 12/15/27(b)(c) | 200,000 | 200,807 | ||||||
Cent CLO Ltd. (Cayman Islands), Series 2013-19A, Class C, Floating Rate Pass Through Ctfs., 3.55%, 10/29/25(b)(c) | 250,000 | 240,850 | ||||||
Cerberus Onshore II CLO-2 LLC, Series 2014-1A, Class D, Floating Rate Pass Through Ctfs., 4.43%, 10/15/23(b)(c) | 350,000 | 338,695 | ||||||
Chase Mortgage Finance Trust, Series 2007-A1, Class 13A1, Floating Rate Pass Through Ctfs., 5.08%, 03/25/37(c) | 247,365 | 234,453 | ||||||
Citigroup Commercial Mortgage Trust, Series 2014-388G, Class C, Floating Rate Pass Through Ctfs., 1.58%, 06/15/33(b)(c) | 300,000 | 300,633 | ||||||
Citigroup Mortgage Loan Trust Inc., Series 2005-11, Class A2A, Floating Rate Pass Through Ctfs., 2.51%, 10/25/35(c) | 183,903 | 182,675 | ||||||
Series 2005-3, Class 2A2A, Floating Rate Pass Through Ctfs., 2.58%, 08/25/35(c) | 184,158 | 183,073 | ||||||
COMM Mortgage Trust, Series 2014-FL5, Class A, Floating Rate Pass Through Ctfs., 1.55%, 10/15/31(b)(c) | 300,000 | 301,151 | ||||||
Credit Suisse First Boston Mortgage Securities Corp., | 140,065 | 138,061 | ||||||
Series 2005-C3, Class AJ, Pass Through Ctfs., 4.77%, 07/15/37 | 183,000 | 182,909 |
Principal Amount | Value | |||||||
GMACM Mortgage Loan Trust, | $ | 117,134 | $ | 111,433 | ||||
GSAA Home Equity Trust, Series 2005-11, Class 3A5, Floating Rate Pass Through Ctfs., 0.55%, 10/25/35(c) | 250,000 | 227,513 | ||||||
GSR Mortgage Loan Trust, | 245,132 | 237,852 | ||||||
Series 2006-1F, Class 1A11, Pass Through Ctfs., 5.50%, 02/25/36 | 254,305 | 245,296 | ||||||
Highbridge Loan Management Ltd. (Cayman Islands), Series 2015-6A, Class D, Floating Rate Pass Through Ctfs., 1.27%, 05/05/27 (Acquired 03/17/15; Cost $240,954)(b)(c) | 250,000 | 240,950 | ||||||
ING IM CLO Ltd. (Cayman Islands), Series 2012-1 RA, Class A2R, Floating Rate Pass Through Ctfs., 2.09%, 03/14/22(b)(c)(d) | 500,000 | 501,000 | ||||||
JP Morgan Chase Commercial Mortgage Securities Trust, | 300,000 | 308,098 | ||||||
Series 2014-C20, Class B, Variable Rate Pass Through Ctfs., 4.40%, 07/15/47(c) | 300,000 | 323,836 | ||||||
JP Morgan Mortgage Trust, | 337,845 | 320,132 | ||||||
Series 2007-A1, Class 5A5, Floating Rate Pass Through Ctfs., 2.56%, 07/25/35(c) | 187,600 | 191,173 | ||||||
Series 2007-A1, Class 6A1, Floating Rate Pass Through Ctfs., 2.50%, 07/25/35(c) | 159,637 | 158,288 | ||||||
Series 2007-A2, Class 4A2, Floating Rate Pass Through Ctfs., 4.94%, 04/25/37(c) | 249,949 | 229,245 | ||||||
KKR CLO Ltd. (Cayman Islands), Series 11, Class B, Floating Rate Pass Through Ctfs., | 460,000 | 457,112 | ||||||
LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class AJ, Pass Through Ctfs., 4.84%, 07/15/40 | 206,135 | 206,196 | ||||||
Series 2005-C7, Class AJ, Variable Rate Pass Through Ctfs., 5.32%, 11/15/40(c) | 250,000 | 253,620 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Unconstrained Bond Fund
Principal Amount | Value | |||||||
Merrill Lynch Mortgage Investors Trust, Series 2005-A5, Class A9, Floating Rate Pass Through Ctfs., 2.48%, 06/25/35(c) | $ | 194,170 | $ | 190,108 | ||||
Series 2005-A9, Class 2A1C, Floating Rate Pass Through Ctfs., 2.51%, 12/25/35(c) | 260,000 | 250,386 | ||||||
Morgan Stanley Capital I Trust, Series 2005-HQ6, Class AJ, Variable Rate Pass Through Ctfs., 5.07%, 08/13/42(c) | 115,106 | 115,126 | ||||||
Morgan Stanley Mortgage Loan Trust, Series 2005-10, Class 1A1, Floating Rate Pass Through Ctfs., 0.88%, 12/25/35(c) | 252,800 | 207,383 | ||||||
Series 2005-3AR, Class 3A, Floating Rate Pass Through Ctfs., 2.54%, 07/25/35(c) | 252,795 | 221,902 | ||||||
Northwoods Capital X Ltd. (Cayman Islands), Series 2013-10A, Class D, Floating Rate Pass Through Ctfs., 3.85%, 11/04/25(b)(c) | 250,000 | 234,975 | ||||||
Octagon Investment Partners XVI Ltd. (Cayman Islands), Series 2013-1A, Class B1, Floating Rate Pass Through Ctfs., 1.87%, 07/17/25(b)(c) | 500,000 | 489,200 | ||||||
Octagon Investment Partners XXI Ltd. (Cayman Islands), Series 2014-1A, Class D, Floating Rate Pass Through Ctfs., 6.85%, 11/14/26(b)(c) | 250,000 | 251,850 | ||||||
Seneca Park CLO Ltd. (Cayman Islands), Series 2014-1A, Class B2, Pass Through Ctfs., | 500,000 | 508,150 | ||||||
Slater Mill Loan Fund L.P. (Cayman Islands), Series 2012-1A, Class B, Floating Rate Pass Through Ctfs., 2.91%, 08/17/22(b)(c) | 250,000 | 251,850 | ||||||
Starwood Retail Property Trust, Series 2014-STAR, Class B, Floating Rate Pass Through Ctfs., 1.83%, 11/15/27(b)(c) | 250,000 | 252,021 | ||||||
Stone Tower CLO VII Ltd. (Cayman Islands), Series 2007-7A, Class B, Floating Rate Pass Through Ctfs., 4.47%, 08/30/21(b)(c) | 250,000 | 248,225 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, | 364,378 | 353,207 | ||||||
Series 2004-20, Class 3A1, Floating Rate Pass Through Ctfs., 2.49%, 01/25/35(c) | 224,646 | 216,463 | ||||||
Sudbury Mill CLO Ltd. (Cayman Islands), Series 2013-1A, Class B1, Floating Rate Pass Through Ctfs., 2.47%, 01/17/26(b)(c) | 500,000 | 499,750 | ||||||
Symphony CLO XI Ltd. (Cayman Islands), Series 2013-11A, Class D, Floating Rate Pass Through Ctfs., 4.27%, 01/17/25(b)(c) | 250,000 | 250,625 |
Principal Amount | Value | |||||||
Symphony CLO XV Ltd. (Cayman Islands), Series 2014-15A, Class C, Floating Rate Pass Through Ctfs., | $ | 500,000 | $ | 501,350 | ||||
WaMu Mortgage Pass-Through Trust, Series 2006-AR14, Class 1A4, Floating Rate Pass Through Ctfs., 1.96%, 11/25/36(c) | 121,001 | 107,787 | ||||||
Series 2007-HY1, Class 3A1, Floating Rate Pass Through Ctfs., 4.39%, 02/25/37(c) | 271,549 | 254,181 | ||||||
Series 2007-HY2, Class 2A1, Floating Rate Pass Through Ctfs., 2.34%, 11/25/36(c) | 277,621 | 244,460 | ||||||
Wells Fargo Mortgage Backed Securities Trust, | 258,295 | 256,957 | ||||||
Series 2005-AR16, Class 4A2, Floating Rate Pass Through Ctfs., 2.64%, 10/25/35(c) | 264,142 | 264,969 | ||||||
Series 2006-2, Class 2A3, Pass Through Ctfs., 5.50%, 03/25/36 | 160,659 | 155,072 | ||||||
WFRBS Commercial Mortgage Trust, Series 2014-C24, Class B, Variable Rate Pass Through Ctfs., 4.20%, 11/15/47(c) | 250,000 | 266,677 | ||||||
Total Asset-Backed Securities | 14,655,359 | |||||||
U.S. Dollar Denominated Bonds & Notes–20.98% |
| |||||||
Apparel Retail–0.28% | ||||||||
Men’s Wearhouse Inc. (The), Sr. Unsec. Gtd. Notes, 7.00%, 07/01/22(b) | 67,000 | 71,439 | ||||||
Casinos & Gaming–0.34% | ||||||||
MGM Resorts International, Sr. Unsec. Gtd. Global Notes, 6.75%, 10/01/20 | 82,000 | 88,663 | ||||||
Communications Equipment–0.39% | ||||||||
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b) | 100,000 | 101,125 | ||||||
Construction Materials–0.29% | ||||||||
Building Materials Corp. of America, Sr. Unsec. Notes, 5.38%, 11/15/24(b) | 72,000 | 74,205 | ||||||
Consumer Finance–2.50% | ||||||||
Ally Financial Inc., Sr. Unsec. Global Notes, 4.13%, 03/30/20 | 510,000 | 513,825 | ||||||
Navient Corp., Sr. Unsec. Medium-Term Notes, 4.88%, 06/17/19 | 127,000 | 127,318 | ||||||
641,143 | ||||||||
Diversified Banks–1.32% | ||||||||
Industrial & Commercial Bank of China Ltd. (China), Jr. Unsec. Sub. Notes, 6.00%(b)(c)(e) | 200,000 | 209,138 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Unconstrained Bond Fund
Principal Amount | Value | |||||||
Diversified Banks–(continued) | ||||||||
JPMorgan Chase & Co., Series Z, Jr. Unsec. Sub. Global Notes, | $ | 130,000 | $ | 130,812 | ||||
339,950 | ||||||||
Homebuilding–1.07% | ||||||||
K. Hovnanian Enterprises Inc., Sr. Sec. Gtd. Notes, 7.25%, 10/15/20(b) | 131,000 | 137,550 | ||||||
KB Home, Sr. Unsec. Gtd. Notes, 7.00%, 12/15/21 | 130,000 | 136,338 | ||||||
273,888 | ||||||||
Integrated Oil & Gas–0.25% | ||||||||
Ecopetrol S.A. (Colombia), Sr. Unsec. Global Bonds, 4.13%, 01/16/25 | 66,000 | 63,855 | ||||||
Marine–0.77% | ||||||||
PT Pelabuhan Indonesia II (Indonesia), Sr. Unsec. Bonds, | 200,000 | 197,250 | ||||||
Oil & Gas Exploration & Production–3.70% | ||||||||
Antero Resources Corp., Sr. Unsec. Gtd. Global Notes, 5.38%, 11/01/21 | 90,000 | 91,350 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 4.88%, 04/15/22 | 95,000 | 88,350 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 4.38%, 06/01/24 | 120,000 | 122,100 | ||||||
EXCO Resources, Inc., Sr. Unsec. Gtd. Notes, 8.50%, 04/15/22 | 170,000 | 102,425 | ||||||
Halcón Resources Corp., Sec. Gtd. Second Lien Notes, | 283,000 | 295,735 | ||||||
Range Resources Corp., Sr. Unsec. Gtd. Sub. Global Notes, 5.00%, 03/15/23 | 50,000 | 51,000 | ||||||
SandRidge Energy, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 02/15/23 | 156,000 | 104,520 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Notes, 6.25%, 04/01/23(b) | 90,000 | 93,487 | ||||||
948,967 | ||||||||
Oil & Gas Storage & Transportation–0.50% | ||||||||
MarkWest Energy Partners, L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 4.88%, 12/01/24 | 124,000 | 129,890 | ||||||
Regional Banks–1.54% | ||||||||
Synovus Financial Corp., Unsec. Sub. Global Notes, 5.13%, 06/15/17 | 385,000 | 395,106 | ||||||
Specialized Finance–4.41% | ||||||||
CIT Group Inc., | 86,000 | 89,010 | ||||||
Sr. Unsec. Notes, 5.00%, 05/15/17 | 380,000 | 395,200 |
Principal Amount | Value | |||||||
Specialized Finance–(continued) | ||||||||
International Lease Finance Corp., Sr. Unsec. Global Notes, 5.75%, 05/15/16 | $ | 375,000 | $ | 388,594 | ||||
Sr. Unsec. Notes, 8.25%, 12/15/20 | 210,000 | 258,300 | ||||||
1,131,104 | ||||||||
Trading Companies & Distributors–2.99% | ||||||||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust (Netherlands), Sr. Unsec. Gtd. Notes, 2.75%, 05/15/17(b) | 150,000 | 149,250 | ||||||
Air Lease Corp., Sr. Unsec. Global Notes, 4.50%, 01/15/16 | 605,000 | 618,234 | ||||||
767,484 | ||||||||
Wireless Telecommunication Services–0.63% | ||||||||
Sprint Communications Inc., Sr. Unsec. Gtd. Notes, 9.00%, 11/15/18(b) | 141,000 | 161,269 | ||||||
Total U.S. Dollar Denominated Bonds & Notes |
| 5,385,338 | ||||||
Non-U.S. Dollar Denominated Bonds & Notes–12.51%(f) |
| |||||||
Diversified Banks–1.89% | ||||||||
Standard Chartered Bank (Singapore) Ltd. (United Kingdom), Sr. Unsec. Medium-Term Euro Notes, 7.28%, 06/05/19(b) | INR | 31,200,000 | 485,351 | |||||
Sovereign Debt–10.62% | ||||||||
Australian Government (Australia), Series 126, Sr. Unsec. Bonds, 4.50%, 04/15/20 | AUD | 1,600,000 | 1,408,154 | |||||
Mexican Bonos (Mexico), | MXN | 9,910,000 | 738,190 | |||||
Series M 10, Sr. Unsec. Bonds, 8.00%, 12/17/15 | MXN | 1,800,000 | 120,946 | |||||
Portugal Obrigacoes do Tesouro (Portugal), Unsec. Euro Bonds, 3.88%, 02/15/30(b) | EUR | 350,000 | 458,958 | |||||
2,726,248 | ||||||||
Total Non-U.S. Dollar Denominated Bonds & Notes |
| 3,211,599 | ||||||
U.S. Treasury Bills–5.07% |
| |||||||
0.07%, 10/29/15(g)(h) | $ | 1,300,000 | 1,299,805 | |||||
Structured Agency Credit Risk Notes (STACR®)–2.37% |
| |||||||
Freddie Mac, Series 2014-DN4, Class M2 , Floating Rate STACR® Debt Notes, 2.58%, 10/25/24(c)(i) (Cost $600,000) | 600,000 | 609,162 | ||||||
U.S. Government Sponsored Agency Mortgage-Backed Securities–0.33% |
| |||||||
Collateralized Mortgage Obligations–0.33% | ||||||||
Fannie Mae REMICs, 3.00%, 06/25/27, IO | 803,947 | 84,227 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Unconstrained Bond Fund
Principal Amount | Value | |||||||
Municipal Obligations–0.17% |
| |||||||
Puerto Rico (Commonwealth of) Government Development Bank; Series 2014 B-1A, Sr. RN, 7.75%, 06/30/15 | $ | 44,445 | $ | 43,778 | ||||
Shares | ||||||||
Money Market Funds–8.03% |
| |||||||
Liquid Assets Portfolio–Institutional Class(j) | 1,029,729 | 1,029,729 | ||||||
Premier Portfolio–Institutional Class(j) | 1,029,728 | 1,029,728 | ||||||
Total Money Market Funds | 2,059,457 |
Value | ||||||
Options Purchased–0.45%(k) | ||||||
(Cost $114,161) | $ | 115,272 | ||||
TOTAL INVESTMENTS–107.02% | 27,463,997 | |||||
OTHER ASSETS LESS LIABILITIES–(7.02)% | (1,802,124 | ) | ||||
NET ASSETS–100.00% | $ | 25,661,873 |
Investment Abbreviations:
AUD | – Australian Dollar | |
CLO | – Collateralized Loan Obligation | |
Ctfs. | – Certificates | |
EUR | – Euro | |
Gtd. | – Guaranteed | |
INR | – Indian Rupee | |
IO | – Interest Only | |
Jr. | – Junior |
MXN | – Mexican Peso | |
REMICs | – Real Estate Investment Conduits | |
RN | – Revenue Notes | |
Sec. | – Secured | |
Sr. | – Senior | |
STACR® | – Structured Agency Credit Risk | |
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) | 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 April 30, 2015 was $9,600,829, which represented 37.41% of the Fund’s Net Assets. |
(c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on April 30, 2015. |
(d) | All or a portion of the security is pledged as collateral for open reverse repurchase agreements. See Note 1I. The following table presents the Fund’s collateral pledged as of April 30, 2015: |
Counterparty | Reverse Repurchase Agreements | Value of Non- cash Collateral Pledged* | Net Amount | |||||||||
Royal Bank of Canada | $ | 893,836 | $ | (893,836 | ) | $ | — |
* | Amount does not include excess collateral pledged. |
(e) | Perpetual bond with no specified maturity date. |
(f) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(g) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(h) | All or a portion of the value was pledged and/or designated as collateral to cover margin requirement for open futures contracts and centrally cleared swap agreements. See Notes 1L, 1O and 4. |
(i) | Principal payments are determined by the delinquency and principal payment experience on the STACR® reference pool. Freddie Mac transfers credit risk from the mortgages in the reference pool to credit investors who invest in the STACR® debt notes. |
(j) | The money market fund and the Fund are affiliated by having the same investment adviser. |
(k) | The table below details options purchased: |
Open Over-The-Counter Foreign Currency Options Purchased — Currency Risk | ||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Strike Price | Notional Value | Value | ||||||||||||||||||||||||||
USD versus CNH | Call | Bank of America, N.A. | 06/16/15 | CNH | 6.345 | USD | 735,000 | $ | 689 | |||||||||||||||||||||||
Options Purchased — Currency Risk | $ | 689 |
Investment Abbreviations:
CNH | – Chinese Yuan | |
USD | – United States Dollar |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Unconstrained Bond Fund
Open Over-The-Counter Interest Rate Swaptions Purchased | ||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Exercise Rate | Pay/Receive Exercise Rate | Floating Rate Index | Expiration Date | Notional Value | Value | ||||||||||||||||||
2 Year Interest Rate Swap | Put | Morgan Stanley & Co. International PLC | 1.45 | % | Pay | 3 Month USD LIBOR | 10/14/15 | $ | 11,900,000 | $ | 16,657 | |||||||||||||||
2 Year Interest Rate Swap | Put | Morgan Stanley & Co. International PLC | 1.45 | Pay | 3 Month USD LIBOR | 10/15/15 | 6,700,000 | 9,701 | ||||||||||||||||||
5 Year Interest Rate Swap | Put | Morgan Stanley & Co. International PLC | 2.05 | Pay | 3 Month USD LIBOR | 10/15/15 | 15,300,000 | 87,969 | ||||||||||||||||||
10 Year Interest Rate Swap | Call | Deutsche Bank Securities Inc. | 1.90 | Receive | 3 Month USD LIBOR | 05/11/15 | 1,100,000 | 256 | ||||||||||||||||||
Total Swaptions Purchased — Interest Rate Risk | $ | 114,583 | ||||||||||||||||||||||||
Total Options Purchased (Cost $114,161) | $ | 115,272 |
Abbreviations:
LIBOR | – London Interbank Offered Rate | |
USD | – U.S. Dollar |
Portfolio Composition
By security type, based on Net Assets
as of April 30, 2015
Asset-Backed Securities | 57.1 | % | ||
U.S. Dollar Denominated Bonds and Notes | 21.0 | |||
Non-U.S. Dollar Denominated Bonds & Notes | 12.5 | |||
U.S. Treasury Bills | 5.1 | |||
Structured Agency Credit Risk Notes | 2.4 | |||
Options Purchased | 0.5 | |||
U.S. Government Sponsored Agency Mortgage-Backed Securities | 0.3 | |||
Municipal Obligations | 0.2 | |||
Money Market Funds Plus Other Assets Less Liabilities | 0.9 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Unconstrained Bond Fund
Statement of Assets and Liabilities
April 30, 2015
(Unaudited)
Assets: |
| |||
Investments, at value (Cost $25,246,075) | $ | 25,404,540 | ||
Investments in affiliated money market funds, at value and cost | 2,059,457 | |||
Total investments, at value (Cost $27,305,532) | 27,463,997 | |||
Cash | 5,801 | |||
Foreign currencies, at value (Cost $13,699) | 14,629 | |||
Receivable for: | ||||
Variation margin — centrally cleared swap agreements | 4,095 | |||
Dividends and interest | 168,097 | |||
Swap agreements — OTC | 786 | |||
Investment for trustee deferred compensation and retirement plans | 721 | |||
Unrealized appreciation on forward foreign currency contracts outstanding | 74,564 | |||
Unrealized appreciation on swap agreements — OTC | 686 | |||
Other assets | 55,473 | |||
Total assets | 27,788,849 | |||
Liabilities: |
| |||
Payable for: | ||||
Investments purchased | 1,076,597 | |||
Options written, at value (premiums received $2,117) | 88 | |||
Reverse Repurchase Agreement | 888,000 | |||
Swap agreements — OTC | 1,819 | |||
Variation margin — futures | 504 | |||
Variation margin — centrally cleared swap agreements | 160 | |||
Accrued fees to affiliates | 15,817 | |||
Accrued interest expense and line of credit fees | 4,137 | |||
Accrued trustees’ and officers’ fees and benefits | 2,318 | |||
Accrued other operating expenses | 89,376 | |||
Trustee deferred compensation and retirement plans | 721 | |||
Premiums paid on swap agreements — OTC | 8,896 | |||
Unrealized depreciation on forward foreign currency contracts outstanding | 35,795 | |||
Unrealized depreciation on swap agreements — OTC | 2,748 | |||
Total liabilities | 2,126,976 | |||
Net assets applicable to shares outstanding | $ | 25,661,873 | ||
Net assets consist of: |
| |||
Shares of beneficial interest | $ | 25,572,745 | ||
Undistributed net investment income | (86,877 | ) | ||
Undistributed net realized gain (loss) | (30,399 | ) | ||
Net unrealized appreciation | 206,404 | |||
$ | 25,661,873 |
Net Assets: |
| |||
Class A | $ | 12,731,813 | ||
Class C | $ | 53,682 | ||
Class R | $ | 10,039 | ||
Class Y | $ | 12,846,247 | ||
Class R5 | $ | 10,046 | ||
Class R6 | $ | 10,046 | ||
Shares outstanding, $0.01 par value per share, |
| |||
Class A | 1,269,119 | |||
Class C | 5,356 | |||
Class R | 1,001 | |||
Class Y | 1,280,117 | |||
Class R5 | 1,001 | |||
Class R6 | 1,001 | |||
Class A: | ||||
Net asset value per share | $ | 10.03 | ||
Maximum offering price per share | ||||
(Net asset value of $10.03 ¸ 95.75%) | $ | 10.48 | ||
Class C: | ||||
Net asset value and offering price per share | $ | 10.02 | ||
Class R: | ||||
Net asset value and offering price per share | $ | 10.03 | ||
Class Y: | ||||
Net asset value and offering price per share | $ | 10.04 | ||
Class R5: | ||||
Net asset value and offering price per share | $ | 10.04 | ||
Class R6: | ||||
Net asset value and offering price per share | $ | 10.04 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Unconstrained Bond Fund
Statement of Operations
For the six months ended April 30, 2015
(Unaudited)
Investment income: |
| |||
Interest (net of foreign withholding taxes of $614) | $ | 297,037 | ||
Dividends | 98,126 | |||
Dividends from affiliated money market funds | 600 | |||
Total investment income | 395,763 | |||
Expenses: | ||||
Advisory fees | 87,870 | |||
Administrative services fees | 24,795 | |||
Custodian fees | 6,724 | |||
Distribution fees: | ||||
Class A | 15,651 | |||
Class C | 125 | |||
Class R | 25 | |||
Interest, facilities and maintenance fees | 4,137 | |||
Transfer agent fees — A, C, R and Y | 3,663 | |||
Transfer agent fees — R5 | 5 | |||
Transfer agent fees — R6 | 5 | |||
Trustees’ and officers’ fees and benefits | 11,106 | |||
Registration and filing fees | 52,402 | |||
Professional services fees | 41,456 | |||
Other | 17,082 | |||
Total expenses | 265,046 | |||
Less: Fees waived and expenses reimbursed | (160,706 | ) | ||
Net expenses | 104,340 | |||
Net investment income | 291,423 | |||
Realized and unrealized gain (loss) from: | ||||
Net realized gain (loss) from: | ||||
Investment securities | 146,878 | |||
Foreign currencies | (54,481 | ) | ||
Forward foreign currency contracts | 123,572 | |||
Futures contracts | (192,140 | ) | ||
Option contracts written | (3,367 | ) | ||
Swap agreements | (11,738 | ) | ||
8,724 | ||||
Change in net unrealized appreciation (depreciation) of: | ||||
Investment securities | 102,573 | |||
Foreign currencies | (1,209 | ) | ||
Forward foreign currency contracts | 15,526 | |||
Futures contracts | (18,257 | ) | ||
Option contracts written | 2,029 | |||
Swap agreements | 9,054 | |||
109,716 | ||||
Net realized and unrealized gain | 118,440 | |||
Net increase in net assets resulting from operations | $ | 409,863 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Unconstrained Bond Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2015 and the period, October 14, 2014 (commencement date) through October 31, 2014
(Unaudited)
April 30, 2015 | October 14, 2014 (commencement date) through October 31, 2014 | |||||||
Operations: |
| |||||||
Net investment income | $ | 291,423 | $ | 10,074 | ||||
Net realized gain (loss) | 8,724 | (1,289 | ) | |||||
Change in net unrealized appreciation | 109,716 | 96,688 | ||||||
Net increase in net assets resulting from operations | 409,863 | 105,473 | ||||||
Distributions to shareholders from net investment income: | ||||||||
Class A | (189,612 | ) | — | |||||
Class C | (315 | ) | — | |||||
Class R | (141 | ) | — | |||||
Class Y | (202,921 | ) | — | |||||
Class R5 | (161 | ) | — | |||||
Class R6 | (161 | ) | — | |||||
Total distributions from net investment income | (393,311 | ) | — | |||||
Distributions to shareholders from net realized gains: | ||||||||
Class A | (19,520 | ) | — | |||||
Class C | (35 | ) | — | |||||
Class R | (16 | ) | — | |||||
Class Y | (19,520 | ) | — | |||||
Class R5 | (16 | ) | — | |||||
Class R6 | (16 | ) | — | |||||
Total distributions from net realized gains | (39,123 | ) | — | |||||
Share transactions–net: | ||||||||
Class A | 211,191 | 12,480,560 | ||||||
Class C | 43,665 | 10,010 | ||||||
Class R | — | 10,010 | ||||||
Class Y | 290,905 | 12,512,610 | ||||||
Class R5 | — | 10,010 | ||||||
Class R6 | — | 10,010 | ||||||
Net increase in net assets resulting from share transactions | 545,761 | 25,033,210 | ||||||
Net increase in net assets | 523,190 | 25,138,683 | ||||||
Net assets: | ||||||||
Beginning of period | 25,138,683 | — | ||||||
End of period (includes undistributed net investment income of $(86,877) and $15,011, respectively) | $ | 25,661,873 | $ | 25,138,683 |
Notes to Financial Statements
April 30, 2015
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Unconstrained Bond Fund (the “Fund”) is a series portfolio of AIM Investment Funds (Invesco Investment Funds) (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-four separate series 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 positive absolute return over a full market cycle.
11 Invesco Unconstrained Bond Fund
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 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
12 Invesco Unconstrained Bond 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 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 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. | Reverse Repurchase Agreements — The Fund may enter into reverse repurchase agreements. Reverse repurchase agreements involve the sale of securities held by the Fund, with an agreement that the Fund will repurchase such securities at an agreed upon price and date. The Fund will use the proceeds of a reverse repurchase agreement (which are considered to be borrowings under the 1940 Act) to purchase other permitted securities either maturing, or under an agreement to resell, at a date simultaneous with or prior to the expiration of the reverse repurchase agreement. The agreements are collateralized by the underlying securities and are carried at the amount at which the securities subsequently will be repurchased as specified in the agreements. |
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. |
13 Invesco Unconstrained Bond Fund
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. 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 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. | Call Options Written and Purchased — The Fund may write covered call options and/or buy call options. A covered call option gives the purchaser of such option the right to buy, and the writer the obligation to sell, the underlying security or foreign currency at the stated exercise price during the option period for American style options or at expiration date for European style options. 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.
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. 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 |
14 Invesco Unconstrained Bond Fund
option premiums if it expects the price of the underlying instrument to remain stable or rise during the option period for American style or on expiration date for European style 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 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, 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
15 Invesco Unconstrained Bond Fund
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. A short position in a security poses more risk than holding the same security long. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.
Notional amounts of each individual credit default swap agreement outstanding as of April 30, 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. | 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. |
Q. | Other Risks — The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly. |
The Fund may invest in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claim.
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 $1 billion | 0 | .70% | ||||
Next $3.5 billion | 0 | .65% | ||||
Over $4.5 billion | 0 | .55% |
For the six months ended April 30, 2015, the effective advisory fees incurred by the Fund was 0.70%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco 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, through at least February 29, 2016, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.03%, 1.78%, 1.28%, 0.78%, 0.78% and 0.78%, 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 February 29, 2016. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2017, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2015, the Adviser waived advisory fees of $87,870 and reimbursed class level expenses of $36,322, $73, $29, $36,348, $32 and $32 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 April 30, 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 April 30, 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 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
16 Invesco Unconstrained Bond Fund
Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 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 April 30, 2015, IDI advised the Fund that IDI retained $260 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 April 30, 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 | $ | 2,059,457 | $ | — | $ | — | $ | 2,059,457 | ||||||||
U.S. Treasury Securities | — | 1,299,805 | — | 1,299,805 | ||||||||||||
U.S. Government Sponsored Agency Securities | — | 84,227 | — | 84,227 | ||||||||||||
Structured Agency Credit Risk Notes | — | 609,162 | — | 609,162 | ||||||||||||
Asset-Backed Securities | — | 14,655,359 | — | 14,655,359 | ||||||||||||
Corporate Debt Securities | — | 5,385,338 | — | 5,385,338 | ||||||||||||
Foreign Debt Securities | — | 485,351 | — | 485,351 | ||||||||||||
Foreign Sovereign Debt Securities | — | 2,726,248 | — | 2,726,248 | ||||||||||||
Municipal Obligations | — | 43,778 | — | 43,778 | ||||||||||||
Options Purchased | — | 115,272 | — | 115,272 | ||||||||||||
2,059,457 | 25,404,540 | — | 27,463,997 | |||||||||||||
Forward Foreign Currency Contracts* | — | 38,769 | — | 38,769 | ||||||||||||
Futures Contracts* | (3,118 | ) | — | — | (3,118 | ) | ||||||||||
Options Written* | — | (88 | ) | — | (88 | ) | ||||||||||
Swap Agreements* | — | 11,328 | — | 11,328 | ||||||||||||
Total Investments | $ | 2,056,339 | $ | 25,454,549 | $ | — | $ | 27,510,888 |
* | Forward foreign currency contracts, futures contracts and swap agreements are valued at unrealized appreciation (depreciation). Options written are shown at value. |
17 Invesco Unconstrained 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 April 30, 2015:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Credit risk: | ||||||||
Swap agreements(a)(b) | $ | 4,133 | $ | (1,053 | ) | |||
Currency risk: | ||||||||
Forward foreign currency contracts(c) | 114,199 | (75,430 | ) | |||||
Options purchased(d) | 689 | — | ||||||
Options written(e) | — | (88 | ) | |||||
Interest rate risk: | ||||||||
Futures contracts(f) | 1,276 | (4,394 | ) | |||||
Options purchased(d) | 114,583 | — | ||||||
Swap agreements(a)(b) | 9,943 | (1,695 | ) | |||||
Total | $ | 244,823 | $ | (82,660 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Unrealized appreciation on swap agreements — OTC and Unrealized depreciation on swap agreements — OTC. |
(b) | Includes cumulative appreciation (depreciation) of centrally cleared swap agreements. Only current day’s variation margin receivable and (payable) are reported within the Statement of Assets and Liabilities. |
(c) | Values are disclosed on the Statement of Assets and Liabilities under the captions Unrealized appreciation on forward foreign currency contracts outstanding and Unrealized depreciation on forward foreign currency contracts outstanding. |
(d) | Options purchased at value as reported in the Schedule of Investments. |
(e) | Values are disclosed on the Statement of Assets and Liabilities under the caption Options written, at value. |
(f) | 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 April 30, 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 Contracts(a) | Swap Agreements | |||||||||||||
Realized Gain (Loss): | ||||||||||||||||
Credit risk | $ | — | $ | — | $ | — | $ | 35,237 | ||||||||
Currency risk | 123,572 | — | (3,367 | ) | — | |||||||||||
Interest rate risk | — | (192,140 | ) | — | (46,975 | ) | ||||||||||
Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||
Credit risk | — | — | — | 776 | ||||||||||||
Currency risk | 15,526 | — | (5,771 | ) | — | |||||||||||
Interest rate risk | — | (18,257 | ) | 7,926 | 8,278 | |||||||||||
Total | $ | 139,098 | $ | (210,397 | ) | $ | (1,212 | ) | $ | (2,684 | ) |
(a) | Options purchased net realized gain (loss) of $0 and change in net unrealized appreciation (depreciation) of $126 are included in the net realized gain (loss) from investment securities and the change in net unrealized appreciation (depreciation) of investment securities, respectively. |
The table below summarizes the six month average notional value of forward foreign currency contracts, futures contracts and swap agreements, the three month average notional value of options written and the five month average notional value of options purchased outstanding during the period.
Forward Foreign Currency Contracts | Futures Contracts | Options Written | Options Purchased | Swap Agreements | ||||||||||||||||
Average notional value | $ | 4,002,442 | $ | 13,148,775 | $ | 2,393,814 | $ | 9,455,760 | $ | 12,169,255 |
18 Invesco Unconstrained Bond Fund
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement
| Contract to | Notional
| Unrealized
| |||||||||||||||||||||||
Counterparty | Deliver | Receive | ||||||||||||||||||||||||
5/04/15 | Citigroup Global Markets Inc. | NZD | 47,500 | USD | 34,300 | $ | 36,247 | $ | (1,947 | ) | ||||||||||||||||
5/04/15 | Citigroup Global Markets Inc. | USD | 34,706 | NZD | 47,500 | 36,247 | 1,541 | |||||||||||||||||||
5/18/15 | Barclays Bank PLC | USD | 260,956 | EUR | 234,000 | 262,813 | 1,857 | |||||||||||||||||||
5/18/15 | Citigroup Global Markets Inc. | EUR | 952,128 | USD | 1,065,013 | 1,069,366 | (4,353 | ) | ||||||||||||||||||
5/18/15 | Citigroup Global Markets Inc. | SGD | 636,633 | USD | 467,830 | 480,935 | (13,105 | ) | ||||||||||||||||||
5/18/15 | Citigroup Global Markets Inc. | USD | 634,770 | EUR | 600,000 | 673,879 | 39,109 | |||||||||||||||||||
5/18/15 | Citigroup Global Markets Inc. | USD | 467,006 | SGD | 636,633 | 480,934 | 13,928 | |||||||||||||||||||
5/18/15 | Deutsche Bank Securities Inc. | EUR | 220,469 | USD | 250,000 | 247,616 | 2,384 | |||||||||||||||||||
5/18/15 | Goldman Sachs International | EUR | 253,442 | USD | 272,121 | 284,649 | (12,528 | ) | ||||||||||||||||||
5/18/15 | J.P. Morgan Securities LLC | EUR | 110,000 | USD | 123,038 | 123,544 | (506 | ) | ||||||||||||||||||
5/18/15 | Morgan Stanley Capital Services LLC | USD | 309,284 | EUR | 292,000 | 327,955 | 18,671 | |||||||||||||||||||
6/11/15 | Deutsche Bank Securities Inc. | TWD | 16,150,000 | USD | 510,613 | 527,512 | (16,899 | ) | ||||||||||||||||||
6/11/15 | Deutsche Bank Securities Inc. | USD | 518,825 | TWD | 16,150,000 | 527,512 | 8,687 | |||||||||||||||||||
6/18/15 | Citigroup Global Markets Inc. | SGD | 228,000 | USD | 163,499 | 172,152 | (8,653 | ) | ||||||||||||||||||
6/18/15 | Citigroup Global Markets Inc. | USD | 166,981 | SGD | 228,000 | 172,152 | 5,171 | |||||||||||||||||||
7/08/15 | Citigroup Global Markets Inc. | USD | 254,888 | MXN | 3,946,437 | 255,992 | 1,104 | |||||||||||||||||||
7/08/15 | J.P. Morgan Securities LLC | MXN | 11,705,549 | USD | 781,048 | 759,301 | 21,747 | |||||||||||||||||||
7/29/15 | Bank of America Merrill Lynch | AUD | 1,787,840 | USD | 1,389,761 | 1,407,200 | (17,439 | ) | ||||||||||||||||||
Total Open Forward Foreign Currency Contracts — Currency Risk | $ | 38,769 |
Open Futures Contracts | ||||||||||||||||||||
Futures Contracts | Type of Contract | Number of Contracts | Expiration Month | Notional Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
U.S. Treasury 5 Year Notes | Short | 2 | June-2015 | $ | (240,265 | ) | $ | (1,457 | ) | |||||||||||
U.S. Treasury 10 Year Notes | Short | 2 | June-2015 | (256,750 | ) | 1,276 | ||||||||||||||
U.S. Treasury 30 Year Notes | Long | 1 | June-2015 | 159,594 | (2,937 | ) | ||||||||||||||
Total Futures Contracts — Interest Rate Risk |
| $ | (3,118 | ) |
Open Foreign Currency Options Written — Currency Risk | ||||||||||||||||||||||||||||||||||
Description | Type of Contract | Counterparty | Expiration Date | Number of Contracts | Strike Price | Premiums Received | Notional Value | Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||||||
USD versus CNH | Call | Bank of America, N.A. | 06/16/15 | 735 | CNH 6.625 | $ | 2,117 | USD 735,000 | $ | (88 | ) | $ | (2,029 | ) |
Options Written Transactions Summary | ||||||||||||||||||||||||||||||||||
Call Options | Put Options | |||||||||||||||||||||||||||||||||
Number of Contracts | Notional Value | Premiums Received | Number of Contracts | Notional Value | Premiums Received | |||||||||||||||||||||||||||||
Beginning of period | — | — | $ | — | — | — | $ | — | ||||||||||||||||||||||||||
Written | 2,255 | USD | 2,255,000 | 6,259 | 3,685 | EUR | 3,685,000 | 15,548 | ||||||||||||||||||||||||||
Closed | (1,520 | ) | USD | (1,520,000 | ) | (4,142 | ) | (3,685 | ) | EUR | (3,685,000 | ) | (15,548 | ) | ||||||||||||||||||||
End of period | 735 | USD | 735,000 | $ | 2,117 | — | EUR | — | $ | — |
Currency Abbreviations:
AUD | – Australian Dollar | |
CNH | – Chinese Yuan |
EUR | – Euro | |
MXN | – Mexican Peso |
NZD | – New Zealand Dollar | |
SGD | – Singapore Dollar |
TWD | – Taiwan Dollar | |
USD | – U.S. Dollar |
19 Invesco Unconstrained Bond Fund
Open Centrally Cleared Credit Default Swap Agreements — Credit Risk | ||||||||||||||||||||||||||||||
Counterparty/ Clearinghouse | Reference Entity | Buy/Sell Protection | (Pay)/Receive Fixed Rate | Expiration Date | Implied Credit Spread(a) | Notional Value | Upfront Payments Received/ Paid | Unrealized Appreciation | ||||||||||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Markit CDX North America Investment Grade Index, Series 23 | Buy | (1.00 | )% | 12/20/19 | 0.64 | % | $ | (2,700,000 | ) | $ | (47,939 | ) | $ | 3,447 |
Open Centrally Cleared Interest Rate Swap Agreements | ||||||||||||||||||||||
Counterparty/Clearinghouse | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation | ||||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Pay | 3 Month USD LIBOR | 1.25 | % | 10/16/17 | USD | 2,975,000 | $ | 91 | |||||||||||||
Credit Suisse Securities (USA) LLC/CME | Receive | 6 Month EURIBOR | 0.661 | 04/24/30 | EUR (250,000 | ) | 9,116 | |||||||||||||||
Credit Suisse Securities (USA) LLC/CME | Receive | 6 Month EURIBOR | 0.845 | 04/24/30 | EUR (100,000 | ) | 736 | |||||||||||||||
Total Centrally Cleared Interest Rate Swap Agreements — Interest Rate Risk |
| $ | 9,943 |
Open Over-The-Counter Credit Default Swap Agreements | ||||||||||||||||||||||||||||||
Counterparty | Reference Entity | Buy/Sell Protection | (Pay)/Receive Fixed Rate | Expiration Date | Implied Credit Spread(a) | Notional Value | Upfront Payments Received/ Paid | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
Goldman Sachs International | Viacom Inc. | Buy | (1.00 | )% | 06/20/24 | 1.02 | % | $ | (500,000 | ) | $ | 83 | $ | 686 | ||||||||||||||||
Goldman Sachs International | McKesson Corp. | Buy | (1.00 | ) | 03/20/19 | 0.14 | (300,000 | ) | (8,979 | ) | (904 | ) | ||||||||||||||||||
Total Over-The-Counter Credit Default Swap Agreements — Credit Risk |
| $ | (8,896 | ) | $ | (218 | ) |
(a) | Implied credit spreads represent the current level as of April 30, 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 | ||||||||||||||||||||||
Counterparty | Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Termination Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||
J.P. Morgan Chase Bank, N.A. | Pay | 1 Day INR MIBOR | 6.78 | % | 04/09/20 | $ | 12,200,000 | $ | (1,695 | ) |
Open Over-The-Counter Total Return Swap Agreements | ||||||||||||||||||||||
Description | Type of Contract | Counterparty | Number of Contracts | Expiration Date | Notional Value | Unrealized Appreciation (Depreciation) | ||||||||||||||||
Receive a return equal to the Markit iBoxx Liquid High Yield Index and pay a floating rate equal to the 3 Month USD LIBOR | Long | J.P. Morgan Chase Bank, N.A. | 5,000 | 06/22/15 | $ | 500,000 | $ | (8 | ) | |||||||||||||
Receive a return equal to the Markit iBoxx Liquid High Yield Index and pay a floating rate equal to the 3 Month USD LIBOR | Long | J.P. Morgan Chase Bank, N.A. | 7,750 | 06/20/15 | 775,000 | (141 | ) | |||||||||||||||
Total — Total Return Swap Agreements — Credit Risk | $ | (149 | ) |
Abbreviations:
CME | – Chicago Mercantile Exchange | |
EUR | – Euro |
EURIBOR | – Euro Interbank Offered Rate | |
INR | – Indian Rupee |
LIBOR | – London Interbank Offered Rate | |
MIBOR | – Mumbai Interbank Offered Rate |
USD | – U.S. Dollar |
20 Invesco Unconstrained Bond Fund
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 April 30, 2015.
Assets: | ||||||||||||||||||||||||
Counterparty | 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 | |||||||||||||||||||
Financial Instruments | Cash | |||||||||||||||||||||||
Barclays Bank PLC(a) | $ | 1,857 | $ | — | $ | 1,857 | $ | — | $ | — | $ | 1,857 | ||||||||||||
Citigroup Global Markets Inc.(a) | 60,853 | (28,058 | ) | 32,795 | — | — | 32,795 | |||||||||||||||||
Credit Suisse Securities (USA) LLC(b) | 13,390 | (13,390 | ) | — | — | — | — | |||||||||||||||||
Deutsche Bank Securities Inc.(a) | 11,071 | (11,071 | ) | — | — | — | — | |||||||||||||||||
Goldman Sachs International(c) | 769 | (769 | ) | — | — | — | — | |||||||||||||||||
J.P. Morgan Chase Bank, N.A.(c) | 803 | (803 | ) | — | — | — | — | |||||||||||||||||
J.P. Morgan Securities LLC(a) | 21,747 | (506 | ) | 21,241 | — | — | 21,241 | |||||||||||||||||
Morgan Stanley Capital Services LLC(a) | 18,671 | — | 18,671 | — | — | 18,671 | ||||||||||||||||||
Total | $ | 129,161 | $ | (54,597 | ) | $ | 74,564 | $ | — | $ | — | $ | 74,564 | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Counterparty | 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 | |||||||||||||||||||
Financial Instruments | Cash | |||||||||||||||||||||||
Bank of America Merrill Lynch(a) | $ | 17,439 | $ | — | $ | 17,439 | $ | — | $ | — | $ | 17,439 | ||||||||||||
Citigroup Global Markets Inc.(a) | 28,058 | (28,058 | ) | — | — | — | — | |||||||||||||||||
Credit Suisse Securities (USA) LLC(b) | 47,939 | (13,390 | ) | 34,549 | (34,549 | ) | — | — | ||||||||||||||||
Deutsche Bank Securities Inc.(a) | 16,899 | (11,071 | ) | 5,828 | — | — | 5,828 | |||||||||||||||||
Goldman Sachs International(a) | 12,528 | — | 12,528 | — | — | 12,528 | ||||||||||||||||||
Goldman Sachs International(c) | 10,816 | (769 | ) | 10,047 | — | — | 10,047 | |||||||||||||||||
JPMorgan Chase Bank, N.A.(c) | 2,747 | (803 | ) | 1,944 | 1,944 | |||||||||||||||||||
J.P. Morgan Securities LLC(a) | 506 | (506 | ) | — | — | — | — | |||||||||||||||||
Total | $ | 136,932 | $ | (54,597 | ) | $ | 82,335 | $ | (34,549 | ) | $ | — | $ | 47,786 |
(a) | Forward foreign currency contracts Counterparty. |
(b) | Swap agreements — centrally cleared Counterparty. Includes cumulative appreciation (depreciation). |
(c) | Swap agreements — OTC Counterparty. |
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. Obligations under the deferred compensation plan 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.
21 Invesco Unconstrained Bond Fund
NOTE 7—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 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 October 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 April 30, 2015 was $22,116,437 and $13,807,640, 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 | $ | 261,849 | ||
Aggregate unrealized (depreciation) of investment securities | (101,659 | ) | ||
Net unrealized appreciation of investment securities | $ | 160,190 |
Cost of investments for tax purposes is $27,303,807.
NOTE 9—Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended April 30, 2015(a) | October 14, 2014 (commencement date) through October 31, 2014 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: | ||||||||||||||||
Class A | 22,706 | $ | 227,640 | 1,248,056 | $ | 12,480,560 | ||||||||||
Class C | 4,668 | 46,824 | 1,001 | 10,010 | ||||||||||||
Class R | — | — | 1,001 | 10,010 | ||||||||||||
Class Y | 28,732 | 289,625 | 1,251,257 | 12,512,610 | ||||||||||||
Class R5 | — | — | 1,001 | 10,010 | ||||||||||||
Class R6 | — | — | 1,001 | 10,010 | ||||||||||||
Issued as reinvestment of dividends: | ||||||||||||||||
Class A | 139 | 1,388 | — | — | ||||||||||||
Class C | 22 | 215 | — | — | ||||||||||||
Class R | — | — | — | — | ||||||||||||
Class Y | 204 | 2,044 | — | — | ||||||||||||
Class R5 | — | — | — | — | ||||||||||||
Class R6 | — | — | — | — | ||||||||||||
Reacquired: | ||||||||||||||||
Class A | (1,782 | ) | (17,837 | ) | — | — | ||||||||||
Class C | (335 | ) | (3,374 | ) | — | — | ||||||||||
Class R | — | — | — | — | ||||||||||||
Class Y | (76 | ) | (764 | ) | — | — | ||||||||||
Class R5 | — | — | — | — | ||||||||||||
Class R6 | — | — | — | — | ||||||||||||
Net increase in share activity | 54,278 | $ | 545,761 | 2,503,317 | $ | 25,033,210 |
(a) | 98% of the outstanding shares of the Fund are owned by the Adviser. |
22 Invesco Unconstrained Bond 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 on securities (both realized and unrealized) | Total from investment operations | Dividends from net investment income | Distributions gains | Total distributions | Net asset value, end of period | Total return(b) | Net assets, end of period (000’s omitted) | Ratio of with fee and/or | Ratio of with fee | Ratio of expenses to average Net assets (including interest expense) without fee waivers and/or expenses absorbed | Ratio of expenses to average net assets (excluding interest expense) without fee waivers and/or expenses absorbed | Ratio of net to average | Ratio of interest expense to average net assets | Portfolio turnover(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | $ | 10.04 | $ | 0.11 | $ | 0.05 | $ | 0.16 | $ | (0.15 | ) | $ | (0.02 | ) | $ | (0.17 | ) | $ | 10.03 | 1.57 | % | $ | 12,732 | 0.95 | %(d)(e) | 0.92 | %(d) | 2.23 | %(d) | 2.20 | %(d) | 2.20 | %(d) | 3.00 | %(d) | 66 | % | |||||||||||||||||||||||||||||||
Year ended 10/31/14(f) | 10.00 | 0.00 | 0.04 | 0.04 | — | — | — | 10.04 | 0.40 | 12,532 | 0.87 | (e)(g) | — | 5.89 | (g) | — | 0.69 | (g) | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.04 | 0.07 | 0.05 | 0.12 | (0.12 | ) | (0.02 | ) | (0.14 | ) | 10.02 | 1.15 | 54 | 1.70 | (d)(e) | 1.67 | (d) | 2.98 | (d) | 2.95 | (d) | 1.45 | (d) | 3.00 | (d) | 66 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(f) | 10.00 | (0.00 | ) | 0.04 | 0.04 | — | — | — | 10.04 | 0.40 | 10 | 1.62 | (e)(g) | — | 6.64 | (g) | — | (0.06 | )(g) | — | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
Class R | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.04 | 0.10 | 0.05 | 0.15 | (0.14 | ) | (0.02 | ) | (0.16 | ) | 10.03 | 1.47 | 10 | 1.20 | (d)(e) | 1.17 | (d) | 2.48 | (d) | 2.45 | (d) | 1.95 | (d) | 3.00 | (d) | 66 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(f) | 10.00 | 0.00 | 0.04 | 0.04 | — | — | — | 10.04 | 0.40 | 10 | 1.12 | (e)(g) | — | 6.14 | (g) | — | 0.44 | (g) | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.04 | 0.12 | 0.06 | 0.18 | (0.16 | ) | (0.02 | ) | (0.18 | ) | 10.04 | 1.78 | 12,846 | 0.70 | (d)(e) | 0.67 | (d) | 1.98 | (d) | 1.95 | (d) | 2.45 | (d) | 3.00 | (d) | 66 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(f) | 10.00 | 0.00 | 0.04 | 0.04 | — | — | — | 10.04 | 0.40 | 12,566 | 0.62 | (e)(g) | — | 5.64 | — | 0.94 | (g) | — | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class R5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.04 | 0.12 | 0.06 | 0.18 | (0.16 | ) | (0.02 | ) | (0.18 | ) | 10.04 | 1.78 | 10 | 0.70 | (d)(e) | 0.67 | (d) | 2.05 | (d) | 2.02 | (d) | 2.45 | (d) | 3.00 | (d) | 66 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(f) | 10.00 | 0.00 | 0.04 | 0.04 | — | — | — | 10.04 | 0.40 | 10 | 0.62 | (e)(g) | — | 5.74 | (g) | — | 0.94 | (g) | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 04/30/15 | 10.04 | 0.12 | 0.06 | 0.18 | (0.16 | ) | (0.02 | ) | (0.18 | ) | 10.04 | 1.78 | 10 | 0.70 | (d)(e) | 0.67 | (d) | 2.05 | (d) | 2.02 | (d) | 2.45 | (d) | 3.00 | (d) | 66 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/14(f) | 10.00 | 0.00 | 0.04 | 0.04 | — | — | — | 10.04 | 0.40 | 10 | 0.62 | (e)(g) | — | 5.74 | (g) | — | 0.94 | (g) | — | 0 |
(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 $12,625, $25, $10, $12,634, $10 and $10 for Class A, Class C, Class R, Class Y, Class R5 and Class R6, 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 0.10% and 0.10% for the six months ended April 30, 2015 and the period October 14, 2014 (commencement date) through October 31, 2014, respectively. |
(f) | Commencement date of October 14, 2014. |
(g) | Annualized. |
23 Invesco Unconstrained 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 November 1, 2014 through April 30, 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 (11/01/14) | ACTUAL | HYPOTHETICAL (5% annual return before expenses) | Annualized Expense Ratio | ||||||||||||||||||||
Ending Account Value (04/30/15)1 | Expenses Paid During Period2 | Ending Account Value (04/30/15) | Expenses Paid During Period2 | |||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,015.70 | $ | 4.75 | $ | 1,020.08 | $ | 4.76 | 0.95 | % | ||||||||||||
C | 1,000.00 | 1,011.50 | 8.48 | 1,016.36 | 8.50 | 1.70 | ||||||||||||||||||
R | 1,000.00 | 1,014.70 | 5.99 | 1,018.84 | 6.01 | 1.20 | ||||||||||||||||||
Y | 1,000.00 | 1,017.80 | 3.50 | 1,021.32 | 3.51 | 0.70 | ||||||||||||||||||
R5 | 1,000.00 | 1,017.80 | 3.50 | 1,021.32 | 3.51 | 0.70 | ||||||||||||||||||
R6 | 1,000.00 | 1,017.80 | 3.50 | 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 November 1, 2014 through April 30, 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 Unconstrained Bond Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov.
The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-05426 and 033-19338 | UCB-SAR-1 | Invesco Distributors, Inc. |
ITEM 2. | CODE OF ETHICS. |
There were no amendments to the Code of Ethics (the “Code”) that applies to the Registrant’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
ITEM 6. | SCHEDULE OF INVESTMENTS. |
Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form.
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
None.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) | As of May 15, 2015, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of May 15, 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 Investment Funds (Invesco Investment Funds)
By: | /s/ Philip A. Taylor | |
Philip A. Taylor | ||
Principal Executive Officer | ||
Date: | July 9, 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: | July 9, 2015 |
By: | /s/ Sheri Morris | |
Sheri Morris | ||
Principal Financial Officer | ||
Date: | July 9, 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. |