UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
| | |
Investment Company Act file number | | 811-06463 |
|
AIM International Mutual Funds (Invesco International Mutual Funds) |
(Exact name of registrant as specified in charter) |
|
11 Greenway Plaza, Suite 1000 Houston, Texas 77046 |
(Address of principal executive offices) (Zip code) |
|
Glenn Brightman 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: | | 10/31/2023 | | |
ITEM 1. | REPORTS TO STOCKHOLDERS. |
(a) The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g376860dsp01.jpg)
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Annual Report to Shareholders | | October 31, 2023 |
Invesco Advantage International Fund
Nasdaq:
A: QMGAX ∎ C: QMGCX ∎ R: QMGRX ∎ Y: QMGYX ∎ R5: GMAGX ∎ R6: QMGIX
Management’s Discussion of Fund Performance
| | | | |
|
Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco Advantage International Fund (the Fund), at net asset value (NAV), underperformed the MSCI All Country World ex USA Index. | |
Your Fund’s long-term performance appears later in this report. | |
|
Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, 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 | | | 1.79 | % |
Class C Shares | | | 1.03 | |
Class R Shares | | | 1.51 | |
Class Y Shares | | | 2.06 | |
Class R5 Shares | | | 1.97 | |
Class R6 Shares | | | 2.06 | |
MSCI All Country World ex USA Index▼ | | | 12.07 | |
| |
Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
For the fiscal year ended October 31, 2023, the Fund at NAV reported positive absolute performance with international equity markets delivering gains overall for the fiscal year.
Equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks were led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, international equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in European financial stocks. Optimism about AI (artificial intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The first half of 2023’s rally in equities came to an end in the third quarter as international equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. International developed market
equities underperformed emerging market equities. Within emerging markets, China’s equities were weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both international developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
Against this backdrop, the Fund’s positioning toward options-based defense and overweight exposure to low volatility stocks dragged on performance as low volatility underperformed the benchmark and the options-based defense also limited some of the equity market upside participation during the fiscal year.
Unlike the cap-weighted benchmark, which simply overweights the largest companies and underweights smaller companies, the Fund buys stocks based on multiple characteristics that have proven to be important drivers of returns. These characteristics, or factors, are widely known as value, momentum, quality and low or minimum volatility. While the Fund’s relative positioning during the fiscal year ultimately resulted in underperformance, we continue to believe equity portfolios should be constructed with intentional exposures to a diversified set of identifiable risk factors. Doing so, the team’s research shows it allows the Fund to better target its exposure to rewarded risks over a full market cycle.
Please note that the Fund’s strategy utilizes derivative instruments that include futures, options and total return swaps. Therefore, some of the strategy performance, both positive and negative, can be attributed to these instruments. Derivatives can be a cost-effective way to gain exposure to asset classes. However, derivatives may amplify
traditional investment risks through the creation of leverage and may be less liquid than traditional securities.
Thank you for your continued investment in Invesco Advantage International Fund. As always, we welcome your comments and questions.
Portfolio manager(s):
Mark Ahnrud
John Burrello
Chris Devine
Scott Hixon
Christian Ulrich
Scott Wolle
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
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2 | | Invesco Advantage International Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 8/27/15
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g376860dsp003.jpg)
1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
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3 | | Invesco Advantage International Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (8/27/15) | | | 3.02 | % |
5 Years | | | 2.19 | |
1 Year | | | -3.85 | |
| |
Class C Shares | | | | |
Inception (8/27/15) | | | 2.99 | % |
5 Years | | | 2.62 | |
1 Year | | | 0.03 | |
| |
Class R Shares | | | | |
Inception (8/27/15) | | | 3.49 | % |
5 Years | | | 3.12 | |
1 Year | | | 1.51 | |
| |
Class Y Shares | | | | |
Inception (8/27/15) | | | 3.95 | % |
5 Years | | | 3.60 | |
1 Year | | | 2.06 | |
| |
Class R5 Shares | | | | |
Inception | | | 3.88 | % |
5 Years | | | 3.59 | |
1 Year | | | 1.97 | |
| |
Class R6 Shares | | | | |
Inception (8/27/15) | | | 4.01 | % |
5 Years | | | 3.66 | |
1 Year | | | 2.06 | |
Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer Global Multi-Asset Growth Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer Global Multi-Asset Growth Fund. Note: The Fund was subsequently renamed the Invesco Advantage International Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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.
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4 | | Invesco Advantage International Fund |
Supplemental Information
Invesco Advantage International Fund’s investment objective is to seek capital appreciation.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World ex USA® Index is an index considered representative of developed and emerging stock markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
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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 |
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5 | | Invesco Advantage International Fund |
Fund Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Financials | | | | 17.01 | % |
| |
Consumer Discretionary | | | | 11.22 | |
| |
Industrials | | | | 10.33 | |
| |
U.S. Treasury Securities | | | | 10.02 | |
| |
Health Care | | | | 8.23 | |
| |
Information Technology | | | | 7.68 | |
| |
Materials | | | | 6.10 | |
| |
Consumer Staples | | | | 5.70 | |
| |
Energy | | | | 3.67 | |
| |
Communication Services | | | | 3.56 | |
| |
Other Sectors, Each Less than 2% of Net Assets | | | | 2.42 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | | 14.06 | |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Novo Nordisk A/S, Class B | | | | 1.99 | % |
| | |
2. | | Samsung Electronics Co. Ltd. | | | | 1.28 | |
| | |
3. | | BHP Group Ltd. | | | | 1.22 | |
| | |
4. | | UniCredit S.p.A. | | | | 1.14 | |
| | |
5. | | Petroleo Brasileiro S.A., Preference Shares | | | | 1.07 | |
| | |
6. | | Novartis AG | | | | 1.01 | |
| | |
7. | | Roche Holding AG | | | | 0.97 | |
| | |
8. | | LVMH Moet Hennessy Louis Vuitton SE | | | | 0.95 | |
| | |
9. | | ASML Holding N.V. | | | | 0.94 | |
| | |
10. | | Banco Santander S.A. | | | | 0.93 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
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6 | | Invesco Advantage International Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–75.58% | |
Australia–2.49% | | | | | | | | |
ANZ Group Holdings Ltd. | | | 455 | | | $ | 7,179 | |
|
| |
BHP Group Ltd. | | | 12,739 | | | | 363,682 | |
|
| |
Commonwealth Bank of Australia | | | 105 | | | | 6,449 | |
|
| |
Fortescue Metals Group Ltd. | | | 1,923 | | | | 27,308 | |
|
| |
Glencore PLC | | | 14,019 | | | | 74,067 | |
|
| |
Goodman Group | | | 525 | | | | 6,974 | |
|
| |
Rio Tinto Ltd. | | | 1,734 | | | | 129,704 | |
|
| |
Rio Tinto PLC | | | 1,417 | | | | 90,316 | |
|
| |
Telstra Group Ltd. | | | 7,246 | | | | 17,592 | |
|
| |
Wesfarmers Ltd. | | | 263 | | | | 8,507 | |
|
| |
Woolworths Group Ltd. | | | 289 | | | | 6,471 | |
|
| |
| | | | | | | 738,249 | |
|
| |
| | |
Austria–0.06% | | | | | | | | |
OMV AG | | | 380 | | | | 16,649 | |
|
| |
| | |
Belgium–0.88% | | | | | | | | |
Anheuser-Busch InBev S.A./N.V. | | | 4,049 | | | | 230,339 | |
|
| |
KBC Group N.V. | | | 455 | | | | 25,046 | |
|
| |
UCB S.A. | | | 101 | | | | 7,402 | |
|
| |
| | | | | | | 262,787 | |
|
| |
| | |
Brazil–2.26% | | | | | | | | |
B3 S.A. - Brasil, Bolsa, Balcao | | | 20,200 | | | | 44,473 | |
|
| |
Banco Bradesco S.A., Preference Shares | | | 3,300 | | | | 9,157 | |
|
| |
Banco do Brasil S.A. | | | 2,600 | | | | 24,934 | |
|
| |
Banco Santander Brasil S.A., Series CPO | | | 900 | | | | 4,805 | |
|
| |
BB Seguridade Participacoes S.A. | | | 1,100 | | | | 6,711 | |
|
| |
Gerdau S.A., Preference Shares | | | 3,215 | | | | 13,882 | |
|
| |
Itausa S.A., Preference Shares | | | 7,710 | | | | 13,213 | |
|
| |
Petroleo Brasileiro S.A., Preference Shares | | | 45,900 | | | | 316,272 | |
|
| |
Raia Drogasil S.A. | | | 1,400 | | | | 7,164 | |
|
| |
Rumo S.A. | | | 1,700 | | | | 7,523 | |
|
| |
Suzano S.A. | | | 1,200 | | | | 12,274 | |
|
| |
Telefonica Brasil S.A. | | | 600 | | | | 5,384 | |
|
| |
Vale S.A. | | | 12,900 | | | | 176,546 | |
|
| |
WEG S.A. | | | 4,500 | | | | 29,463 | |
|
| |
| | | | | | | 671,801 | |
|
| |
| | |
Chile–0.10% | | | | | | | | |
Banco de Chile | | | 79,694 | | | | 8,188 | |
|
| |
Banco Santander Chile | | | 194,654 | | | | 8,486 | |
|
| |
Cencosud S.A. | | | 5,572 | | | | 9,027 | |
|
| |
Enel Americas S.A. | | | 53,739 | | | | 5,524 | |
|
| |
| | | | | | | 31,225 | |
|
| |
| | |
China–7.76% | | | | | | | | |
Agricultural Bank of China Ltd., H Shares | | | 82,000 | | | | 30,478 | |
|
| |
Alibaba Group Holding Ltd.(a) | | | 23,000 | | | | 236,964 | |
|
| |
Aluminum Corp. of China Ltd., H Shares | | | 18,000 | | | | 9,634 | |
|
| |
ANTA Sports Products Ltd. | | | 2,800 | | | | 31,528 | |
|
| |
Baidu, Inc., A Shares(a) | | | 3,400 | | | | 44,552 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
China–(continued) | | | | | | | | |
Bank of China Ltd., H Shares | | | 211,000 | | | $ | 74,250 | |
|
| |
Bank of Communications Co. Ltd., H Shares | | | 47,000 | | | | 27,798 | |
|
| |
BeiGene Ltd., ADR(a) | | | 347 | | | | 64,639 | |
|
| |
Beijing Enterprises Holdings Ltd. | | | 2,500 | | | | 8,323 | |
|
| |
BOC Hong Kong (Holdings) Ltd. | | | 5,500 | | | | 14,558 | |
|
| |
BYD Co. Ltd., H Shares | | | 2,000 | | | | 60,847 | |
|
| |
BYD Electronic International Co. Ltd. | | | 2,000 | | | | 8,330 | |
|
| |
China CITIC Bank Corp. Ltd., H Shares | | | 32,000 | | | | 14,313 | |
|
| |
China Construction Bank Corp., H Shares | | | 259,000 | | | | 146,575 | |
|
| |
China Hongqiao Group Ltd. | | | 13,000 | | | | 12,156 | |
|
| |
China Life Insurance Co. Ltd., H Shares | | | 24,000 | | | | 32,492 | |
|
| |
China Longyuan Power Group Corp. Ltd., H Shares | | | 7,000 | | | | 5,923 | |
|
| |
China Merchants Bank Co. Ltd., H Shares | | | 7,000 | | | | 26,548 | |
|
| |
China Minsheng Banking Corp. Ltd., H Shares | | | 27,500 | | | | 9,167 | |
|
| |
China Overseas Land & Investment Ltd. | | | 3,000 | | | | 5,663 | |
|
| |
China Pacific Insurance (Group) Co. Ltd., H Shares | | | 6,600 | | | | 16,254 | |
|
| |
China Petroleum & Chemical Corp., H Shares | | | 76,000 | | | | 38,835 | |
|
| |
China Resources Beer Holdings Co. Ltd. | | | 2,000 | | | | 10,575 | |
|
| |
China Resources Land Ltd. | | | 4,000 | | | | 14,968 | |
|
| |
China Resources Mixc Lifestyle Services Ltd.(b) | | | 2,400 | | | | 9,427 | |
|
| |
China Taiping Insurance Holdings Co. Ltd. | | | 6,800 | | | | 6,271 | |
|
| |
China Tower Corp. Ltd., H Shares(b) | | | 138,000 | | | | 12,927 | |
|
| |
CITIC Ltd. | | | 15,000 | | | | 12,740 | |
|
| |
CMOC Group Ltd., H Shares | | | 24,000 | | | | 14,409 | |
|
| |
COSCO SHIPPING Holdings Co. Ltd., H Shares | | | 10,000 | | | | 10,157 | |
|
| |
Country Garden Services Holdings Co. Ltd. | | | 5,000 | | | | 4,367 | |
|
| |
CSPC Pharmaceutical Group Ltd. | | | 26,640 | | | | 23,242 | |
|
| |
ENN Energy Holdings Ltd. | | | 1,700 | | | | 12,974 | |
|
| |
Geely Automobile Holdings Ltd. | | | 5,000 | | | | 5,666 | |
|
| |
Great Wall Motor Co. Ltd., H Shares | | | 5,000 | | | | 6,974 | |
|
| |
H World Group Ltd., ADR(a) | | | 832 | | | | 31,333 | |
|
| |
Haidilao International Holding Ltd.(b) | | | 3,000 | | | | 7,579 | |
|
| |
Haier Smart Home Co. Ltd., H Shares | | | 3,200 | | | | 9,075 | |
|
| |
Industrial & Commercial Bank of China Ltd., H Shares | | | 187,000 | | | | 89,885 | |
|
| |
Innovent Biologics, Inc.(a)(b) | | | 1,500 | | | | 8,808 | |
|
| |
JD Health International, Inc.(a)(b) | | | 1,700 | | | | 7,717 | |
|
| |
JD.com, Inc., A Shares | | | 4,416 | | | | 55,995 | |
|
| |
Jiangxi Copper Co. Ltd., H Shares | | | 5,000 | | | | 7,077 | |
|
| |
Kanzhun Ltd., ADR(a) | | | 324 | | | | 4,795 | |
|
| |
Kingsoft Corp. Ltd. | | | 5,800 | | | | 20,194 | |
|
| |
Kunlun Energy Co. Ltd. | | | 12,000 | | | | 9,995 | |
|
| |
Lenovo Group Ltd. | | | 26,000 | | | | 30,392 | |
|
| |
Li Auto, Inc., A Shares(a) | | | 1,200 | | | | 20,302 | |
|
| |
Lufax Holding Ltd., ADR | | | 4,831 | | | | 4,613 | |
|
| |
NetEase, Inc. | | | 2,500 | | | | 53,463 | |
|
| |
New China Life Insurance Co. Ltd., H Shares | | | 2,900 | | | | 6,384 | |
|
| |
New Oriental Education & Technology Group, Inc.(a) | | | 5,700 | | | | 37,428 | |
|
| |
Nongfu Spring Co. Ltd., H Shares(b) | | | 2,800 | | | | 15,936 | |
|
| |
NXP Semiconductors N.V. | | | 92 | | | | 15,864 | |
|
| |
PDD Holdings, Inc., ADR(a) | | | 2,035 | | | | 206,390 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
7 | | Invesco Advantage International Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
China–(continued) | | | | | | | | |
People’s Insurance Co. (Group) of China Ltd. (The), H Shares | | | 26,000 | | | $ | 8,605 | |
|
| |
PetroChina Co. Ltd., H Shares | | | 92,000 | | | | 59,947 | |
|
| |
PICC Property & Casualty Co. Ltd., H Shares | | | 12,000 | | | | 13,705 | |
|
| |
Ping An Insurance (Group) Co. of China Ltd., H Shares | | | 22,000 | | | | 111,211 | |
|
| |
Postal Savings Bank of China Co. Ltd., H Shares(b) | | | 17,000 | | | | 7,752 | |
|
| |
Prosus N.V.(a) | | | 2,096 | | | | 58,708 | |
|
| |
Shandong Weigao Group Medical Polymer Co. Ltd., H Shares | | | 5,600 | | | | 5,187 | |
|
| |
Shenzhou International Group Holdings Ltd. | | | 1,200 | | | | 11,723 | |
|
| |
Sino Biopharmaceutical Ltd. | | | 52,000 | | | | 20,191 | |
|
| |
Sinotruk Hong Kong Ltd. | | | 2,500 | | | | 4,701 | |
|
| |
SITC International Holdings Co. Ltd. | | | 3,000 | | | | 4,637 | |
|
| |
Sunny Optical Technology Group Co. Ltd. | | | 900 | | | | 7,599 | |
|
| |
Tencent Holdings Ltd. | | | 3,900 | | | | 144,475 | |
|
| |
Trip.com Group Ltd.(a) | | | 800 | | | | 27,268 | |
|
| |
Vipshop Holdings Ltd., ADR(a) | | | 1,572 | | | | 22,417 | |
|
| |
Yankuang Energy Group Co. Ltd., H Shares | | | 4,000 | | | | 7,003 | |
|
| |
Yum China Holdings, Inc. | | | 578 | | | | 30,380 | |
|
| |
Zijin Mining Group Co. Ltd., H Shares | | | 16,000 | | | | 24,854 | |
|
| |
ZTE Corp., H Shares | | | 5,200 | | | | 11,546 | |
|
| |
ZTO Express (Cayman), Inc., ADR | | | 601 | | | | 14,166 | |
|
| |
| | | | | | | 2,303,824 | |
|
| |
| | |
Colombia–0.06% | | | | | | | | |
Bancolombia S.A., Preference Shares | | | 2,941 | | | | 18,864 | |
|
| |
| | |
Czech Republic–0.05% | | | | | | | | |
CEZ A.S. | | | 139 | | | | 5,952 | |
|
| |
Komercni banka A.S. | | | 277 | | | | 8,114 | |
|
| |
| | | | | | | 14,066 | |
|
| |
| | |
Denmark–2.74% | | | | | | | | |
AP Moller - Maersk A/S, Class B | | | 69 | | | | 114,826 | |
|
| |
Carlsberg A/S, Class B | | | 202 | | | | 24,103 | |
|
| |
Coloplast A/S, Class B | | | 152 | | | | 15,849 | |
|
| |
Danske Bank A/S | | | 1,619 | | | | 37,944 | |
|
| |
DSV A/S | | | 210 | | | | 31,247 | |
|
| |
Novo Nordisk A/S, Class B | | | 6,127 | | | | 590,859 | |
|
| |
| | | | | | | 814,828 | |
|
| |
| | |
Finland–0.33% | | | | | | | | |
Kone OYJ, Class B | | | 380 | | | | 16,467 | |
|
| |
Mandatum OYJ(a) | | | 131 | | | | 506 | |
|
| |
Nokia OYJ | | | 8,148 | | | | 27,189 | |
|
| |
Nordea Bank Abp | | | 4,631 | | | | 48,688 | |
|
| |
Sampo OYJ | | | 131 | | | | 5,170 | |
|
| |
| | | | | | | 98,020 | |
|
| |
| | |
France–6.21% | | | | | | | | |
Air Liquide S.A. | | | 481 | | | | 82,438 | |
|
| |
Airbus SE | | | 607 | | | | 81,191 | |
|
| |
AXA S.A. | | | 1,645 | | | | 48,820 | |
|
| |
BNP Paribas S.A. | | | 2,252 | | | | 129,419 | |
|
| |
Capgemini SE | | | 152 | | | | 26,942 | |
|
| |
Carrefour S.A. | | | 2,100 | | | | 36,875 | |
|
| |
Cie de Saint-Gobain S.A. | | | 1,189 | | | | 64,946 | |
|
| |
Cie Generale des Etablissements Michelin S.C.A. | | | 405 | | | | 12,023 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
France–(continued) | | | | | | | | |
Credit Agricole S.A. | | | 2,961 | | | $ | 35,790 | |
|
| |
Danone S.A. | | | 158 | | | | 9,412 | |
|
| |
ENGIE S.A. | | | 5,491 | | | | 87,448 | |
|
| |
EssilorLuxottica S.A. | | | 202 | | | | 36,532 | |
|
| |
Hermes International S.C.A. | | | 69 | | | | 129,397 | |
|
| |
Kering S.A. | | | 116 | | | | 46,915 | |
|
| |
Legrand S.A. | | | 430 | | | | 37,142 | |
|
| |
L’Oreal S.A. | | | 416 | | | | 174,492 | |
|
| |
LVMH Moet Hennessy Louis Vuitton SE | | | 393 | | | | 281,257 | |
|
| |
Orange S.A. | | | 3,720 | | | | 43,765 | |
|
| |
Pernod Ricard S.A. | | | 177 | | | | 31,470 | |
|
| |
Safran S.A. | | | 658 | | | | 102,494 | |
|
| |
Schneider Electric SE | | | 481 | | | | 73,966 | |
|
| |
Societe Generale S.A. | | | 1,518 | | | | 34,133 | |
|
| |
Thales S.A. | | | 101 | | | | 14,885 | |
|
| |
TotalEnergies SE | | | 1,024 | | | | 68,581 | |
|
| |
Veolia Environnement S.A. | | | 734 | | | | 20,129 | |
|
| |
Vinci S.A. | | | 1,215 | | | | 134,355 | |
|
| |
| | | | | | | 1,844,817 | |
|
| |
| | |
Germany–6.62% | | | | | | | | |
Allianz SE | | | 370 | | | | 86,481 | |
|
| |
BASF SE | | | 1,113 | | | | 51,273 | |
|
| |
Bayer AG | | | 2,682 | | | | 115,258 | |
|
| |
Bayerische Motoren Werke AG | | | 1,493 | | | | 138,433 | |
|
| |
Beiersdorf AG | | | 101 | | | | 13,248 | |
|
| |
Continental AG | | | 127 | | | | 8,247 | |
|
| |
Daimler Truck Holding AG | | | 329 | | | | 10,310 | |
|
| |
Deutsche Bank AG | | | 13,993 | | | | 153,237 | |
|
| |
Deutsche Post AG | | | 1,822 | | | | 70,816 | |
|
| |
Deutsche Telekom AG | | | 7,085 | | | | 153,528 | |
|
| |
Dr. Ing. h.c. F. Porsche AG, Preference Shares(b) | | | 152 | | | | 13,271 | |
|
| |
E.ON SE | | | 6,149 | | | | 72,969 | |
|
| |
Fresenius Medical Care AG & Co. KGaA | | | 557 | | | | 18,492 | |
|
| |
Fresenius SE & Co. KGaA | | | 2,809 | | | | 71,978 | |
|
| |
Hannover Rueck SE | | | 76 | | | | 16,735 | |
|
| |
Henkel AG & Co. KGaA, Preference Shares | | | 228 | | | | 16,421 | |
|
| |
Infineon Technologies AG | | | 2,429 | | | | 70,578 | |
|
| |
Mercedes-Benz Group AG | | | 2,100 | | | | 123,174 | |
|
| |
Merck KGaA | | | 228 | | | | 34,314 | |
|
| |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen, Class R | | | 208 | | | | 83,290 | |
|
| |
RWE AG | | | 759 | | | | 29,003 | |
|
| |
SAP SE | | | 1,757 | | | | 235,438 | |
|
| |
Siemens AG | | | 1,595 | | | | 210,909 | |
|
| |
Siemens Energy AG, class A(a) | | | 759 | | | | 6,720 | |
|
| |
Siemens Healthineers AG(b) | | | 152 | | | | 7,438 | |
|
| |
Volkswagen AG, Preference Shares | | | 1,468 | | | | 154,945 | |
|
| |
| | | | | | | 1,966,506 | |
|
| |
| | |
Hong Kong–0.91% | | | | | | | | |
CK Asset Holdings Ltd. | | | 3,000 | | | | 14,985 | |
|
| |
CK Hutchison Holdings Ltd. | | | 19,000 | | | | 95,810 | |
|
| |
CK Infrastructure Holdings Ltd. | | | 4,000 | | | | 18,525 | |
|
| |
Jardine Matheson Holdings Ltd. | | | 800 | | | | 32,387 | |
|
| |
Link REIT | | | 2,500 | | | | 11,464 | |
|
| |
Prudential PLC | | | 5,036 | | | | 52,829 | |
|
| |
Sun Hung Kai Properties Ltd. | | | 3,500 | | | | 35,923 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco Advantage International Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Hong Kong–(continued) | | | | | | | | |
Wharf Real Estate Investment Co. Ltd. | | | 2,000 | | | $ | 7,022 | |
|
| |
| | | | | | | 268,945 | |
|
| |
| | |
Hungary–0.11% | | | | | | | | |
OTP Bank Nyrt. | | | 902 | | | | 33,525 | |
|
| |
| | |
Indonesia–0.60% | | | | | | | | |
PT Adaro Energy Indonesia Tbk | | | 61,800 | | | | 9,978 | |
|
| |
PT Astra International Tbk | | | 39,100 | | | | 14,163 | |
|
| |
PT Bank Central Asia Tbk | | | 112,500 | | | | 62,024 | |
|
| |
PT Bank Mandiri (Persero) Tbk | | | 65,700 | | | | 23,544 | |
|
| |
PT Bank Negara Indonesia (Persero) Tbk | | | 24,400 | | | | 7,358 | |
|
| |
PT Bank Rakyat Indonesia (Persero) Tbk | | | 93,000 | | | | 29,072 | |
|
| |
PT Kalbe Farma Tbk | | | 66,800 | | | | 7,121 | |
|
| |
PT Telkom Indonesia (Persero) Tbk | | | 81,800 | | | | 17,981 | |
|
| |
PT United Tractors Tbk | | | 5,200 | | | | 8,246 | |
|
| |
| | | | | | | 179,487 | |
|
| |
| | |
Ireland–0.47% | | | | | | | | |
Flutter Entertainment PLC(a) | | | 759 | | | | 119,422 | |
|
| |
Ryanair Holdings PLC, ADR(a) | | | 228 | | | | 19,995 | |
|
| |
| | | | | | | 139,417 | |
|
| |
| | |
Italy–2.41% | | | | | | | | |
Assicurazioni Generali S.p.A. | | | 2,415 | | | | 48,026 | |
|
| |
Enel S.p.A. | | | 10,729 | | | | 68,220 | |
|
| |
Eni S.p.A. | | | 2,910 | | | | 47,477 | |
|
| |
Ferrari N.V. | | | 185 | | | | 55,996 | |
|
| |
Intesa Sanpaolo S.p.A. | | | 58,833 | | | | 153,254 | |
|
| |
Poste Italiane S.p.A.(b) | | | 455 | | | | 4,511 | |
|
| |
UniCredit S.p.A. | | | 13,479 | | | | 337,211 | |
|
| |
| | | | | | | 714,695 | |
|
| |
| | |
Japan–11.57% | | | | | | | | |
Asahi Group Holdings Ltd. | | | 600 | | | | 21,661 | |
|
| |
Astellas Pharma, Inc. | | | 3,600 | | | | 45,416 | |
|
| |
Bridgestone Corp. | | | 900 | | | | 33,959 | |
|
| |
Canon, Inc. | | | 1,100 | | | | 25,931 | |
|
| |
Central Japan Railway Co. | | | 800 | | | | 17,944 | |
|
| |
Chugai Pharmaceutical Co. Ltd. | | | 800 | | | | 23,840 | |
|
| |
Dai-ichi Life Holdings, Inc. | | | 400 | | | | 8,397 | |
|
| |
Daiichi Sankyo Co. Ltd. | | | 1,600 | | | | 41,113 | |
|
| |
Daiwa House Industry Co. Ltd. | | | 900 | | | | 24,764 | |
|
| |
Denso Corp. | | | 400 | | | | 5,929 | |
|
| |
Eisai Co. Ltd. | | | 500 | | | | 26,529 | |
|
| |
Fast Retailing Co. Ltd. | | | 200 | | | | 44,233 | |
|
| |
Fujitsu Ltd. | | | 200 | | | | 25,892 | |
|
| |
Hitachi Ltd. | | | 1,300 | | | | 82,610 | |
|
| |
Honda Motor Co. Ltd. | | | 12,400 | | | | 127,350 | |
|
| |
Hoya Corp. | | | 300 | | | | 28,859 | |
|
| |
ITOCHU Corp. | | | 3,300 | | | | 118,899 | |
|
| |
Japan Post Bank Co. Ltd. | | | 3,200 | | | | 29,656 | |
|
| |
Japan Post Holdings Co. Ltd. | | | 5,900 | | | | 52,106 | |
|
| |
Japan Tobacco, Inc. | | | 3,800 | | | | 88,708 | |
|
| |
Kao Corp. | | | 200 | | | | 7,273 | |
|
| |
KDDI Corp. | | | 1,100 | | | | 32,815 | |
|
| |
Keyence Corp. | | | 300 | | | | 116,131 | |
|
| |
Komatsu Ltd. | | | 1,900 | | | | 44,054 | |
|
| |
LY Corp. | | | 5,100 | | | | 12,919 | |
|
| |
Mitsubishi Corp. | | | 4,000 | | | | 186,257 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Japan–(continued) | | | | | | | | |
Mitsubishi Electric Corp. | | | 4,600 | | | $ | 51,490 | |
|
| |
Mitsubishi Estate Co. Ltd. | | | 700 | | | | 8,940 | |
|
| |
Mitsubishi UFJ Financial Group, Inc. | | | 32,700 | | | | 274,757 | |
|
| |
Mitsui & Co. Ltd. | | | 6,100 | | | | 224,178 | |
|
| |
Mitsui Fudosan Co. Ltd. | | | 500 | | | | 10,835 | |
|
| |
Mizuho Financial Group, Inc. | | | 9,570 | | | | 162,693 | |
|
| |
MS&AD Insurance Group Holdings, Inc. | | | 100 | | | | 3,652 | |
|
| |
Nexon Co. Ltd. | | | 500 | | | | 9,296 | |
|
| |
Nippon Paint Holdings Co. Ltd. | | | 900 | | | | 6,050 | |
|
| |
Nippon Telegraph & Telephone Corp. | | | 69,900 | | | | 81,929 | |
|
| |
Nissan Motor Co. Ltd. | | | 10,800 | | | | 41,522 | |
|
| |
Oriental Land Co. Ltd. | | | 1,300 | | | | 42,105 | |
|
| |
ORIX Corp. | | | 1,600 | | | | 29,063 | |
|
| |
Otsuka Holdings Co. Ltd. | | | 700 | | | | 23,594 | |
|
| |
Panasonic Holdings Corp. | | | 6,200 | | | | 54,207 | |
|
| |
Recruit Holdings Co. Ltd. | | | 1,000 | | | | 28,925 | |
|
| |
Renesas Electronics Corp.(a) | | | 4,900 | | | | 64,411 | |
|
| |
SECOM Co. Ltd. | | | 300 | | | | 20,863 | |
|
| |
Sekisui House Ltd. | | | 1,100 | | | | 21,519 | |
|
| |
Seven & i Holdings Co. Ltd. | | | 800 | | | | 29,121 | |
|
| |
Shimano, Inc. | | | 100 | | | | 14,482 | |
|
| |
Shin-Etsu Chemical Co. Ltd. | | | 3,000 | | | | 89,773 | |
|
| |
Shionogi & Co. Ltd. | | | 1,100 | | | | 51,012 | |
|
| |
Shiseido Co. Ltd. | | | 800 | | | | 25,325 | |
|
| |
SoftBank Corp. | | | 3,000 | | | | 33,878 | |
|
| |
SoftBank Group Corp. | | | 600 | | | | 24,614 | |
|
| |
Sompo Holdings, Inc. | | | 600 | | | | 25,937 | |
|
| |
Sumitomo Corp. | | | 5,500 | | | | 108,679 | |
|
| |
Sumitomo Mitsui Financial Group, Inc. | | | 5,200 | | | | 249,663 | |
|
| |
Suzuki Motor Corp. | | | 300 | | | | 11,642 | |
|
| |
Takeda Pharmaceutical Co. Ltd. | | | 4,938 | | | | 133,921 | |
|
| |
Tokio Marine Holdings, Inc. | | | 700 | | | | 15,603 | |
|
| |
Toyota Industries Corp. | | | 200 | | | | 14,863 | |
|
| |
Toyota Motor Corp. | | | 9,400 | | | | 165,773 | |
|
| |
Unicharm Corp. | | | 200 | | | | 6,779 | |
|
| |
| | | | | | | 3,434,339 | |
|
| |
| | |
Luxembourg–0.25% | | | | | | | | |
ArcelorMittal S.A. | | | 3,340 | | | | 73,797 | |
|
| |
| | |
Macau–0.16% | | | | | | | | |
Galaxy Entertainment Group Ltd. | | | 3,000 | | | | 16,804 | |
|
| |
Sands China Ltd.(a) | | | 11,600 | | | | 31,114 | |
|
| |
| | | | | | | 47,918 | |
|
| |
| | |
Malaysia–0.19% | | | | | | | | |
IHH Healthcare Bhd. | | | 7,800 | | | | 9,834 | |
|
| |
Petronas Chemicals Group Bhd. | | | 8,000 | | | | 12,331 | |
|
| |
Public Bank Bhd. | | | 24,100 | | | | 21,055 | |
|
| |
Tenaga Nasional Bhd. | | | 5,700 | | | | 11,845 | |
|
| |
| | | | | | | 55,065 | |
|
| |
| | |
Mexico–0.97% | | | | | | | | |
America Movil S.A.B. de C.V., Class B(a) | | | 64,700 | | | | 53,435 | |
|
| |
Arca Continental S.A.B. de C.V. | | | 1,000 | | | | 8,967 | |
|
| |
CEMEX S.A.B. de C.V., Series CPO(a) | | | 22,700 | | | | 13,636 | |
|
| |
Fomento Economico Mexicano S.A.B. de C.V., Series CPO | | | 4,800 | | | | 54,329 | |
|
| |
Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B | | | 400 | | | | 4,666 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco Advantage International Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Mexico–(continued) | | | | | | | | |
Grupo Bimbo S.A.B. de C.V., Series A | | | 2,200 | | | $ | 8,954 | |
|
| |
Grupo Elektra S.A.B. de C.V. | | | 275 | | | | 17,598 | |
|
| |
Grupo Financiero Banorte S.A.B. de C.V., Class O | | | 4,600 | | | | 37,333 | |
|
| |
Grupo Financiero Inbursa S.A.B. de C.V., Class O(a) | | | 5,000 | | | | 10,311 | |
|
| |
Grupo Mexico S.A.B. de C.V., Class B | | | 2,900 | | | | 11,827 | |
|
| |
Industrias Penoles S.A.B. de C.V.(a) | | | 600 | | | | 6,698 | |
|
| |
Kimberly-Clark de Mexico S.A.B. de C.V., Class A | | | 6,400 | | | | 11,732 | |
|
| |
Wal-Mart de Mexico S.A.B. de C.V., Series V | | | 13,973 | | | | 50,013 | |
|
| |
| | | | | | | 289,499 | |
|
| |
| | |
Netherlands–2.58% | | | | | | | | |
Akzo Nobel N.V. | | | 127 | | | | 8,530 | |
|
| |
ASML Holding N.V. | | | 462 | | | | 277,920 | |
|
| |
EXOR N.V. | | | 481 | | | | 41,239 | |
|
| |
Heineken Holding N.V. | | | 315 | | | | 24,012 | |
|
| |
ING Groep N.V. | | | 6,351 | | | | 81,438 | |
|
| |
Koninklijke Ahold Delhaize N.V. | | | 2,733 | | | | 80,904 | |
|
| |
Shell PLC | | | 6,543 | | | | 210,281 | |
|
| |
Wolters Kluwer N.V. | | | 324 | | | | 41,663 | |
|
| |
| | | | | | | 765,987 | |
|
| |
| | |
Philippines–0.13% | | | | | | | | |
BDO Unibank, Inc. | | | 4,550 | | | | 10,250 | |
|
| |
International Container Terminal Services, Inc. | | | 4,440 | | | | 15,762 | |
|
| |
SM Prime Holdings, Inc. | | | 21,400 | | | | 11,288 | |
|
| |
| | | | | | | 37,300 | |
|
| |
| | |
Poland–0.34% | | | | | | | | |
Allegro.eu S.A.(a)(b) | | | 786 | | | | 5,639 | |
|
| |
Bank Polska Kasa Opieki S.A. | | | 855 | | | | 25,939 | |
|
| |
KGHM Polska Miedz S.A. | | | 185 | | | | 4,927 | |
|
| |
Powszechna Kasa Oszczednosci Bank Polski S.A.(a) | | | 3,375 | | | | 34,987 | |
|
| |
Powszechny Zaklad Ubezpieczen S.A. | | | 1,480 | | | | 16,734 | |
|
| |
Santander Bank Polska S.A.(a) | | | 116 | | | | 12,611 | |
|
| |
| | | | | | | 100,837 | |
|
| |
| | |
Russia–0.00% | | | | | | | | |
Sberbank of Russia PJSC(a)(c) | | | 9,800 | | | | 0 | |
|
| |
Tatneft PJSC(a)(c) | | | 1,980 | | | | 0 | |
|
| |
VTB Bank PJSC(a)(c) | | | 9,716,000 | | | | 0 | |
|
| |
| | | | | | | 0 | |
|
| |
| | |
Singapore–0.52% | | | | | | | | |
DBS Group Holdings Ltd. | | | 1,600 | | | | 38,471 | |
|
| |
Oversea-Chinese Banking Corp. Ltd. | | | 4,500 | | | | 41,690 | |
|
| |
Sea Ltd., ADR(a) | | | 607 | | | | 25,312 | |
|
| |
Singapore Telecommunications Ltd. | | | 8,000 | | | | 13,913 | |
|
| |
STMicroelectronics N.V. | | | 886 | | | | 33,902 | |
|
| |
| | | | | | | 153,288 | |
|
| |
| | |
South Africa–1.40% | | | | | | | | |
Absa Group Ltd. | | | 2,127 | | | | 19,439 | |
|
| |
Anglo American PLC | | | 1,923 | | | | 49,087 | |
|
| |
Bid Corp. Ltd. | | | 416 | | | | 8,817 | |
|
| |
Capitec Bank Holdings Ltd. | | | 208 | | | | 18,566 | |
|
| |
Discovery Ltd. | | | 1,443 | | | | 9,950 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
South Africa–(continued) | | | | | | | | |
FirstRand Ltd. | | | 8,554 | | | $ | 28,210 | |
|
| |
Gold Fields Ltd. | | | 3,907 | | | | 51,496 | |
|
| |
Impala Platinum Holdings Ltd. | | | 1,110 | | | | 4,621 | |
|
| |
MTN Group Ltd. | | | 832 | | | | 4,074 | |
|
| |
Naspers Ltd. | | | 809 | | | | 126,119 | |
|
| |
Nedbank Group Ltd. | | | 709 | | | | 7,631 | |
|
| |
Sanlam Ltd. | | | 5,815 | | | | 20,400 | |
|
| |
Sasol Ltd. | | | 1,024 | | | | 12,996 | |
|
| |
Shoprite Holdings Ltd. | | | 2,404 | | | | 30,808 | |
|
| |
Standard Bank Group Ltd. | | | 2,312 | | | | 22,763 | |
|
| |
| | | | | | | 414,977 | |
|
| |
| | |
South Korea–2.25% | | | | | | | | |
Hyundai Mobis Co. Ltd. | | | 46 | | | | 7,175 | |
|
| |
Hyundai Motor Co. | | | 116 | | | | 14,676 | |
|
| |
Kia Corp. | | | 1,133 | | | | 64,841 | |
|
| |
LG Chem Ltd. | | | 46 | | | | 15,158 | |
|
| |
LG Energy Solution Ltd.(a) | | | 46 | | | | 13,244 | |
|
| |
POSCO Holdings, Inc. | | | 231 | | | | 71,253 | |
|
| |
Samsung C&T Corp. | | | 236 | | | | 18,652 | |
|
| |
Samsung Electronics Co. Ltd. | | | 7,606 | | | | 379,278 | |
|
| |
Samsung SDI Co. Ltd. | | | 139 | | | | 44,366 | |
|
| |
SK hynix, Inc. | | | 462 | | | | 40,361 | |
|
| |
| | | | | | | 669,004 | |
|
| |
| | |
Spain–3.00% | | | | | | | | |
Aena SME S.A.(b) | | | 177 | | | | 25,651 | |
|
| |
Amadeus IT Group S.A. | | | 455 | | | | 25,995 | |
|
| |
Banco Bilbao Vizcaya Argentaria S.A. | | | 30,079 | | | | 236,262 | |
|
| |
Banco Santander S.A. | | | 74,877 | | | | 275,530 | |
|
| |
CaixaBank S.A. | | | 7,693 | | | | 31,239 | |
|
| |
Iberdrola S.A. | | | 10,122 | | | | 112,801 | |
|
| |
Industria de Diseno Textil S.A. | | | 2,556 | | | | 88,289 | |
|
| |
Repsol S.A. | | | 3,669 | | | | 53,598 | |
|
| |
Telefonica S.A. | | | 10,679 | | | | 41,091 | |
|
| |
| | | | | | | 890,456 | |
|
| |
| | |
Sweden–1.43% | | | | | | | | |
Assa Abloy AB, Class B | | | 987 | | | | 21,034 | |
|
| |
Atlas Copco AB, Class A | | | 2,809 | | | | 36,342 | |
|
| |
Epiroc AB, Class A | | | 1,063 | | | | 17,502 | |
|
| |
Essity AB, Class B | | | 1,139 | | | | 25,990 | |
|
| |
Evolution AB(b) | | | 709 | | | | 63,286 | |
|
| |
H & M Hennes & Mauritz AB, Class B | | | 1,012 | | | | 13,550 | |
|
| |
Investor AB, Class B | | | 1,721 | | | | 31,638 | |
|
| |
Sandvik AB | | | 1,366 | | | | 23,240 | |
|
| |
Skandinaviska Enskilda Banken AB, Class A | | | 1,392 | | | | 15,526 | |
|
| |
Svenska Handelsbanken AB, Class A | | | 3,037 | | | | 25,855 | |
|
| |
Swedbank AB, Class A | | | 1,898 | | | | 31,211 | |
|
| |
Telefonaktiebolaget LM Ericsson, Class B | | | 5,769 | | | | 25,924 | |
|
| |
Volvo AB, Class B | | | 4,732 | | | | 93,735 | |
|
| |
| | | | | | | 424,833 | |
|
| |
| | |
Switzerland–3.23% | | | | | | | | |
ABB Ltd. | | | 2,455 | | | | 82,544 | |
|
| |
Alcon, Inc. | | | 79 | | | | 5,661 | |
|
| |
Cie Financiere Richemont S.A. | | | 1,189 | | | | 140,388 | |
|
| |
Geberit AG | | | 11 | | | | 5,131 | |
|
| |
Kuehne + Nagel International AG, Class R | | | 139 | | | | 37,550 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco Advantage International Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Switzerland–(continued) | |
Nestle S.A. | | | 832 | | | $ | 89,759 | |
|
| |
Novartis AG | | | 3,214 | | | | 300,055 | |
|
| |
Partners Group Holding AG | | | 25 | | | | 26,485 | |
|
| |
Sandoz Group AG(a) | | | 642 | | | | 16,691 | |
|
| |
Schindler Holding AG, PC | | | 127 | | | | 25,646 | |
|
| |
Straumann Holding AG | | | 152 | | | | 18,108 | |
|
| |
Swatch Group AG (The), BR | | | 76 | | | | 19,467 | |
|
| |
Swisscom AG | | | 46 | | | | 27,537 | |
|
| |
UBS Group AG(a) | | | 7,010 | | | | 163,755 | |
|
| |
| | | | | | | 958,777 | |
|
| |
| | |
Taiwan–3.47% | | | | | | | | |
Advantech Co. Ltd. | | | 1,000 | | | | 10,241 | |
|
| |
ASE Technology Holding Co. Ltd., ADR | | | 6,404 | | | | 47,710 | |
|
| |
Asustek Computer, Inc. | | | 2,000 | | | | 21,126 | |
|
| |
Catcher Technology Co. Ltd. | | | 3,000 | | | | 16,800 | |
|
| |
Chailease Holding Co. Ltd. | | | 4,218 | | | | 23,015 | |
|
| |
Cheng Shin Rubber Industry Co. Ltd. | | | 6,000 | | | | 8,210 | |
|
| |
China Steel Corp. | | | 12,000 | | | | 8,968 | |
|
| |
Chunghwa Telecom Co. Ltd., ADR | | | 301 | | | | 10,725 | |
|
| |
Delta Electronics, Inc. | | | 5,000 | | | | 45,263 | |
|
| |
Evergreen Marine Corp. Taiwan Ltd. | | | 2,800 | | | | 9,306 | |
|
| |
Far Eastern New Century Corp. | | | 9,000 | | | | 8,193 | |
|
| |
First Financial Holding Co. Ltd. | | | 14,000 | | | | 11,225 | |
|
| |
Formosa Plastics Corp. | | | 6,000 | | | | 14,284 | |
|
| |
Fubon Financial Holding Co. Ltd. | | | 24,150 | | | | 44,948 | |
|
| |
Hon Hai Precision Industry Co. Ltd. | | | 10,000 | | | | 29,872 | |
|
| |
Hotai Motor Co. Ltd. | | | 20 | | | | 375 | |
|
| |
MediaTek, Inc. | | | 2,000 | | | | 52,694 | |
|
| |
Nan Ya Plastics Corp. | | | 14,000 | | | | 26,859 | |
|
| |
Nanya Technology Corp. | | | 4,000 | | | | 8,022 | |
|
| |
Novatek Microelectronics Corp. | | | 8,000 | | | | 112,762 | |
|
| |
Pegatron Corp. | | | 5,000 | | | | 11,708 | |
|
| |
Quanta Computer, Inc. | | | 7,000 | | | | 40,948 | |
|
| |
Realtek Semiconductor Corp. | | | 2,000 | | | | 24,960 | |
|
| |
Taishin Financial Holding Co. Ltd. | | | 18,588 | | | | 9,911 | |
|
| |
Taiwan Cooperative Financial Holding Co. Ltd. | | | 14,000 | | | | 10,867 | |
|
| |
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | | | 3,006 | | | | 259,448 | |
|
| |
Unimicron Technology Corp. | | | 2,000 | | | | 8,960 | |
|
| |
Uni-President Enterprises Corp. | | | 14,000 | | | | 29,528 | |
|
| |
United Microelectronics Corp., ADR | | | 9,757 | | | | 69,470 | |
|
| |
Yageo Corp. | | | 2,000 | | | | 32,630 | |
|
| |
Yuanta Financial Holding Co. Ltd. | | | 26,274 | | | | 19,769 | |
|
| |
| | | | | | | 1,028,797 | |
|
| |
|
Turkey–0.47% | |
Enka Insaat ve Sanayi A.S. | | | 6,843 | | | | 7,417 | |
|
| |
Eregli Demir ve Celik Fabrikalari T.A.S.(a) | | | 3,006 | | | | 4,021 | |
|
| |
Ford Otomotiv Sanayi A.S. | | | 624 | | | | 17,326 | |
|
| |
KOC Holding A.S. | | | 5,919 | | | | 28,592 | |
|
| |
Sasa Polyester Sanayi A.S.(a) | | | 5,618 | | | | 8,550 | |
|
| |
Turk Hava Yollari AO(a) | | | 9,340 | | | | 72,468 | |
|
| |
| | | | | | | 138,374 | |
|
| |
|
United Kingdom–5.72% | |
AngloGold Ashanti PLC | | | 1,988 | | | | 36,747 | |
|
| |
Ashtead Group PLC | | | 105 | | | | 6,014 | |
|
| |
Associated British Foods PLC | | | 1,594 | | | | 39,294 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United Kingdom–(continued) | |
Aviva PLC | | | 4,884 | | | $ | 23,699 | |
|
| |
BAE Systems PLC | | | 12,349 | | | | 165,790 | |
|
| |
Barclays PLC | | | 40,918 | | | | 65,423 | |
|
| |
BP PLC | | | 41,338 | | | | 252,341 | |
|
| |
British American Tobacco PLC | | | 6,655 | | | | 198,609 | |
|
| |
BT Group PLC | | | 9,869 | | | | 13,583 | |
|
| |
Coca-Cola Europacific Partners PLC | | | 1,113 | | | | 65,122 | |
|
| |
Compass Group PLC | | | 394 | | | | 9,942 | |
|
| |
Diageo PLC | | | 866 | | | | 32,817 | |
|
| |
Haleon PLC | | | 21,281 | | | | 85,176 | |
|
| |
HSBC Holdings PLC | | | 18,194 | | | | 131,087 | |
|
| |
Imperial Brands PLC | | | 1,366 | | | | 29,126 | |
|
| |
Lloyds Banking Group PLC | | | 198,313 | | | | 96,655 | |
|
| |
National Grid PLC | | | 6,554 | | | | 77,890 | |
|
| |
NatWest Group PLC | | | 9,894 | | | | 21,514 | |
|
| |
RELX PLC | | | 3,340 | | | | 116,830 | |
|
| |
Smith & Nephew PLC | | | 2,126 | | | | 23,729 | |
|
| |
SSE PLC | | | 289 | | | | 5,754 | |
|
| |
Standard Chartered PLC | | | 4,251 | | | | 32,857 | |
|
| |
Tesco PLC | | | 11,868 | | | | 38,999 | |
|
| |
Vodafone Group PLC | | | 139,176 | | | | 128,509 | |
|
| |
| | | | | | | 1,697,507 | |
|
| |
| | |
United States–3.84% | | | | | | | | |
Atlassian Corp., Class A(a) | | | 92 | | | | 16,619 | |
|
| |
Experian PLC | | | 394 | | | | 11,985 | |
|
| |
Ferrovial SE | | | 210 | | | | 6,328 | |
|
| |
GSK PLC | | | 7,288 | | | | 129,656 | |
|
| |
Holcim AG(a) | | | 1,822 | | | | 112,808 | |
|
| |
JBS S.A. | | | 2,500 | | | | 9,932 | |
|
| |
Newmont Corp., CDI(a) | | | 1,973 | | | | 75,607 | |
|
| |
Roche Holding AG | | | 1,113 | | | | 287,541 | |
|
| |
Sanofi | | | 2,733 | | | | 249,432 | |
|
| |
Spotify Technology S.A.(a) | | | 127 | | | | 20,924 | |
|
| |
Stellantis N.V. | | | 8,857 | | | | 165,644 | |
|
| |
Swiss Re AG | | | 481 | | | | 52,518 | |
|
| |
| | | | | | | 1,138,994 | |
|
| |
| | |
Vietnam–0.00% | | | | | | | | |
Vietnam Dairy Products JSC | | | 2 | | | | 6 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $21,331,556) | | | | 22,437,460 | |
|
| |
| | |
| | Principal Amount | | | | |
U.S. Treasury Securities–10.02% | | | | | |
U.S. Treasury Bills–10.02% | |
4.59%, 01/25/2024(d) | | $ | 1,494,138 | | | | 1,491,098 | |
|
| |
4.66 - 4.69%, 02/22/2024(d) | | | 1,488,652 | | | | 1,484,832 | |
|
| |
Total U.S. Treasury Securities (Cost $2,982,790) | | | | 2,975,930 | |
|
| |
| | |
| | Shares | | | | |
Preferred Stocks–0.18% | |
Multinational–0.18% | | | | | | | | |
Harambee Re Ltd., Pfd.(c) | | | 8 | | | | 1,377 | |
|
| |
Mt. Logan Re Ltd., Pfd.(c) | | | 51 | | | | 45,677 | |
|
| |
Thopas Re Ltd., Pfd.(c) | | | 5 | | | | 2,638 | |
|
| |
Viribus Re Ltd., Pfd.(c) | | | 33,312 | | | | 2,762 | |
|
| |
Total Preferred Stocks (Cost $85,244) | | | | 52,454 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco Advantage International Fund |
| | | | | | | | |
| | Principal Amount | | | Value | |
Event-Linked Bonds–0.16% | | | | | | | | |
Multinational–0.16% | | | | | | | | |
| | |
Limestone Re Ltd., Class A, Catastrophe Linked Notes, 0.00%, 12/31/2024(b)(c)(e) | | $ | 1,175 | | | $ | 1,574 | |
| | |
Sector Re V Ltd., Series 2019-1, Class A, Catastrophe Linked Notes, 0.00%, 03/01/2024(b)(c)(e) | | | 81,903 | | | | 45,526 | |
Total Event-Linked Bonds (Cost $83,078) | | | | 47,100 | |
| | |
| | Shares | | | | |
Money Market Funds–10.26% | | | | | | | | |
| | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(f)(g) | | | 1,066,143 | | | | 1,066,143 | |
| | | | | | | | |
| | | | | | |
| | Shares | | | Value | |
Money Market Funds–(continued) | | | | | | | | |
| | |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(f)(g) | | | 761,267 | | | $ | 761,496 | |
| | |
Invesco Treasury Portfolio, Institutional Class, 5.27%(f)(g) | | | 1,218,450 | | | | 1,218,450 | |
Total Money Market Funds (Cost $3,045,969) | | | | 3,046,089 | |
| |
TOTAL INVESTMENTS IN SECURITIES–96.20% (Cost $27,528,637) | | | | 28,559,033 | |
| |
OTHER ASSETS LESS LIABILITIES–3.80% | | | | 1,126,734 | |
| | |
NET ASSETS–100.00% | | | | | | $ | 29,685,767 | |
| | | | |
Investment Abbreviations: |
| | |
ADR | | – | | American Depositary Receipt |
BR | | – | | Bearer Shares |
CDI | | – | | CREST Depository Interest |
CPO | | – | | Certificates of Ordinary Participation |
PC | | – | | Participation Certificate |
Pfd. | | – | | Preferred |
REIT | | – | | Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(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 October 31, 2023 was $237,042, which represented less than 1% of the Fund’s Net Assets. |
(c) | Security valued using significant unobservable inputs (Level 3). See Note 3. |
(d) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(e) | Zero coupon bond issued at a discount. |
(f) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | | Realized Gain (Loss) | | | Value October 31, 2023 | | | Dividend Income | |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | | $1,503,463 | | | | $ 9,335,154 | | | | $(9,772,474 | ) | | | $ - | | | | $ - | | | | $1,066,143 | | | | $84,379 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 1,074,009 | | | | 6,667,967 | | | | (6,980,338 | ) | | | 14 | | | | (156) | | | | 761,496 | | | | 59,154 | |
Invesco Treasury Portfolio, Institutional Class | | | 1,718,243 | | | | 10,668,748 | | | | (11,168,541 | ) | | | - | | | | - | | | | 1,218,450 | | | | 92,107 | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Private Government Fund | | | 18,242 | | | | 88,348 | | | | (106,590 | ) | | | - | | | | - | | | | - | | | | 98* | |
Invesco Private Prime Fund | | | 46,646 | | | | 208,849 | | | | (255,488 | ) | | | (4) | | | | (3) | | | | - | | | | 261* | |
Total | | | $4,360,603 | | | | $26,969,066 | | | | $(28,283,431 | ) | | | $10 | | | | $(159) | | | | $3,046,089 | | | | $235,999 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(g) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Open Exchange-Traded Index Options Written | |
|
| |
Description | | Type of Contract | | | Expiration Date | | | Number of Contracts | | | Exercise Price | | | Notional Value* | | | Value | |
|
| |
Equity Risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
MSCI Emerging Markets Index | | | Call | | | | 11/17/2023 | | | | 45 | | | | USD | | | | 990.00 | | | | USD | | | | 4,455,000 | | | $ | (2,250 | ) |
|
| |
Equity Risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
MSCI Emerging Markets Index | | | Put | | | | 11/17/2023 | | | | 45 | | | | USD | | | | 910.00 | | | | USD | | | | 4,095,000 | | | | (52,200 | ) |
|
| |
Total Index Options Written | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (54,450 | ) |
|
| |
* | Notional Value is calculated by multiplying the Number of Contracts by the Exercise Price by the multiplier. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco Advantage International Fund |
| | | | | | | | | | | | | | | | | | | | |
Open Futures Contracts(a) | |
| | | | | | | | | | | | | | Unrealized | |
| | Number of | | | Expiration | | | Notional | | | | | | Appreciation | |
Long Futures Contracts | | Contracts | | | Month | | | Value | | | Value | | | (Depreciation) | |
|
| |
Currency Risk | | | | | | | | | | | | | | | | | | | | |
|
| |
Canadian Dollar | | | 31 | | | | December-2023 | | | $ | 2,237,115 | | | $ | (57,438 | ) | | | $ (57,438 | ) |
|
| |
Equity Risk | | | | | | | | | | | | | | | | | | | | |
|
| |
S&P/TSX 60 Index | | | 13 | | | | December-2023 | | | | 2,127,997 | | | | (142,902 | ) | | | (142,902 | ) |
|
| |
Subtotal–Long Futures Contracts | | | | | | | | | | | | | | | (200,340 | ) | | | (200,340 | ) |
|
| |
| | | | | |
Short Futures Contracts | | | | | | | | | | | | | | | | | | | | |
|
| |
Equity Risk | | | | | | | | | | | | | | | | | | | | |
|
| |
MSCI Emerging Markets Index | | | 90 | | | | December-2023 | | | | (4,136,400 | ) | | | 154,802 | | | | 154,802 | |
|
| |
Total Futures Contracts | | | | | | | | | | | | | | $ | (45,538 | ) | | | $ (45,538 | ) |
|
| |
(a) | Futures contracts collateralized by $284,578 cash held with Merrill Lynch International, the futures commission merchant. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Open Over-The-Counter Total Return Swap Agreements(a) | |
|
| |
Counterparty | | Pay/ Receive | | | Reference Entity | | Floating Rate Index | | | Payment Frequency | | | Number of Contracts | | | Maturity Date | | | Notional Value | | | Upfront Payments Paid (Received) | | | Value | | | Unrealized Appreciation (Depreciation) | |
|
| |
Equity Risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
BNP Paribas S.A. | | | Receive | | | MSCI EAFE Minimum Volatility Index | |
| SOFR + 0.230% | | | | Monthly | | | | 1,243 | | | | November–2023 | | | | USD | | | | 2,444,683 | | | | $– | | | | $ (52,417 | ) | | | $ (52,417 | ) |
|
| |
BNP Paribas S.A. | | | Receive | | | MSCI Emerging Markets Minimum Volatility Index | |
| SOFR + 0.640% | | | | Monthly | | | | 307 | | | | March–2024 | | | | USD | | | | 561,991 | | | | – | | | | (14,883 | ) | | | (14,883 | ) |
|
| |
J.P. Morgan Chase Bank, N.A. | | | Receive | | | MSCI Emerging Markets Minimum Volatility Index | |
| SOFR + 0.690% | | | | Monthly | | | | 278 | | | | February–2024 | | | | USD | | | | 508,904 | | | | – | | | | (13,478 | ) | | | (13,478 | ) |
|
| |
Merrill Lynch International | | | Receive | | | MSCI Emerging Markets Minimum Volatility Index | |
| SOFR + 0.610% | | | | Monthly | | | | 775 | | | | May–2024 | | | | USD | | | | 1,408,431 | | | | – | | | | (27,296 | ) | | | (27,296 | ) |
|
| |
Total – Total Return Swap Agreements | | | | | | | | | | | | | | | | | | | | | | | | $– | | | | $(108,074 | ) | | | $(108,074 | ) |
|
| |
(a) The Fund receives or pays payments based on any positive or negative return on the Reference Entity, respectively.
Abbreviations:
SOFR | –Secured Overnight Financing Rate |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
13 | | Invesco Advantage International Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $24,482,668) | | $ | 25,512,944 | |
|
| |
Investments in affiliated money market funds, at value (Cost $3,045,969) | | | 3,046,089 | |
|
| |
Other investments: | | | | |
Variation margin receivable – futures contracts | | | 788,145 | |
|
| |
Deposits with brokers: | | | | |
Cash collateral – exchange-traded futures contracts | | | 284,578 | |
|
| |
Cash | | | 75,000 | |
|
| |
Foreign currencies, at value (Cost $54,003) | | | 53,959 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 74,768 | |
|
| |
Fund shares sold | | | 20,619 | |
|
| |
Dividends | | | 132,238 | |
|
| |
Interest | | | 342 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 13,864 | |
|
| |
Other assets | | | 41,997 | |
|
| |
Total assets | | | 30,044,543 | |
|
| |
| |
Liabilities: | | | | |
Other investments: | | | | |
Options written, at value (premiums received $73,978) | | | 54,450 | |
|
| |
Swaps payable – OTC | | | 12,408 | |
|
| |
Unrealized depreciation on swap agreements–OTC | | | 108,074 | |
|
| |
Payable for: | | | | |
Investments purchased | | | 74,768 | |
|
| |
Fund shares reacquired | | | 20,896 | |
|
| |
Accrued fees to affiliates | | | 12,913 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 378 | |
|
| |
Accrued other operating expenses | | | 61,025 | |
|
| |
Trustee deferred compensation and retirement plans | | | 13,864 | |
|
| |
Total liabilities | | | 358,776 | |
|
| |
Net assets applicable to shares outstanding | | $ | 29,685,767 | |
|
| |
| | | | |
Net assets consist of: | | | | |
| |
Shares of beneficial interest | | $ | 30,754,373 | |
|
| |
Distributable earnings (loss) | | | (1,068,606 | ) |
|
| |
| | $ | 29,685,767 | |
|
| |
| |
Net Assets: | | | | |
Class A | | $ | 14,416,640 | |
|
| |
Class C | | $ | 2,877,724 | |
|
| |
Class R | | $ | 4,071,331 | |
|
| |
Class Y | | $ | 1,586,093 | |
|
| |
Class R5 | | $ | 10,082 | |
|
| |
Class R6 | | $ | 6,723,897 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
Class A | | | 1,406,506 | |
|
| |
Class C | | | 294,186 | |
|
| |
Class R | | | 403,070 | |
|
| |
Class Y | | | 152,544 | |
|
| |
Class R5 | | | 974 | |
|
| |
Class R6 | | | 646,134 | |
|
| |
Class A: | | | | |
Net asset value per share
| | $ | 10.25 | |
|
| |
Maximum offering price per share (Net asset value of $10.25 ÷ 94.50%) | | $ | 10.85 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 9.78 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 10.10 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 10.40 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 10.35 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 10.41 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
14 | | Invesco Advantage International Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Interest | | $ | 151,075 | |
|
| |
Dividends (net of foreign withholding taxes of $124,764) | | | 912,921 | |
|
| |
Dividends from affiliated money market funds (includes net securities lending income of $280) | | | 235,920 | |
|
| |
Total investment income | | | 1,299,916 | |
|
| |
| |
Expenses: | | | | |
| |
Advisory fees | | | 142,321 | |
|
| |
| |
Administrative services fees | | | 4,213 | |
|
| |
| |
Custodian fees | | | 37,487 | |
|
| |
| |
Distribution fees: | | | | |
Class A | | | 33,188 | |
|
| |
Class C | | | 31,793 | |
|
| |
Class R | | | 20,185 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 50,188 | |
|
| |
Transfer agent fees – R5 | | | 3 | |
|
| |
Transfer agent fees – R6 | | | 1,395 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 15,903 | |
|
| |
Registration and filing fees | | | 79,188 | |
|
| |
Reports to shareholders | | | 10,981 | |
|
| |
Professional services fees | | | 71,601 | |
|
| |
Other | | | 42,285 | |
|
| |
Total expenses | | | 540,731 | |
|
| |
Less: Fees waived, expenses reimbursed and/or expense offset arrangement(s) | | | (284,376 | ) |
|
| |
Net expenses | | | 256,355 | |
|
| |
Net investment income | | | 1,043,561 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
| |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities | | | (257,739 | ) |
|
| |
Affiliated investment securities | | | (159 | ) |
|
| |
Foreign currencies | | | (1,666 | ) |
|
| |
Forward foreign currency contracts | | | (219 | ) |
|
| |
Futures contracts | | | (1,366,298 | ) |
|
| |
Option contracts written | | | (98,406 | ) |
|
| |
Swap agreements | | | 266,345 | |
|
| |
| | | (1,458,142 | ) |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities | | | 1,673,399 | |
|
| |
Affiliated investment securities | | | 10 | |
|
| |
Foreign currencies | | | 1,142 | |
|
| |
Futures contracts | | | (766,339 | ) |
|
| |
Option contracts written | | | (108,075 | ) |
|
| |
Swap agreements | | | (154,798 | ) |
|
| |
| | | 645,339 | |
|
| |
Net realized and unrealized gain (loss) | | | (812,803 | ) |
|
| |
Net increase in net assets resulting from operations | | $ | 230,758 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
15 | | Invesco Advantage International Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
| | |
Net investment income | | $ | 1,043,561 | | | $ | 566,531 | |
|
| |
| | |
Net realized gain (loss) | | | (1,458,142 | ) | | | (1,967,626 | ) |
|
| |
| | |
Change in net unrealized appreciation (depreciation) | | | 645,339 | | | | (1,858,169 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 230,758 | | | | (3,259,264 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
| | |
Class A | | | – | | | | (1,513,571 | ) |
|
| |
| | |
Class C | | | – | | | | (394,740 | ) |
|
| |
| | |
Class R | | | – | | | | (529,023 | ) |
|
| |
| | |
Class Y | | | – | | | | (138,310 | ) |
|
| |
| | |
Class R5 | | | – | | | | (1,617 | ) |
|
| |
| | |
Class R6 | | | – | | | | (232 | ) |
|
| |
Total distributions from distributable earnings | | | – | | | | (2,577,493 | ) |
|
| |
| | |
Share transactions-net: | | | | | | | | |
| | |
Class A | | | 1,837,833 | | | | 3,277,465 | |
|
| |
| | |
Class C | | | (77,550 | ) | | | 486,659 | |
|
| |
| | |
Class R | | | 506,500 | | | | 281,907 | |
|
| |
| | |
Class Y | | | (1,596,304 | ) | | | 2,325,217 | |
|
| |
| | |
Class R6 | | | 6,844,401 | | | | – | |
|
| |
Net increase in net assets resulting from share transactions | | | 7,514,880 | | | | 6,371,248 | |
|
| |
Net increase in net assets | | | 7,745,638 | | | | 534,491 | |
|
| |
| | |
Net assets: | | | | | | | | |
| | |
Beginning of year | | | 21,940,129 | | | | 21,405,638 | |
|
| |
| | |
End of year | | $ | 29,685,767 | | | $ | 21,940,129 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
16 | | Invesco Advantage International Fund |
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(c) | | Ratio of net investment income to average net assets | | Portfolio turnover (d) |
Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $10.06 | | | | $0.39 | | | | $(0.20 | ) | | | $ 0.19 | | | | $ – | | | | $ – | | | | $ – | | | | $10.25 | | | | 1.89 | %(e) | | | $14,417 | | | | 0.83 | %(e) | | | 1.84 | %(e) | | | 3.65 | %(e) | | | 196 | % |
Year ended 10/31/22 | | | 13.37 | | | | 0.32 | | | | (2.00 | ) | | | (1.68 | ) | | | (0.14 | ) | | | (1.49 | ) | | | (1.63 | ) | | | 10.06 | | | | (14.27 | )(e) | | | 12,412 | | | | 0.83 | (e) | | | 1.87 | (e) | | | 2.85 | (e) | | | 157 | |
Year ended 10/31/21 | | | 10.83 | | | | 0.25 | | | | 2.30 | | | | 2.55 | | | | – | | | | (0.01 | ) | | | (0.01 | ) | | | 13.37 | | | | 23.54 | (e) | | | 12,502 | | | | 0.87 | (e) | | | 2.27 | (e) | | | 1.89 | (e) | | | 141 | |
Year ended 10/31/20 | | | 10.90 | | | | 0.12 | | | | (0.13 | ) | | | (0.01 | ) | | | – | | | | (0.06 | ) | | | (0.06 | ) | | | 10.83 | | | | (0.09 | ) | | | 9,934 | | | | 0.94 | | | | 1.74 | | | | 1.08 | | | | 238 | |
Year ended 10/31/19 | | | 10.57 | | | | 0.09 | | | | 0.82 | | | | 0.91 | | | | 0.00 | | | | (0.58 | ) | | | (0.58 | ) | | | 10.90 | | | | 9.51 | | | | 63,878 | | | | 1.14 | | | | 1.53 | | | | 0.91 | | | | 43 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 9.67 | | | | 0.29 | | | | (0.18 | ) | | | 0.11 | | | | – | | | | – | | | | – | | | | 9.78 | | | | 1.14 | | | | 2,878 | | | | 1.58 | | | | 2.60 | | | | 2.90 | | | | 196 | |
Year ended 10/31/22 | | | 12.90 | | | | 0.23 | | | | (1.93 | ) | | | (1.70 | ) | | | (0.04 | ) | | | (1.49 | ) | | | (1.53 | ) | | | 9.67 | | | | (14.94 | ) | | | 2,920 | | | | 1.58 | | | | 2.64 | | | | 2.10 | | | | 157 | |
Year ended 10/31/21 | | | 10.52 | | | | 0.14 | | | | 2.25 | | | | 2.39 | | | | – | | | | (0.01 | ) | | | (0.01 | ) | | | 12.90 | | | | 22.72 | | | | 3,350 | | | | 1.62 | | | | 3.04 | | | | 1.14 | | | | 141 | |
Year ended 10/31/20 | | | 10.66 | | | | 0.04 | | | | (0.12 | ) | | | (0.08 | ) | | | – | | | | (0.06 | ) | | | (0.06 | ) | | | 10.52 | | | | (0.75 | ) | | | 3,241 | | | | 1.65 | | | | 2.49 | | | | 0.37 | | | | 238 | |
Year ended 10/31/19 | | | 10.42 | | | | 0.02 | | | | 0.80 | | | | 0.82 | | | | – | | | | (0.58 | ) | | | (0.58 | ) | | | 10.66 | | | | 8.73 | | | | 3,294 | | | | 1.89 | | | | 2.43 | | | | 0.16 | | | | 43 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 9.94 | | | | 0.36 | | | | (0.20 | ) | | | 0.16 | | | | – | | | | – | | | | – | | | | 10.10 | | | | 1.61 | | | | 4,071 | | | | 1.08 | | | | 2.10 | | | | 3.40 | | | | 196 | |
Year ended 10/31/22 | | | 13.23 | | | | 0.29 | | | | (1.98 | ) | | | (1.69 | ) | | | (0.11 | ) | | | (1.49 | ) | | | (1.60 | ) | | | 9.94 | | | | (14.53 | ) | | | 3,521 | | | | 1.08 | | | | 2.14 | | | | 2.60 | | | | 157 | |
Year ended 10/31/21 | | | 10.74 | | | | 0.21 | | | | 2.29 | | | | 2.50 | | | | – | | | | (0.01 | ) | | | (0.01 | ) | | | 13.23 | | | | 23.27 | | | | 4,360 | | | | 1.12 | | | | 2.54 | | | | 1.64 | | | | 141 | |
Year ended 10/31/20 | | | 10.83 | | | | 0.09 | | | | (0.12 | ) | | | (0.03 | ) | | | – | | | | (0.06 | ) | | | (0.06 | ) | | | 10.74 | | | | (0.28 | ) | | | 3,607 | | | | 1.14 | | | | 1.99 | | | | 0.88 | | | | 238 | |
Year ended 10/31/19 | | | 10.52 | | | | 0.07 | | | | 0.82 | | | | 0.89 | | | | – | | | | (0.58 | ) | | | (0.58 | ) | | | 10.83 | | | | 9.35 | | | | 3,266 | | | | 1.39 | | | | 1.94 | | | | 0.66 | | | | 43 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 10.17 | | | | 0.42 | | | | (0.19 | ) | | | 0.23 | | | | – | | | | – | | | | – | | | | 10.40 | | | | 2.26 | | | | 1,586 | | | | 0.58 | | | | 1.60 | | | | 3.90 | | | | 196 | |
Year ended 10/31/22 | | | 13.51 | | | | 0.34 | | | | (2.01 | ) | | | (1.67 | ) | | | (0.18 | ) | | | (1.49 | ) | | | (1.67 | ) | | | 10.17 | | | | (14.12 | ) | | | 3,076 | | | | 0.58 | | | | 1.64 | | | | 3.10 | | | | 157 | |
Year ended 10/31/21 | | | 10.91 | | | | 0.28 | | | | 2.33 | | | | 2.61 | | | | – | | | | (0.01 | ) | | | (0.01 | ) | | | 13.51 | | | | 23.92 | | | | 1,178 | | | | 0.62 | | | | 2.04 | | | | 2.14 | | | | 141 | |
Year ended 10/31/20 | | | 10.95 | | | | 0.14 | | | | (0.12 | ) | | | 0.02 | | | | – | | | | (0.06 | ) | | | (0.06 | ) | | | 10.91 | | | | 0.18 | | | | 890 | | | | 0.71 | | | | 1.49 | | | | 1.31 | | | | 238 | |
Year ended 10/31/19 | | | 10.60 | | | | 0.11 | | | | 0.82 | | | | 0.93 | | | | – | | | | (0.58 | ) | | | (0.58 | ) | | | 10.95 | | | | 9.67 | | | | 1,433 | | | | 0.99 | | | | 1.36 | | | | 1.06 | | | | 43 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 10.14 | | | | 0.42 | | | | (0.21 | ) | | | 0.21 | | | | – | | | | – | | | | – | | | | 10.35 | | | | 2.07 | | | | 10 | | | | 0.58 | | | | 1.42 | | | | 3.90 | | | | 196 | |
Year ended 10/31/22 | | | 13.46 | | | | 0.35 | | | | (2.00 | ) | | | (1.65 | ) | | | (0.18 | ) | | | (1.49 | ) | | | (1.67 | ) | | | 10.14 | | | | (14.02 | ) | | | 10 | | | | 0.58 | | | | 1.47 | | | | 3.10 | | | | 157 | |
Year ended 10/31/21 | | | 10.88 | | | | 0.28 | | | | 2.31 | | | | 2.59 | | | | – | | | | (0.01 | ) | | | (0.01 | ) | | | 13.46 | | | | 23.80 | | | | 13 | | | | 0.62 | | | | 1.85 | | | | 2.14 | | | | 141 | |
Year ended 10/31/20 | | | 10.91 | | | | 0.15 | | | | (0.12 | ) | | | 0.03 | | | | – | | | | (0.06 | ) | | | (0.06 | ) | | | 10.88 | | | | 0.28 | | | | 11 | | | | 0.66 | | | | 1.47 | | | | 1.36 | | | | 238 | |
Period ended 10/31/19(f) | | | 10.27 | | | | 0.05 | | | | 0.59 | | | | 0.64 | | | | – | | | | – | | | | – | | | | 10.91 | | | | 6.23 | | | | 11 | | | | 1.94 | (g) | | | 1.26 | (g) | | | 1.11 | (g) | | | 43 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 10.19 | | | | 0.42 | | | | (0.20 | ) | | | 0.22 | | | | – | | | | – | | | | – | | | | 10.41 | | | | 2.16 | | | | 6,724 | | | | 0.58 | | | | 1.42 | | | | 3.90 | | | | 196 | |
Year ended 10/31/22 | | | 13.53 | | | | 0.35 | | | | (2.02 | ) | | | (1.67 | ) | | | (0.18 | ) | | | (1.49 | ) | | | (1.67 | ) | | | 10.19 | | | | (14.10 | ) | | | 1 | | | | 0.58 | | | | 1.47 | | | | 3.10 | | | | 157 | |
Year ended 10/31/21 | | | 10.93 | | | | 0.28 | | | | 2.33 | | | | 2.61 | | | | – | | | | (0.01 | ) | | | (0.01 | ) | | | 13.53 | | | | 23.88 | | | | 2 | | | | 0.62 | | | | 1.85 | | | | 2.14 | | | | 141 | |
Year ended 10/31/20 | | | 10.96 | | | | 0.14 | | | | (0.11 | ) | | | 0.03 | | | | – | | | | (0.06 | ) | | | (0.06 | ) | | | 10.93 | | | | 0.28 | | | | 2 | | | | 0.68 | | | | 1.47 | | | | 1.34 | | | | 238 | |
Year ended 10/31/19 | | | 10.59 | | | | 0.12 | | | | 0.83 | | | | 0.95 | | | | – | | | | (0.58 | ) | | | (0.58 | ) | | | 10.96 | | | | 9.88 | | | | 11 | | | | 0.89 | | | | 1.21 | | | | 1.16 | | | | 43 | |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Estimated acquired fund fees from underlying funds was 0.14% for the year ended October 31, 2019. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.24%, 0.23% and 0.23% for the years ended October 31, 2023, 2022 and 2021, respectively. |
(f) | Commencement date after the close of business on May 24, 2019. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
17 | | Invesco Advantage International Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco Advantage International Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is to seek capital appreciation.
Prior to February 10, 2020, the Fund sought to gain exposure to Regulation S securities primarily through investments in the Invesco Oppenheimer Global Multi-Asset Growth Fund (Cayman) Ltd. (the “Subsidiary”), a wholly owned and controlled subsidiary by the Fund that was organized under the laws of the Cayman Islands. Effective February 10, 2020, the Subsidiary liquidated and ceased operations. For periods prior to February 10, 2020, the Subsidiary operations were consolidated on the Financial Highlights.
The Fund currently consists of six different classes of shares: Class A, Class C, Class R, Class Y, Class R5 and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
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. Centrally cleared swap agreements are valued at the daily settlement price determined by the relevant exchange or clearinghouse.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or
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18 | | Invesco Advantage International Fund |
other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 based on relative net assets of Class R5 and Class R6. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending – The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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 |
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19 | | Invesco Advantage International Fund |
| compensation to counterparties, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities. |
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, fees paid to the Adviser were less than $500. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the 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 the 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 exchange of the two currencies on the settlement date, 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).
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 for hedging 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 instrument or asset. 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 Purchased and Written – 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 call options written are included in the Statement of Operations as Net realized gain (loss) from and Change in net unrealized appreciation (depreciation) of Option contracts written. 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 call options purchased are included in the Statement of Operations as Net realized gain (loss) from and Change in net unrealized appreciation (depreciation) of 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.
N. | Put Options Purchased and Written – The Fund may purchase and write put options including options on securities indexes, or foreign currency and/or |
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20 | | Invesco Advantage International Fund |
| 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 Statement of Assets and Liabilities. Realized and unrealized gains and losses on put options purchased and put options written are included in the Statement of Operations as Net realized gain (loss) from and Change in net unrealized appreciation (depreciation) of Investment securities and Option contracts written, respectively. 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 net asset value (“NAV”) per share 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.
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 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 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. Cash held as collateral is recorded as deposits with brokers on the Statement of Assets and Liabilities. 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, which could result in the Fund accruing additional expenses. 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. Additionally, an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) includes credit related contingent
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features which allow Counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event that, for example, the Fund’s net assets decline by a stated percentage or the Fund fails to meet the terms of its ISDA master agreements, which would cause the Fund to accelerate payment of any net liability owed to the Counterparty. 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 October 31, 2023, if any, 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 the 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 - Active trading of portfolio securities may result in added expenses, a lower return and increased tax liability. |
Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information.
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
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Average Daily Net Assets | | Rate* | |
|
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First $500 million | | | 0.490% | |
|
| |
Next $500 million | | | 0.470% | |
|
| |
Next $4.0 billion | | | 0.440% | |
|
| |
Over $5.0 billion | | | 0.420% | |
|
| |
* | The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser. |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.49%.
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. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.
The Adviser has contractually agreed, through February 29, 2024, 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 0.85%, 1.60%, 1.10%, 0.60%, 0.60% and 0.60%, respectively, of the Fund’s average daily net assets (the “expense limits”). Effective March 1, 2024, the Adviser has contractually agreed, through at least February 28, 2025, 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 1.18%, 1.93%, 1.43%, 0.93%, 0.93% and 0.93%, respectively, of the Fund’s 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 28, 2025. During its term, the fee waiver agreement cannot be terminated or amended to increase the expense limits or reduce the advisory fee waiver without approval of the Board of Trustees.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $142,321, reimbursed fund level expenses of $87,747 and reimbursed class level expenses of $29,497, $6,667, $8,455, $5,568, $3 and $1,395 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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the
| | |
22 | | Invesco Advantage International Fund |
annual rate of 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $11,607 in front-end sales commissions from the sale of Class A shares and $0 and $53 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. 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 Adviser’s 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 October 31, 2023. 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 | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Australia | | $ | – | | | | | | | $ | 738,249 | | | | | | | $ | – | | | | | | | $ | 738,249 | |
|
| |
Austria | | | – | | | | | | | | 16,649 | | | | | | | | – | | | | | | | | 16,649 | |
|
| |
Belgium | | | – | | | | | | | | 262,787 | | | | | | | | – | | | | | | | | 262,787 | |
|
| |
Brazil | | | 671,801 | | | | | | | | – | | | | | | | | – | | | | | | | | 671,801 | |
|
| |
Chile | | | 31,225 | | | | | | | | – | | | | | | | | – | | | | | | | | 31,225 | |
|
| |
China | | | 394,597 | | | | | | | | 1,909,227 | | | | | | | | – | | | | | | | | 2,303,824 | |
|
| |
Colombia | | | 18,864 | | | | | | | | – | | | | | | | | – | | | | | | | | 18,864 | |
|
| |
Czech Republic | | | – | | | | | | | | 14,066 | | | | | | | | – | | | | | | | | 14,066 | |
|
| |
Denmark | | | – | | | | | | | | 814,828 | | | | | | | | – | | | | | | | | 814,828 | |
|
| |
Finland | | | 506 | | | | | | | | 97,514 | | | | | | | | – | | | | | | | | 98,020 | |
|
| |
France | | | – | | | | | | | | 1,844,817 | | | | | | | | – | | | | | | | | 1,844,817 | |
|
| |
Germany | | | – | | | | | | | | 1,966,506 | | | | | | | | – | | | | | | | | 1,966,506 | |
|
| |
Hong Kong | | | – | | | | | | | | 268,945 | | | | | | | | – | | | | | | | | 268,945 | |
|
| |
Hungary | | | – | | | | | | | | 33,525 | | | | | | | | – | | | | | | | | 33,525 | |
|
| |
Indonesia | | | – | | | | | | | | 179,487 | | | | | | | | – | | | | | | | | 179,487 | |
|
| |
Ireland | | | 19,995 | | | | | | | | 119,422 | | | | | | | | – | | | | | | | | 139,417 | |
|
| |
Italy | | | – | | | | | | | | 714,695 | | | | | | | | – | | | | | | | | 714,695 | |
|
| |
Japan | | | – | | | | | | | | 3,434,339 | | | | | | | | – | | | | | | | | 3,434,339 | |
|
| |
Luxembourg | | | – | | | | | | | | 73,797 | | | | | | | | – | | | | | | | | 73,797 | |
|
| |
Macau | | | – | | | | | | | | 47,918 | | | | | | | | – | | | | | | | | 47,918 | |
|
| |
Malaysia | | | – | | | | | | | | 55,065 | | | | | | | | – | | | | | | | | 55,065 | |
|
| |
Mexico | | | 289,499 | | | | | | | | – | | | | | | | | – | | | | | | | | 289,499 | |
|
| |
Multinational | | | – | | | | | | | | – | | | | | | | | 99,554 | | | | | | | | 99,554 | |
|
| |
Netherlands | | | – | | | | | | | | 765,987 | | | | | | | | – | | | | | | | | 765,987 | |
|
| |
Philippines | | | – | | | | | | | | 37,300 | | | | | | | | – | | | | | | | | 37,300 | |
|
| |
Poland | | | – | | | | | | | | 100,837 | | | | | | | | – | | | | | | | | 100,837 | |
|
| |
Russia | | | – | | | | | | | | – | | | | | | | | – | | | | | | | | – | |
|
| |
Singapore | | | 25,312 | | | | | | | | 127,976 | | | | | | | | – | | | | | | | | 153,288 | |
|
| |
South Africa | | | – | | | | | | | | 414,977 | | | | | | | | – | | | | | | | | 414,977 | |
|
| |
South Korea | | | – | | | | | | | | 669,004 | | | | | | | | – | | | | | | | | 669,004 | |
|
| |
Spain | | | – | | | | | | | | 890,456 | | | | | | | | – | | | | | | | | 890,456 | |
|
| |
Sweden | | | – | | | | | | | | 424,833 | | | | | | | | – | | | | | | | | 424,833 | |
|
| |
Switzerland | | | 16,691 | | | | | | | | 942,086 | | | | | | | | – | | | | | | | | 958,777 | |
|
| |
Taiwan | | | 387,353 | | | | | | | | 641,444 | | | | | | | | – | | | | | | | | 1,028,797 | |
|
| |
| | |
23 | | Invesco Advantage International Fund |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Level 1 | | | | | | Level 2 | | | | | | Level 3 | | | | | | Total | |
|
| |
Turkey | | $ | – | | | | | | | $ | 138,374 | | | | | | | $ | – | | | | | | | $ | 138,374 | |
|
| |
United Kingdom | | | 101,869 | | | | | | | | 1,595,638 | | | | | | | | – | | | | | | | | 1,697,507 | |
|
| |
United States | | | 123,082 | | | | | | | | 3,991,842 | | | | | | | | – | | | | | | | | 4,114,924 | |
|
| |
Vietnam | | | – | | | | | | | | 6 | | | | | | | | – | | | | | | | | 6 | |
|
| |
Money Market Funds | | | 3,046,089 | | | | | | | | – | | | | | | | | – | | | | | | | | 3,046,089 | |
|
| |
Total Investments in Securities | | | 5,126,883 | | | | | | | | 23,332,596 | | | | | | | | 99,554 | | | | | | | | 28,559,033 | |
|
| |
| | | | | | | |
Other Investments - Assets* | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Futures Contracts | | | 154,802 | | | | | | | | – | | | | | | | | – | | | | | | | | 154,802 | |
|
| |
| | | | | | | |
Other Investments - Liabilities* | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Futures Contracts | | | (200,340 | ) | | | | | | | – | | | | | | | | – | | | | | | | | (200,340 | ) |
|
| |
Options Written | | | (54,450 | ) | | | | | | | – | | | | | | | | – | | | | | | | | (54,450 | ) |
|
| |
Swap Agreements | | | – | | | | | | | | (108,074 | ) | | | | | | | – | | | | | | | | (108,074 | ) |
|
| |
| | | (254,790 | ) | | | | | | | (108,074 | ) | | | | | | | – | | | | | | | | (362,864 | ) |
|
| |
Total Other Investments | | | (99,988 | ) | | | | | | | (108,074 | ) | | | | | | | – | | | | | | | | (208,062 | ) |
|
| |
Total Investments | | $ | 5,026,895 | | | | | | | $ | 23,224,522 | | | | | | | $ | 99,554 | | | | | | | $ | 28,350,971 | |
|
| |
* | Futures contracts and swap agreements are valued at unrealized appreciation (depreciation). Options written are shown at value. |
NOTE 4–Derivative Investments
The Fund may enter into an ISDA Master Agreement under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
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 October 31, 2023:
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Value | |
Derivative Assets | | | | | | | | | | | | | | Equity Risk | |
|
| |
Unrealized appreciation on futures contracts –Exchange-Traded(a) | | | | | | | | | | | | | | | | | | $ | 154,802 | |
|
| |
Derivatives not subject to master netting agreements | | | | | | | | | | | | | | | | | | | (154,802 | ) |
|
| |
Total Derivative Assets subject to master netting agreements | | | | | | | | | | | | | | | | | | $ | – | |
|
| |
| | Value | |
Derivative Liabilities | | Currency Risk | | | | | | Equity Risk | | | | | | Total | |
|
| |
Unrealized depreciation on futures contracts –Exchange-Traded(a) | | $ | (57,438 | ) | | | | | | $ | (142,902 | ) | | | | | | $ | (200,340 | ) |
|
| |
Unrealized depreciation on swap agreements – OTC | | | – | | | | | | | | (108,074 | ) | | | | | | | (108,074 | ) |
|
| |
Options written, at value – Exchange-Traded | | | – | | | | | | | | (54,450 | ) | | | | | | | (54,450 | ) |
|
| |
Total Derivative Liabilities | | | (57,438 | ) | | | | | | | (305,426 | ) | | | | | | | (362,864 | ) |
|
| |
Derivatives not subject to master netting agreements | | | 57,438 | | | | | | | | 197,352 | | | | | | | | 254,790 | |
|
| |
Total Derivative Liabilities subject to master netting agreements | | $ | – | | | | | | | $ | (108,074 | ) | | | | | | $ | (108,074 | ) |
|
| |
(a) | The daily variation margin receivable (payable) at period-end is recorded in the Statement of Assets and Liabilities. |
Offsetting Assets and Liabilities
The table below reflects the Fund’s exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of October 31, 2023.
| | | | | | | | | | | | | | | | | | | | |
| | Financial Derivative Liabilities | | | | | | Collateral (Received)/Pledged | | | | |
Counterparty | | Swap Agreements | | | Net Value of Derivatives | | | Non-Cash | | | Cash | | | Net Amount | |
|
| |
BNP Paribas S.A. | | | $ (73,578 | ) | | | $ (73,578 | ) | | | $– | | | | $– | | | $ | (73,578 | ) |
|
| |
J.P. Morgan Chase Bank, N.A. | | | (14,748 | ) | | | (14,748 | ) | | | – | | | | – | | | | (14,748 | ) |
|
| |
Merrill Lynch International | | | (32,156 | ) | | | (32,156 | ) | | | – | | | | – | | | | (32,156 | ) |
|
| |
Total | | | $(120,482 | ) | | | $(120,482 | ) | | | $– | | | | $– | | | $ | (120,482 | ) |
|
| |
| | |
24 | | Invesco Advantage International Fund |
Effect of Derivative Investments for the year ended October 31, 2023
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 | |
| | Currency | | | | | | Equity | | | | | | | | | | |
| | Risk | | | | | | Risk | | | | | | Total | | | | |
|
| |
Realized Gain (Loss): | | | | | | | | | | | | | | | | | | | | | | | | |
Forward foreign currency contracts | | $ | (219 | ) | | | | | | $ | - | | | | | | | $ | (219 | ) | | | | |
|
| |
Futures contracts | | | (39,206 | ) | | | | | | | (1,327,092 | ) | | | | | | | (1,366,298 | ) | | | | |
|
| |
Options written | | | - | | | | | | | | (98,406 | ) | | | | | | | (98,406 | ) | | | | |
|
| |
Swap agreements | | | - | | | | | | | | 266,345 | | | | | | | | 266,345 | | | | | |
|
| |
Change in Net Unrealized Appreciation (Depreciation): | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | | (18,833 | ) | | | | | | | (747,506 | ) | | | | | | | (766,339 | ) | | | | |
|
| |
Options written | | | - | | | | | | | | (108,075 | ) | | | | | | | (108,075 | ) | | | | |
|
| |
Swap agreements | | | - | | | | | | | | (154,798 | ) | | | | | | | (154,798 | ) | | | | |
|
| |
Total | | $ | (58,258 | ) | | | | | | $ | (2,169,532 | ) | | | | | | $ | (2,227,790 | ) | | | | |
|
| |
The table below summarizes the average notional value of derivatives held during the period.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Forward | | | | | | | | | | | | Index | | | | | | | |
| | Foreign Currency | | | | | | Futures | | | | | | Options | | | | | | Swap | |
| | Contracts | | | | | | Contracts | | | | | | Written | | | | | | Agreements | |
|
| |
Average notional value | | $ | 30,852 | | | | | | | $ | 7,830,628 | | | | | | | $ | 11,617,250 | | | | | | | $ | 6,021,864 | |
|
| |
Average contracts | | | – | | | | | | | | – | | | | | | | | 78 | | | | | | | | — | |
|
| |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $2,723.
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 SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | | | |
| | 2023 | | | | | 2022 | |
|
| |
Ordinary income* | | | $– | | | | | | | $ | 1,824,898 | |
|
| |
Long-term capital gain | | | – | | | | | | | | 752,595 | |
|
| |
Total distributions | | | $– | | | | | | | $ | 2,577,493 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
| | |
25 | | Invesco Advantage International Fund |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 1,494,743 | |
|
| |
Net unrealized appreciation — investments | | | 327,548 | |
|
| |
Net unrealized appreciation (depreciation) — foreign currencies | | | (4,232 | ) |
|
| |
Temporary book/tax differences | | | (11,596 | ) |
|
| |
Capital loss carryforward | | | (2,875,069 | ) |
|
| |
Shares of beneficial interest | | | 30,754,373 | |
|
| |
Total net assets | | $ | 29,685,767 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales, derivative instruments and passive foreign investment companies.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund has a capital loss carryforward as of October 31, 2023, as follows:
| | | | | | | | | | |
Capital Loss Carryforward* |
|
|
Expiration | | Short-Term | | | | Long-Term | | | | Total |
|
|
Not subject to expiration | | $1,289,126 | | | | $1,585,943 | | | | $2,875,069 |
|
|
* | Capital loss carryforward 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 Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $44,779,302 and $40,078,338, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
|
| |
Aggregate unrealized appreciation of investments | | $ | 1,667,168 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (1,339,620 | ) |
|
| |
Net unrealized appreciation of investments | | $ | 327,548 | |
|
| |
Cost of investments for tax purposes is $28,023,423.
NOTE 10–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of passive foreign investment companies and derivative instruments, on October 31, 2023, undistributed net investment income was increased by $537,305, undistributed net realized gain (loss) was decreased by $536,988 and shares of beneficial interest was decreased by $317. This reclassification had no effect on the net assets of the Fund.
NOTE 11–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 408,886 | | | $ | 4,344,778 | | | | 349,749 | | | $ | 3,777,786 | |
|
| |
Class C | | | 67,888 | | | | 689,747 | | | | 65,696 | | | | 724,213 | |
|
| |
Class R | | | 109,216 | | | | 1,142,005 | | | | 80,205 | | | | 887,745 | |
|
| |
Class Y | | | 108,903 | | | | 1,171,806 | | | | 261,354 | | | | 2,817,156 | |
|
| |
Class R6 | | | 755,173 | | | | 8,027,473 | | | | - | | | | - | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | - | | | | - | | | | 128,932 | | | | 1,505,924 | |
|
| |
Class C | | | - | | | | - | | | | 34,576 | | | | 390,706 | |
|
| |
Class R | | | - | | | | - | | | | 44,248 | | | | 511,946 | |
|
| |
Class Y | | | - | | | | - | | | | 8,680 | | | | 102,345 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 6,941 | | | | 73,067 | | | | 8,202 | | | | 88,383 | |
|
| |
Class C | | | (7,243 | ) | | | (73,067 | ) | | | (8,512 | ) | | | (88,383 | ) |
|
| |
| | |
26 | | Invesco Advantage International Fund |
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (242,799 | ) | | $ | (2,580,012 | ) | | | (188,143 | ) | | $ | (2,094,628 | ) |
|
| |
Class C | | | (68,377 | ) | | | (694,230 | ) | | | (49,589 | ) | | | (539,877 | ) |
|
| |
Class R | | | (60,313 | ) | | | (635,505 | ) | | | (99,929 | ) | | | (1,117,784 | ) |
|
| |
Class Y | | | (258,690 | ) | | | (2,768,110 | ) | | | (54,935 | ) | | | (594,284 | ) |
|
| |
Class R6 | | | (109,179 | ) | | | (1,183,072 | ) | | | - | | | | - | |
|
| |
Net increase in share activity | | | 710,406 | | | $ | 7,514,880 | | | | 580,534 | | | $ | 6,371,248 | |
|
| |
(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. |
| | |
27 | | Invesco Advantage International Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco Advantage International Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco Advantage International Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent, insurance companies, and brokers; when replies were not received from brokers or insurance companies, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
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28 | | Invesco Advantage International 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 May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $942.90 | | $4.06 | | $1,021.02 | | $4.23 | | 0.83% |
Class C | | 1,000.00 | | 939.40 | | 7.72 | | 1,017.24 | | 8.03 | | 1.58 |
Class R | | 1,000.00 | | 942.10 | | 5.29 | | 1,019.76 | | 5.50 | | 1.08 |
Class Y | | 1,000.00 | | 944.50 | | 2.84 | | 1,022.28 | | 2.96 | | 0.58 |
Class R5 | | 1,000.00 | | 944.30 | | 2.84 | | 1,022.28 | | 2.96 | | 0.58 |
Class R6 | | 1,000.00 | | 944.60 | | 2.84 | | 1,022.28 | | 2.96 | | 0.58 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
29 | | Invesco Advantage International Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Advantage International Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC, Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior
Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a
description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country World ex-USA Index (Index). The Board noted that performance of Class A shares of the Fund was in the second quintile of its performance universe for the one, three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above the
| | |
30 | | Invesco Advantage International Fund |
performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board noted that, prior to November 18, 2019, the Fund was sub-advised by Barings. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board further considered that the Fund had changed its name, investment strategy and index against which future performance will be compared in 2020 and that performance results prior to such date reflected that of the Fund’s former strategy. As a result, the Board did not consider performance of the Fund prior to such date to be particularly relevant. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the Fund’s contractual management fee schedule was reduced at certain breakpoint levels effective in 2020. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board noted that Invesco Advisers and the Affiliated Sub-Advisers do not manage other similarly managed mutual funds or client accounts.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. Economies of Scale and Breakpoints
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated
measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund may benefit from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
Collateral Benefits to Invesco Advisers and its Affiliates
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco
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31 | | Invesco Advantage International Fund |
Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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32 | | Invesco Advantage International Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year–end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | |
Federal and State Income Tax | | | | | | |
Qualified Dividend Income* | | | 45.85 | % | | | | |
Corporate Dividends Received Deduction* | | | 0.00 | % | | | | |
U.S. Treasury Obligations* | | | 6.43 | % | | | | |
Qualified Business Income* | | | 0.00 | % | | | | |
Business Interest Income* | | | 5.20 | % | | | | |
Foreign Taxes | | | $0.0345 | | | | per share | |
Foreign Source Income | | | $0.3440 | | | | per share | |
|
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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33 | | Invesco Advantage International Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 – 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
| | |
T-1 | | Invesco Advantage International Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown – 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler – 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones – 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman – 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management – Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. – 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis – 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
| | |
T-2 | | Invesco Advantage International Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
Joel W. Motley – 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non- profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel – 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli – 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver – Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort – 1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
| | |
T-3 | | Invesco Advantage International Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman – 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold – 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg – 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
| | |
T-4 | | Invesco Advantage International Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr – 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.;Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong – 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher – 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes – 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom – 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco Advantage International Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl – 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. – 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
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Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
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T-6 | | Invesco Advantage International Fund |
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Go paperless with eDelivery
Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
With eDelivery, you can elect to have any or all of the following materials delivered straight to your inbox to download, save and print from your own computer:
∎ Fund reports and prospectuses
∎ Quarterly statements
∎ Daily confirmations
∎ Tax forms
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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/ corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | O-GLMAG-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco EQV Asia Pacific Equity Fund
Nasdaq:
A: ASIAX ∎ C: ASICX ∎ Y: ASIYX ∎ R6: ASISX
Management’s Discussion of Fund Performance
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Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco EQV Asia Pacific Equity Fund (the Fund), at net asset value (NAV), underperformed the MSCI All Country Asia Pacific ex Japan Index, the Fund’s broad market/style-specific benchmark. | |
Your Fund’s long-term performance appears later in this report. | |
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Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance. | |
Class A Shares | | | 10.70 | % |
Class C Shares | | | 9.85 | |
Class Y Shares | | | 10.94 | |
Class R6 Shares | | | 11.13 | |
MSCI All Country Asia Pacific ex Japan Index▼ (Broad Market/Style-Specific Index) | | | 11.75 | |
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Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within emerging markets, China’s equities were weighed down by concerns in the real estate
sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
Regardless of the macroeconomic environment, we remain focused on our bottom-up investment approach of identifying attractive companies that fit our earnings, quality, and valuation (EQV) process.
The Invesco EQV Asia Pacific Equity Fund underperformed the MSCI All Country Asia Pacific ex Japan Index for the fiscal year.
Stock selection in real estate, combined with an overweight in the sector, was the largest detractor from relative performance. Indonesian real estate developer Pakuwon Jati was a notable relative detractor. Fund holdings in the health care sector underperformed those of the benchmark index, detracting from relative results. An overweight in the health care sector hampered relative return as well. Within health care, Kalbe Farma, a large pharmaceutical and consumer health company in Indonesia, detracted from both absolute and relative results. Underweight exposure and stock selection in the communication services sector also detracted from relative performance. On a geographic basis, an overweight in Indonesia relative to the benchmark index was the most notable relative detractor. Stock selection in China and New Zealand and an overweight in New Zealand also detracted from relative results.
Conversely, strong stock selection in information technology (IT) was the largest contributor to relative performance. US semiconductor products manufacturer Broadcom was a key contributor to both absolute and relative results within the IT sector. The frenzy over generative AI during the fiscal year led
to significant appreciation in the stock price. We purchased Broadcom several years ago when it was a Singapore-based company called Avago Technologies. The Fund’s holdings in consumer discretionary outperformed those of the benchmark index, contributing to relative results. An overweight in the sector added to relative return. Yum China, the owner/operator of KFC and Pizza Hut in China, was a notable relative contributor in the consumer discretionary sector. Having no exposure in the utilities sector benefited relative performance as well. Geographically, exposure in the US and underweights in India and Australia contributed to relative performance.
During the fiscal year, we continued to look for opportunities to improve the growth potential and quality of the Fund’s portfolio by adding companies based on our evaluation of the EQV characteristics for each company. We added several new holdings, including Hong Kong-based power equipment manufacturer Techtronic Industries, Hong Kong-based life insurance group in Asia Pacific AIA and India-based private life insurance company SBI Life Insurance. We sold Chinese ecommerce company JD.com, property management and development company Hong-kong Land and Singapore-based KEPPEL REIT, which mainly owns office buildings in Singapore, but also has a major presence in Australia.
As always, we remain focused on a bottom-up investment approach of identifying attractive companies that fit our EQV-focused investment process. Our EQV investment approach focuses on earnings, demonstrated by sustainable earnings growth; quality, demonstrated by efficient capital allocation; and valuation, demonstrated by attractive prices. Our balanced EQV-focused approach aligns with our goal of delivering attractive risk-adjusted returns over the long term.
We thank you for your continued investment in Invesco EQV Asia Pacific Equity Fund.
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2 | | Invesco EQV Asia Pacific Equity Fund |
Portfolio manager(s):
Brent Bates
Steve Cao - Lead
Mark Jason
Michael Shaman
Ge Sun
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
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3 | | Invesco EQV Asia Pacific Equity Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g368801dsp004.jpg)
1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
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4 | | Invesco EQV Asia Pacific Equity Fund |
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Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
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Class A Shares | | | | |
Inception (11/3/97) | | | 7.28 | % |
10 Years | | | 2.78 | |
5 Years | | | 2.78 | |
1 Year | | | 4.61 | |
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Class C Shares | | | | |
Inception (11/3/97) | | | 7.27 | % |
10 Years | | | 2.75 | |
5 Years | | | 3.17 | |
1 Year | | | 8.85 | |
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Class Y Shares | | | | |
Inception (10/3/08) | | | 8.20 | % |
10 Years | | | 3.62 | |
5 Years | | | 4.20 | |
1 Year | | | 10.94 | |
| |
Class R6 Shares | | | | |
10 Years | | | 3.65 | % |
5 Years | | | 4.37 | |
1 Year | | | 11.13 | |
Class R6 shares incepted on April 4, 2017. Performance shown prior to that date is that of Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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 Y shares 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.
| | |
5 | | Invesco EQV Asia Pacific Equity Fund |
Supplemental Information
Invesco EQV Asia Pacific Equity Fund’s investment objective is long-term growth of capital.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country Asia Pacific ex Japan Index is an unmanaged index considered representative of Asia Pacific region stock markets, excluding Japan. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
| | |
6 | | Invesco EQV Asia Pacific Equity Fund |
Fund Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Financials | | | | 19.38 | % |
| |
Information Technology | | | | 17.21 | |
| |
Consumer Discretionary | | | | 16.34 | |
| |
Consumer Staples | | | | 14.23 | |
| |
Real Estate | | | | 10.91 | |
| |
Industrials | | | | 8.18 | |
| |
Health Care | | | | 6.91 | |
| |
Communication Services | | | | 4.86 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | | 1.98 | |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Yum China Holdings, Inc. | | | | 6.23 | % |
| | |
2. | | Taiwan Semiconductor Manufacturing Co. Ltd. | | | | 5.12 | |
| | |
3. | | Broadcom, Inc. | | | | 4.20 | |
| | |
4. | | BDO Unibank, Inc. | | | | 3.99 | |
| | |
5. | | HDFC Bank Ltd., ADR | | | | 3.94 | |
| | |
6. | | Tencent Holdings Ltd. | | | | 3.82 | |
| | |
7. | | Central Pattana PCL, Foreign Shares | | | | 3.70 | |
| | |
8. | | Tongcheng Travel Holdings Ltd. | | | | 3.44 | |
| | |
9. | | Samsung Electronics Co. Ltd. | | | | 3.38 | |
| | |
10. | | Wuliangye Yibin Co. Ltd., A Shares | | | | 3.37 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
| | |
7 | | Invesco EQV Asia Pacific Equity Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–98.02% | |
Australia–2.93% | | | | | | | | |
Aristocrat Leisure Ltd. | | | 200,681 | | | $ | 4,978,921 | |
|
| |
CSL Ltd. | | | 50,054 | | | | 7,410,792 | |
|
| |
| | | | | | | 12,389,713 | |
|
| |
| | |
China–29.69% | | | | | | | | |
Airtac International Group | | | 311,000 | | | | 10,169,363 | |
|
| |
China Mengniu Dairy Co. Ltd.(a) | | | 4,244,000 | | | | 13,981,052 | |
|
| |
China Resources Beer Holdings Co. Ltd. | | | 2,134,000 | | | | 11,283,406 | |
|
| |
Chongqing Fuling Zhacai Group Co. Ltd., A Shares | | | 1,708,555 | | | | 3,613,175 | |
|
| |
Fuyao Glass Industry Group Co. Ltd., H Shares(b) | | | 2,440,400 | | | | 11,150,064 | |
|
| |
Minth Group Ltd. | | | 1,838,000 | | | | 4,126,632 | |
|
| |
Tencent Holdings Ltd. | | | 436,000 | | | | 16,151,549 | |
|
| |
Tongcheng Travel Holdings Ltd.(a)(b) | | | 7,614,800 | | | | 14,532,479 | |
|
| |
Wuliangye Yibin Co. Ltd., A Shares | | | 669,038 | | | | 14,276,393 | |
|
| |
Yum China Holdings, Inc. | | | 501,197 | | | | 26,342,914 | |
|
| |
| | | | | | | 125,627,027 | |
|
| |
| | |
Hong Kong–6.47% | | | | | | | | |
AIA Group Ltd. | | | 1,043,600 | | | | 9,088,911 | |
|
| |
Swire Properties Ltd. | | | 4,317,600 | | | | 8,411,111 | |
|
| |
Techtronic Industries Co. Ltd. | | | 1,089,000 | | | | 9,876,426 | |
|
| |
| | | | | | | 27,376,448 | |
|
| |
| | |
India–8.41% | | | | | | | | |
Emami Ltd. | | | 1,137,103 | | | | 6,967,476 | |
|
| |
HDFC Bank Ltd., ADR | | | 294,806 | | | | 16,671,279 | |
|
| |
MakeMyTrip Ltd.(a)(c) | | | 109,158 | | | | 4,227,690 | |
|
| |
SBI Life Insurance Co. Ltd.(b) | | | 470,973 | | | | 7,744,890 | |
|
| |
| | | | | | | 35,611,335 | |
|
| |
| | |
Indonesia–12.23% | | | | | | | | |
PT Bank Central Asia Tbk | | | 24,034,100 | | | | 13,250,532 | |
|
| |
PT Kalbe Farma Tbk | | | 98,091,500 | | | | 10,456,012 | |
|
| |
PT Mitra Keluarga Karyasehat Tbk(b) | | | 66,098,300 | | | | 11,391,567 | |
|
| |
PT Pakuwon Jati Tbk | | | 484,554,400 | | | | 12,260,456 | |
|
| |
PT Telkom Indonesia (Persero) Tbk | | | 19,920,800 | | | | 4,379,001 | |
|
| |
| | | | | | | 51,737,568 | |
|
| |
| | |
Macau–0.88% | | | | | | | | |
Galaxy Entertainment Group Ltd. | | | 665,000 | | | | 3,724,832 | |
|
| |
| | |
Malaysia–4.25% | | | | | | | | |
Bursa Malaysia Bhd. | | | 7,043,950 | | | | 10,038,537 | |
|
| |
Heineken Malaysia Bhd. | | | 1,591,000 | | | | 7,962,603 | |
|
| |
| | | | | | | 18,001,140 | |
|
| |
| | |
New Zealand–1.74% | | | | | | | | |
Auckland International Airport Ltd. | | | 968,036 | | | | 4,139,811 | |
|
| |
Freightways Group Ltd. | | | 742,047 | | | | 3,225,888 | |
|
| |
| | | | | | | 7,365,699 | |
|
| |
| | |
Philippines–8.02% | | | | | | | | |
BDO Unibank, Inc. | | | 7,495,468 | | | | 16,886,141 | |
|
| |
SM Investments Corp. | | | 511,646 | | | | 7,223,237 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Philippines–(continued) | | | | | | | | |
SM Prime Holdings, Inc. | | | 18,662,900 | | | $ | 9,843,897 | |
|
| |
| | | | | | | 33,953,275 | |
|
| |
| | |
Singapore–1.97% | | | | | | | | |
United Overseas Bank Ltd. | | | 422,000 | | | | 8,330,997 | |
|
| |
| | |
South Korea–4.68% | | | | | | | | |
Douzone Bizon Co. Ltd. | | | 9,854 | | | | 200,444 | |
|
| |
LEENO Industrial, Inc. | | | 51,217 | | | | 5,277,099 | |
|
| |
Samsung Electronics Co. Ltd. | | | 286,996 | | | | 14,311,250 | |
|
| |
| | | | | | | 19,788,793 | |
|
| |
| | |
Taiwan–8.33% | | | | | | | | |
ASPEED Technology, Inc. | | | 32,000 | | | | 2,567,615 | |
|
| |
MediaTek, Inc. | | | 275,000 | | | | 7,245,377 | |
|
| |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 1,314,464 | | | | 21,656,612 | |
|
| |
Visual Photonics Epitaxy Co. Ltd. | | | 831,000 | | | | 3,804,384 | |
|
| |
| | | | | | | 35,273,988 | |
|
| |
| | |
Thailand–3.70% | | | | | | | | |
Central Pattana PCL, Foreign Shares | | | 8,990,800 | | | | 15,665,189 | |
|
| |
| | |
United States–4.20% | | | | | | | | |
Broadcom, Inc. | | | 21,103 | | | | 17,755,431 | |
|
| |
| | |
Vietnam–0.52% | | | | | | | | |
Vietnam Dairy Products JSC | | | 795,090 | | | | 2,205,200 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $336,410,330) | | | | 414,806,635 | |
|
| |
| | |
Money Market Funds–2.14% | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e) | | | 3,163,086 | | | | 3,163,086 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e) | | | 2,281,847 | | | | 2,282,532 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e) | | | 3,614,956 | | | | 3,614,956 | |
|
| |
Total Money Market Funds (Cost $9,059,087) | | | | 9,060,574 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES (excluding Investments purchased with cash collateral from securities on loan)–100.16% (Cost $345,469,417) | | | | 423,867,209 | |
|
| |
|
Investments Purchased with Cash Collateral from Securities on Loan | |
Money Market Funds–0.80% | | | | | | | | |
Invesco Private Government Fund, 5.32%(d)(e)(f) | | | 947,423 | | | | 947,423 | |
|
| |
Invesco Private Prime Fund, 5.53%(d)(e)(f) | | | 2,436,608 | | | | 2,436,851 | |
|
| |
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $3,384,274) | | | | 3,384,274 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–100.96% (Cost $348,853,691) | | | | 427,251,483 | |
|
| |
OTHER ASSETS LESS LIABILITIES–(0.96)% | | | | (4,063,718 | ) |
|
| |
NET ASSETS–100.00% | | | | | | $ | 423,187,765 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco EQV Asia Pacific Equity Fund |
Investment Abbreviations:
ADR – American Depositary Receipt
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(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 October 31, 2023 was $44,819,000, which represented 10.59% of the Fund’s Net Assets. |
(c) | All or a portion of this security was out on loan at October 31, 2023. |
(d) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | | Realized Gain | | | Value October 31, 2023 | | | Dividend Income | |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | | $13,283,138 | | | $ | 35,146,145 | | | $ | (45,266,197 | ) | | | $ - | | | | $ - | | | | $ 3,163,086 | | | $ | 535,455 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 9,510,912 | | | | 25,104,389 | | | | (32,332,998 | ) | | | (1,904 | ) | | | 2,133 | | | | 2,282,532 | | | | 393,906 | |
Invesco Treasury Portfolio, Institutional Class | | | 15,180,730 | | | | 40,167,023 | | | | (51,732,797 | ) | | | - | | | | - | | | | 3,614,956 | | | | 611,020 | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Private Government Fund | | | 2,413,043 | | | | 50,949,027 | | | | (52,414,647 | ) | | | - | | | | - | | | | 947,423 | | | | 47,434* | |
Invesco Private Prime Fund | | | 6,203,151 | | | | 129,202,172 | | | | (132,970,242 | ) | | | (621 | ) | | | 2,391 | | | | 2,436,851 | | | | 129,545* | |
Total | | | $46,590,974 | | | $ | 280,568,756 | | | $ | (314,716,881 | ) | | | $(2,525 | ) | | | $4,524 | | | | $12,444,848 | | | $ | 1,717,360 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
(f) | 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. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco EQV Asia Pacific Equity Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $336,410,330)* | | $ | 414,806,635 | |
|
| |
Investments in affiliated money market funds, at value (Cost $12,443,361) | | | 12,444,848 | |
|
| |
Foreign currencies, at value (Cost $280,942) | | | 280,846 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 125,391 | |
|
| |
Fund shares sold | | | 275,817 | |
|
| |
Dividends | | | 258,420 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 81,925 | |
|
| |
Other assets | | | 34,939 | |
|
| |
Total assets | | | 428,308,821 | |
|
| |
| |
Liabilities: | | | | |
Payable for: | | | | |
Fund shares reacquired | | | 802,541 | |
|
| |
Accrued foreign taxes | | | 539,091 | |
|
| |
Collateral upon return of securities loaned | | | 3,384,274 | |
|
| |
Accrued fees to affiliates | | | 209,471 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 160 | |
|
| |
Accrued other operating expenses | | | 96,381 | |
|
| |
Trustee deferred compensation and retirement plans | | | 89,138 | |
|
| |
Total liabilities | | | 5,121,056 | |
|
| |
Net assets applicable to shares outstanding | | $ | 423,187,765 | |
|
| |
| | | | |
Net assets consist of: | | | | |
Shares of beneficial interest | | $ | 333,248,188 | |
|
| |
Distributable earnings | | | 89,939,577 | |
|
| |
| | $ | 423,187,765 | |
|
| |
| |
Net Assets: | | | | |
Class A | | $ | 293,667,968 | |
|
| |
Class C | | $ | 6,021,915 | |
|
| |
Class Y | | $ | 102,149,228 | |
|
| |
Class R6 | | $ | 21,348,654 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
Class A | | | 11,353,131 | |
|
| |
Class C | | | 265,657 | |
|
| |
Class Y | | | 3,936,378 | |
|
| |
Class R6 | | | 823,767 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 25.87 | |
|
| |
Maximum offering price per share (Net asset value of $25.87 ÷ 94.50%) | | $ | 27.38 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 22.67 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 25.95 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 25.92 | |
|
| |
* | At October 31, 2023, security with a value of $3,404,367 was on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco EQV Asia Pacific Equity Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Dividends (net of foreign withholding taxes of $826,010) | | $ | 9,939,664 | |
|
| |
Dividends from affiliated money market funds (includes net securities lending income of $6,698) | | | 1,547,079 | |
|
| |
Total investment income | | | 11,486,743 | |
|
| |
| |
Expenses: | | | | |
Advisory fees | | | 4,587,416 | |
|
| |
Administrative services fees | | | 70,891 | |
|
| |
Custodian fees | | | 92,517 | |
|
| |
Distribution fees: | | | | |
Class A | | | 835,698 | |
|
| |
Class C | | | 88,004 | |
|
| |
Transfer agent fees – A, C and Y | | | 911,767 | |
|
| |
Transfer agent fees – R6 | | | 6,784 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 19,725 | |
|
| |
Registration and filing fees | | | 72,161 | |
|
| |
Reports to shareholders | | | 90,509 | |
|
| |
Professional services fees | | | 76,035 | |
|
| |
Other | | | 14,597 | |
|
| |
Total expenses | | | 6,866,104 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (50,728 | ) |
|
| |
Net expenses | | | 6,815,376 | |
|
| |
Net investment income | | | 4,671,367 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities (net of foreign taxes of $120,618) | | | 7,825,823 | |
|
| |
Affiliated investment securities | | | 4,524 | |
|
| |
Foreign currencies | | | (128,634 | ) |
|
| |
| | | 7,701,713 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities (net of foreign taxes of $243,789) | | | 38,778,745 | |
|
| |
Affiliated investment securities | | | (2,525 | ) |
|
| |
Foreign currencies | | | 867 | |
|
| |
| | | 38,777,087 | |
|
| |
Net realized and unrealized gain | | | 46,478,800 | |
|
| |
Net increase in net assets resulting from operations | | $ | 51,150,167 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco EQV Asia Pacific Equity Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
Net investment income | | $ | 4,671,367 | | | $ | 3,657,103 | |
|
| |
Net realized gain | | | 7,701,713 | | | | 34,761,195 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | 38,777,087 | | | | (208,797,056 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 51,150,167 | | | | (170,378,758 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
Class A | | | (23,019,545 | ) | | | (30,871,663 | ) |
|
| |
Class C | | | (689,858 | ) | | | (1,135,132 | ) |
|
| |
Class Y | | | (9,157,836 | ) | | | (11,823,956 | ) |
|
| |
Class R6 | | | (1,652,040 | ) | | | (6,813,606 | ) |
|
| |
Total distributions from distributable earnings | | | (34,519,279 | ) | | | (50,644,357 | ) |
|
| |
| | |
Share transactions-net: | | | | | | | | |
Class A | | | (11,959,783 | ) | | | (11,461,589 | ) |
|
| |
Class C | | | (3,328,057 | ) | | | (2,034,106 | ) |
|
| |
Class Y | | | (25,793,836 | ) | | | 11,646,727 | |
|
| |
Class R6 | | | 519,455 | | | | (53,445,726 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (40,562,221 | ) | | | (55,294,694 | ) |
|
| |
Net increase (decrease) in net assets | | | (23,931,333 | ) | | | (276,317,809 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
Beginning of year | | | 447,119,098 | | | | 723,436,907 | |
|
| |
End of year | | $ | 423,187,765 | | | $ | 447,119,098 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco EQV Asia Pacific Equity Fund |
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 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $25.07 | | | | $0.24 | | | | $2.56 | | | | $2.80 | | | | $(0.16 | ) | | | $(1.84 | ) | | | $(2.00 | ) | | | $25.87 | | | | 10.66 | % | | | $293,668 | | | | 1.44 | % | | | 1.45 | % | | | 0.87 | % | | | 16 | % |
Year ended 10/31/22 | | | 36.69 | | | | 0.17 | | | | (9.22 | ) | | | (9.05 | ) | | | (0.07 | ) | | | (2.50 | ) | | | (2.57 | ) | | | 25.07 | | | | (26.39 | ) | | | 295,255 | | | | 1.45 | | | | 1.45 | | | | 0.53 | | | | 13 | |
Year ended 10/31/21 | | | 36.20 | | | | 0.07 | | | | 3.23 | | | | 3.30 | | | | (0.10 | ) | | | (2.71 | ) | | | (2.81 | ) | | | 36.69 | | | | 8.97 | | | | 447,947 | | | | 1.38 | | | | 1.38 | | | | 0.17 | | | | 15 | |
Year ended 10/31/20 | | | 33.15 | | | | 0.13 | | | | 5.12 | | | | 5.25 | | | | (0.35 | ) | | | (1.85 | ) | | | (2.20 | ) | | | 36.20 | | | | 16.67 | | | | 438,473 | | | | 1.44 | | | | 1.45 | | | | 0.40 | | | | 27 | |
Year ended 10/31/19 | | | 30.30 | | | | 0.35 | | | | 4.60 | | | | 4.95 | | | | (0.34 | ) | | | (1.76 | ) | | | (2.10 | ) | | | 33.15 | | | | 17.17 | | | | 433,120 | | | | 1.43 | | | | 1.44 | | | | 1.08 | | | | 17 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 22.19 | | | | 0.03 | | | | 2.29 | | | | 2.32 | | | | – | | | | (1.84 | ) | | | (1.84 | ) | | | 22.67 | | | | 9.85 | | | | 6,022 | | | | 2.19 | | | | 2.20 | | | | 0.12 | | | | 16 | |
Year ended 10/31/22 | | | 32.94 | | | | (0.06 | ) | | | (8.19 | ) | | | (8.25 | ) | | | – | | | | (2.50 | ) | | | (2.50 | ) | | | 22.19 | | | | (26.94 | ) | | | 8,847 | | | | 2.20 | | | | 2.20 | | | | (0.22 | ) | | | 13 | |
Year ended 10/31/21 | | | 32.90 | | | | (0.20 | ) | | | 2.95 | | | | 2.75 | | | | – | | | | (2.71 | ) | | | (2.71 | ) | | | 32.94 | | | | 8.16 | | | | 15,631 | | | | 2.13 | | | | 2.13 | | | | (0.58 | ) | | | 15 | |
Year ended 10/31/20 | | | 30.25 | | | | (0.10 | ) | | | 4.65 | | | | 4.55 | | | | (0.05 | ) | | | (1.85 | ) | | | (1.90 | ) | | | 32.90 | | | | 15.78 | | | | 23,167 | | | | 2.19 | | | | 2.20 | | | | (0.35 | ) | | | 27 | |
Year ended 10/31/19 | | | 27.77 | | | | 0.10 | | | | 4.21 | | | | 4.31 | | | | (0.07 | ) | | | (1.76 | ) | | | (1.83 | ) | | | 30.25 | | | | 16.29 | | | | 31,409 | | | | 2.18 | | | | 2.19 | | | | 0.33 | | | | 17 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 25.15 | | | | 0.32 | | | | 2.57 | | | | 2.89 | | | | (0.25 | ) | | | (1.84 | ) | | | (2.09 | ) | | | 25.95 | | | | 10.94 | | | | 102,149 | | | | 1.19 | | | | 1.20 | | | | 1.12 | | | | 16 | |
Year ended 10/31/22 | | | 36.83 | | | | 0.24 | | | | (9.25 | ) | | | (9.01 | ) | | | (0.17 | ) | | | (2.50 | ) | | | (2.67 | ) | | | 25.15 | | | | (26.24 | ) | | | 122,929 | | | | 1.20 | | | | 1.20 | | | | 0.78 | | | | 13 | |
Year ended 10/31/21 | | | 36.31 | | | | 0.16 | | | | 3.25 | | | | 3.41 | | | | (0.18 | ) | | | (2.71 | ) | | | (2.89 | ) | | | 36.83 | | | | 9.28 | | | | 167,045 | | | | 1.13 | | | | 1.13 | | | | 0.42 | | | | 15 | |
Year ended 10/31/20 | | | 33.25 | | | | 0.21 | | | | 5.13 | | | | 5.34 | | | | (0.43 | ) | | | (1.85 | ) | | | (2.28 | ) | | | 36.31 | | | | 16.95 | | | | 154,378 | | | | 1.19 | | | | 1.20 | | | | 0.65 | | | | 27 | |
Year ended 10/31/19 | | | 30.41 | | | | 0.43 | | | | 4.60 | | | | 5.03 | | | | (0.43 | ) | | | (1.76 | ) | | | (2.19 | ) | | | 33.25 | | | | 17.44 | | | | 170,249 | | | | 1.18 | | | | 1.19 | | | | 1.33 | | | | 17 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 25.13 | | | | 0.36 | | | | 2.57 | | | | 2.93 | | | | (0.30 | ) | | | (1.84 | ) | | | (2.14 | ) | | | 25.92 | | | | 11.13 | | | | 21,349 | | | | 1.03 | | | | 1.04 | | | | 1.28 | | | | 16 | |
Year ended 10/31/22 | | | 36.83 | | | | 0.31 | | | | (9.28 | ) | | | (8.97 | ) | | | (0.23 | ) | | | (2.50 | ) | | | (2.73 | ) | | | 25.13 | | | | (26.16 | ) | | | 20,088 | | | | 1.03 | | | | 1.03 | | | | 0.95 | | | | 13 | |
Year ended 10/31/21 | | | 36.32 | | | | 0.22 | | | | 3.25 | | | | 3.47 | | | | (0.25 | ) | | | (2.71 | ) | | | (2.96 | ) | | | 36.83 | | | | 9.44 | | | | 92,813 | | | | 0.97 | | | | 0.97 | | | | 0.58 | | | | 15 | |
Year ended 10/31/20 | | | 33.27 | | | | 0.28 | | | | 5.12 | | | | 5.40 | | | | (0.50 | ) | | | (1.85 | ) | | | (2.35 | ) | | | 36.32 | | | | 17.16 | | | | 107,226 | | | | 0.99 | | | | 1.00 | | | | 0.85 | | | | 27 | |
Year ended 10/31/19 | | | 30.43 | | | | 0.49 | | | | 4.61 | | | | 5.10 | | | | (0.50 | ) | | | (1.76 | ) | | | (2.26 | ) | | | 33.27 | | | | 17.70 | | | | 96,533 | | | | 0.98 | | | | 0.99 | | | | 1.53 | | | | 17 | |
(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. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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13 | | Invesco EQV Asia Pacific Equity Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco EQV Asia Pacific Equity Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of four different classes of shares: Class A, Class C, Class Y and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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 R6 shares are sold at net asset value. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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14 | | Invesco EQV Asia Pacific Equity 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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions – Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes – The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses – Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R6 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities. |
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, fees paid to the Adviser were less than $500. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the 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 the 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 |
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15 | | Invesco EQV Asia Pacific Equity Fund |
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 exchange of the two currencies on the settlement date, 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).
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 for hedging 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. | Other Risks – Investments in companies located or operating in Greater China (normally considered to be the geographical area that includes mainland China, Hong Kong, Macau and Taiwan) involve risks and considerations not typically associated with investments in the U.S. and other Western nations, such as greater government control over the economy; political, legal and regulatory uncertainty; nationalization, expropriation, or confiscation of property; lack of willingness or ability of the Chinese government to support the economies and markets of the Greater China region; difficulty in obtaining information necessary for investigations into and/or litigation against Chinese companies, as well as in obtaining and/or enforcing judgments; lack of publicly available information; limited legal remedies for shareholders; alteration or discontinuation of economic reforms; military conflicts and the risk of war, either internal or with other countries; public health emergencies resulting in market closures, travel restrictions, quarantines or other interventions; inflation, currency fluctuations and fluctuations in inflation and interest rates that may have negative effects on the economy and securities markets of Greater China; and Greater China’s dependency on the economies of other Asian countries, many of which are developing countries. Events in any one country within Greater China may impact the other countries in the region or Greater China as a whole. |
The level of development of the economies of countries in the Asia Pacific region varies greatly. Furthermore, since the economies of the countries in the region are largely intertwined, if an economic recession is experienced by any of these countries, it will likely adversely impact the economic performance of other countries in the region. Certain economies in the region may be adversely affected by increased competition, high inflation rates, undeveloped financial services sectors, currency fluctuations or restrictions, political and social instability and increased economic volatility. In addition, the risks of expropriation and/or nationalization of assets, confiscatory taxation, and armed conflict as a result of religious, ethnic, socio- economic and/or political unrest may adversely affect the value of the Fund’s Asia Pacific investments.
Certain securities issued by companies located or operating in Greater China, such as China A-shares, are subject to trading restrictions and suspensions, quota limitations and sudden changes in those limitations, and operational, clearing and settlement risks. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities, and have shown a willingness to exercise that option in response to market volatility and other events. The liquidity of Chinese securities may shrink or disappear suddenly and without warning as a result of adverse economic, market or political events, or adverse investor perceptions, whether or not accurate.
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 | % |
| |
Amount over $10 billion | | | 0.760 | % |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.92%.
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, will 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 July 1, 2023, the Adviser has agreed, for an indefinite period, 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 Y and Class R6 shares to 2.25%, 3.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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)
| | |
16 | | Invesco EQV Asia Pacific Equity Fund |
expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $37,701.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Y 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 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 C shares. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $34,546 in front-end sales commissions from the sale of Class A shares and $118 and $3,111 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. 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 Adviser’s 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 October 31, 2023. 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 |
| | | | |
Investments in Securities | | | | | | | | | | | | | | |
| | | | |
Australia | | $ | – | | | $ | 12,389,713 | | | $ | – | | | $ 12,389,713 |
| | | | |
China | | | 26,342,914 | | | | 99,284,113 | | | | – | | | 125,627,027 |
| | | | |
Hong Kong | | | – | | | | 27,376,448 | | | | – | | | 27,376,448 |
| | | | |
India | | | 20,898,969 | | | | 14,712,366 | | | | – | | | 35,611,335 |
| | | | |
Indonesia | | | – | | | | 51,737,568 | | | | – | | | 51,737,568 |
| | | | |
Macau | | | – | | | | 3,724,832 | | | | – | | | 3,724,832 |
| | | | |
Malaysia | | | – | | | | 18,001,140 | | | | – | | | 18,001,140 |
| | | | |
New Zealand | | | – | | | | 7,365,699 | | | | – | | | 7,365,699 |
| | | | |
Philippines | | | – | | | | 33,953,275 | | | | – | | | 33,953,275 |
| | | | |
Singapore | | | – | | | | 8,330,997 | | | | – | | | 8,330,997 |
| | | | |
South Korea | | | – | | | | 19,788,793 | | | | – | | | 19,788,793 |
| | | | |
Taiwan | | | – | | | | 35,273,988 | | | | – | | | 35,273,988 |
| | | | |
Thailand | | | – | | | | 15,665,189 | | | | – | | | 15,665,189 |
| | | | |
United States | | | 17,755,431 | | | | – | | | | – | | | 17,755,431 |
| | | | |
Vietnam | | | – | | | | 2,205,200 | | | | – | | | 2,205,200 |
| | | | |
Money Market Funds | | | 9,060,574 | | | | 3,384,274 | | | | – | | | 12,444,848 |
Total Investments | | $ | 74,057,888 | | | $ | 353,193,595 | | | $ | – | | | $427,251,483 |
| | |
17 | | Invesco EQV Asia Pacific Equity Fund |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $13,027.
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 SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | |
| | 2023 | | | 2022 |
| | |
Ordinary income* | | $ | 3,201,721 | | | $ 2,226,909 |
| | |
Long-term capital gain | | | 31,317,558 | | | 48,417,448 |
| | |
Total distributions | | $ | 34,519,279 | | | $50,644,357 |
* | Includes short-term capital gain distributions, if any. |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 4,352,932 | |
|
| |
Undistributed long-term capital gain | | | 7,797,523 | |
|
| |
Net unrealized appreciation – investments | | | 77,857,788 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (134 | ) |
|
| |
Temporary book/tax differences | | | (68,532 | ) |
|
| |
Shares of beneficial interest | | | 333,248,188 | |
|
| |
Total net assets | | $ | 423,187,765 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund does not have a capital loss carryforward as of October 31, 2023.
NOTE 8–Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $71,781,217 and $109,240,067, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $103,837,977 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (25,980,189 | ) |
|
| |
Net unrealized appreciation of investments | | | $ 77,857,788 | |
|
| |
Cost of investments for tax purposes is $349,393,695.
NOTE 9–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of foreign currency transactions and foreign capital gains taxes, on October 31, 2023, undistributed net investment income was decreased by $249,251, undistributed net realized gain was increased by $249,253 and shares of beneficial interest was decreased by $2. This reclassification had no effect on the net assets of the Fund.
| | |
18 | | Invesco EQV Asia Pacific Equity Fund |
NOTE 10–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 695,630 | | | $ | 19,794,347 | | | | 664,361 | | | $ | 20,457,732 | |
|
| |
Class C | | | 75,545 | | | | 1,892,280 | | | | 75,647 | | | | 2,139,688 | |
|
| |
Class Y | | | 1,480,206 | | | | 42,272,526 | | | | 1,901,384 | | | | 56,730,168 | |
|
| |
Class R6 | | | 379,927 | | | | 10,612,533 | | | | 203,870 | | | | 6,226,437 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | 769,158 | | | | 21,290,293 | | | | 848,289 | | | | 28,137,738 | |
|
| |
Class C | | | 26,435 | | | | 645,553 | | | | 34,846 | | | | 1,030,042 | |
|
| |
Class Y | | | 248,393 | | | | 6,882,957 | | | | 284,922 | | | | 9,462,262 | |
|
| |
Class R6 | | | 36,539 | | | | 1,009,929 | | | | 42,783 | | | | 1,418,688 | |
|
| |
|
Automatic conversion of Class C shares to Class A shares: | |
Class A | | | 55,168 | | | | 1,553,764 | | | | 67,760 | | | | 2,080,436 | |
|
| |
Class C | | | (62,693 | ) | | | (1,553,764 | ) | | | (76,186 | ) | | | (2,080,436 | ) |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (1,945,232 | ) | | | (54,598,187 | ) | | | (2,009,691 | ) | | | (62,137,495 | ) |
|
| |
Class C | | | (172,253 | ) | | | (4,312,126 | ) | | | (110,161 | ) | | | (3,123,400 | ) |
|
| |
Class Y | | | (2,679,555 | ) | | | (74,949,319 | ) | | | (1,835,074 | ) | | | (54,545,703 | ) |
|
| |
Class R6 | | | (392,057 | ) | | | (11,103,007 | ) | | | (1,967,336 | ) | | | (61,090,851 | ) |
|
| |
Net increase (decrease) in share activity | | | (1,484,789 | ) | | $ | (40,562,221 | ) | | | (1,874,586 | ) | | $ | (55,294,694 | ) |
|
| |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 39% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| | |
19 | | Invesco EQV Asia Pacific Equity Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco EQV Asia Pacific Equity Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco EQV Asia Pacific Equity Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the five years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and broker. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
| | |
20 | | Invesco EQV Asia Pacific 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 May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $905.50 | | $6.92 | | $1,017.95 | | $7.32 | | 1.44% |
Class C | | 1,000.00 | | 902.10 | | 10.50 | | 1,014.17 | | 11.12 | | 2.19 |
Class Y | | 1,000.00 | | 906.70 | | 5.72 | | 1,019.21 | | 6.06 | | 1.19 |
Class R6 | | 1,000.00 | | 907.60 | | 5.05 | | 1,019.91 | | 5.35 | | 1.05 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
21 | | Invesco EQV Asia Pacific Equity Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco EQV Asia Pacific Equity Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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 and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees
are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy
and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country Asia Pacific ex-Japan Index (Index). The Board noted that performance of Class A shares of the Fund was in the first quintile of its performance universe for the one and three year periods and the second quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above the performance of the Index for the one, three and five year periods. The Board recognized that the performance data reflects a
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22 | | Invesco EQV Asia Pacific Equity Fund |
snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was above the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components. The Board noted that there were only five funds (including the Fund) in the expense group.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board noted that Invesco Advisers and the Affiliated Sub-Advisers do not manage other similarly managed mutual funds or client accounts.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money
market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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23 | | Invesco EQV Asia Pacific Equity Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | | | | | |
Federal and State Income Tax | | | | | | | | | |
Long-Term Capital Gain Distributions | | $ | 31,317,558 | | | | | | | | | |
Qualified Dividend Income* | | | 100.00 | % | | | | | | | | |
Corporate Dividends Received Deduction* | | | 34.88 | % | | | | | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | | | | | |
Qualified Business Income* | | | 0.00 | % | | | | | | | | |
Business Interest Income* | | | 0.00 | % | | | | | | | | |
Foreign Taxes | | $ | 0.0502 | | | | per share | | | | | |
Foreign Source Income | | $ | 0.5997 | | | | per share | | | | | |
|
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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24 | | Invesco EQV Asia Pacific Equity Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 – 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
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T-1 | | Invesco EQV Asia Pacific Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown – 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler – 1962 Trustee | | 2017 | | Non–Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones – 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School – Texas A&M University Formerly: Dean of Mays Business School–Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman – 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management - Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. – 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis – 1950 Trustee | | 1998 | | Retired Formerly: Co–Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self–Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T–2 | | Invesco EQV Asia Pacific Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
Joel W. Motley – 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel – 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli – 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver - Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort – 1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco EQV Asia Pacific Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman – 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold – 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg – 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco EQV Asia Pacific Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr – 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong – 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher – 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes – 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom – 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco EQV Asia Pacific Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl – 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. – 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
| | | | | | |
Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
| | |
T-6 | | Invesco EQV Asia Pacific Equity Fund |
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Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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| | | | |
SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | APG-AR-1 |
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| |
Annual Report to Shareholders | | October 31, 2023 |
Invesco EQV European Equity Fund
Nasdaq:
A: AEDAX ∎ C: AEDCX ∎ R: AEDRX ∎ Y: AEDYX ∎ Investor: EGINX ∎ R6: AEGSX
Management’s Discussion of Fund Performance
| | | | |
|
Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco EQV European Equity Fund (the Fund), at net asset value (NAV), underperformed the MSCI Europe Index, the Fund’s broad market benchmark. | |
Your Fund’s long-term performance appears later in this report. | |
|
Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance. | |
Class A Shares | | | 14.22 | % |
Class C Shares | | | 13.33 | |
Class R Shares | | | 13.93 | |
Class Y Shares | | | 14.47 | |
Investor Class Shares | | | 14.33 | |
Class R6 Shares | | | 14.66 | |
MSCI Europe Index▼ (Broad Market Index) | | | 15.74 | |
| |
Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS take-over of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within emerging markets, China’s equities were
weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
Regardless of the macroeconomic environment, we remain focused on our bottom-up investment approach of identifying attractive companies that fit our earnings, quality, and valuation (EQV) process.
The Invesco EQV European Equity Fund underperformed the MSCI Europe Index for the fiscal year.
Stock selection in the financials sector was the largest detractor from relative return. Within financials, British global online trading company IG Group and Italian bank, wealth manager and brokerage house FinecoBank were notable detractors during the fiscal year. FinecoBank shares were weak during the first quarter as the market expressed concerns about contagion from the bank failures that occurred in the US. An underweight in financials relative to the MSCI Europe Index also hampered relative return. Stock selection in information technology (IT) detracted from relative performance. Not owning select strong index performers, including SAP and ASM International, hampered relative results. The Fund’s holdings in the consumer discretionary sector underperformed those of the benchmark index, detracting from relative return as well. On a geographic basis, stock selection in Italy, the UK and Germany detracted from relative results. An underweight in Germany also had a negative effect on relative return.
Conversely, strong stock selection and an underweight in the health care sector was the largest contributor to relative performance.
Hungarian pharmaceutical and biotechnology company Gedeon Richter was a notable contributor to both absolute and relative performance during the fiscal year. The stock performed well due to strong first quarter earnings and more bullish estimates for its royalty income from Vraylar (an atypical antipsychotic) following better-than-expected prescription trends in the US. Fund holdings in the materials sector outperformed those of the benchmark index, adding to relative return. An underweight in the sector was advantageous as well. Irish building materials company CRH was a key relative contributor within the materials sector. Positive stock selection in communication services added to relative results. Geographically, the fund’s holdings in the US, stock selection in Sweden and having no exposure in Finland all contributed to relative performance.
During the fiscal year, we continued to look for opportunities to improve the growth potential and quality of the Fund’s portfolio by adding companies based on our evaluation of the EQV characteristics for each company. We added several new holdings, including British high-quality information services publisher RELX, British consumer health company Haleon and French multinational advertising and communications company Publicis Groupe. We sold several holdings during the fiscal year, including Turkish financial and industrial conglomerate Haci Ömer Sabanci, French diversified chemicals company Arkema and Origin Enterprises, an Irish consumer staples company providing agronomy advice and other on-farm services and distributing farm inputs.
As always, we remain focused on a bottom-up investment approach of identifying attractive companies that fit our EQV-focused investment process. Our EQV investment approach focuses on earnings, demonstrated by sustainable earnings growth; quality, demonstrated by efficient capital allocation; and valuation, demonstrated by attractive prices. Our balanced EQV-focused approach aligns with our goal of delivering attractive risk-adjusted returns over the long term.
We thank you for your continued investment in Invesco EQV European Equity Fund.
| | |
2 | | Invesco EQV European Equity Fund |
Portfolio manager(s):
Borge Endresen - Lead
Mark McDonnell
Richard Nield
Clas Olsson - Lead
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
| | |
3 | | Invesco EQV European Equity Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g389223dsp04.jpg)
1 | Source: RIMES Technologies Corp. |
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
| | |
4 | | Invesco EQV European Equity Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (11/3/97) | | | 7.53 | % |
10 Years | | | 0.93 | |
5 Years | | | 0.26 | |
1 Year | | | 7.94 | |
| |
Class C Shares | | | | |
Inception (11/3/97) | | | 7.53 | % |
10 Years | | | 0.90 | |
5 Years | | | 0.63 | |
1 Year | | | 12.33 | |
| |
Class R Shares | | | | |
Inception (6/3/02) | | | 6.18 | % |
10 Years | | | 1.26 | |
5 Years | | | 1.14 | |
1 Year | | | 13.93 | |
| |
Class Y Shares | | | | |
Inception (10/3/08) | | | 4.89 | % |
10 Years | | | 1.76 | |
5 Years | | | 1.64 | |
1 Year | | | 14.47 | |
| |
Investor Class Shares | | | | |
Inception (9/30/03) | | | 6.79 | % |
10 Years | | | 1.57 | |
5 Years | | | 1.48 | |
1 Year | | | 14.33 | |
| |
Class R6 Shares | | | | |
10 Years | | | 1.76 | % |
5 Years | | | 1.77 | |
1 Year | | | 14.66 | |
Class R6 shares incepted on April 4, 2017. Performance shown prior to that date is that of Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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 shares, Class Y shares, Investor Class shares 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.
| | |
5 | | Invesco EQV European Equity Fund |
Supplemental Information
Invesco EQV European Equity Fund’s investment objective is long-term growth of capital.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI Europe Index is an unmanaged index considered representative of stocks of developed European countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
| | |
6 | | Invesco EQV European Equity Fund |
Fund Information
Portfolio Composition
| | | | |
By sector | | % of total net assets |
| |
Industrials | | | 28.45 | % |
| |
Consumer Staples | | | 14.66 | |
| |
Financials | | | 13.15 | |
| |
Consumer Discretionary | | | 11.35 | |
| |
Health Care | | | 11.28 | |
| |
Materials | | | 5.44 | |
| |
Energy | | | 4.14 | |
| |
Communication Services | | | 4.04 | |
| |
Information Technology | | | 3.73 | |
| |
Real Estate | | | 0.93 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | 2.83 | |
Top 10 Equity Holdings*
| | | | | | |
| | | | % of total net assets |
| | |
1. | | Novo Nordisk A/S, Class B | | | 3.79 | % |
| | |
2. | | Nestle S.A. | | | 3.42 | |
| | |
3. | | Heineken Holding N.V. | | | 3.40 | |
| | |
4. | | Gedeon Richter PLC | | | 3.21 | |
| | |
5. | | RELX PLC | | | 3.15 | |
| | |
6. | | Investor AB, Class B | | | 3.09 | |
| | |
7. | | Deutsche Boerse AG | | | 2.79 | |
| | |
8. | | DCC PLC | | | 2.70 | |
| | |
9. | | Wolters Kluwer N.V. | | | 2.69 | |
| | |
10. | | LVMH Moet Hennessy Louis Vuitton SE | | | 2.56 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
| | |
7 | | Invesco EQV European Equity Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–97.17% | |
China–1.75% | |
Prosus N.V.(a) | | | 275,564 | | | $ | 7,718,385 | |
|
| |
| | |
Denmark–4.99% | | | | | | | | |
Carlsberg A/S, Class B | | | 44,192 | | | | 5,273,014 | |
|
| |
Novo Nordisk A/S, Class B | | | 173,161 | | | | 16,698,740 | |
|
| |
| | | | | | | 21,971,754 | |
|
| |
| | |
France–18.07% | | | | | | | | |
Air Liquide S.A. | | | 52,626 | | | | 9,019,479 | |
|
| |
Bollore SE | | | 1,786,242 | | | | 9,762,431 | |
|
| |
Capgemini SE | | | 33,720 | | | | 5,976,868 | |
|
| |
Kaufman & Broad S.A. | | | 241,351 | | | | 6,436,945 | |
|
| |
LVMH Moet Hennessy Louis Vuitton SE | | | 15,754 | | | | 11,274,629 | |
|
| |
Metropole Television S.A. | | | 100,641 | | | | 1,260,032 | |
|
| |
Pernod Ricard S.A. | | | 48,547 | | | | 8,631,622 | |
|
| |
Publicis Groupe S.A. | | | 89,419 | | | | 6,827,074 | |
|
| |
Schneider Electric SE | | | 64,732 | | | | 9,954,148 | |
|
| |
TotalEnergies SE | | | 156,548 | | | | 10,484,560 | |
|
| |
| | | | | | | 79,627,788 | |
|
| |
| | |
Germany–3.69% | | | | | | | | |
Deutsche Boerse AG | | | 74,843 | | | | 12,293,541 | |
|
| |
flatexDEGIRO AG(a) | | | 392,137 | | | | 3,961,709 | |
|
| |
| | | | | | | 16,255,250 | |
|
| |
| | |
Hungary–3.21% | | | | | | | | |
Gedeon Richter PLC | | | 602,621 | | | | 14,131,947 | |
|
| |
| | |
Ireland–2.55% | | | | | | | | |
Flutter Entertainment PLC(a) | | | 43,658 | | | | 6,869,190 | |
|
| |
Kingspan Group PLC | | | 64,974 | | | | 4,369,105 | |
|
| |
| | | | | | | 11,238,295 | |
|
| |
| | |
Italy–5.80% | | | | | | | | |
Danieli & C. Officine Meccaniche S.p.A., RSP | | | 390,872 | | | | 7,885,927 | |
|
| |
FinecoBank Banca Fineco S.p.A. | | | 952,151 | | | | 11,240,158 | |
|
| |
Technogym S.p.A.(b) | | | 853,766 | | | | 6,418,836 | |
|
| |
| | | | | | | 25,544,921 | |
|
| |
| | |
Netherlands–11.22% | | | | | | | | |
Aalberts N.V. | | | 141,332 | | | | 4,423,422 | |
|
| |
ASML Holding N.V. | | | 17,384 | | | | 10,457,510 | |
|
| |
Heineken Holding N.V. | | | 196,561 | | | | 14,983,737 | |
|
| |
Shell PLC | | | 241,058 | | | | 7,747,202 | |
|
| |
Wolters Kluwer N.V. | | | 92,115 | | | | 11,844,932 | |
|
| |
| | | | | | | 49,456,803 | |
|
| |
| | |
Russia–0.00% | | | | | | | | |
Sberbank of Russia PJSC, Preference Shares(a)(c) | | | 11,172,332 | | | | 11 | |
|
| |
| | |
Spain–2.61% | | | | | | | | |
Amadeus IT Group S.A. | | | 114,870 | | | | 6,562,763 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Spain–(continued) | | | | | | | | |
Construcciones y Auxiliar de Ferrocarriles S.A. | | | 165,476 | | | $ | 4,942,620 | |
|
| |
| | | | | | | 11,505,383 | |
|
| |
| | |
Sweden–7.15% | | | | | | | | |
Investor AB, Class B | | | 740,977 | | | | 13,621,942 | |
|
| |
Lifco AB, Class B | | | 220,600 | | | | 4,032,726 | |
|
| |
Sandvik AB | | | 485,693 | | | | 8,263,129 | |
|
| |
Svenska Handelsbanken AB, Class A | | | 656,711 | | | | 5,590,771 | |
|
| |
| | | | | | | 31,508,568 | |
|
| |
| | |
Switzerland–4.49% | | | | | | | | |
Cie Financiere Richemont S.A. | | | 40,088 | | | | 4,733,282 | |
|
| |
Nestle S.A. | | | 139,451 | | | | 15,044,517 | |
|
| |
| | | | | | | 19,777,799 | |
|
| |
| | |
United Kingdom–22.39% | | | | | | | | |
Ashtead Group PLC | | | 135,772 | | | | 7,777,175 | |
|
| |
BAE Systems PLC | | | 381,118 | | | | 5,116,668 | |
|
| |
Clarkson PLC | | | 205,493 | | | | 6,629,250 | |
|
| |
DCC PLC | | | 213,705 | | | | 11,866,881 | |
|
| |
Diploma PLC | | | 180,389 | | | | 6,257,554 | |
|
| |
Haleon PLC | | | 2,696,234 | | | | 10,791,562 | |
|
| |
Hays PLC | | | 4,667,761 | | | | 5,475,572 | |
|
| |
IG Group Holdings PLC | | | 1,446,803 | | | | 11,223,088 | |
|
| |
Reckitt Benckiser Group PLC | | | 146,779 | | | | 9,840,006 | |
|
| |
RELX PLC | | | 396,493 | | | | 13,868,901 | |
|
| |
Savills PLC | | | 429,650 | | | | 4,112,934 | |
|
| |
Serco Group PLC | | | 3,253,974 | | | | 5,677,468 | |
|
| |
| | | | | | | 98,637,059 | |
|
| |
| | |
United States–9.25% | | | | | | | | |
CRH PLC | | | 153,899 | | | | 8,244,370 | |
|
| |
ICON PLC(a) | | | 44,968 | | | | 10,970,393 | |
|
| |
Linde PLC | | | 17,498 | | | | 6,687,036 | |
|
| |
Roche Holding AG | | | 30,486 | | | | 7,875,978 | |
|
| |
Signify N.V. | | | 268,975 | | | | 6,974,750 | |
|
| |
| | | | | | | 40,752,527 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $359,733,123) | | | | 428,126,490 | |
|
| |
| | |
Money Market Funds–2.26% | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e) | | | 3,482,381 | | | | 3,482,381 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e) | | | 2,486,121 | | | | 2,486,867 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e) | | | 3,979,864 | | | | 3,979,864 | |
|
| |
Total Money Market Funds (Cost $9,948,724) | | | | 9,949,112 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–99.43% (Cost $369,681,847) | | | | 438,075,602 | |
|
| |
OTHER ASSETS LESS LIABILITIES–0.57% | | | | 2,493,300 | |
|
| |
NET ASSETS–100.00% | | | | | | $ | 440,568,902 | |
|
| |
Investment Abbreviations:
RSP - Registered Savings Plan Shares
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco EQV European Equity Fund |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(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 October 31, 2023 was $6,418,836, which represented 1.46% of the Fund’s Net Assets. |
(c) | Security valued using significant unobservable inputs (Level 3). See Note 3. |
(d) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | Purchases at Cost | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | Realized Gain (Loss) | | Value October 31, 2023 | | Dividend Income |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | $ | 1,920,372 | | | $ | 51,829,466 | | | $ | (50,267,457) | | | $ | - | | | $ | - | | | $ | 3,482,381 | | | $ | 211,619 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 1,639,220 | | | | 37,021,048 | | | | (36,173,138) | | | | (17) | | | | (246) | | | | 2,486,867 | | | | 156,638 | |
Invesco Treasury Portfolio, Institutional Class | | | 2,194,711 | | | | 59,233,676 | | | | (57,448,523) | | | | - | | | | - | | | | 3,979,864 | | | | 241,439 | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Private Government Fund | | | 3,165,143 | | | | 47,553,531 | | | | (50,718,674) | | | | - | | | | - | | | | - | | | | 89,511* | |
Invesco Private Prime Fund | | | 8,136,806 | | | | 118,515,287 | | | | (126,648,848) | | | | (87) | | | | (3,158) | | | | - | | | | 240,095* | |
Total | | $ | 17,056,252 | | | $ | 314,153,008 | | | $ | (321,256,640) | | | $ | (104) | | | $ | (3,404) | | | $ | 9,949,112 | | | $ | 939,302 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco EQV European Equity Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $359,733,123) | | $ | 428,126,490 | |
|
| |
Investments in affiliated money market funds, at value (Cost $9,948,724) | | | 9,949,112 | |
|
| |
Foreign currencies, at value (Cost $3,237) | | | 3,208 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 1,065,768 | |
|
| |
Fund shares sold | | | 33,553 | |
|
| |
Dividends | | | 1,972,602 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 134,433 | |
|
| |
Other assets | | | 42,330 | |
|
| |
Total assets | | | 441,327,496 | |
|
| |
| |
Liabilities: | | | | |
Payable for: | | | | |
Fund shares reacquired | | | 328,513 | |
|
| |
Amount due custodian | | | 1,500 | |
|
| |
Accrued fees to affiliates | | | 221,060 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 2,154 | |
|
| |
Accrued other operating expenses | | | 58,995 | |
|
| |
Trustee deferred compensation and retirement plans | | | 146,372 | |
|
| |
Total liabilities | | | 758,594 | |
|
| |
Net assets applicable to shares outstanding | | $ | 440,568,902 | |
|
| |
| |
Net assets consist of: | | | | |
Shares of beneficial interest | | $ | 371,215,086 | |
|
| |
Distributable earnings | | | 69,353,816 | |
|
| |
| | $ | 440,568,902 | |
|
| |
| | | | |
Net Assets: | | | | |
| |
Class A | | $ | 217,328,096 | |
|
| |
Class C | | $ | 5,924,843 | |
|
| |
Class R | | $ | 3,571,142 | |
|
| |
Class Y | | $ | 127,534,253 | |
|
| |
Investor Class | | $ | 83,597,394 | |
|
| |
Class R6 | | $ | 2,613,174 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
Class A | | | 7,092,042 | |
|
| |
Class C | | | 212,138 | |
|
| |
Class R | | | 117,234 | |
|
| |
Class Y | | | 4,154,461 | |
|
| |
Investor Class | | | 2,736,015 | |
|
| |
Class R6 | | | 85,170 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 30.64 | |
|
| |
Maximum offering price per share (Net asset value of $30.64 ÷ 94.50%) | | $ | 32.42 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 27.93 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 30.46 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 30.70 | |
|
| |
Investor Class: | | | | |
Net asset value and offering price per share | | $ | 30.55 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 30.68 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco EQV European Equity Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Interest | | $ | 49,284 | |
|
| |
| |
Dividends (net of foreign withholding taxes of $1,479,743) | | | 13,465,231 | |
|
| |
| |
Dividends from affiliated money market funds (includes net securities lending income of $44,257) | | | 653,953 | |
|
| |
Foreign withholding tax claims | | | 864,256 | |
|
| |
Total investment income | | | 15,032,724 | |
|
| |
| |
Expenses: | | | | |
| |
Advisory fees | | | 4,711,353 | |
|
| |
| |
Administrative services fees | | | 77,721 | |
|
| |
| |
Custodian fees | | | 59,984 | |
|
| |
| |
Distribution fees: | | | | |
Class A | | | 597,499 | |
|
| |
Class C | | | 83,370 | |
|
| |
Class R | | | 22,946 | |
|
| |
Investor Class | | | 144,441 | |
|
| |
Transfer agent fees – A, C, R, Y and Investor | | | 804,050 | |
|
| |
Transfer agent fees – R6 | | | 919 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 21,648 | |
|
| |
Registration and filing fees | | | 95,830 | |
|
| |
Reports to shareholders | | | 73,693 | |
|
| |
Professional services fees | | | 87,461 | |
|
| |
Other | | | 28,255 | |
|
| |
Total expenses | | | 6,809,170 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (31,402 | ) |
|
| |
Net expenses | | | 6,777,768 | |
|
| |
Net investment income | | | 8,254,956 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities | | | 6,603,247 | |
|
| |
Affiliated investment securities | | | (3,404 | ) |
|
| |
Foreign currencies | | | (143,012 | ) |
|
| |
| | | 6,456,831 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities | | | 61,551,207 | |
|
| |
Affiliated investment securities | | | (104 | ) |
|
| |
Foreign currencies | | | (322,539 | ) |
|
| |
| | | 61,228,564 | |
|
| |
Net realized and unrealized gain | | | 67,685,395 | |
|
| |
Net increase in net assets resulting from operations | | $ | 75,940,351 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco EQV European Equity Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
Net investment income | | $ | 8,254,956 | | | $ | 11,740,962 | |
|
| |
Net realized gain | | | 6,456,831 | | | | 59,797,222 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | 61,228,564 | | | | (382,281,834 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 75,940,351 | | | | (310,743,650 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
Class A | | | (16,195,024 | ) | | | (30,271,914 | ) |
|
| |
Class C | | | (706,223 | ) | | | (1,645,602 | ) |
|
| |
Class R | | | (361,560 | ) | | | (595,162 | ) |
|
| |
Class Y | | | (13,444,757 | ) | | | (53,433,019 | ) |
|
| |
Investor Class | | | (6,257,365 | ) | | | (10,970,302 | ) |
|
| |
Class R6 | | | (236,728 | ) | | | (597,707 | ) |
|
| |
Total distributions from distributable earnings | | | (37,201,657 | ) | | | (97,513,706 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
Class A | | | (10,971,543 | ) | | | (11,928,341 | ) |
|
| |
Class C | | | (3,605,168 | ) | | | (4,950,092 | ) |
|
| |
Class R | | | (1,450,755 | ) | | | (70,600 | ) |
|
| |
Class Y | | | (89,026,999 | ) | | | (214,465,710 | ) |
|
| |
Investor Class | | | (2,900,719 | ) | | | 1,040,973 | |
|
| |
Class R6 | | | (639,545 | ) | | | (1,671,354 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (108,594,729 | ) | | | (232,045,124 | ) |
|
| |
Net increase (decrease) in net assets | | | (69,856,035 | ) | | | (640,302,480 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
Beginning of year | | | 510,424,937 | | | | 1,150,727,417 | |
|
| |
End of year | | $ | 440,568,902 | | | $ | 510,424,937 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco EQV European Equity Fund |
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 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $28.86 | | | | $0.49 | (d) | | | $ 3.53 | | | | $ 4.02 | | | | $(0.01 | ) | | | $(2.23 | ) | | | $(2.24 | ) | | | $30.64 | | | | 14.18 | % | | | $217,328 | | | | 1.42 | % | | | 1.42 | % | | | 1.52 | %(d) | | | 17 | % |
Year ended 10/31/22 | | | 45.47 | | | | 0.46 | | | | (13.20 | ) | | | (12.74 | ) | | | (1.04 | ) | | | (2.83 | ) | | | (3.87 | ) | | | 28.86 | | | | (30.38 | ) | | | 213,529 | | | | 1.37 | | | | 1.37 | | | | 1.32 | | | | 24 | |
Year ended 10/31/21 | | | 33.73 | | | | 0.44 | | | | 11.81 | | | | 12.25 | | | | (0.51 | ) | | | – | | | | (0.51 | ) | | | 45.47 | | | | 36.58 | | | | 359,154 | | | | 1.35 | | | | 1.35 | | | | 1.02 | | | | 18 | |
Year ended 10/31/20 | | | 38.76 | | | | 0.30 | | | | (4.31 | ) | | | (4.01 | ) | | | (1.02 | ) | | | – | | | | (1.02 | ) | | | 33.73 | | | | (10.74 | ) | | | 287,960 | | | | 1.36 | | | | 1.37 | | | | 0.84 | | | | 27 | |
Year ended 10/31/19 | | | 35.55 | | | | 0.74 | | | | 2.94 | | | | 3.68 | | | | (0.47 | ) | | | – | | | | (0.47 | ) | | | 38.76 | | | | 10.57 | | | | 386,369 | | | | 1.35 | | | | 1.36 | | | | 2.02 | | | | 10 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 26.66 | | | | 0.23 | (d) | | | 3.27 | | | | 3.50 | | | | – | | | | (2.23 | ) | | | (2.23 | ) | | | 27.93 | | | | 13.33 | | | | 5,925 | | | | 2.17 | | | | 2.17 | | | | 0.77 | (d) | | | 17 | |
Year ended 10/31/22 | | | 42.22 | | | | 0.18 | | | | (12.24 | ) | | | (12.06 | ) | | | (0.67 | ) | | | (2.83 | ) | | | (3.50 | ) | | | 26.66 | | | | (30.89 | ) | | | 8,844 | | | | 2.12 | | | | 2.12 | | | | 0.57 | | | | 24 | |
Year ended 10/31/21 | | | 31.31 | | | | 0.11 | | | | 11.00 | | | | 11.11 | | | | (0.20 | ) | | | — | | | | (0.20 | ) | | | 42.22 | | | | 35.56 | | | | 20,596 | | | | 2.10 | | | | 2.10 | | | | 0.27 | | | | 18 | |
Year ended 10/31/20 | | | 35.97 | | | | 0.03 | | | | (4.04 | ) | | | (4.01 | ) | | | (0.65 | ) | | | — | | | | (0.65 | ) | | | 31.31 | | | | (11.43 | ) | | | 22,166 | | | | 2.11 | | | | 2.12 | | | | 0.09 | | | | 27 | |
Year ended 10/31/19 | | | 32.94 | | | | 0.43 | | | | 2.75 | | | | 3.18 | | | | (0.15 | ) | | | — | | | | (0.15 | ) | | | 35.97 | | | | 9.72 | | | | 38,236 | | | | 2.10 | | | | 2.11 | | | | 1.27 | | | | 10 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 28.76 | | | | 0.41 | (d) | | | 3.52 | | | | 3.93 | | | | – | | | | (2.23 | ) | | | (2.23 | ) | | | 30.46 | | | | 13.89 | | | | 3,571 | | | | 1.67 | | | | 1.67 | | | | 1.27 | (d) | | | 17 | |
Year ended 10/31/22 | | | 45.29 | | | | 0.37 | | | | (13.15 | ) | | | (12.78 | ) | | | (0.92 | ) | | | (2.83 | ) | | | (3.75 | ) | | | 28.76 | | | | (30.53 | ) | | | 4,661 | | | | 1.62 | | | | 1.62 | | | | 1.07 | | | | 24 | |
Year ended 10/31/21 | | | 33.59 | | | | 0.33 | | | | 11.78 | | | | 12.11 | | | | (0.41 | ) | | | – | | | | (0.41 | ) | | | 45.29 | | | | 36.25 | | | | 7,420 | | | | 1.60 | | | | 1.60 | | | | 0.77 | | | | 18 | |
Year ended 10/31/20 | | | 38.59 | | | | 0.21 | | | | (4.32 | ) | | | (4.11 | ) | | | (0.89 | ) | | | – | | | | (0.89 | ) | | | 33.59 | | | | (10.98 | ) | | | 6,092 | | | | 1.61 | | | | 1.62 | | | | 0.59 | | | | 27 | |
Year ended 10/31/19 | | | 35.38 | | | | 0.64 | | | | 2.93 | | | | 3.57 | | | | (0.36 | ) | | | – | | | | (0.36 | ) | | | 38.59 | | | | 10.26 | | | | 7,803 | | | | 1.60 | | | | 1.61 | | | | 1.77 | | | | 10 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 28.93 | | | | 0.58 | (d) | | | 3.53 | | | | 4.11 | | | | (0.11 | ) | | | (2.23 | ) | | | (2.34 | ) | | | 30.70 | | | | 14.47 | | | | 127,534 | | | | 1.17 | | | | 1.17 | | | | 1.77 | (d) | | | 17 | |
Year ended 10/31/22 | | | 45.58 | | | | 0.56 | | | | (13.23 | ) | | | (12.67 | ) | | | (1.15 | ) | | | (2.83 | ) | | | (3.98 | ) | | | 28.93 | | | | (30.21 | ) | | | 199,354 | | | | 1.12 | | | | 1.12 | | | | 1.57 | | | | 24 | |
Year ended 10/31/21 | | | 33.81 | | | | 0.54 | | | | 11.84 | | | | 12.38 | | | | (0.61 | ) | | | – | | | | (0.61 | ) | | | 45.58 | | | | 36.93 | | | | 628,317 | | | | 1.10 | | | | 1.10 | | | | 1.27 | | | | 18 | |
Year ended 10/31/20 | | | 38.85 | | | | 0.39 | | | | (4.31 | ) | | | (3.92 | ) | | | (1.12 | ) | | | – | | | | (1.12 | ) | | | 33.81 | | | | (10.51 | ) | | | 524,899 | | | | 1.11 | | | | 1.12 | | | | 1.09 | | | | 27 | |
Year ended 10/31/19 | | | 35.67 | | | | 0.83 | | | | 2.93 | | | | 3.76 | | | | (0.58 | ) | | | – | | | | (0.58 | ) | | | 38.85 | | | | 10.81 | | | | 700,808 | | | | 1.10 | | | | 1.11 | | | | 2.27 | | | | 10 | |
Investor Class | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 28.78 | | | | 0.52 | (d) | | | 3.52 | | | | 4.04 | | | | (0.04 | ) | | | (2.23 | ) | | | (2.27 | ) | | | 30.55 | | | | 14.29 | (e) | | | 83,597 | | | | 1.33 | (e) | | | 1.33 | (e) | | | 1.61 | (d)(e) | | | 17 | |
Year ended 10/31/22 | | | 45.37 | | | | 0.48 | | | | (13.16 | ) | | | (12.68 | ) | | | (1.08 | ) | | | (2.83 | ) | | | (3.91 | ) | | | 28.78 | | | | (30.33 | )(e) | | | 80,989 | | | | 1.30 | (e) | | | 1.30 | (e) | | | 1.39 | (e) | | | 24 | |
Year ended 10/31/21 | | | 33.65 | | | | 0.48 | | | | 11.79 | | | | 12.27 | | | | (0.55 | ) | | | – | | | | (0.55 | ) | | | 45.37 | | | | 36.73 | (e) | | | 128,214 | | | | 1.24 | (e) | | | 1.24 | (e) | | | 1.13 | (e) | | | 18 | |
Year ended 10/31/20 | | | 38.67 | | | | 0.33 | | | | (4.31 | ) | | | (3.98 | ) | | | (1.04 | ) | | | – | | | | (1.04 | ) | | | 33.65 | | | | (10.68 | )(e) | | | 103,954 | | | | 1.27 | (e) | | | 1.28 | (e) | | | 0.93 | (e) | | | 27 | |
Year ended 10/31/19 | | | 35.48 | | | | 0.76 | | | | 2.93 | | | | 3.69 | | | | (0.50 | ) | | | – | | | | (0.50 | ) | | | 38.67 | | | | 10.61 | (e) | | | 133,149 | | | | 1.29 | (e) | | | 1.30 | (e) | | | 2.08 | (e) | | | 10 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 28.93 | | | | 0.62 | (d) | | | 3.53 | | | | 4.15 | | | | (0.17 | ) | | | (2.23 | ) | | | (2.40 | ) | | | 30.68 | | | | 14.63 | | | | 2,613 | | | | 1.04 | | | | 1.04 | | | | 1.90 | (d) | | | 17 | |
Year ended 10/31/22 | | | 45.58 | | | | 0.60 | | | | (13.22 | ) | | | (12.62 | ) | | | (1.20 | ) | | | (2.83 | ) | | | (4.03 | ) | | | 28.93 | | | | (30.11 | ) | | | 3,048 | | | | 1.00 | | | | 1.00 | | | | 1.69 | | | | 24 | |
Year ended 10/31/21 | | | 33.81 | | | | 0.59 | | | | 11.84 | | | | 12.43 | | | | (0.66 | ) | | | – | | | | (0.66 | ) | | | 45.58 | | | | 37.08 | | | | 7,026 | | | | 0.98 | | | | 0.98 | | | | 1.39 | | | | 18 | |
Year ended 10/31/20 | | | 38.86 | | | | 0.43 | | | | (4.32 | ) | | | (3.89 | ) | | | (1.16 | ) | | | – | | | | (1.16 | ) | | | 33.81 | | | | (10.43 | ) | | | 8,477 | | | | 0.99 | | | | 1.00 | | | | 1.21 | | | | 27 | |
Year ended 10/31/19 | | | 35.68 | | | | 0.87 | | | | 2.94 | | | | 3.81 | | | | (0.63 | ) | | | – | | | | (0.63 | ) | | | 38.86 | | | | 10.96 | | | | 8,613 | | | | 0.98 | | | | 0.99 | | | | 2.39 | | | | 10 | |
(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) | Net investment income per share and the ratio of net investment income to average net assets include significant dividends received during the year ended October 31, 2023. Net investment income per share and the ratio of net investment income to average net assets excluding the significant dividends are $0.29 and 0.91%, $0.03 and 0.16%, $0.21 and 0.66%, $0.38 and 1.16%, $0.32 and 1.00%, $0.42 and 1.29% for Class A, Class C, Class R, Class Y, Investor Class and Class R6 shares, respectively. |
(e) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.16%, 0.18%, 0.14%, 0.16% and 0.19% for the years ended October 31, 2023, 2022, 2021, 2020 and 2019, respectively. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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13 | | Invesco EQV European Equity Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco EQV European Equity Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each 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, Investor Class and Class R6. Class Y and Investor Class shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. Under certain circumstances, load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Investor Class and Class R6 shares are sold at net asset value. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.
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14 | | Invesco EQV European Equity Fund |
Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund did not enter into any closing agreements.
G. | Expenses – Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R6 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
H. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
J. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower |
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15 | | Invesco EQV European Equity Fund |
or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, fees paid to the Adviser were less than $500. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.
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 the date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
L. | Forward Foreign Currency Contracts – The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical exchange of the two currencies on the settlement date, 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).
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 for hedging does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M. | Other Risks – Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information. |
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.92%.
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. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the
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16 | | Invesco EQV European Equity Fund |
Adviser, not the Fund, will 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 July 1, 2023, the Adviser has agreed, for an indefinite period, 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, Investor Class and Class R6 shares to 2.25%, 3.00%, 2.50%, 2.00%, 2.25% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $13,610.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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, Investor Class 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, Class R, 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 C shares and 0.50% of the average daily net assets of Class R shares. The Fund, pursuant to the Investor Class Plan, reimburses IDI for its allocated share of expenses incurred pursuant to the Investor Class Plan for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Investor Class shares. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $16,915 in front-end sales commissions from the sale of Class A shares and $14 and $535 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
For the year ended October 31, 2023, the Fund incurred $118 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. 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 Adviser’s 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 October 31, 2023. 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.
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17 | | Invesco EQV European Equity Fund |
| | | | | | | | | | | | | | | | |
| | Level 1 | | | Level 2 | | | Level 3 | | Total | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | |
|
| |
China | | $ | – | | | $ | 7,718,385 | | | $ | – | | | $ | 7,718,385 | |
|
| |
Denmark | | | – | | | | 21,971,754 | | | | – | | | | 21,971,754 | |
|
| |
France | | | – | | | | 79,627,788 | | | | – | | | | 79,627,788 | |
|
| |
Germany | | | – | | | | 16,255,250 | | | | – | | | | 16,255,250 | |
|
| |
Hungary | | | – | | | | 14,131,947 | | | | – | | | | 14,131,947 | |
|
| |
Ireland | | | – | | | | 11,238,295 | | | | – | | | | 11,238,295 | |
|
| |
Italy | | | – | | | | 25,544,921 | | | | – | | | | 25,544,921 | |
|
| |
Netherlands | | | – | | | | 49,456,803 | | | | – | | | | 49,456,803 | |
|
| |
Russia | | | – | | | | – | | | | 11 | | | | 11 | |
|
| |
Spain | | | – | | | | 11,505,383 | | | | – | | | | 11,505,383 | |
|
| |
Sweden | | | – | | | | 31,508,568 | | | | – | | | | 31,508,568 | |
|
| |
Switzerland | | | – | | | | 19,777,799 | | | | – | | | | 19,777,799 | |
|
| |
United Kingdom | | | – | | | | 98,637,059 | | | | – | | | | 98,637,059 | |
|
| |
United States | | | 25,901,799 | | | | 14,850,728 | | | | – | | | | 40,752,527 | |
|
| |
Money Market Funds | | | 9,949,112 | | | | – | | | | – | | | | 9,949,112 | |
|
| |
Total Investments | | $ | 35,850,911 | | | $ | 402,224,680 | | | $ | 11 | | | $ | 438,075,602 | |
|
| |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $17,792.
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 SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | | | |
| | 2023 | | | | | | 2022 | |
|
| |
Ordinary income* | | $ | 848,629 | | | | | | | $ | 27,301,453 | |
|
| |
Long-term capital gain | | | 36,353,028 | | | | | | | | 70,212,253 | |
|
| |
Total distributions | | $ | 37,201,657 | | | | | | | $ | 97,513,706 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 7,600,214 | |
|
| |
Undistributed long-term capital gain | | | 5,253,690 | |
|
| |
Net unrealized appreciation – investments | | | 57,195,046 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (583,984 | ) |
|
| |
Temporary book/tax differences | | | (111,150 | ) |
|
| |
Shares of beneficial interest | | | 371,215,086 | |
|
| |
Total net assets | | $ | 440,568,902 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to passive foreign investment companies.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
| | |
18 | | Invesco EQV European Equity 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. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund does not have a capital loss carryforward as of October 31, 2023.
NOTE 8–Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $83,445,265 and $222,706,442, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $ 96,879,819 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (39,684,773 | ) |
|
| |
Net unrealized appreciation of investments | | | $ 57,195,046 | |
|
| |
Cost of investments for tax purposes is $380,880,556.
NOTE 9–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of passive foreign investment companies and foreign currency transactions, on October 31, 2023, undistributed net investment income was increased by $839,045 and undistributed net realized gain was decreased by $839,045. This reclassification had no effect on the net assets or the distributable earnings of the Fund.
NOTE 10–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 317,637 | | | $ | 10,393,858 | | | | 337,999 | | | $ | 12,427,640 | |
|
| |
Class C | | | 18,611 | | | | 538,789 | | | | 17,552 | | | | 584,593 | |
|
| |
Class R | | | 20,703 | | | | 669,724 | | | | 22,213 | | | | 744,958 | |
|
| |
Class Y | | | 480,177 | | | | 15,275,384 | | | | 1,152,186 | | | | 41,667,586 | |
|
| |
Investor Class | | | 19,267 | | | | 612,252 | | | | 23,957 | | | | 863,836 | |
|
| |
Class R6 | | | 110,414 | | | | 3,709,892 | | | | 31,176 | | | | 1,109,207 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | 486,919 | | | | 14,442,006 | | | | 671,928 | | | | 26,816,647 | |
|
| |
Class C | | | 23,740 | | | | 645,962 | | | | 37,200 | | | | 1,380,497 | |
|
| |
Class R | | | 12,180 | | | | 359,923 | | | | 14,784 | | | | 589,150 | |
|
| |
Class Y | | | 334,307 | | | | 9,912,191 | | | | 928,843 | | | | 37,079,406 | |
|
| |
Investor Class | | | 188,928 | | | | 5,582,808 | | | | 243,268 | | | | 9,677,197 | |
|
| |
Class R6 | | | 7,449 | | | | 220,487 | | | | 13,696 | | | | 546,053 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 81,421 | | | | 2,630,214 | | | | 92,954 | | | | 3,291,723 | |
|
| |
Class C | | | (89,004 | ) | | | (2,630,214 | ) | | | (100,193 | ) | | | (3,291,723 | ) |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (1,192,638 | ) | | | (38,437,621 | ) | | | (1,603,594 | ) | | | (54,464,351 | ) |
|
| |
Class C | | | (72,974 | ) | | | (2,159,705 | ) | | | (110,590 | ) | | | (3,623,459 | ) |
|
| |
Class R | | | (77,723 | ) | | | (2,480,402 | ) | | | (38,749 | ) | | | (1,404,708 | ) |
|
| |
Class Y | | | (3,551,916 | ) | | | (114,214,574 | ) | | | (8,975,208 | ) | | | (293,212,702 | ) |
|
| |
Investor Class | | | (286,065 | ) | | | (9,095,779 | ) | | | (279,180 | ) | | | (9,500,060 | ) |
|
| |
Class R6 | | | (138,071 | ) | | | (4,569,924 | ) | | | (93,647 | ) | | | (3,326,614 | ) |
|
| |
Net increase (decrease) in share activity | | | (3,306,638 | ) | | $ | (108,594,729 | ) | | | (7,613,405 | ) | | $ | (232,045,124 | ) |
|
| |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 32% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| | |
19 | | Invesco EQV European Equity Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco EQV European Equity Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco EQV European Equity Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the five years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
| | |
20 | | Invesco EQV European 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 May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $901.70 | | $6.85 | | $1,018.00 | | $7.27 | | 1.43% |
Class C | | 1,000.00 | | 898.40 | | 10.43 | | 1,014.22 | | 11.07 | | 2.18 |
Class R | | 1,000.00 | | 900.70 | | 8.05 | | 1,016.74 | | 8.54 | | 1.68 |
Class Y | | 1,000.00 | | 902.70 | | 5.66 | | 1,019.26 | | 6.01 | | 1.18 |
Investor Class | | 1,000.00 | | 902.00 | | 6.42 | | 1,018.45 | | 6.82 | | 1.34 |
Class R6 | | 1,000.00 | | 903.70 | | 5.04 | | 1,019.91 | | 5.35 | | 1.05 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
21 | | Invesco EQV European Equity Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco EQV European Equity Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior
Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a
description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI Europe Index (Index). The Board noted that performance of Class A shares of the Fund was in the fourth quintile of its performance universe for the one year period and the fifth quintile for the three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was below
| | |
22 | | Invesco EQV European Equity Fund |
the performance of the Index for the one, three and five year periods. The Board considered that stock selection in and exposure to certain sectors as well as its exposure to Russian stocks detracted from Fund performance. The Board noted that the Fund’s underperformance relative to its peers was also attributable to its lower market cap profile and growth tilt. The Board also considered that the Fund changed its benchmark in 2022. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was above the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group.
The Board also considered comparative information regarding the Fund’s total expense ratio and its various components. The Board noted that the Fund’s total expense ratio was in the fifth quintile of its expense group and discussed with management reasons for such relative total expenses. As previously noted, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management, including with respect to the Fund’s total expenses relative to peers and how the Fund’s expense group does not differentiate by capitalization weightings. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer, and subsequently with representatives of management.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space,
technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The
Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related
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23 | | Invesco EQV European Equity Fund |
responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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24 | | Invesco EQV European Equity Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | | | | | |
Federal and State Income Tax | | | | | | | | | |
Long-Term Capital Gain Distributions | | $ | 36,353,028 | | | | | | | | | |
Qualified Dividend Income* | | | 100.00% | | | | | | | | | |
Corporate Dividends Received Deduction* | | | 22.87% | | | | | | | | | |
U.S. Treasury Obligations* | | | 0.00% | | | | | | | | | |
Qualified Business Income* | | | 0.00% | | | | | | | | | |
Business Interest Income* | | | 0.00% | | | | | | | | | |
Foreign Taxes | | $ | 0.0257 | | | | per share | | | | | |
Foreign Source Income | | $ | 1.2571 | | | | per share | | | | | |
|
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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25 | | Invesco EQV European Equity Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
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T-1 | | Invesco EQV European Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler - 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Board Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management - Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T-2 | | Invesco EQV European Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver - Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort - 1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco EQV European Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco EQV European Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco EQV European Equity Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
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Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
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Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
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T-6 | | Invesco EQV European Equity Fund |
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Go paperless with eDelivery
Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
With eDelivery, you can elect to have any or all of the following materials delivered straight to your inbox to download, save and print from your own computer:
∎ Fund reports and prospectuses
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∎ Tax forms
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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | EGR-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco Global Focus Fund
Nasdaq:
A: GLVAX ∎ C: GLVCX ∎ R: GLVNX ∎ Y: GLVYX ∎ R5: GFFDX ∎ R6: GLVIX
Management’s Discussion of Fund Performance
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Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco Global Focus Fund (the Fund), at net asset value (NAV), outperformed the MSCI All Country World Growth Index. | |
Your Fund’s long-term performance appears later in this report. | |
|
Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, 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 | | | 23.68 | % |
Class C Shares | | | 22.75 | |
Class R Shares | | | 23.38 | |
Class Y Shares | | | 23.95 | |
Class R5 Shares | | | 24.15 | |
Class R6 Shares | | | 24.13 | |
MSCI All Country World Index▼ | | | 10.50 | |
MSCI All Country World Growth Index▼ | | | 17.07 | |
| |
Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within
emerging markets, China’s equities were weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
The Fund’s Class A shares (without sales charge) produced a total return of 23.68% during the fiscal year ended October 31, 2023, outperforming the MSCI All Country World Growth Index (the “Index”) which returned 17.07%. The Fund outperformed the Index most in the communication services, industrials and consumer discretionary sectors, primarily due to stock selection within each, though the Fund’s overweight to communication services also contributed to the Fund’s relative performance. The Fund underperformed the Index in the information technology sector, due to both an underweight allocation and stock selection within the sector, and in health care, where the Fund’s substantial overweight was the primary detractor.
The three most significant contributors to the Fund’s performance for the reporting period were Meta Platforms, Hermes International and Novo Nordisk.
Meta Platforms is the social media company that owns the Facebook, Instagram, and WhatsApp platforms. The stock had been under pressure in the previous fiscal year, as capital expenditures on building the metaverse had been a headwind. Historically, Meta has allocated capital quite effectively. The company has taken out significant costs over the last fiscal year and has returned to growth, which has bolstered the bottom line and garnered it an expanded price/earnings
multiple, all contributing to its substantial outperformance in the most recent fiscal year. It remains the largest holding in the Fund.
Hermes International, the French-based luxury goods producer, is at the apex of the market in terms of price and brand, in our opinion. Hermes has built a reservoir of demand by creating scarcity, limiting their volume while raising pricing, year after year. We continue to view Hermes’ prospects favorably.
Novo Nordisk is a Danish pharmaceutical company focused on diabetes care, including its pre-eminent GLP-1 drug franchise. Driven by Ozempic, the largest global GLP-1 drug for diabetes, Novo Nordisk maintains a significant market share in treating this chronic condition. Additionally, Novo Nordisk is addressing an emerging opportunity in obesity care with its new drug, called Wegovy. Obesity-related sales are growing more than 100% and we believe are expected to become an increasingly large contributor to growth in the years to come. Both diabetes and obesity are chronic conditions, and the number of people impacted is sadly on the rise across much of the world, which provides a structural tailwind to this company’s economic profile. We believe Wegovy could end up being one of the top selling drugs in history and Novo Nordisk remains a top holding in the Fund as of the end of the fiscal year.
The three major negative contributors to the Fund’s relative performance for the reporting period were Illumina, Adyen NV and CrowdStrike Holdings.
Illumina is a unique company. They have an installed base globally of 70% of the worlds DNA sequencing systems, which is a position of considerable privilege they have earned via technology and scale. However, we believe the company has had challenges with respect to management and governance that have resulted in poor capital allocation decisions and underwhelming free cash flow production. The IP remains robust, and a new generation sequencing platform is rolling out which we believe should sustain their competitive advantage. The capital allocation decisions have attracted activist Carl Icahn, who, via a proxy fight, has won a board seat. The CEO resigned in June 2023, and a new CEO took over on September 25th. In our view, what is needed here is a clear plan to improve execution and profitability. We believe the potential in this name remains sizable, but given its troubles we have reduced its portfolio weight.
Adyen NV issued a weak earnings announcement in August of 2023 and the shares plunged sharply. The issue appears to be stiffening competition in North America, which is not a minor issue. We have trimmed the position.
CrowdStrike Holdings’ share price has derated significantly over the last two fiscal years even as its growth has continued. Network security is a mission critical item for nearly
| | |
2 | | Invesco Global Focus Fund |
any business and CrowdStrike has, we believe, the leading technology platform.
There is now a noteworthy cost of capital given for companies, due to normalizing interest rates, and we expect that the burdens of it will most hit the beneficiaries of the zero interest rate environment that prevailed in the years after the Great Financial Crisis of 2008-2009. As debt needs to be refinanced in the future at materially higher rates, this dynamic will likely become more apparent. Strong companies with healthy balance sheets are well positioned to get stronger in the periods ahead, in our view.
We believe the portfolio is well positioned for this cost of capital world. The next few years, we believe, will be all about companies executing well against their respective opportunities and we are quite comfortable with our positioning for that.
Thank you for your continued investment in the Invesco Global Focus Fund.
Portfolio manager(s):
John Delano
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
| | |
3 | | Invesco Global Focus Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g415384dsp4.jpg)
1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
| | |
4 | | Invesco Global Focus Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (10/1/07) | | | 5.56 | % |
10 Years | | | 4.89 | |
5 Years | | | 6.37 | |
1 Year | | | 16.86 | |
| |
Class C Shares | | | | |
Inception (10/1/07) | | | 5.59 | % |
10 Years | | | 4.85 | |
5 Years | | | 6.77 | |
1 Year | | | 21.75 | |
| |
Class R Shares | | | | |
Inception (10/1/07) | | | 5.73 | % |
10 Years | | | 5.22 | |
5 Years | | | 7.32 | |
1 Year | | | 23.38 | |
| |
Class Y Shares | | | | |
Inception (10/1/07) | | | 6.29 | % |
10 Years | | | 5.74 | |
5 Years | | | 7.84 | |
1 Year | | | 23.95 | |
| |
Class R5 Shares | | | | |
10 Years | | | 5.65 | % |
5 Years | | | 7.93 | |
1 Year | | | 24.15 | |
| |
Class R6 Shares | | | | |
Inception (8/28/12) | | | 9.14 | % |
10 Years | | | 5.91 | |
5 Years | | | 8.00 | |
1 Year | | | 24.13 | |
Effective May 24, 2019, Class A, Class C, Class R, Class Y, and Class I shares of the Oppenheimer Global Focus Fund (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer Global Focus Fund. The Fund was subsequently renamed the Invesco Global Focus Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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.
| | |
5 | | Invesco Global Focus Fund |
Supplemental Information
Invesco Global Focus Fund’s investment objective is to seek capital appreciation.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World Index is an unmanaged index considered representative of large- and mid-cap stocks across developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The MSCI All Country World Growth Index is an unmanaged index considered representative of large- and mid-cap growth stocks of developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
| | |
6 | | Invesco Global Focus Fund |
Fund Information
Portfolio Composition
| | |
By sector | | % of total net assets |
| |
Communication Services | | 23.51% |
| |
Consumer Discretionary | | 23.23 |
| |
Health Care | | 21.45 |
| |
Information Technology | | 16.04 |
| |
Financials | | 9.79 |
| |
Industrials | | 3.59 |
| |
Materials | | 0.70 |
| |
Money Market Funds Plus Other Assets Less Liabilities | | 1.69 |
Top 10 Equity Holdings*
| | | | |
| | | | % of total net assets |
| | |
1. | | Meta Platforms, Inc., Class A | | 12.02% |
| | |
2. | | Amazon.com, Inc. | | 7.39 |
| | |
3. | | Alphabet, Inc., Class A | | 6.94 |
| | |
4. | | Hermes International S.C.A. | | 6.24 |
| | |
5. | | Novo Nordisk A/S, Class B | | 5.20 |
| | |
6. | | Mastercard, Inc., Class A | | 4.86 |
| | |
7. | | Tencent Holdings Ltd. | | 4.05 |
| | |
8. | | Uber Technologies, Inc. | | 3.60 |
| | |
9. | | Thermo Fisher Scientific, Inc. | | 3.53 |
| | |
10. | | ServiceNow, Inc. | | 3.39 |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
| | |
7 | | Invesco Global Focus Fund |
Schedule of Investments(a)
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–98.31% | |
Apparel, Accessories & Luxury Goods–7.12% | |
Hermes International S.C.A. (France) | | | 15,942 | | | $ | 29,896,298 | |
|
| |
Moncler S.p.A. (Italy) | | | 80,686 | | | | 4,196,866 | |
|
| |
| | | | 34,093,164 | |
|
| |
|
Application Software–6.00% | |
Nice Ltd., ADR (Israel)(b) | | | 76,373 | | | | 11,788,172 | |
|
| |
Salesforce, Inc.(b) | | | 76,546 | | | | 15,372,733 | |
|
| |
Splunk, Inc.(b) | | | 10,748 | | | | 1,581,676 | |
|
| |
| | | | 28,742,581 | |
|
| |
|
Biotechnology–1.61% | |
BeiGene Ltd., ADR (China)(b) | | | 41,418 | | | | 7,715,345 | |
|
| |
|
Broadline Retail–10.69% | |
Alibaba Group Holding Ltd., ADR | |
(China)(b) | | | 174,996 | | | | 14,444,170 | |
|
| |
Amazon.com, Inc.(b) | | | 266,037 | | | | 35,406,865 | |
|
| |
JD.com, Inc., ADR (China) | | | 52,946 | | | | 1,345,887 | |
|
| |
| | | | 51,196,922 | |
|
| |
|
Financial Exchanges & Data–1.69% | |
S&P Global, Inc. | | | 23,245 | | | | 8,119,711 | |
|
| |
|
Health Care Equipment–8.08% | |
Boston Scientific Corp.(b) | | | 33,135 | | | | 1,696,181 | |
|
| |
Edwards Lifesciences Corp.(b) | | | 148,109 | | | | 9,437,505 | |
|
| |
IDEXX Laboratories, Inc.(b) | | | 31,384 | | | | 12,536,966 | |
|
| |
Stryker Corp. | | | 55,589 | | | | 15,021,260 | |
|
| |
| | | | 38,691,912 | |
|
| |
|
Hotels, Resorts & Cruise Lines–4.86% | |
Airbnb, Inc., Class A(b) | | | 72,409 | | | | 8,565,261 | |
|
| |
Amadeus IT Group S.A. (Spain) | | | 257,379 | | | | 14,704,600 | |
|
| |
| | | | 23,269,861 | |
|
| |
|
Interactive Media & Services–23.01% | |
Alphabet, Inc., Class A(b) | | | 267,904 | | | | 33,241,528 | |
|
| |
Meta Platforms, Inc., Class A(b) | | | 191,178 | | | | 57,596,195 | |
|
| |
Tencent Holdings Ltd. (China) | | | 523,700 | | | | 19,400,382 | |
|
| |
| | | | 110,238,105 | |
|
| |
|
Life Sciences Tools & Services–6.56% | |
Illumina, Inc.(b) | | | 62,901 | | | | 6,882,627 | |
|
| |
Lonza Group AG (Switzerland) | | | 21,726 | | | | 7,618,526 | |
|
| |
Thermo Fisher Scientific, Inc. | | | 38,032 | | | | 16,915,493 | |
|
| |
| | | | 31,416,646 | |
|
| |
|
Movies & Entertainment–0.50% | |
Netflix, Inc.(b) | | | 5,796 | | | | 2,386,155 | |
|
| |
Investment Abbreviations:
ADR - American Depositary Receipt
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Passenger Ground Transportation–3.59% | |
Uber Technologies, Inc.(b) | | | 397,776 | | | $ | 17,215,745 | |
|
| |
|
Pharmaceuticals–5.20% | |
Novo Nordisk A/S, Class B (Denmark) | | | 258,160 | | | | 24,895,742 | |
|
| |
|
Restaurants–0.56% | |
Meituan, B Shares (China)(b)(c) | | | 189,620 | | | | 2,693,889 | |
|
| |
| |
Semiconductor Materials & Equipment–2.45% | | | | | |
ASML Holding N.V. (Netherlands) | | | 19,551 | | | | 11,761,090 | |
|
| |
| | |
Semiconductors–1.51% | | | | | | | | |
Infineon Technologies AG (Germany) | | | 56,798 | | | | 1,650,342 | |
|
| |
Marvell Technology, Inc. | | | 70,553 | | | | 3,331,513 | |
|
| |
NXP Semiconductors N.V. (China) | | | 13,010 | | | | 2,243,314 | |
|
| |
| | | | | | | 7,225,169 | |
|
| |
| | |
Specialty Chemicals–0.70% | | | | | | | | |
Symrise AG (Germany) | | | 32,928 | | | | 3,351,803 | |
|
| |
| | |
Systems Software–6.08% | | | | | | | | |
CrowdStrike Holdings, Inc., Class A(b) | | | 59,314 | | | | 10,484,936 | |
|
| |
Microsoft Corp. | | | 7,138 | | | | 2,413,429 | |
|
| |
ServiceNow, Inc.(b) | | | 27,913 | | | | 16,241,179 | |
|
| |
| | | | | | | 29,139,544 | |
|
| |
|
Transaction & Payment Processing Services–8.10% | |
Adyen N.V. (Netherlands)(b)(c) | | | 6,866 | | | | 4,641,428 | |
|
| |
Mastercard, Inc., Class A | | | 61,828 | | | | 23,268,968 | |
|
| |
Visa, Inc., Class A | | | 46,301 | | | | 10,885,365 | |
|
| |
| | | | | | | 38,795,761 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $335,324,184) | | | | 470,949,145 | |
|
| |
| | |
Money Market Funds–0.63% | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e) | | | 1,046,863 | | | | 1,046,863 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e) | | | 747,608 | | | | 747,833 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e) | | | 1,196,415 | | | | 1,196,415 | |
|
| |
Total Money Market Funds (Cost $2,990,960) | | | | 2,991,111 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES-98.94% (Cost $338,315,144) | | | | 473,940,256 | |
|
| |
OTHER ASSETS LESS LIABILITIES-1.06% | | | | 5,098,425 | |
|
| |
NET ASSETS-100.00% | | | $ | 479,038,681 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco Global Focus Fund |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
(b) | Non-income producing security. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “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 October 31, 2023 was $7,335,317, which represented 1.53% of the Fund’s Net Assets. |
(d) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation | | | Realized Gain (Loss) | | | Value October 31, 2023 | | | Dividend Income |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | | $- | | | | $31,425,907 | | | | $(30,379,044) | | | | $ - | | | | $ - | | | | $1,046,863 | | | | $151,150 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | - | | | | 22,447,076 | | | | (21,699,347) | | | | 151 | | | | (47) | | | | 747,833 | | | | 110,473 | |
Invesco Treasury Portfolio, Institutional Class | | | - | | | | 35,915,322 | | | | (34,718,907) | | | | - | | | | - | | | | 1,196,415 | | | | 172,399 | |
Total | | | $- | | | | $89,788,305 | | | | $(86,797,298) | | | | $151 | | | | $(47) | | | | $2,991,111 | | | | $434,022 | |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco Global Focus Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $335,324,184) | | $ | 470,949,145 | |
|
| |
Investments in affiliated money market funds, at value (Cost $2,990,960) | | | 2,991,111 | |
|
| |
Cash | | | 100,000 | |
|
| |
Foreign currencies, at value (Cost $854) | | | 848 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 5,148,791 | |
|
| |
Fund shares sold | | | 147,395 | |
|
| |
Dividends | | | 372,026 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 26,630 | |
|
| |
Other assets | | | 54,518 | |
|
| |
Total assets | | | 479,790,464 | |
|
| |
| |
Liabilities: | | | | |
| |
Payable for: | | | | |
Fund shares reacquired | | | 442,161 | |
|
| |
Accrued fees to affiliates | | | 230,256 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 96 | |
|
| |
Accrued other operating expenses | | | 52,640 | |
|
| |
Trustee deferred compensation and retirement plans | | | 26,630 | |
|
| |
Total liabilities | | | 751,783 | |
|
| |
Net assets applicable to shares outstanding | | $ | 479,038,681 | |
|
| |
| |
Net assets consist of: | | | | |
| |
Shares of beneficial interest | | $ | 373,678,096 | |
|
| |
Distributable earnings | | | 105,360,585 | |
|
| |
| | $ | 479,038,681 | |
|
| |
| | | | |
Net Assets: | | | | |
| |
Class A | | $ | 247,964,730 | |
|
| |
Class C | | $ | 23,897,800 | |
|
| |
Class R | | $ | 26,757,246 | |
|
| |
Class Y | | $ | 149,616,407 | |
|
| |
Class R5 | | $ | 8,401 | |
|
| |
Class R6 | | $ | 30,794,097 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
| |
Class A | | | 4,444,859 | |
|
| |
Class C | | | 486,755 | |
|
| |
Class R | | | 500,978 | |
|
| |
Class Y | | | 2,583,568 | |
|
| |
Class R5 | | | 148 | |
|
| |
Class R6 | | | 520,943 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 55.79 | |
|
| |
Maximum offering price per share (Net asset value of $55.79 ÷ 94.50%) | | $ | 59.04 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 49.10 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 53.41 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 57.91 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 56.76 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 59.11 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco Global Focus Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Dividends (net of foreign withholding taxes of $171,328) | | $ | 1,697,035 | |
|
| |
Dividends from affiliated money market funds | | | 434,022 | |
|
| |
Total investment income | | | 2,131,057 | |
|
| |
| |
Expenses: | | | | |
| |
Advisory fees | | | 4,005,058 | |
|
| |
Administrative services fees | | | 72,974 | |
|
| |
Custodian fees | | | 64,162 | |
|
| |
Distribution fees: | | | | |
Class A | | | 620,429 | |
|
| |
Class C | | | 261,085 | |
|
| |
Class R | | | 135,541 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 785,973 | |
|
| |
Transfer agent fees – R5 | | | 1 | |
|
| |
Transfer agent fees – R6 | | | 9,531 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 19,632 | |
|
| |
Registration and filing fees | | | 104,038 | |
|
| |
Reports to shareholders | | | 79,956 | |
|
| |
Professional services fees | | | 49,239 | |
|
| |
Other | | | 23,231 | |
|
| |
Total expenses | | | 6,230,850 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (26,923 | ) |
|
| |
Net expenses | | | 6,203,927 | |
|
| |
Net investment income (loss) | | | (4,072,870 | ) |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
| |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities | | | (2,395,918 | ) |
|
| |
Affiliated investment securities | | | (47 | ) |
|
| |
Foreign currencies | | | (5,729 | ) |
|
| |
Forward foreign currency contracts | | | 5,630 | |
|
| |
| | | (2,396,064 | ) |
|
| |
Change in net unrealized appreciation of: | | | | |
Unaffiliated investment securities | | | 108,127,133 | |
|
| |
Affiliated investment securities | | | 151 | |
|
| |
Foreign currencies | | | 39,734 | |
|
| |
| | | 108,167,018 | |
|
| |
Net realized and unrealized gain | | | 105,770,954 | |
|
| |
Net increase in net assets resulting from operations | | $ | 101,698,084 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco Global Focus Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
| | |
Net investment income (loss) | | $ | (4,072,870 | ) | | $ | (5,389,132 | ) |
|
| |
Net realized gain (loss) | | | (2,396,064 | ) | | | (21,329,756 | ) |
|
| |
Change in net unrealized appreciation (depreciation) | | | 108,167,018 | | | | (412,218,804 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 101,698,084 | | | | (438,937,692 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
| | |
Class A | | | – | | | | (14,955,683 | ) |
|
| |
Class C | | | – | | | | (2,706,384 | ) |
|
| |
Class R | | | – | | | | (1,493,565 | ) |
|
| |
Class Y | | | – | | | | (15,895,479 | ) |
|
| |
Class R5 | | | – | | | | (462 | ) |
|
| |
Class R6 | | | – | | | | (1,926,473 | ) |
|
| |
Total distributions from distributable earnings | | | – | | | | (36,978,046 | ) |
|
| |
| | |
Share transactions-net: | | | | | | | | |
| | |
Class A | | | (5,772,182 | ) | | | (11,792,696 | ) |
|
| |
Class C | | | (4,092,133 | ) | | | (19,164,475 | ) |
|
| |
Class R | | | 409,007 | | | | 1,281,449 | |
|
| |
Class Y | | | (62,448,633 | ) | | | (74,121,872 | ) |
|
| |
Class R5 | | | (169 | ) | | | 5 | |
|
| |
Class R6 | | | (2,477,874 | ) | | | (2,148,288 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (74,381,984 | ) | | | (105,945,877 | ) |
|
| |
Net increase (decrease) in net assets | | | 27,316,100 | | | | (581,861,615 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
| | |
Beginning of year | | | 451,722,581 | | | | 1,033,584,196 | |
|
| |
End of year | | $ | 479,038,681 | | | $ | 451,722,581 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco Global Focus Fund |
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(c) | | Ratio of net investment income (loss) to average net assets | | Portfolio turnover (d) |
Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $45.11 | | | | $(0.48 | ) | | | $ 11.16 | | | | $ 10.68 | | | | $ – | | | | $55.79 | | | | 23.68 | % | | | $247,965 | | | | 1.28 | % | | | 1.28 | % | | | (0.86 | )% | | | 9 | % |
Year ended 10/31/22 | | | 85.76 | | | | (0.51 | )(e) | | | (37.02 | ) | | | (37.53 | ) | | | (3.12 | ) | | | 45.11 | | | | (45.25 | ) | | | 206,115 | | | | 1.23 | | | | 1.23 | | | | (0.85 | )(e) | | | 25 | |
Year ended 10/31/21 | | | 72.26 | | | | (0.84 | ) | | | 17.88 | | | | 17.04 | | | | (3.54 | ) | | | 85.76 | | | | 24.30 | (f) | | | 414,186 | | | | 1.18 | (f) | | | 1.18 | (f) | | | (1.03 | )(f) | | | 24 | |
Year ended 10/31/20 | | | 52.99 | | | | (0.51 | ) | | | 25.00 | | | | 24.49 | | | | (5.22 | ) | | | 72.26 | | | | 50.31 | (f) | | | 273,684 | | | | 1.26 | (f) | | | 1.26 | (f) | | | (0.84 | )(f) | | | 43 | |
Six months ended 10/31/19 | | | 54.20 | | | | (0.16 | ) | | | (1.05 | ) | | | (1.21 | ) | | | – | | | | 52.99 | | | | (2.23 | ) | | | 145,332 | | | | 1.27 | (g) | | | 1.31 | (g) | | | (0.60 | )(g) | | | 20 | |
Year ended 04/30/19 | | | 51.71 | | | | (0.13 | ) | | | 4.48 | | | | 4.35 | | | | (1.86 | ) | | | 54.20 | | | | 9.11 | | | | 155,251 | | | | 1.25 | | | | 1.25 | | | | (0.26 | ) | | | 46 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 40.00 | | | | (0.80 | ) | | | 9.90 | | | | 9.10 | | | | – | | | | 49.10 | | | | 22.75 | | | | 23,898 | | | | 2.03 | | | | 2.03 | | | | (1.61 | ) | | | 9 | |
Year ended 10/31/22 | | | 77.00 | | | | (0.89 | )(e) | | | (32.99 | ) | | | (33.88 | ) | | | (3.12 | ) | | | 40.00 | | | | (45.66 | ) | | | 22,964 | | | | 1.98 | | | | 1.98 | | | | (1.60 | )(e) | | | 25 | |
Year ended 10/31/21 | | | 65.69 | | | | (1.31 | ) | | | 16.16 | | | | 14.85 | | | | (3.54 | ) | | | 77.00 | | | | 23.36 | | | | 70,996 | | | | 1.94 | | | | 1.94 | | | | (1.79 | ) | | | 24 | |
Year ended 10/31/20 | | | 48.95 | | | | (0.88 | ) | | | 22.84 | | | | 21.96 | | | | (5.22 | ) | | | 65.69 | | | | 49.20 | | | | 73,587 | | | | 2.01 | | | | 2.02 | | | | (1.59 | ) | | | 43 | |
Six months ended 10/31/19 | | | 50.26 | | | | (0.33 | ) | | | (0.98 | ) | | | (1.31 | ) | | | – | | | | 48.95 | | | | (2.60 | ) | | | 43,574 | | | | 2.01 | (g) | | | 2.07 | (g) | | | (1.34 | )(g) | | | 20 | |
Year ended 04/30/19 | | | 48.45 | | | | (0.49 | ) | | | 4.16 | | | | 3.67 | | | | (1.86 | ) | | | 50.26 | | | | 8.28 | | | | 55,891 | | | | 2.01 | | | | 2.01 | | | | (1.02 | ) | | | 46 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 43.29 | | | | (0.60 | ) | | | 10.72 | | | | 10.12 | | | | – | | | | 53.41 | | | | 23.38 | | | | 26,757 | | | | 1.53 | | | | 1.53 | | | | (1.11 | ) | | | 9 | |
Year ended 10/31/22 | | | 82.63 | | | | (0.64 | )(e) | | | (35.58 | ) | | | (36.22 | ) | | | (3.12 | ) | | | 43.29 | | | | (45.38 | ) | | | 21,519 | | | | 1.48 | | | | 1.48 | | | | (1.10 | )(e) | | | 25 | |
Year ended 10/31/21 | | | 69.91 | | | | (1.02 | ) | | | 17.28 | | | | 16.26 | | | | (3.54 | ) | | | 82.63 | | | | 23.99 | | | | 39,611 | | | | 1.44 | | | | 1.44 | | | | (1.29 | ) | | | 24 | |
Year ended 10/31/20 | | | 51.54 | | | | (0.65 | ) | | | 24.24 | | | | 23.59 | | | | (5.22 | ) | | | 69.91 | | | | 49.95 | | | | 22,854 | | | | 1.52 | | | | 1.52 | | | | (1.10 | ) | | | 43 | |
Six months ended 10/31/19 | | | 52.79 | | | | (0.22 | ) | | | (1.03 | ) | | | (1.25 | ) | | | – | | | | 51.54 | | | | (2.37 | ) | | | 9,692 | | | | 1.52 | (g) | | | 1.57 | (g) | | | (0.85 | )(g) | | | 20 | |
Year ended 04/30/19 | | | 50.53 | | | | (0.26 | ) | | | 4.38 | | | | 4.12 | | | | (1.86 | ) | | | 52.79 | | | | 8.84 | | | | 9,895 | | | | 1.51 | | | | 1.51 | | | | (0.52 | ) | | | 46 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 46.71 | | | | (0.35 | ) | | | 11.55 | | | | 11.20 | | | | – | | | | 57.91 | | | | 23.98 | | | | 149,616 | | | | 1.03 | | | | 1.03 | | | | (0.61 | ) | | | 9 | |
Year ended 10/31/22 | | | 88.48 | | | | (0.38 | )(e) | | | (38.27 | ) | | | (38.65 | ) | | | (3.12 | ) | | | 46.71 | | | | (45.11 | ) | | | 174,208 | | | | 0.98 | | | | 0.98 | | | | (0.60 | )(e) | | | 25 | |
Year ended 10/31/21 | | | 74.28 | | | | (0.66 | ) | | | 18.40 | | | | 17.74 | | | | (3.54 | ) | | | 88.48 | | | | 24.60 | | | | 453,276 | | | | 0.94 | | | | 0.94 | | | | (0.79 | ) | | | 24 | |
Year ended 10/31/20 | | | 54.21 | | | | (0.38 | ) | | | 25.67 | | | | 25.29 | | | | (5.22 | ) | | | 74.28 | | | | 50.68 | | | | 304,779 | | | | 1.02 | | | | 1.02 | | | | (0.60 | ) | | | 43 | |
Six months ended 10/31/19 | | | 55.39 | | | | (0.10 | ) | | | (1.08 | ) | | | (1.18 | ) | | | – | | | | 54.21 | | | | (2.13 | ) | | | 138,470 | | | | 1.02 | (g) | | | 1.07 | (g) | | | (0.36 | )(g) | | | 20 | |
Year ended 04/30/19 | | | 52.67 | | | | (0.01 | ) | | | 4.59 | | | | 4.58 | | | | (1.86 | ) | | | 55.39 | | | | 9.36 | | | | 301,919 | | | | 1.02 | | | | 1.02 | | | | (0.03 | ) | | | 46 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 45.71 | | | | (0.27 | ) | | | 11.32 | | | | 11.05 | | | | – | | | | 56.76 | | | | 24.17 | | | | 8 | | | | 0.88 | | | | 0.88 | | | | (0.46 | ) | | | 9 | |
Year ended 10/31/22 | | | 86.56 | | | | (0.29 | )(e) | | | (37.44 | ) | | | (37.73 | ) | | | (3.12 | ) | | | 45.71 | | | | (45.05 | ) | | | 7 | | | | 0.85 | | | | 0.85 | | | | (0.47 | )(e) | | | 25 | |
Year ended 10/31/21 | | | 72.67 | | | | (0.56 | ) | | | 17.99 | | | | 17.43 | | | | (3.54 | ) | | | 86.56 | | | | 24.72 | | | | 13 | | | | 0.84 | | | | 0.84 | | | | (0.69 | ) | | | 24 | |
Year ended 10/31/20 | | | 53.08 | | | | (0.28 | ) | | | 25.09 | | | | 24.81 | | | | (5.22 | ) | | | 72.67 | | | | 50.88 | | | | 14 | | | | 0.89 | | | | 0.89 | | | | (0.47 | ) | | | 43 | |
Period ended 10/31/19(h) | | | 51.06 | | | | (0.05 | ) | | | 2.07 | | | | 2.02 | | | | – | | | | 53.08 | | | | 3.96 | | | | 10 | | | | 0.90 | (g) | | | 0.92 | (g) | | | (0.23 | )(g) | | | 20 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 47.62 | | | | (0.28 | ) | | | 11.77 | | | | 11.49 | | | | – | | | | 59.11 | | | | 24.13 | | | | 30,794 | | | | 0.90 | | | | 0.90 | | | | (0.48 | ) | | | 9 | |
Year ended 10/31/22 | | | 90.02 | | | | (0.30 | )(e) | | | (38.98 | ) | | | (39.28 | ) | | | (3.12 | ) | | | 47.62 | | | | (45.04 | ) | | | 26,910 | | | | 0.85 | | | | 0.85 | | | | (0.47 | )(e) | | | 25 | |
Year ended 10/31/21 | | | 75.43 | | | | (0.58 | ) | | | 18.71 | | | | 18.13 | | | | (3.54 | ) | | | 90.02 | | | | 24.74 | | | | 55,502 | | | | 0.84 | | | | 0.84 | | | | (0.69 | ) | | | 24 | |
Year ended 10/31/20 | | | 54.89 | | | | (0.26 | ) | | | 26.02 | | | | 25.76 | | | | (5.22 | ) | | | 75.43 | | | | 50.94 | | | | 33,645 | | | | 0.85 | | | | 0.89 | | | | (0.43 | ) | | | 43 | |
Six months ended 10/31/19 | | | 56.03 | | | | (0.05 | ) | | | (1.09 | ) | | | (1.14 | ) | | | – | | | | 54.89 | | | | (2.03 | ) | | | 113,768 | | | | 0.85 | (g) | | | 0.87 | (g) | | | (0.18 | )(g) | | | 20 | |
Year ended 04/30/19 | | | 53.16 | | | | 0.08 | | | | 4.65 | | | | 4.73 | | | | (1.86 | ) | | | 56.03 | | | | 9.56 | | | | 131,074 | | | | 0.85 | | | | 0.85 | | | | 0.15 | | | | 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) | Does not include indirect expenses from affiliated fund fees and expenses of 0.00% for the six months ended October 31, 2019 and the years ended April 30, 2019, respectively. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Net investment income per share and the ratio of net investment income to average net assets include significant dividends received during the year ended October 31, 2022. Net investment income per share and the ratio of net investment income to average net assets excluding the significant dividends are $(0.60) and (1.00)%, $(0.98) and (1.75)%, $(0.73) and (1.25)%, $(0.47) and (0.75)%, $(0.38) and (0.62)%, $(0.39) and (0.62)% for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(f) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.24% for the years ended October 31, 2021 and 2020, respectively. |
(h) | Commencement date after the close of business on May 24, 2019. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
13 | | Invesco Global Focus Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco Global Focus Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is to seek 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
| | |
14 | | Invesco Global Focus 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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 based on relative net assets of Class R5 and Class R6. 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 the 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 exchange of the two currencies on the settlement date, 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).
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 for hedging 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,
| | |
15 | | Invesco Global Focus Fund |
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 – Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information. |
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 | | | 0.800% | |
|
| |
Next $500 million | | | 0.750% | |
|
| |
Over $1 billion | | | 0.720% | |
|
| |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.78%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.
Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 2.25%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $9,630.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the annual rate of 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $71,354 in front-end sales commissions from the sale of Class A shares and $9,194 and $889 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.
| | |
16 | | Invesco Global Focus 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. 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 Adviser’s 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 October 31, 2023. 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 | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | |
|
| |
Common Stocks & Other Equity Interests | | | $346,138,179 | | | | $124,810,966 | | | | $– | | | | $470,949,145 | |
|
| |
Money Market Funds | | | 2,991,111 | | | | – | | | | – | | | | 2,991,111 | |
|
| |
Total Investments | | | $349,129,290 | | | | $124,810,966 | | | | $– | | | | $473,940,256 | |
|
| |
NOTE 4–Derivative Investments
The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
Effect of Derivative Investments for the year ended October 31, 2023
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| | | | |
| | Location of Gain on Statement of Operations |
| |
| | Currency Risk |
Realized Gain: | | | | |
Forward foreign currency contracts | | | $5,630 | |
The table below summarizes the average notional value of derivatives held during the period.
| | | | |
| | Forward Foreign Currency Contracts |
Average notional value | | | $1,339,479 | |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $17,293.
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 SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
| | |
17 | | Invesco Global Focus Fund |
NOTE 8–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | |
| | 2023 | | | | | 2022 | |
|
| |
Ordinary income* | | $– | | | | | | $ | 7,550,181 | |
|
| |
Long-term capital gain | | – | | | | | | | 29,427,865 | |
|
| |
Total distributions | | $– | | | | | | $ | 36,978,046 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Net unrealized appreciation – investments | | $ | 127,807,746 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (12,548 | ) |
|
| |
Temporary book/tax differences | | | (23,693 | ) |
|
| |
Late-Year ordinary loss deferral | | | (1,948,205 | ) |
|
| |
Capital loss carryforward | | | (20,462,715 | ) |
|
| |
Shares of beneficial interest | | | 373,678,096 | |
|
| |
Total net assets | | $ | 479,038,681 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales and distributions.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund has a capital loss carryforward as of October 31, 2023, as follows:
| | | | | | |
Capital Loss Carryforward* |
Expiration | | Short-Term | | Long-Term | | Total |
|
|
Not subject to expiration | | $20,462,715 | | $– | | $20,462,715 |
|
|
* | Capital loss carryforward 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 Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $45,472,138 and $131,167,553, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $169,742,348 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (41,934,602 | ) |
|
| |
Net unrealized appreciation of investments | | | $127,807,746 | |
|
| |
Cost of investments for tax purposes is $346,132,510.
NOTE 10–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of net operating losses and distributions, on October 31, 2023, undistributed net investment income (loss) was increased by $5,756,936, undistributed net realized gain (loss) was decreased by $1,292,813 and shares of beneficial interest was decreased by $4,464,123. This reclassification had no effect on the net assets of the Fund.
NOTE 11–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 806,727 | | | $ | 45,748,421 | | | | 599,231 | | | $ | 37,546,596 | |
|
| |
Class C | | | 127,854 | | | | 6,432,559 | | | | 90,052 | | | | 5,167,312 | |
|
| |
Class R | | | 168,145 | | | | 9,284,202 | | | | 116,370 | | | | 7,005,595 | |
|
| |
Class Y | | | 508,635 | | | | 30,494,201 | | | | 1,281,119 | | | | 81,643,797 | |
|
| |
Class R5 | | | 65 | | | | 4,000 | | | | - | | | | - | |
|
| |
Class R6 | | | 148,722 | | | | 8,976,878 | | | | 220,246 | | | | 14,286,678 | |
|
| |
| | |
18 | | Invesco Global Focus Fund |
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | - | | | $ | - | | | | 187,077 | | | $ | 14,217,809 | |
|
| |
Class C | | | - | | | | - | | | | 37,118 | | | | 2,518,470 | |
|
| |
Class R | | | - | | | | - | | | | 20,415 | | | | 1,492,133 | |
|
| |
Class Y | | | - | | | | - | | | | 156,123 | | | | 12,261,933 | |
|
| |
Class R5 | | | - | | | | - | | | | - | | | | 5 | |
|
| |
Class R6 | | | - | | | | - | | | | 23,043 | | | | 1,842,783 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 78,120 | | | | 4,306,659 | | | | 178,917 | | | | 10,908,341 | |
|
| |
Class C | | | (88,419 | ) | | | (4,306,659 | ) | | | (200,823 | ) | | | (10,908,341 | ) |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (1,009,360 | ) | | | (55,827,262 | ) | | | (1,225,186 | ) | | | (74,465,442 | ) |
|
| |
Class C | | | (126,821 | ) | | | (6,218,033 | ) | | | (274,234 | ) | | | (15,941,916 | ) |
|
| |
Class R | | | (164,278 | ) | | | (8,875,195 | ) | | | (119,047 | ) | | | (7,216,279 | ) |
|
| |
Class Y | | | (1,654,558 | ) | | | (92,942,834 | ) | | | (2,830,430 | ) | | | (168,027,602 | ) |
|
| |
Class R5 | | | (65 | ) | | | (4,169 | ) | | | - | | | | - | |
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Class R6 | | | (192,915 | ) | | | (11,454,752 | ) | | | (294,696 | ) | | | (18,277,749 | ) |
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Net increase (decrease) in share activity | | | (1,398,148 | ) | | $ | (74,381,984 | ) | | | (2,034,705 | ) | | $ | (105,945,877 | ) |
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(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. |
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19 | | Invesco Global Focus Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco Global Focus Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco Global Focus Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
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Fund Name |
Financial Highlights |
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For each of the four years in the period ended October 31, 2023 and the six months ended October 31, 2019 for Class A, Class C, Class R, Class Y and Class R6. |
For each of the four years in the period ended October 31, 2023 and the period May 24, 2019 (commencement of operations) through October 31, 2019 for Class R5. |
The financial statements of Oppenheimer Global Focus Fund (subsequently renamed Invesco Global Focus Fund) as of and for the year ended April 30, 2019 and the financial highlights for the year then ended (not presented herein, other than the financial highlights) were audited by other auditors whose report dated June 25, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
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20 | | Invesco Global Focus 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 May 1, 2023 through October 31, 2023.
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.
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| | | | ACTUAL | | HYPOTHETICAL (5% annual return before expenses) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $956.00 | | $6.21 | | $1,018.85 | | $6.41 | | 1.26% |
Class C | | 1,000.00 | | 952.30 | | 9.89 | | 1,015.07 | | 10.21 | | 2.01 |
Class R | | 1,000.00 | | 954.80 | | 7.44 | | 1,017.59 | | 7.68 | | 1.51 |
Class Y | | 1,000.00 | | 957.00 | | 4.98 | | 1,020.11 | | 5.14 | | 1.01 |
Class R5 | | 1,000.00 | | 957.80 | | 4.29 | | 1,020.82 | | 4.43 | | 0.87 |
Class R6 | | 1,000.00 | | 957.60 | | 4.34 | | 1,020.77 | | 4.48 | | 0.88 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
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21 | | Invesco Global Focus Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Global Focus Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an
independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to
attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country World Growth Index (Index). The Board noted that performance of Class A shares of the Fund was in the fifth quintile of its performance universe for the one and three year periods and the fourth quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The
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22 | | Invesco Global Focus Fund |
Board noted that performance of Class A shares of the Fund was below the performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board considered that the Fund’s stock selection in certain sectors detracted from the Fund’s performance, and that the strength of growth and momentum factors for the Fund’s peers detracted from the Fund’s longer-term performance. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees
payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund may benefit from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including
information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent,
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23 | | Invesco Global Focus Fund |
including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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24 | | Invesco Global Focus Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year–end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
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Federal and State Income Tax | | | | | | |
Qualified Dividend Income* | | | 0.00 | % | | | | |
Corporate Dividends Received Deduction* | | | 0.00 | % | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | |
Qualified Business Income* | | | 0.00 | % | | | | |
Business Interest Income* | | | 0.00 | % | | | | |
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* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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25 | | Invesco Global Focus Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
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T-1 | | Invesco Global Focus Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler - 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management – Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
| | |
T-2 | | Invesco Global Focus Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver – Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort - 1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
| | |
T-3 | | Invesco Global Focus Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
| | |
T-4 | | Invesco Global Focus Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.;Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
| | |
T-5 | | Invesco Global Focus Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
| | | | | | |
Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
| | |
T-6 | | Invesco Global Focus Fund |
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Go paperless with eDelivery
Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
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∎ Fund reports and prospectuses
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | O-GLF-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco Global Fund
Nasdaq:
A: OPPAX ∎ C: OGLCX ∎ R: OGLNX ∎ Y: OGLYX ∎ R5: GFDDX ∎ R6: OGLIX
Management’s Discussion of Fund Performance
| | | | |
|
Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco Global Fund (the Fund), at net asset value (NAV), outperformed the MSCI All Country World Growth Index. | |
Your Fund’s long-term performance appears later in this report. | |
| |
Fund vs. Indexes | | | | |
Total returns, 10/31/22 to 10/31/23, 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 | | | 20.56 | % |
Class C Shares | | | 19.65 | |
Class R Shares | | | 20.24 | |
Class Y Shares | | | 20.82 | |
Class R5 Shares | | | 20.94 | |
Class R6 Shares | | | 20.96 | |
MSCI All Country World Index▼ | | | 10.50 | |
MSCI All Country World Growth Index▼ | | | 17.07 | |
| |
Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within
emerging markets, China’s equities were weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
The Fund outperformed the MSCI All Country World Growth Index in nine of 11 Global Industry Classification Standard sectors. Stock selection in the communication services and real estate sectors, as well as an underweight allocation to the consumer staples sector, added most to relative performance. Stock selection in the information technology and consumer discretionary sectors detracted from relative Fund performance during the fiscal year.
On a geographic basis, stock selection in the United States, Denmark and India contributed most to relative performance. Stock selection in China, Israel and Japan detracted most from relative Fund performance during the fiscal year.
The top three individual contributors to Fund performance during the fiscal year were Meta Platforms, Alphabet and Novo Nordisk. Meta Platforms has bounced back after having a difficult year in 2022, with the stock price up 169% over the last 12 months. The company has maintained its strong network effect advantage, with its user base growing across all applications. Engagement remains resilient and further monetization improvements have been seen in recent quarters. Advertisers are increasingly confident with Meta’s AI-powered ad capabilities, while Reels monetization remains strong. Meta has also done a great job with overall cost cutting and improvement in efficiencies. Alphabet is one
of the best positioned companies across today’s major waves of innovation. This year, the company has been firing on all cylinders: advertising demand has stabilized, Search and YouTube growth have been accelerating, Cloud growth remains resilient and the company’s focus on efficiency has been bearing fruit. Novo Nordisk is the world’s leading provider of diabetes care products and insulin. With its solid portfolio of GLP-1 products, such as Ozempic and Rybelsus, the company is in good standing to defend its formidable diabetes market share. Although strong growth in such products has been a key driver in sales this year, the focus has really been on obesity. In 2022, Novo introduced Wegovy, a drug for weight loss that allowed patients to lose as much as 20% of their weight in clinical trials. Demand has been remarkable, and Novo has been boosting its capacity to keep up its supply. This market is still in its infancy and has tremendous growth potential, with few players able to benefit from it.
The top three individual detractors from Fund performance were JD.com, Illumina and NICE. JD.com is a major player in Chinese e-commerce, offering a wide selection of authentic products at competitive prices, with fast and reliable delivery. The shares have trended lower over the course of the year, as the Chinese COVID-19 lockdowns weighed on economic growth and the subsequent recovery was underwhelming. Like many other Chinese stocks, its results in the first half of 2023, as well as its outlook were quite muted. Illumina is the leading provider of genomic sequencing tools. Their equipment and intellectual property are foundational to medical diagnostics and research everywhere in the world. The company has faced a difficult macroenvironment in life sciences, especially in China, over the past year. In addition, they have been working through some internal challenges, such as management changes and the divestiture of Grail. NICE provides cloud and on-premises software solutions that primarily serve the customer engagement market. The company’s software records a wide array of communications to ensure quality, alert to burgeoning problems and to assist with compliance monitoring. The share price has been down due to the threat of AI to their business, especially in regard to call centers. However, we believe their AI capabilities and their recent acquisition of LiveVox, will improve their business and drive growth.
The Fund’s holdings are selected for the sustainability of their purpose and the sensibility of their price. If we have this combination well calibrated, we believe our portfolio should be able to weather most transient issues well and create meaningful economic value for our clients.
We thank you for your continued investment in Invesco Global Fund.
Portfolio manager(s):
John Delano
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
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1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
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Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (12/22/69) | | | 10.67 | % |
10 Years | | | 6.34 | |
5 Years | | | 5.62 | |
1 Year | | | 13.92 | |
| |
Class C Shares | | | | |
Inception (10/2/95) | | | 8.67 | % |
10 Years | | | 6.29 | |
5 Years | | | 6.00 | |
1 Year | | | 18.65 | |
| |
Class R Shares | | | | |
Inception (3/1/01) | | | 6.34 | % |
10 Years | | | 6.66 | |
5 Years | | | 6.53 | |
1 Year | | | 20.24 | |
| |
Class Y Shares | | | | |
Inception (11/17/98) | | | 8.61 | % |
10 Years | | | 7.19 | |
5 Years | | | 7.07 | |
1 Year | | | 20.82 | |
| |
Class R5 Shares | | | | |
10 Years | | | 7.11 | % |
5 Years | | | 7.15 | |
1 Year | | | 20.94 | |
| |
Class R6 Shares | | | | |
Inception (1/27/12) | | | 9.30 | % |
10 Years | | | 7.36 | |
5 Years | | | 7.21 | |
1 Year | | | 20.96 | |
Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer Global Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer Global Fund. Note: The Fund was subsequently renamed the Invesco Global Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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.
Supplemental Information
Invesco Global Fund’s investment objective is to seek capital appreciation.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World Index is an unmanaged index considered representative of large- and mid-cap stocks across developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for nonresident investors. |
∎ | The MSCI All Country World Growth Index is an unmanaged index considered representative of large- and mid-cap growth stocks of developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
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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 Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Information Technology | | | | 29.16 | % |
| |
Communication Services | | | | 20.60 | |
| |
Consumer Discretionary | | | | 13.19 | |
| |
Industrials | | | | 11.84 | |
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Health Care | | | | 11.04 | |
| |
Financials | | | | 8.90 | |
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Real Estate | | | | 4.85 | |
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Other Sectors, Each Less than 2% of Net Assets | | | | 0.51 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | | (0.09 | ) |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Alphabet, Inc., Class A | | | | 11.82 | % |
| | |
2. | | Meta Platforms, Inc., Class A | | | | 7.16 | |
| | |
3. | | DLF Ltd. | | | | 4.85 | |
| | |
4. | | Airbus SE | | | | 4.66 | |
| | |
5. | | Novo Nordisk A/S, Class B | | | | 4.57 | |
| | |
6. | | Analog Devices, Inc. | | | | 4.50 | |
| | |
7. | | LVMH Moet Hennessy Louis Vuitton SE | | | | 4.48 | |
| | |
8. | | Adobe, Inc. | | | | 4.42 | |
| | |
9. | | Intuit, Inc. | | | | 4.41 | |
| | |
10. | | S&P Global, Inc. | | | | 4.00 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–100.09% | |
Argentina–0.37% | |
Reservas de Maternidad - Swiss Medical(a)(b) | | | 11,660,215,622 | | | $ | 28,521,445 | |
|
| |
|
Canada–0.62% | |
Canadian Pacific Kansas City Ltd. | | | 684,960 | | | | 48,611,611 | |
|
| |
|
China–3.39% | |
JD.com, Inc., ADR | | | 6,561,057 | | | | 166,782,069 | |
|
| |
Meituan, B Shares(c)(d) | | | 3,310,610 | | | | 47,033,097 | |
|
| |
Tencent Holdings Ltd. | | | 1,174,200 | | | | 43,498,048 | |
|
| |
Yum China Holdings, Inc. | | | 135,010 | | | | 7,096,126 | |
|
| |
| | | | | | | 264,409,340 | |
|
| |
|
Denmark–4.57% | |
Novo Nordisk A/S, Class B | | | 3,694,510 | | | | 356,281,257 | |
|
| |
|
France–12.13% | |
Airbus SE | | | 2,718,288 | | | | 363,592,774 | |
|
| |
Dassault Systemes SE | | | 897,636 | | | | 37,024,506 | |
|
| |
EssilorLuxottica S.A. | | | 354,298 | | | | 64,076,002 | |
|
| |
Kering S.A. | | | 300,665 | | | | 121,601,388 | |
|
| |
LVMH Moet Hennessy Louis Vuitton SE | | | 487,919 | | | | 349,187,869 | |
|
| |
Pernod Ricard S.A. | | | 63,269 | | | | 11,249,184 | |
|
| |
| | | | | | | 946,731,723 | |
|
| |
|
Germany–3.02% | |
Allianz SE | | | 181,212 | | | | 42,355,046 | |
|
| |
SAP SE | | | 1,444,177 | | | | 193,519,478 | |
|
| |
| | | | | | | 235,874,524 | |
|
| |
|
India–6.80% | |
DLF Ltd. | | | 55,904,636 | | | | 378,641,614 | |
|
| |
HDFC Bank Ltd. | | | 2,184,688 | | | | 38,785,168 | |
|
| |
ICICI Bank Ltd., ADR | | | 5,080,176 | | | | 112,729,106 | |
|
| |
| | | | | | | 530,155,888 | |
|
| |
|
Israel–0.86% | |
Nice Ltd., ADR(d) | | | 435,994 | | | | 67,295,674 | |
|
| |
|
Italy–0.96% | |
Brunello Cucinelli S.p.A. | | | 778,303 | | | | 62,411,346 | |
|
| |
Ferrari N.V. | | | 40,365 | | | | 12,217,838 | |
|
| |
| | | | | | | 74,629,184 | |
|
| |
|
Japan–5.33% | |
Hoya Corp. | | | 347,800 | | | | 33,457,152 | |
|
| |
Keyence Corp. | | | 557,212 | | | | 215,697,852 | |
|
| |
Murata Manufacturing Co. Ltd. | | | 4,548,236 | | | | 75,505,224 | |
|
| |
TDK Corp. | | | 2,436,700 | | | | 91,498,099 | |
|
| |
| | | | | | | 416,158,327 | |
|
| |
|
Netherlands–1.53% | |
ASML Holding N.V. | | | 163,582 | | | | 98,404,305 | |
|
| |
Universal Music Group N.V. | | | 847,366 | | | | 20,661,815 | |
|
| |
| | | | | | | 119,066,120 | |
|
| |
|
Spain–1.27% | |
Amadeus IT Group S.A. | | | 1,739,772 | | | | 99,396,812 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Sweden–4.33% | |
Assa Abloy AB, Class B | | | 6,275,847 | | | $ | 133,744,774 | |
|
| |
Atlas Copco AB, Class A | | | 15,804,470 | | | | 204,475,962 | |
|
| |
| | | | | | | 338,220,736 | |
|
| |
|
Switzerland–0.59% | |
Lonza Group AG | | | 130,855 | | | | 45,886,134 | |
|
| |
|
United States–54.32% | |
Adobe, Inc.(d) | | | 648,665 | | | | 345,128,700 | |
|
| |
Alphabet, Inc., Class A(d) | | | 7,428,373 | | | | 921,712,522 | |
|
| |
Amazon.com, Inc.(d) | | | 738,722 | | | | 98,316,511 | |
|
| |
Analog Devices, Inc. | | | 2,230,915 | | | | 350,989,857 | |
|
| |
Avantor, Inc.(d) | | | 1,453,212 | | | | 25,329,485 | |
|
| |
Boston Scientific Corp.(d) | | | 559,155 | | | | 28,623,144 | |
|
| |
Charles River Laboratories International, Inc.(d) | | | 136,695 | | | | 23,013,970 | |
|
| |
Charter Communications, Inc., Class A(d) | | | 115,184 | | | | 46,396,115 | |
|
| |
Danaher Corp. | | | 177,811 | | | | 34,143,268 | |
|
| |
Ecolab, Inc. | | | 170,952 | | | | 28,675,488 | |
|
| |
Edwards Lifesciences Corp.(d) | | | 283,194 | | | | 18,045,122 | |
|
| |
Equifax, Inc. | | | 586,591 | | | | 99,468,236 | |
|
| |
IDEXX Laboratories, Inc.(d) | | | 72,513 | | | | 28,966,768 | |
|
| |
Illumina, Inc.(d) | | | 299,947 | | | | 32,820,201 | |
|
| |
Intuit, Inc. | | | 694,397 | | | | 343,691,795 | |
|
| |
Intuitive Surgical, Inc.(d) | | | 264,648 | | | | 69,395,999 | |
|
| |
IQVIA Holdings, Inc.(d) | | | 405,156 | | | | 73,264,360 | |
|
| |
Lam Research Corp. | | | 28,165 | | | | 16,567,216 | |
|
| |
Marriott International, Inc., Class A | | | 342,790 | | | | 64,636,482 | |
|
| |
Marvell Technology, Inc. | | | 2,433,197 | | | | 114,895,562 | |
|
| |
Meta Platforms, Inc., Class A(d) | | | 1,854,559 | | | | 558,722,990 | |
|
| |
Microsoft Corp. | | | 492,444 | | | | 166,500,241 | |
|
| |
Netflix, Inc.(d) | | | 37,942 | | | | 15,620,342 | |
|
| |
NVIDIA Corp. | | | 256,825 | | | | 104,733,235 | |
|
| |
Phathom Pharmaceuticals, Inc.(d)(e) | | | 1,745,374 | | | | 16,231,978 | |
|
| |
S&P Global, Inc. | | | 894,134 | | | | 312,329,948 | |
|
| |
Splunk, Inc.(d) | | | 378,856 | | | | 55,752,449 | |
|
| |
Thermo Fisher Scientific, Inc. | | | 23,896 | | | | 10,628,224 | |
|
| |
United Parcel Service, Inc., Class B | | | 293,574 | | | | 41,467,328 | |
|
| |
Veralto Corp.(d) | | | 59,270 | | | | 4,089,630 | |
|
| |
Visa, Inc., Class A | | | 799,314 | | | | 187,918,721 | |
|
| |
| | | | | | | 4,238,075,887 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $3,505,745,429) | | | | 7,809,314,662 | |
|
| |
|
Money Market Funds–0.01% | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(a)(f) | | | 227,675 | | | | 227,675 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(a)(f) | | | 162,588 | | | | 162,637 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Money Market Funds–(continued) | |
Invesco Treasury Portfolio, Institutional Class, 5.27%(a)(f) | | | 260,200 | | | $ | 260,200 | |
|
| |
Total Money Market Funds (Cost $650,512) | | | | | | | 650,512 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES (excluding Investments purchased with cash collateral from securities on loan)-100.10% (Cost $3,506,395,941) | | | | | | | 7,809,965,174 | |
|
| |
|
Investments Purchased with Cash Collateral from Securities on Loan | |
Money Market Funds–0.18% | |
Invesco Private Government Fund, 5.32%(a)(f)(g) | | | 3,927,977 | | | | 3,927,977 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Money Market Funds–(continued) | |
Invesco Private Prime Fund, 5.53%(a)(f)(g) | | | 10,110,008 | | | $ | 10,111,019 | |
|
| |
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $14,038,996) | | | | 14,038,996 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–100.28% (Cost $3,520,434,937) | | | | 7,824,004,170 | |
|
| |
OTHER ASSETS LESS LIABILITIES–(0.28)% | | | | (21,866,166 | ) |
|
| |
NET ASSETS–100.00% | | | $ | 7,802,138,004 | |
|
| |
Investment Abbreviations:
ADR – American Depositary Receipt
Notes to Schedule of Investments:
(a) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | Realized Gain (Loss) | | Value October 31, 2023 | | Dividend Income |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | $ | - | | | $ | 97,909,395 | | | $ | (97,681,720) | | | $ | - | | | $ | - | | | $ | 227,675 | | | $ | 42,475 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | - | | | | 69,935,278 | | | | (69,770,898) | | | | - | | | | (1,743) | | | | 162,637 | | | | 34,702 | |
Invesco Treasury Portfolio, Institutional Class | | | - | | | | 111,896,451 | | | | (111,636,251) | | | | - | | | | - | | | | 260,200 | | | | 48,294 | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Private Government Fund | | | - | | | | 124,446,851 | | | | (120,518,874) | | | | - | | | | - | | | | 3,927,977 | | | | 591,508* | |
Invesco Private Prime Fund | | | - | | | | 313,037,572 | | | | (302,917,602) | | | | - | | | | (8,951) | | | | 10,111,019 | | | | 1,584,395* | |
Investments in Other Affiliates: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reservas de Maternidad - Swiss Medical | | | 38,284,282 | | | | - | | | | - | | | | (9,762,837) | | | | - | | | | 28,521,445 | | | | - | |
Total | | $ | 38,284,282 | | | $ | 717,225,547 | | | $ | (702,525,345) | | | $ | (9,762,837) | | | $ | (10,694) | | | $ | 43,210,953 | | | $ | 2,301,374 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(b) | Security valued using significant unobservable inputs (Level 3). See Note 3. |
(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 value of this security at October 31, 2023 represented less than 1% of the Fund’s Net Assets. |
(d) | Non-income producing security. |
(e) | All or a portion of this security was out on loan at October 31, 2023. |
(f) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
(g) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
Investments in unaffiliated securities, at value (Cost $3,475,355,429)* | | $ | 7,780,793,217 | |
|
| |
Investments in affiliates, at value (Cost $45,079,508) | | | 43,210,953 | |
|
| |
Cash | | | 7,089,748 | |
|
| |
Foreign currencies, at value (Cost $2,079,173) | | | 2,073,214 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 12,758,974 | |
|
| |
Fund shares sold | | | 1,497,214 | |
|
| |
Dividends | | | 5,063,508 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 862,767 | |
|
| |
Other assets | | | 65,338 | |
|
| |
Total assets | | | 7,853,414,933 | |
|
| |
| |
Liabilities: | | | | |
Payable for: | | | | |
Fund shares reacquired | | | 6,685,496 | |
|
| |
Due to broker | | | 9,791 | |
|
| |
Accrued foreign taxes | | | 21,980,288 | |
|
| |
Collateral upon return of securities loaned | | | 14,038,996 | |
|
| |
Accrued fees to affiliates | | | 3,421,639 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 496,643 | |
|
| |
Accrued other operating expenses | | | 511,228 | |
|
| |
IRS closing agreement fees for foreign withholding tax claims | | | 3,256,155 | |
|
| |
Trustee deferred compensation and retirement plans | | | 876,693 | |
|
| |
Total liabilities | | | 51,276,929 | |
|
| |
Net assets applicable to shares outstanding | | $ | 7,802,138,004 | |
|
| |
| |
Net assets consist of: | | | | |
Shares of beneficial interest | | $ | 2,771,484,927 | |
|
| |
Distributable earnings | | | 5,030,653,077 | |
|
| |
| | $ | 7,802,138,004 | |
|
| |
| | | | |
Net Assets: | | | | |
Class A | | $ | 5,099,197,998 | |
|
| |
Class C | | $ | 117,134,514 | |
|
| |
Class R | | $ | 154,644,430 | |
|
| |
Class Y | | $ | 1,168,864,984 | |
|
| |
Class R5 | | $ | 9,306,477 | |
|
| |
Class R6 | | $ | 1,252,989,601 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
Class A | | | 60,261,684 | |
|
| |
Class C | | | 1,641,681 | |
|
| |
Class R | | | 1,867,345 | |
|
| |
Class Y | | | 13,627,619 | |
|
| |
Class R5 | | | 107,946 | |
|
| |
Class R6 | | | 14,503,050 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 84.62 | |
|
| |
Maximum offering price per share (Net asset value of $84.62 ÷ 94.50%) | | $ | 89.54 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 71.35 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 82.82 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 85.77 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 86.21 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 86.39 | |
|
| |
* | At October 31, 2023, securities with an aggregate value of $14,173,516 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Interest | | $ | 198,223 | |
|
| |
Dividends (net of foreign withholding taxes of $5,160,268) | | | 83,492,636 | |
|
| |
Dividends from affiliated money market funds (includes net securities lending income of $121,563) | | | 247,034 | |
|
| |
Foreign withholding tax claims | | | 3,390,976 | |
|
| |
Less: IRS closing agreement fees for foreign withholding tax claims | | | (1,646,058 | ) |
|
| |
Total investment income | | | 85,682,811 | |
|
| |
| |
Expenses: | | | | |
Advisory fees | | | 55,298,885 | |
|
| |
Administrative services fees | | | 1,212,752 | |
|
| |
Custodian fees | | | 1,164,718 | |
|
| |
Distribution fees: | |
Class A | | | 12,291,469 | |
|
| |
Class C | | | 1,325,377 | |
|
| |
Class R | | | 804,527 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 9,872,857 | |
|
| |
Transfer agent fees – R5 | | | 4,456 | |
|
| |
Transfer agent fees – R6 | | | 453,185 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 153,752 | |
|
| |
Registration and filing fees | | | 198,375 | |
|
| |
Reports to shareholders | | | 312,807 | |
|
| |
Professional services fees | | | 164,996 | |
|
| |
Other | | | 126,272 | |
|
| |
Total expenses | | | 83,384,428 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (177,400 | ) |
|
| |
Net expenses | | | 83,207,028 | |
|
| |
Net investment income | | | 2,475,783 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities (net of foreign taxes of $2,664,249) | | | 794,802,658 | |
|
| |
Affiliated investment securities | | | (10,694 | ) |
|
| |
Foreign currencies | | | (4,162,583 | ) |
|
| |
| | | 790,629,381 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities (net of foreign taxes of $9,086,349) | | | 796,337,126 | |
|
| |
Affiliated investment securities | | | (9,762,837 | ) |
|
| |
Foreign currencies | | | 440,614 | |
|
| |
| | | 787,014,903 | |
|
| |
Net realized and unrealized gain | | | 1,577,644,284 | |
|
| |
Net increase in net assets resulting from operations | | $ | 1,580,120,067 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
Net investment income | | $ | 2,475,783 | | | $ | 98,081 | |
|
| |
Net realized gain | | | 790,629,381 | | | | 1,104,779,995 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | 787,014,903 | | | | (5,996,312,711 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 1,580,120,067 | | | | (4,891,434,635 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
Class A | | | (589,886,821 | ) | | | (527,301,347 | ) |
|
| |
Class C | | | (18,183,402 | ) | | | (18,273,693 | ) |
|
| |
Class R | | | (18,897,610 | ) | | | (16,351,348 | ) |
|
| |
Class Y | | | (170,490,867 | ) | | | (177,321,555 | ) |
|
| |
Class R5 | | | (889,028 | ) | | | (1,053 | ) |
|
| |
Class R6 | | | (195,083,841 | ) | | | (171,095,528 | ) |
|
| |
Total distributions from distributable earnings | | | (993,431,569 | ) | | | (910,344,524 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
Class A | | | 213,331,287 | | | | (173,404,479 | ) |
|
| |
Class C | | | (11,002,979 | ) | | | (22,985,896 | ) |
|
| |
Class R | | | 2,390,554 | | | | (215,109 | ) |
|
| |
Class Y | | | (342,022,486 | ) | | | (185,436,166 | ) |
|
| |
Class R5 | | | 1,578,614 | | | | 7,790,385 | |
|
| |
Class R6 | | | (384,588,279 | ) | | | (439,745 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (520,313,289 | ) | | | (374,691,010 | ) |
|
| |
Net increase (decrease) in net assets | | | 66,375,209 | | | | (6,176,470,169 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
Beginning of year | | | 7,735,762,795 | | | | 13,912,232,964 | |
|
| |
End of year | | $ | 7,802,138,004 | | | $ | 7,735,762,795 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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(c) | | Ratio of net investment income (loss) to average net assets | | Portfolio turnover (d) |
Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $ 79.63 | | | | $(0.05 | ) | | | $ 15.59 | | | | $ 15.54 | | | | $ – | | | | $(10.55 | ) | | | $(10.55 | ) | | | $ 84.62 | | | | 20.54 | % | | | $5,099,198 | | | | 1.06 | %(e) | | | 1.06 | %(e) | | | (0.05 | )%(e) | | | 7 | % |
Year ended 10/31/22 | | | 135.11 | | | | (0.10 | ) | | | (46.46 | ) | | | (46.56 | ) | | | – | | | | (8.92 | ) | | | (8.92 | ) | | | 79.63 | | | | (36.79 | )(e) | | | 4,538,019 | | | | 1.04 | (e) | | | 1.04 | (e) | | | (0.09 | )(e) | | | 9 | |
Year ended 10/31/21 | | | 101.84 | | | | (0.52 | ) | | | 40.40 | | | | 39.88 | | | | – | | | | (6.61 | ) | | | (6.61 | ) | | | 135.11 | | | | 40.51 | (e) | | | 8,073,179 | | | | 1.03 | (e) | | | 1.03 | (e) | | | (0.42 | )(e) | | | 7 | |
Year ended 10/31/20 | | | 90.42 | | | | (0.23 | ) | | | 12.95 | | | | 12.72 | | | | (0.51 | ) | | | (0.79 | ) | | | (1.30 | ) | | | 101.84 | | | | 14.17 | | | | 6,256,292 | | | | 1.06 | | | | 1.06 | | | | (0.25 | ) | | | 8 | |
One month ended 10/31/19 | | | 86.02 | | | | (0.02 | ) | | | 4.42 | | | | 4.40 | | | | – | | | | – | | | | – | | | | 90.42 | | | | 5.11 | | | | 6,250,324 | | | | 1.06 | (f) | | | 1.06 | (f) | | | (0.23 | )(f) | | | 1 | |
Year ended 09/30/19 | | | 98.63 | | | | 0.42 | | | | (3.48 | ) | | | (3.06 | ) | | | (0.40 | ) | | | (9.15 | ) | | | (9.55 | ) | | | 86.02 | | | | (2.09 | ) | | | 6,026,243 | | | | 1.09 | | | | 1.09 | | | | 0.49 | | | | 10 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 69.09 | | | | (0.59 | ) | | | 13.40 | | | | 12.81 | | | | – | | | | (10.55 | ) | | | (10.55 | ) | | | 71.35 | | | | 19.61 | | | | 117,135 | | | | 1.83 | | | | 1.83 | | | | (0.82 | ) | | | 7 | |
Year ended 10/31/22 | | | 119.28 | | | | (0.77 | ) | | | (40.50 | ) | | | (41.27 | ) | | | – | | | | (8.92 | ) | | | (8.92 | ) | | | 69.09 | | | | (37.26 | ) | | | 122,529 | | | | 1.81 | | | | 1.81 | | | | (0.86 | ) | | | 9 | |
Year ended 10/31/21 | | | 91.23 | | | | (1.30 | ) | | | 35.96 | | | | 34.66 | | | | – | | �� | | (6.61 | ) | | | (6.61 | ) | | | 119.28 | | | | 39.44 | | | | 248,647 | | | | 1.80 | | | | 1.80 | | | | (1.19 | ) | | | 7 | |
Year ended 10/31/20 | | | 81.75 | | | | (0.85 | ) | | | 11.63 | | | | 10.78 | | | | (0.51 | ) | | | (0.79 | ) | | | (1.30 | ) | | | 91.23 | | | | 13.28 | | | | 243,600 | | | | 1.83 | | | | 1.83 | | | | (1.02 | ) | | | 8 | |
One month ended 10/31/19 | | | 77.82 | | | | (0.07 | ) | | | 4.00 | | | | 3.93 | | | | – | | | | – | | | | – | | | | 81.75 | | | | 5.05 | | | | 274,378 | | | | 1.82 | (f) | | | 1.82 | (f) | | | (0.99 | )(f) | | | 1 | |
Year ended 09/30/19 | | | 90.43 | | | | (0.22 | ) | | | (3.24 | ) | | | (3.46 | ) | | | – | | | | (9.15 | ) | | | (9.15 | ) | | | 77.82 | | | | (2.85 | ) | | | 267,208 | | | | 1.86 | | | | 1.86 | | | | (0.28 | ) | | | 10 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 78.33 | | | | (0.27 | ) | | | 15.31 | | | | 15.04 | | | | – | | | | (10.55 | ) | | | (10.55 | ) | | | 82.82 | | | | 20.21 | | | | 154,644 | | | | 1.33 | | | | 1.33 | | | | (0.32 | ) | | | 7 | |
Year ended 10/31/22 | | | 133.38 | | | | (0.36 | ) | | | (45.77 | ) | | | (46.13 | ) | | | – | | | | (8.92 | ) | | | (8.92 | ) | | | 78.33 | | | | (36.95 | ) | | | 142,467 | | | | 1.31 | | | | 1.31 | | | | (0.36 | ) | | | 9 | |
Year ended 10/31/21 | | | 100.86 | | | | (0.84 | ) | | | 39.97 | | | | 39.13 | | | | – | | | | (6.61 | ) | | | (6.61 | ) | | | 133.38 | | | | 40.16 | | | | 247,549 | | | | 1.30 | | | | 1.30 | | | | (0.69 | ) | | | 7 | |
Year ended 10/31/20 | | | 89.81 | | | | (0.48 | ) | | | 12.83 | | | | 12.35 | | | | (0.51 | ) | | | (0.79 | ) | | | (1.30 | ) | | | 100.86 | | | | 13.85 | | | | 197,067 | | | | 1.33 | | | | 1.33 | | | | (0.52 | ) | | | 8 | |
One month ended 10/31/19 | | | 85.46 | | | | (0.04 | ) | | | 4.39 | | | | 4.35 | | | | – | | | | – | | | | – | | | | 89.81 | | | | 5.09 | | | | 209,838 | | | | 1.32 | (f) | | | 1.32 | (f) | | | (0.49 | )(f) | | | 1 | |
Year ended 09/30/19 | | | 98.01 | | | | 0.19 | | | | (3.44 | ) | | | (3.25 | ) | | | (0.15 | ) | | | (9.15 | ) | | | (9.30 | ) | | | 85.46 | | | | (2.35 | ) | | | 202,819 | | | | 1.35 | | | | 1.35 | | | | 0.22 | | | | 10 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 80.42 | | | | 0.16 | | | | 15.74 | | | | 15.90 | | | | – | | | | (10.55 | ) | | | (10.55 | ) | | | 85.77 | | | | 20.82 | | | | 1,168,865 | | | | 0.83 | | | | 0.83 | | | | 0.18 | | | | 7 | |
Year ended 10/31/22 | | | 136.06 | | | | 0.14 | | | | (46.86 | ) | | | (46.72 | ) | | | – | | | | (8.92 | ) | | | (8.92 | ) | | | 80.42 | | | | (36.63 | ) | | | 1,405,313 | | | | 0.81 | | | | 0.81 | | | | 0.14 | | | | 9 | |
Year ended 10/31/21 | | | 102.29 | | | | (0.23 | ) | | | 40.61 | | | | 40.38 | | | | – | | | | (6.61 | ) | | | (6.61 | ) | | | 136.06 | | | | 40.84 | | | | 2,713,045 | | | | 0.80 | | | | 0.80 | | | | (0.19 | ) | | | 7 | |
Year ended 10/31/20 | | | 90.61 | | | | (0.01 | ) | | | 12.99 | | | | 12.98 | | | | (0.51 | ) | | | (0.79 | ) | | | (1.30 | ) | | | 102.29 | | | | 14.42 | | | | 2,093,441 | | | | 0.83 | | | | 0.83 | | | | (0.02 | ) | | | 8 | |
One month ended 10/31/19 | | | 86.18 | | | | 0.00 | | | | 4.43 | | | | 4.43 | | | | – | | | | – | | | | – | | | | 90.61 | | | | 5.14 | | | | 1,985,139 | | | | 0.82 | (f) | | | 0.82 | (f) | | | 0.00 | (f) | | | 1 | |
Year ended 09/30/19 | | | 98.88 | | | | 0.62 | | | | (3.51 | ) | | | (2.89 | ) | | | (0.66 | ) | | | (9.15 | ) | | | (9.81 | ) | | | 86.18 | | | | (1.88 | ) | | | 1,899,009 | | | | 0.86 | | | | 0.86 | | | | 0.72 | | | | 10 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 80.72 | | | | 0.23 | | | | 15.81 | | | | 16.04 | | | | – | | | | (10.55 | ) | | | (10.55 | ) | | | 86.21 | | | | 20.93 | | | | 9,306 | | | | 0.74 | | | | 0.74 | | | | 0.27 | | | | 7 | |
Year ended 10/31/22 | | | 136.38 | | | | 0.21 | | | | (46.95 | ) | | | (46.74 | ) | | | – | | | | (8.92 | ) | | | (8.92 | ) | | | 80.72 | | | | (36.56 | ) | | | 7,132 | | | | 0.69 | | | | 0.69 | | | | 0.26 | | | | 9 | |
Year ended 10/31/21 | | | 102.39 | | | | (0.06 | ) | | | 40.66 | | | | 40.60 | | | | – | | | | (6.61 | ) | | | (6.61 | ) | | | 136.38 | | | | 41.03 | | | | 16 | | | | 0.66 | | | | 0.66 | | | | (0.05 | ) | | | 7 | |
Year ended 10/31/20 | | | 90.55 | | | | 0.14 | | | | 13.00 | | | | 13.14 | | | | (0.51 | ) | | | (0.79 | ) | | | (1.30 | ) | | | 102.39 | | | | 14.62 | | | | 12 | | | | 0.68 | | | | 0.68 | | | | 0.13 | | | | 8 | |
One month ended 10/31/19 | | | 86.12 | | | | 0.01 | | | | 4.42 | | | | 4.43 | | | | – | | | | – | | | | – | | | | 90.55 | | | | 5.15 | | | | 11 | | | | 0.66 | (f) | | | 0.66 | (f) | | | 0.17 | (f) | | | 1 | |
Period ended 09/30/19(g) | | | 84.75 | | | | 0.26 | | | | 1.11 | | | | 1.37 | | | | – | | | | – | | | | – | | | | 86.12 | | | | 1.61 | | | | 10 | | | | 0.75 | (f) | | | 0.75 | (f) | | | 0.83 | (f) | | | 10 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 80.86 | | | | 0.25 | | | | 15.83 | | | | 16.08 | | | | – | | | | (10.55 | ) | | | (10.55 | ) | | | 86.39 | | | | 20.94 | | | | 1,252,990 | | | | 0.72 | | | | 0.72 | | | | 0.29 | | | | 7 | |
Year ended 10/31/22 | | | 136.59 | | | | 0.26 | | | | (47.07 | ) | | | (46.81 | ) | | | – | | | | (8.92 | ) | | | (8.92 | ) | | | 80.86 | | | | (36.56 | ) | | | 1,520,303 | | | | 0.69 | | | | 0.69 | | | | 0.26 | | | | 9 | |
Year ended 10/31/21 | | | 102.54 | | | | (0.07 | ) | | | 40.73 | | | | 40.66 | | | | – | | | | (6.61 | ) | | | (6.61 | ) | | | 136.59 | | | | 41.02 | | | | 2,629,798 | | | | 0.66 | | | | 0.66 | | | | (0.05 | ) | | | 7 | |
Year ended 10/31/20 | | | 90.69 | | | | 0.13 | | | | 13.02 | | | | 13.15 | | | | (0.51 | ) | | | (0.79 | ) | | | (1.30 | ) | | | 102.54 | | | | 14.61 | | | | 1,934,295 | | | | 0.68 | | | | 0.68 | | | | 0.13 | | | | 8 | |
One month ended 10/31/19 | | | 86.25 | | | | 0.01 | | | | 4.43 | | | | 4.44 | | | | – | | | | – | | | | – | | | | 90.69 | | | | 5.15 | | | | 2,051,628 | | | | 0.67 | (f) | | | 0.67 | (f) | | | 0.16 | (f) | | | 1 | |
Year ended 09/30/19 | | | 98.97 | | | | 0.76 | | | | (3.51 | ) | | | (2.75 | ) | | | (0.82 | ) | | | (9.15 | ) | | | (9.97 | ) | | | 86.25 | | | | (1.70 | ) | | | 1,957,302 | | | | 0.69 | | | | 0.69 | | | | 0.88 | | | | 10 | |
(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) | Does not include estimated acquired fund fees from underlying funds of 0.00% for the one month ended October 31, 2019 and the year ended September 30, 2019. |
(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, 2023, the portfolio turnover calculation excludes the value of securities purchased of $580,042,718 in connection with the acquisition of Invesco Global Growth Fund into the Fund. |
(e) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.23% for the years ended October 31, 2023, 2022 and 2021, respectively. |
(g) | Commencement date after the close of business on May 24, 2019. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco Global Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is to seek 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund received refunds in excess of the foreign tax paid during the year and has recorded the estimated liability as a reduction to income which is reflected as IRS closing agreement fees for foreign withholding tax claims on the Statement of Operations.
G. | 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 based on relative net assets of Class R5 and Class R6. 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. |
H. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
J. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower |
or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, the Fund paid the Adviser $7,671 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliates on the Statement of Operations.
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 the date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
L. | Forward Foreign Currency Contracts – The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical exchange of the two currencies on the settlement date, 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).
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 for hedging does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M. | Other Risks – Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information. |
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 | | | 0.800% | |
|
| |
Next $250 million | | | 0.770% | |
|
| |
Next $500 million | | | 0.750% | |
|
| |
Next $1 billion | | | 0.690% | |
|
| |
Next $1.5 billion | | | 0.670% | |
|
| |
Next $2.5 billion | | | 0.650% | |
|
| |
Next $2.5 billion | | | 0.630% | |
|
| |
Next $2.5 billion | | | 0.600% | |
|
| |
Next $4 billion | | | 0.580% | |
|
| |
Next $8 billion | | | 0.560% | |
|
| |
Over $23 billion | | | 0.540% | |
|
| |
* | The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser. |
For the year ended October 31, 2023, the effective advisory fee rate 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. and Invesco Canada Ltd. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.
Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 2.25%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $2,800.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the annual rate of 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $247,116 in front-end sales commissions from the sale of Class A shares and $1,451 and $4,155 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
For the year ended October 31, 2023, the Fund incurred $784 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. 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 Adviser’s 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 October 31, 2023. 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 | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | |
|
| |
Argentina | | $ | – | | | $ | – | | | | $28,521,445 | | | $ | 28,521,445 | |
|
| |
Canada | | | 48,611,611 | | | | – | | | | – | | | | 48,611,611 | |
|
| |
China | | | 173,878,195 | | | | 90,531,145 | | | | – | | | | 264,409,340 | |
|
| |
Denmark | | | – | | | | 356,281,257 | | | | – | | | | 356,281,257 | |
|
| |
France | | | – | | | | 946,731,723 | | | | – | | | | 946,731,723 | |
|
| |
Germany | | | – | | | | 235,874,524 | | | | – | | | | 235,874,524 | |
|
| |
India | | | 112,729,106 | | | | 417,426,782 | | | | – | | | | 530,155,888 | |
|
| |
Israel | | | 67,295,674 | | | | – | | | | – | | | | 67,295,674 | |
|
| |
Italy | | | – | | | | 74,629,184 | | | | – | | | | 74,629,184 | |
|
| |
Japan | | | – | | | | 416,158,327 | | | | – | | | | 416,158,327 | |
|
| |
Netherlands | | | – | | | | 119,066,120 | | | | – | | | | 119,066,120 | |
|
| |
Spain | | | – | | | | 99,396,812 | | | | – | | | | 99,396,812 | |
|
| |
Sweden | | | – | | | | 338,220,736 | | | | – | | | | 338,220,736 | |
|
| |
Switzerland | | | – | | | | 45,886,134 | | | | – | | | | 45,886,134 | |
|
| |
United States | | | 4,238,075,887 | | | | – | | | | – | | | | 4,238,075,887 | |
|
| |
Money Market Funds | | | 650,512 | | | | 14,038,996 | | | | – | | | | 14,689,508 | |
|
| |
Total Investments | | $ | 4,641,240,985 | | | $ | 3,154,241,740 | | | | $28,521,445 | | | $ | 7,824,004,170 | |
|
| |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $174,600.
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 SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | | | |
| | 2023 | | | | | | 2022 | |
|
| |
Long-term capital gain | | $ | 993,431,569 | | | | | | | $ | 910,344,524 | |
|
| |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed long-term capital gain | | $ | 870,550,489 | |
|
| |
Net unrealized appreciation – investments | | | 4,276,446,252 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (529,240 | ) |
|
| |
Temporary book/tax differences | | | (1,311,626 | ) |
|
| |
Capital loss carryforward | | | (114,502,798 | ) |
|
| |
Shares of beneficial interest | | | 2,771,484,927 | |
|
| |
Total net assets | | $ | 7,802,138,004 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund has a capital loss carryforward as of October 31, 2023, as follows:
| | | | | | | | | | | | |
Capital Loss Carryforward* | |
Expiration | | Short-Term | | | Long-Term | | | Total | |
|
| |
Not subject to expiration | | $ | 16,077,238 | | | $ | 98,425,560 | | | $ | 114,502,798 | |
|
| |
* | Capital loss carryforward 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 Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $546,605,889 and $2,548,219,645, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $4,650,437,216 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (373,990,964 | ) |
|
| |
Net unrealized appreciation of investments | | | $4,276,446,252 | |
|
| |
Cost of investments for tax purposes is $3,547,557,918.
NOTE 9–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of foreign currency transactions, net operating losses and equalization, on October 31, 2023, undistributed net investment income was decreased by $2,465,693, undistributed net realized gain was decreased by $10,015,742 and shares of beneficial interest was increased by $12,481,435. Further, as a result of tax deferrals acquired in the reorganization of into the Fund, undistributed net investment income was decreased by $136,481, undistributed net realized gain was decreased by $29,459,739 and shares of beneficial interest was increased by $29,596,220. These reclassifications had no effect on the net assets of the Fund.
NOTE 10–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 2,368,224 | | | $ | 202,165,910 | | | | 2,699,919 | | | $ | 276,201,243 | |
|
| |
Class C | | | 178,803 | | | | 12,954,616 | | | | 185,240 | | | | 16,485,700 | |
|
| |
Class R | | | 244,691 | | | | 20,588,467 | | | | 305,417 | | | | 30,560,185 | |
|
| |
Class Y | | | 2,065,695 | | | | 179,124,098 | | | | 2,959,302 | | | | 306,075,991 | |
|
| |
Class R5 | | | 20,128 | | | | 1,736,814 | | | | 91,860 | | | | 8,130,749 | |
|
| |
Class R6 | | | 2,000,432 | | | | 175,551,005 | | | | 3,084,053 | | | | 310,393,178 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | 6,958,562 | | | | 546,525,437 | | | | 3,986,432 | | | | 489,772,840 | |
|
| |
Class C | | | 264,391 | | | | 17,626,964 | | | | 164,422 | | | | 17,644,163 | |
|
| |
Class R | | | 244,159 | | | | 18,812,469 | | | | 134,571 | | | | 16,300,613 | |
|
| |
Class Y | | | 1,891,593 | | | | 150,268,110 | | | | 1,297,998 | | | | 160,718,093 | |
|
| |
Class R5 | | | 11,125 | | | | 887,783 | | | | - | | | | - | |
|
| |
Class R6 | | | 2,413,503 | | | | 192,959,584 | | | | 1,369,177 | | | | 170,270,798 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 245,439 | | | | 20,848,439 | | | | 213,043 | | | | 21,179,663 | |
|
| |
Class C | | | (289,810 | ) | | | (20,848,439 | ) | | | (244,403 | ) | | | (21,179,663 | ) |
|
| |
| | | | |
Issued in connection with acquisitions:(b) | | | | | | | | | | | | | | | | |
Class A | | | 5,602,786 | | | | 453,714,248 | | | | - | | | | - | |
|
| |
Class C | | | 113,708 | | | | 7,806,679 | | | | - | | | | - | |
|
| |
Class Y | | | 199,215 | | | | 16,324,792 | | | | - | | | | - | |
|
| |
Class R5 | | | 5,997 | | | | 493,612 | | | | - | | | | - | |
|
| |
Class R6 | | | 38,915 | | | | 3,209,638 | | | | - | | | | - | |
|
| |
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (11,899,292 | ) | | $ | (1,009,922,747 | ) | | | (9,665,952 | ) | | $ | (960,558,225 | ) |
|
| |
Class C | | | (398,939 | ) | | | (28,542,799 | ) | | | (416,277 | ) | | | (35,936,096 | ) |
|
| |
Class R | | | (440,391 | ) | | | (37,010,382 | ) | | | (477,092 | ) | | | (47,075,907 | ) |
|
| |
Class Y | | | (8,003,139 | ) | | | (687,739,486 | ) | | | (6,723,450 | ) | | | (652,230,250 | ) |
|
| |
Class R5 | | | (17,649 | ) | | | (1,539,595 | ) | | | (3,633 | ) | | | (340,364 | ) |
|
| |
Class R6 | | | (8,752,110 | ) | | | (756,308,506 | ) | | | (4,904,320 | ) | | | (481,103,721 | ) |
|
| |
Net increase (decrease) in share activity | | | (4,933,964 | ) | | $ | (520,313,289 | ) | | | (5,943,693 | ) | | $ | (374,691,010 | ) |
|
| |
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 5% 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. |
(b) | After the close of business on February 10, 2023, the Fund acquired all the net assets of Invesco Global Growth Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Board of Trustees of the Fund on September 20, 2022. The reorganization was executed in order to reduce overlap and increase efficiencies in the Adviser’s product line. The acquisition was accomplished by a tax-free exchange of 5,960,621 shares of the Fund for 35,248,894 shares outstanding of the Target Fund as of the close of business on February 10, 2023. Shares of the Target Fund were exchanged for the like class of shares of the Fund, based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, February 10, 2023. The Target Fund’s net assets as of the close of business on February 10, 2023 of $481,548,969, including $(101,789,047) of unrealized appreciation (depreciation), were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $8,276,255,502 and $8,757,804,471 immediately after the acquisition. |
The pro forma results of operations for the year ended October 31, 2023 assuming the reorganization had been completed on November 1, 2022, the beginning of the semi-annual reporting period are as follows:
| | | | |
Net investment income | | $ | 1,569,270 | |
|
| |
Net realized/unrealized gains | | | 1,645,516,904 | |
|
| |
Change in net assets resulting from operations | | $ | 1,647,086,174 | |
|
| |
As the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since February 11, 2023.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco Global Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco Global Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent, broker and portfolio company investees. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
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 May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $986.60 | | $5.36 | | $1,019.81 | | $5.45 | | 1.07% |
Class C | | 1,000.00 | | 982.80 | | 9.20 | | 1,015.93 | | 9.35 | | 1.84 |
Class R | | 1,000.00 | | 985.20 | | 6.71 | | 1,018.45 | | 6.82 | | 1.34 |
Class Y | | 1,000.00 | | 987.60 | | 4.21 | | 1,020.97 | | 4.28 | | 0.84 |
Class R5 | | 1,000.00 | | 988.10 | | 3.71 | | 1,021.48 | | 3.77 | | 0.74 |
Class R6 | | 1,000.00 | | 988.20 | | 3.66 | | 1,021.53 | | 3.72 | | 0.73 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Global Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an
independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to
attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country World Growth Index (Index). The Board noted that performance of Class A shares of the Fund was in the fifth quintile of its performance universe for the one, three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of
the Fund was below the performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board considered that the Fund’s stock selection in and overweight exposures to certain sectors detracted from Fund performance. The Board also noted that the Fund changed its benchmark in 2022. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also compared the Fund’s effective advisory fee rate (defined for this purpose as the advisory fee rate after advisory fee waivers and before other expense limitations/waivers) to the effective advisory fee rates of other similarly
managed third-party mutual funds advised or sub-advised by Invesco Advisers and its affiliates, based on asset balances as of December 31, 2022.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated
securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | |
Federal and State Income Tax | | | | | | |
Long-Term Capital Gain Distributions | | | $1,006,265,569 | | | | | |
Qualified Dividend Income* | | | 0.00 | % | | | | |
Corporate Dividends Received Deduction* | | | 0.00 | % | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | |
Qualified Business Income* | | | 0.00 | % | | | | |
Business Interest Income* | | | 0.00 | % | | | | |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler - 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Board Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management - Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | |
Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver – Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort -1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
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Officers–(continued) | | | | | | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
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Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza Houston, TX 77046-1173 | | Invesco Advisers, Inc. 1331 Spring Street, NW, Suite 2500 Atlanta, GA 30309 | | Invesco Distributors, Inc. 11 Greenway Plaza Houston, TX 77046-1173 | | PricewaterhouseCoopers LLP 1000 Louisiana Street, Suite 5800 Houston, TX 77002-5021 |
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Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP 2005 Market Street, Suite 2600 Philadelphia, PA 19103-7018 | | Sidley Austin LLP 787 Seventh Avenue New York, NY 10019 | | Invesco Investment Services, Inc. 11 Greenway Plaza Houston, TX 77046-1173 | | State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110-2801 |
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Go paperless with eDelivery
Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
With eDelivery, you can elect to have any or all of the following materials delivered straight to your inbox to download, save and print from your own computer:
∎ Fund reports and prospectuses
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∎ Tax forms
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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | O-GLBL-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco Global Opportunities Fund
Nasdaq:
A: OPGIX ∎ C: OGICX ∎ R: OGINX ∎ Y: OGIYX ∎ R5: GOFFX ∎ R6: OGIIX
Management’s Discussion of Fund Performance
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Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco Global Opportunities Fund (the Fund), at net asset value (NAV), underperformed the MSCI All Country World Index. | |
Your Fund’s long-term performance appears later in this report. | |
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Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, 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 | | | -3.83 | % |
Class C Shares | | | -4.59 | |
Class R Shares | | | -4.10 | |
Class Y Shares | | | -3.60 | |
Class R5 Shares | | | -3.54 | |
Class R6 Shares | | | -3.51 | |
MSCI All Country World Index▼ | | | 10.50 | |
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Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within emerging markets, China’s equities were
weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
The Fund’s Class A shares returned -3.83%, underperforming the MSCI All Country World Index return of 10.50% during the fiscal year. It’s important to note that the Fund’s portfolio is highly active and differentiated versus the benchmark. Compared to the benchmark, the Fund has materially higher exposure to the growth area of the market, as well as to the small- and mid-cap part of the market. These exposures both hurt the Fund’s relative performance during the fiscal year. Value stocks have led the way in performance outside of the US, and large-caps have substantially outperformed small- and mid-caps across the world, continuing the trend of the last few years.
For the fiscal year ended October 31, 2023, the Fund underperformed the most in the information technology, health care and communication services sectors, mainly due to stock selection. Stock selection in the consumer discretionary sector was the most significant contributor to the Fund’s performance, and the Fund’s underweight allocations to the consumer staples, energy, utilities and real estate sectors had a positive impact as well.
On a geographic basis, stock selection in Europe detracted the most from relative returns for the fiscal year. Selections in Japan and the US also had a negative impact. On the positive side, the Fund’s overweights in Europe and Japan, and underweights in developed Asia and the US, contributed to performance.
The top three individual contributors to Fund performance during the fiscal year were Advanced Micro Devices (AMD), Aston Martin and Exact Sciences.
AMD has been a longtime top holding and one of the Fund’s most successful investments as it was an early investor in AMD’s turnaround from mediocrity to perhaps what we believe to be the most innovative chip designer in the world. It is the only major semiconductor company which designs both central processing units (CPUs) and graphics processing units (GPUs), and we believe it will be a beneficiary of many structural growth tailwinds going on across the global economy. The company is soon to offer significant competition in the artificial intelligence (AI) chip realm. Customers will likely welcome it.
Aston Martin is a luxury automaker which has recovered lately from a challenging business environment. It is one of very few high-end luxury car companies that have global brand recognition. The company’s product suite is rounding out and it has recently taken steps to improve its balance sheet, which has driven a rally in the stock this fiscal year.
Exact Sciences is the maker of the Cologuard test for colon cancer, a non-invasive screening method that has gained diagnostic share from colonoscopies. It is now recommended that people get their first colon cancer screening at age 45, five years earlier than prior, which should provide a continued tailwind for the company’s growth.
The three largest individual detractors from Fund performance were Nektar Therapeutics, M3 and IQE.
Nektar Therapeutics is a development stage biopharmaceutical company that had been a long-term, high conviction holding of the Fund, whose drug pipeline we believed had substantial upside. The investment thesis did not work out as we expected, and we have since exited this position.
M3 is a Japanese healthcare company whose software allows doctors to collaborate with their peers on issues relating to patient health. We believe it is critical for doctors to have access to a platform like this, in order to share ideas and provide the best possible outcomes for patients. After experiencing strong performance during the COVID-19 pandemic environment, the stock has since corrected, as COVID-19 concerns and the heightened need for this software have moderated over the fiscal year. M3 remains a Fund holding as of the end of the fiscal year.
IQE is a British semiconductor company that manufactures advanced epitaxial wafers. IQE stands to benefit from the structural growth tailwinds in the semiconductor industry. The unprecedented chip shortage the industry has experienced, along with the decoupling of supply chains due to geopolitics, are forcing manufacturers to look for longer-term commitments that focus on supply security instead of just price. IQE is already starting to benefit from this trend, though the
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2 | | Invesco Global Opportunities Fund |
stock has corrected this fiscal year due to concerns about a cyclical slowdown in the semiconductor industry. It remains a Fund holding as of the end of the fiscal year.
We wanted to take this opportunity to remind our shareholders that lead portfolio manager Frank Jennings will be retiring from Invesco at the end of 2023. We thank Frank for his 28 years of managing the Fund and for providing strong returns for shareholders over that time. David Nadel was added as a portfolio manager of the Fund effective August 1, 2023, and David will become the lead manager upon Frank’s retirement, working closely with the other existing portfolio manager of the Fund, Máire Lane, in managing the Fund’s portfolio into the future.
David has over 30 years of financial industry experience and has managed the Invesco International Small-Mid Company Fund since 2019. Before joining Invesco he managed the Royce International Premier strategy for almost a decade. He has previously spent time at Neuberger Berman and Pequot Capital. David has a very strong background in small-and mid-cap investing, and we believe has the right expertise to succeed in managing the Invesco Global Opportunities Fund moving forward.
Thank you for your continued investment in Invesco Global Opportunities Fund.
Portfolio manager(s):
Frank Jennings - Lead
Máire Lane
David Nadel
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
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3 | | Invesco Global Opportunities Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
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1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
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4 | | Invesco Global Opportunities Fund |
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Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
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Class A Shares | | | | |
Inception (10/22/90) | | | 9.32 | % |
10 Years | | | 4.13 | |
5 Years | | | -4.01 | |
1 Year | | | -9.13 | |
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Class C Shares | | | | |
Inception (12/1/93) | | | 9.09 | % |
10 Years | | | 4.09 | |
5 Years | | | -3.65 | |
1 Year | | | -5.55 | |
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Class R Shares | | | | |
Inception (3/1/01) | | | 6.31 | % |
10 Years | | | 4.45 | |
5 Years | | | -3.17 | |
1 Year | | | -4.10 | |
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Class Y Shares | | | | |
Inception (2/1/01) | | | 6.36 | % |
10 Years | | | 4.98 | |
5 Years | | | -2.69 | |
1 Year | | | -3.60 | |
| |
Class R5 Shares | | | | |
10 Years | | | 4.88 | % |
5 Years | | | -2.62 | |
1 Year | | | -3.54 | |
| |
Class R6 Shares | | | | |
Inception (1/27/12) | | | 6.78 | % |
10 Years | | | 5.14 | |
5 Years | | | -2.55 | |
1 Year | | | -3.51 | |
Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer Global Opportunities Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer Global Opportunities Fund. The Fund was subsequently renamed the Invesco Global Opportunities Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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.
| | |
5 | | Invesco Global Opportunities Fund |
Supplemental Information
Invesco Global Opportunities Fund’s investment objective is to seek capital appreciation.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World Index is an unmanaged index considered representative of large- and mid-cap stocks across developed and emerging markets. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
| | |
6 | | Invesco Global Opportunities Fund |
Fund Information
Portfolio Composition
| | | | |
By sector, based on Net Assets as of October 31, 2023 | | | |
| |
Information Technology | | | 43.50 | % |
| |
Industrials | | | 17.35 | |
| |
Health Care | | | 13.53 | |
| |
Consumer Discretionary | | | 8.45 | |
| |
Financials | | | 3.69 | |
| |
Materials | | | 3.01 | |
| |
Consumer Staples | | | 2.78 | |
| |
Communication Services | | | 2.30 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | 5.39 | |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Advanced Micro Devices, Inc. | | | | 9.15 | % |
| | |
2. | | PTC, Inc. | | | | 4.35 | |
| | |
3. | | Manhattan Associates, Inc. | | | | 3.62 | |
| | |
4. | | Aston Martin Lagonda Global Holdings PLC | | | | 3.34 | |
| | |
5. | | SHIFT, Inc. | | | | 3.12 | |
| | |
6. | | Disco Corp. | | | | 2.86 | |
| | |
7. | | Brunello Cucinelli S.p.A. | | | | 1.99 | |
| | |
8. | | Veeco Instruments, Inc. | | | | 1.98 | |
| | |
9. | | Exact Sciences Corp. | | | | 1.91 | |
| | |
10. | | Mowi ASA | | | | 1.81 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
| | |
7 | | Invesco Global Opportunities Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–94.61% | |
Australia–0.79% | |
Sonic Healthcare Ltd. | | | 1,395,704 | | | $ | 25,594,208 | |
|
| |
|
Belgium–0.27% | |
Biocartis Group N.V.(a)(b)(c)(d) | | | 4,766,019 | | | | 5 | |
|
| |
Materialise N.V., ADR(c) | | | 1,577,983 | | | | 8,678,906 | |
|
| |
| | | | 8,678,911 | |
|
| |
|
Brazil–0.55% | |
WEG S.A. | | | 2,697,500 | | | | 17,661,422 | |
|
| |
|
China–0.57% | |
Shandong Weigao Group Medical Polymer Co. Ltd., H Shares | | | 19,955,200 | | | | 18,483,594 | |
|
| |
|
Denmark–2.00% | |
Atlantic Sapphire ASA, Rts., expiring 12/29/2023 | | | 4,185,177 | | | | 0 | |
|
| |
Bavarian Nordic A/S(c) | | | 2,220,294 | | | | 42,240,940 | |
|
| |
Novozymes A/S, Class B | | | 500,000 | | | | 22,472,821 | |
|
| |
| | | | 64,713,761 | |
|
| |
|
France–1.48% | |
Legrand S.A. | | | 257,121 | | | | 22,209,241 | |
|
| |
Mersen S.A. | | | 770,564 | | | | 25,623,615 | |
|
| |
| | | | 47,832,856 | |
|
| |
|
Germany–2.97% | |
AIXTRON SE | | | 816,563 | | | | 22,880,013 | |
|
| |
Basler AG | | | 1,427,238 | | | | 11,762,705 | |
|
| |
Carl Zeiss Meditec AG, BR | | | 327,701 | | | | 28,343,789 | |
|
| |
Manz AG(c) | | | 403,829 | | | | 3,591,560 | |
|
| |
PVA TePla AG(a)(c) | | | 1,924,343 | | | | 29,133,866 | |
|
| |
| | | | 95,711,933 | |
|
| |
|
Ireland–0.43% | |
Ads-Tec Energy PLC(c) | | | 2,135,727 | | | | 13,882,225 | |
|
| |
|
Italy–2.59% | |
Brunello Cucinelli S.p.A. | | | 801,879 | | | | 64,301,882 | |
|
| |
Reply S.p.A. | | | 204,064 | | | | 19,249,332 | |
|
| |
| | | | 83,551,214 | |
|
| |
|
Japan–16.03% | |
BayCurrent Consulting, Inc. | | | 553,000 | | | | 13,917,247 | |
|
| |
Benefit One, Inc. | | | 2,296,200 | | | | 16,461,976 | |
|
| |
Comture Corp.(a) | | | 2,264,600 | | | | 30,208,114 | |
|
| |
CyberAgent, Inc. | | | 5,200,000 | | | | 27,373,205 | |
|
| |
Disco Corp. | | | 524,000 | | | | 92,234,164 | |
|
| |
Jeol Ltd. | | | 1,945,000 | | | | 54,892,733 | |
|
| |
Kakaku.com, Inc. | | | 1,386,100 | | | | 13,383,061 | |
|
| |
M3, Inc. | | | 2,560,000 | | | | 39,713,275 | |
|
| |
MISUMI Group, Inc. | | | 1,699,800 | | | | 25,475,782 | |
|
| |
Nomura Research Institute Ltd. | | | 679,700 | | | | 17,947,822 | |
|
| |
Optex Group Co. Ltd. | | | 53,000 | | | | 594,382 | |
|
| |
SHIFT, Inc.(c) | | | 550,000 | | | | 100,573,183 | |
|
| |
Sysmex Corp. | | | 558,900 | | | | 27,189,498 | |
|
| |
Yaskawa Electric Corp. | | | 1,760,000 | | | | 57,712,683 | |
|
| |
| | | | 517,677,125 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Norway–3.07% | |
Mowi ASA | | | 3,604,123 | | | $ | 58,522,705 | |
|
| |
Nordic Semiconductor ASA(c) | | | 4,999,999 | | | | 40,588,719 | |
|
| |
| | | | 99,111,424 | |
|
| |
|
South Korea–0.48% | |
NICE Information Service Co. Ltd. | | | 2,361,007 | | | | 15,390,846 | |
|
| |
|
Sweden–5.05% | |
AddTech AB, Class B | | | 2,500,000 | | | | 36,683,226 | |
|
| |
Boozt AB(b)(c) | | | 1,937,100 | | | | 13,531,960 | |
|
| |
Cellavision AB | | | 1,078,562 | | | | 13,132,072 | |
|
| |
Indutrade AB | | | 2,565,679 | | | | 45,549,162 | |
|
| |
Midsona AB, Class B(c) | | | 1,390,891 | | | | 866,729 | |
|
| |
NIBE Industrier AB, Class B | | | 3,871,027 | | | | 22,421,645 | |
|
| |
RaySearch Laboratories AB(c) | | | 1,314,163 | | | | 9,802,677 | |
|
| |
Tobii AB(c) | | | 2,036,309 | | | | 1,892,619 | |
|
| |
Xvivo Perfusion AB(c) | | | 913,609 | | | | 19,018,346 | |
|
| |
| | | | 162,898,436 | |
|
| |
|
Switzerland–1.66% | |
Geberit AG | | | 54,168 | | | | 25,268,478 | |
|
| |
GeNeuro S.A.(a)(c) | | | 2,338,013 | | | | 2,974,664 | |
|
| |
Partners Group Holding AG | | | 24,023 | | | | 25,449,638 | |
|
| |
| | | | 53,692,780 | |
|
| |
|
Taiwan–0.47% | |
Voltronic Power Technology Corp. | | | 378,000 | | | | 15,168,698 | |
|
| |
|
Thailand–0.56% | |
Bumrungrad Hospital PCL, Foreign Shares | | | 2,496,400 | | | | 18,077,432 | |
|
| |
|
United Kingdom–10.17% | |
Aston Martin Lagonda Global Holdings PLC(b)(c) | | | 40,419,254 | | | | 107,646,089 | |
|
| |
Auction Technology Group PLC(c) | | | 3,420,147 | | | | 23,336,104 | |
|
| |
Cirata PLC(a)(c) | | | 7,603,765 | | | | 4,829,865 | |
|
| |
Croda International PLC | | | 468,397 | | | | 24,960,456 | |
|
| |
FD Technologies PLC(c) | | | 1,120,271 | | | | 11,699,114 | |
|
| |
FDM Group Holdings PLC | | | 4,448,508 | | | | 23,601,038 | |
|
| |
Fevertree Drinks PLC | | | 664,957 | | | | 8,153,940 | |
|
| |
Frontier Developments PLC(c) | | | 1,712,492 | | | | 5,012,281 | |
|
| |
Future PLC | | | 484,675 | | | | 5,250,963 | |
|
| |
Gooch & Housego PLC | | | 1,257,162 | | | | 7,638,464 | |
|
| |
IP Group PLC | | | 5,781,813 | | | | 3,082,585 | |
|
| |
IQE PLC(a)(c) | | | 112,416,630 | | | | 18,728,932 | |
|
| |
M&C Saatchi PLC | | | 2,612,634 | | | | 3,898,013 | |
|
| |
Moneysupermarket.com Group PLC | | | 6,115,006 | | | | 19,340,019 | |
|
| |
Sage Group PLC (The) | | | 1,467,769 | | | | 17,349,794 | |
|
| |
Spirax-Sarco Engineering PLC | | | 313,907 | | | | 31,317,108 | |
|
| |
Zoo Digital Group PLC(c) | | | 4,159,782 | | | | 2,072,143 | |
|
| |
Zotefoams PLC(a) | | | 3,022,330 | | | | 10,507,468 | |
|
| |
| | | | 328,424,376 | |
|
| |
|
United States–45.47% | |
Advanced Micro Devices, Inc.(c) | | | 3,000,000 | | | | 295,500,000 | |
|
| |
Align Technology, Inc.(c) | | | 100,000 | | | | 18,459,000 | |
|
| |
Allegion PLC | | | 348,081 | | | | 34,237,247 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco Global Opportunities Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United States–(continued) | |
Arrowhead Pharmaceuticals, Inc.(c) | | | 1,803,700 | | | $ | 44,352,983 | |
|
| |
Cognex Corp. | | | 1,200,000 | | | | 43,188,000 | |
|
| |
Cohen & Steers, Inc. | | | 294,209 | | | | 15,369,478 | |
|
| |
Coherent Corp.(c) | | | 1,000,000 | | | | 29,600,000 | |
|
| |
Columbia Sportswear Co. | | | 353,130 | | | | 26,060,994 | |
|
| |
Donnelley Financial Solutions, Inc.(c) | | | 475,832 | | | | 25,899,536 | |
|
| |
Exact Sciences Corp.(c) | | | 1,000,000 | | | | 61,590,000 | |
|
| |
Exponent, Inc. | | | 267,807 | | | | 19,627,575 | |
|
| |
Impinj, Inc.(c) | | | 400,000 | | | | 25,844,000 | |
|
| |
Inter Parfums, Inc. | | | 175,072 | | | | 22,253,402 | |
|
| |
IPG Photonics Corp.(c) | | | 540,152 | | | | 46,399,057 | |
|
| |
Ivanhoe Electric, Inc.(c) | | | 2,000,000 | | | | 20,480,000 | |
|
| |
Jack Henry & Associates, Inc. | | | 182,820 | | | | 25,775,792 | |
|
| |
Lincoln Electric Holdings, Inc. | | | 138,142 | | | | 24,147,222 | |
|
| |
Littelfuse, Inc. | | | 200,000 | | | | 43,334,000 | |
|
| |
Malibu Boats, Inc., Class A(c) | | | 383,389 | | | | 16,723,428 | |
|
| |
Manhattan Associates, Inc.(c) | | | 600,000 | | | | 116,988,000 | |
|
| |
Nevro Corp.(c) | | | 895,431 | | | | 12,921,069 | |
|
| |
ON Semiconductor Corp.(c) | | | 500,000 | | | | 31,320,000 | |
|
| |
PDF Solutions, Inc.(c) | | | 1,823,962 | | | | 48,389,712 | |
|
| |
Pool Corp. | | | 67,299 | | | | 21,251,005 | |
|
| |
PTC, Inc.(c) | | | 1,000,000 | | | | 140,420,000 | |
|
| |
QUALCOMM, Inc. | | | 500,000 | | | | 54,495,000 | |
|
| |
Reliance Steel & Aluminum Co. | | | 73,455 | | | | 18,685,483 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United States–(continued) | |
SEI Investments Co. | | | 441,726 | | | $ | 23,703,017 | |
|
| |
Simpson Manufacturing Co., Inc. | | | 119,286 | | | | 15,886,510 | |
|
| |
Toro Co. (The) | | | 222,698 | | | | 18,002,906 | |
|
| |
Veeco Instruments, Inc.(c) | | | 2,666,585 | | | | 63,838,045 | |
|
| |
Vicor Corp.(c) | | | 450,541 | | | | 17,453,958 | |
|
| |
Watsco, Inc. | | | 64,660 | | | | 22,559,227 | |
|
| |
WESCO International, Inc. | | | 183,380 | | | | 23,509,316 | |
|
| |
| | | | 1,468,264,962 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $2,715,302,898) | | | | 3,054,816,203 | |
|
| |
|
Money Market Funds–5.13% | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(a)(e) | | | 57,919,072 | | | | 57,919,072 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(a)(e) | | | 41,365,482 | | | | 41,377,891 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(a)(e) | | | 66,193,225 | | | | 66,193,225 | |
|
| |
Total Money Market Funds (Cost $165,482,890) | | | | 165,490,188 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–99.74% (Cost $2,880,785,788) | | | | 3,220,306,391 | |
|
| |
OTHER ASSETS LESS LIABILITIES–0.26% | | | | 8,540,083 | |
|
| |
NET ASSETS–100.00% | | | $ | 3,228,846,474 | |
|
| |
Investment Abbreviations:
ADR – American Depositary Receipt
BR – Bearer Shares
Rts. – Rights
Notes to Schedule of Investments:
(a) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | Realized Gain (Loss) | | Value October 31, 2023 | | Dividend Income |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | $ | 81,100,213 | | | $ | 453,426,767 | | | $ | (476,607,908) | | | $ | - | | | $ | - | | | $ | 57,919,072 | | | $ | 3,318,074 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 51,103,361 | | | | 323,876,263 | | | | (333,610,832) | | | | (4,274) | | | | 13,373 | | | | 41,377,891 | | | | 2,404,438 | |
Invesco Treasury Portfolio, Institutional Class | | | 92,685,957 | | | | 518,202,020 | | | | (544,694,752) | | | | - | | | | - | | | | 66,193,225 | | | | 3,787,293 | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco Global Opportunities Fund |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | Realized Gain (Loss) | | Value October 31, 2023 | | Dividend Income |
Investments in Other Affiliates: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Aumann AG | | $ | 11,861,710 | | | $ | - | | | $ | (14,054,034) | | | $ | 47,558,191 | | | $ | (45,365,867) | | | $ | - | | | $ | - | |
Basler AG* | | | 48,931,519 | | | | - | | | | (6,198,121) | | | | (26,584,457) | | | | (4,386,236) | | | | 11,762,705 | | | | 224,145 | |
Biocartis Group N.V. | | | 7,106,383 | | | | 7,330,294 | | | | (1,780,754) | | | | 36,198,445 | | | | (48,854,363) | | | | 5 | | | | - | |
Boozt AB* | | | 27,374,742 | | | | - | | | | (15,383,929) | | | | 3,847,957 | | | | (2,306,810) | | | | 13,531,960 | | | | - | |
Cirata PLC | | | 25,109,582 | | | | 3,556,476 | | | | (2,262,798) | | | | (9,223,888) | | | | (12,349,507) | | | | 4,829,865 | | | | - | |
Comture Corp. | | | 48,775,634 | | | | - | | | | (10,449,919) | | | | (3,914,075) | | | | (4,203,526) | | | | 30,208,114 | | | | 818,934 | |
Frontier Developments PLC* | | | 45,619,685 | | | | - | | | | (7,498,216) | | | | (11,733,633) | | | | (21,375,555) | | | | 5,012,281 | | | | - | |
GeNeuro S.A. | | | 4,128,332 | | | | - | | | | (216,002) | | | | (763,591) | | | | (174,075) | | | | 2,974,664 | | | | - | |
Gooch & Housego PLC* | | | 11,009,275 | | | | - | | | | (5,548,657) | | | | 14,099,949 | | | | (11,922,103) | | | | 7,638,464 | | | | 310,126 | |
IQE PLC | | | 67,203,506 | | | | 2,879,532 | | | | (9,264,489) | | | | 21,494,137 | | | | (63,583,754) | | | | 18,728,932 | | | | - | |
Manz AG* | | | 13,121,717 | | | | - | | | | (1,526,764) | | | | (5,423,938) | | | | (2,579,455) | | | | 3,591,560 | | | | - | |
Materialise N.V.* | | | 30,711,000 | | | | - | | | | (7,302,185) | | | | 19,150 | | | | (14,749,059) | | | | 8,678,906 | | | | - | |
Nektar Therapeutics | | | 134,495,200 | | | | - | | | | (20,931,278) | | | | 508,216,066 | | | | (621,779,988) | | | | - | | | | - | |
Optex Group Co. Ltd.* | | | 27,540,836 | | | | - | | | | (23,549,957) | | | | 25,913,196 | | | | (29,309,693) | | | | 594,382 | | | | 458,510 | |
PDF Solutions, Inc.* | | | 70,740,000 | | | | - | | | | (37,167,844) | | | | (3,611,640) | | | | 18,429,196 | | | | 48,389,712 | | | | - | |
PVA TePla AG | | | 48,529,344 | | | | - | | | | (18,795,266) | | | | 5,500,680 | | | | (6,100,892) | | | | 29,133,866 | | | | - | |
RaySearch Laboratories AB* | | | 20,788,083 | | | | - | | | | (19,880,798) | | | | 20,449,208 | | | | (11,553,816) | | | | 9,802,677 | | | | - | |
Rovio Entertainment OYJ | | | 26,803,800 | | | | - | | | | (41,712,223) | | | | 13,773,790 | | | | 1,134,633 | | | | - | | | | - | |
Veeco Instruments, Inc.* | | | 54,690,000 | | | | - | | | | (9,247,021) | | | | 14,796,386 | | | | 3,598,680 | | | | 63,838,045 | | | | - | |
Xaar PLC | | | 11,672,694 | | | | - | | | | (13,480,368) | | | | 24,351,080 | | | | (22,543,406) | | | | - | | | | - | |
Zoo Digital Group PLC* | | | 13,245,534 | | | | - | | | | (2,243,642) | | | | (7,631,508) | | | | (1,298,241) | | | | 2,072,143 | | | | - | |
Zotefoams PLC | | | 13,509,174 | | | | - | | | | (4,348,169) | | | | 2,660,219 | | | | (1,313,756) | | | | 10,507,468 | | | | 323,777 | |
Total | | $ | 987,857,281 | | | $ | 1,309,271,352 | | | $ | (1,627,755,926) | | | $ | 669,987,450 | | | $ | (902,574,220) | | | $ | 436,785,937 | | | $ | 11,645,297 | |
| * | At October 31, 2023, this security was no longer an affiliate of the Fund. |
(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 October 31, 2023 was $121,178,054, which represented 3.75% of the Fund’s Net Assets. |
(c) | Non-income producing security. |
(d) | Security valued using significant unobservable inputs (Level 3). See Note 3. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco Global Opportunities Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $2,513,697,564) | | $ | 2,958,433,289 | |
|
| |
Investments in affiliates, at value (Cost $367,088,224) | | | 261,873,102 | |
|
| |
Cash | | | 4,000,000 | |
|
| |
Foreign currencies, at value (Cost $1,962,706) | | | 1,957,366 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 17,236,354 | |
|
| |
Fund shares sold | | | 2,387,136 | |
|
| |
Dividends | | | 5,772,046 | |
|
| |
Interest | | | 24 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 259,816 | |
|
| |
Other assets | | | 65,915 | |
|
| |
Total assets | | | 3,251,985,048 | |
|
| |
| |
Liabilities: | | | | |
Payable for: | | | | |
Investments purchased | | | 4,337,592 | |
|
| |
Fund shares reacquired | | | 16,904,034 | |
|
| |
Accrued fees to affiliates | | | 1,364,844 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 139,916 | |
|
| |
Accrued other operating expenses | | | 132,372 | |
|
| |
Trustee deferred compensation and retirement plans | | | 259,816 | |
|
| |
Total liabilities | | | 23,138,574 | |
|
| |
Net assets applicable to shares outstanding | | $ | 3,228,846,474 | |
|
| |
| |
Net assets consist of: | | | | |
Shares of beneficial interest | | $ | 3,812,921,026 | |
|
| |
Distributable earnings (loss) | | | (584,074,552 | ) |
|
| |
| | $ | 3,228,846,474 | |
|
| |
| | | | |
Net Assets: | | | | |
Class A | | $ | 1,596,177,521 | |
|
| |
Class C | | $ | 120,384,472 | |
|
| |
Class R | | $ | 122,156,146 | |
|
| |
Class Y | | $ | 557,785,556 | |
|
| |
Class R5 | | $ | 34,505 | |
|
| |
Class R6 | | $ | 832,308,274 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
Class A | | | 39,982,015 | |
|
| |
Class C | | | 3,761,195 | |
|
| |
Class R | | | 3,279,963 | |
|
| |
Class Y | | | 13,541,464 | |
|
| |
Class R5 | | | 850 | |
|
| |
Class R6 | | | 19,908,371 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 39.92 | |
|
| |
Maximum offering price per share (Net asset value of $39.92 ÷ 94.50%) | | $ | 42.24 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 32.01 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 37.24 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 41.19 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 40.59 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 41.81 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco Global Opportunities Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
Interest | | $ | 38,942 | |
|
| |
Dividends (net of foreign withholding taxes of $2,421,709) | | | 17,681,872 | |
|
| |
Dividends from affiliates | | | 11,645,297 | |
|
| |
Foreign withholding tax claims | | | 288,256 | |
|
| |
Total investment income | | | 29,654,367 | |
|
| |
| |
Expenses: | | | | |
Advisory fees | | | 28,707,282 | |
|
| |
Administrative services fees | | | 603,235 | |
|
| |
Custodian fees | | | 167,894 | |
|
| |
Distribution fees: | | | | |
Class A | | | 4,845,794 | |
|
| |
Class C | | | 1,618,919 | |
|
| |
Class R | | | 751,495 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 4,861,086 | |
|
| |
Transfer agent fees – R5 | | | 689 | |
|
| |
Transfer agent fees – R6 | | | 334,048 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 69,666 | |
|
| |
Registration and filing fees | | | 171,966 | |
|
| |
Reports to shareholders | | | 511,547 | |
|
| |
Professional services fees | | | 89,474 | |
|
| |
Other | | | 80,338 | |
|
| |
Total expenses | | | 42,813,433 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (320,663 | ) |
|
| |
Net expenses | | | 42,492,770 | |
|
| |
Net investment income (loss) | | | (12,838,403 | ) |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities (includes net gains from securities sold to affiliates of $17,039,671) | | | 4,961,059 | |
|
| |
Affiliated investment securities | | | (902,574,220 | ) |
|
| |
Foreign currencies | | | (16,902 | ) |
|
| |
Forward foreign currency contracts | | | 5,481 | |
|
| |
| | | (897,624,582 | ) |
|
| |
Change in net unrealized appreciation of: | | | | |
Unaffiliated investment securities | | | 215,752,333 | |
|
| |
Affiliated investment securities | | | 669,987,450 | |
|
| |
Foreign currencies | | | 354,272 | |
|
| |
| | | 886,094,055 | |
|
| |
Net realized and unrealized gain (loss) | | | (11,530,527 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | $ | (24,368,930 | ) |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco Global Opportunities Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
Net investment income (loss) | | $ | (12,838,403) | | | $ | (31,046,834) | |
|
| |
Net realized gain (loss) | | | (897,624,582 | ) | | | 36,928,571 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | 886,094,055 | | | | (3,890,928,632 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | (24,368,930 | ) | | | (3,885,046,895 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
Class A | | | – | | | | (194,328,046 | ) |
|
| |
Class C | | | – | | | | (24,420,772 | ) |
|
| |
Class R | | | – | | | | (14,273,037 | ) |
|
| |
Class Y | | | – | | | | (113,074,056 | ) |
|
| |
Class R5 | | | – | | | | (66,097 | ) |
|
| |
Class R6 | | | – | | | | (101,013,872 | ) |
|
| |
Total distributions from distributable earnings | | | – | | | | (447,175,880 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
Class A | | | (296,425,975 | ) | | | (164,909,820 | ) |
|
| |
Class C | | | (43,732,593 | ) | | | (60,433,988 | ) |
|
| |
Class R | | | (14,136,949 | ) | | | 521,479 | |
|
| |
Class Y | | | (347,638,613 | ) | | | (468,704,535 | ) |
|
| |
Class R5 | | | (573,549 | ) | | | 182,418 | |
|
| |
Class R6 | | | (287,949,652 | ) | | | 46,604,325 | |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (990,457,331 | ) | | | (646,740,121 | ) |
|
| |
Net increase (decrease) in net assets | | | (1,014,826,261 | ) | | | (4,978,962,896 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
Beginning of year | | | 4,243,672,735 | | | | 9,222,635,631 | |
|
| |
End of year | | $ | 3,228,846,474 | | | $ | 4,243,672,735 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
13 | | Invesco Global Opportunities Fund |
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(c) | | Ratio of net investment income (loss) to average net assets | | Portfolio turnover (d) |
Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $41.51 | | | | $(0.19 | ) | | | $ (1.40 | ) | | | $ (1.59 | ) | | | $ – | | | | $39.92 | | | | (3.83 | )%(e) | | | $1,596,178 | | | | 1.11 | %(e) | | | 1.12 | %(e) | | | (0.41 | )%(e) | | | 29 | % |
Year ended 10/31/22 | | | 79.58 | | | | (0.34 | ) | | | (33.80 | ) | | | (34.14 | ) | | | (3.93 | ) | | | 41.51 | | | | (44.95 | )(e) | | | 1,927,070 | | | | 1.11 | (e) | | | 1.11 | (e) | | | (0.60 | )(e) | | | 9 | |
Year ended 10/31/21 | | | 68.56 | | | | (0.57 | ) | | | 18.59 | | | | 18.02 | | | | (7.00 | ) | | | 79.58 | | | | 26.83 | (e) | | | 3,991,359 | | | | 1.04 | (e) | | | 1.04 | (e) | | | (0.71 | )(e) | | | 7 | |
Year ended 10/31/20 | | | 57.92 | | | | (0.45 | ) | | | 14.86 | | | | 14.41 | | | | (3.77 | ) | | | 68.56 | | | | 25.88 | (e) | | | 3,359,360 | | | | 1.10 | (e) | | | 1.10 | (e) | | | (0.74 | )(e) | | | 12 | |
One month ended 10/31/19 | | | 56.16 | | | | (0.04 | ) | | | 1.80 | | | | 1.76 | | | | – | | | | 57.92 | | | | 3.13 | | | | 3,099,689 | | | | 1.09 | (f) | | | 1.09 | (f) | | | (0.90 | )(f) | | | 3 | |
Year ended 09/30/19 | | | 75.01 | | | | (0.15 | ) | | | (13.16 | ) | | | (13.31 | ) | | | (5.54 | ) | | | 56.16 | | | | (17.48 | ) | | | 3,059,916 | | | | 1.12 | | | | 1.12 | | | | (0.25 | ) | | | 12 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 33.54 | | | | (0.44 | ) | | | (1.09 | ) | | | (1.53 | ) | | | – | | | | 32.01 | | | | (4.56 | ) | | | 120,384 | | | | 1.87 | | | | 1.88 | | | | (1.17 | ) | | | 29 | |
Year ended 10/31/22 | | | 65.56 | | | | (0.63 | ) | | | (27.46 | ) | | | (28.09 | ) | | | (3.93 | ) | | | 33.54 | | | | (45.36 | ) | | | 165,705 | | | | 1.87 | | | | 1.87 | | | | (1.36 | ) | | | 9 | |
Year ended 10/31/21 | | | 57.90 | | | | (0.98 | ) | | | 15.64 | | | | 14.66 | | | | (7.00 | ) | | | 65.56 | | | | 25.89 | | | | 418,630 | | | | 1.80 | | | | 1.80 | | | | (1.47 | ) | | | 7 | |
Year ended 10/31/20 | | | 49.81 | | | | (0.77 | ) | | | 12.63 | | | | 11.86 | | | | (3.77 | ) | | | 57.90 | | | | 24.91 | | | | 422,919 | | | | 1.86 | | | | 1.86 | | | | (1.50 | ) | | | 12 | |
One month ended 10/31/19 | | | 48.32 | | | | (0.07 | ) | | | 1.56 | | | | 1.49 | | | | – | | | | 49.81 | | | | 3.08 | | | | 467,908 | | | | 1.84 | (f) | | | 1.84 | (f) | | | (1.65 | )(f) | | | 3 | |
Year ended 09/30/19 | | | 65.97 | | | | (0.52 | ) | | | (11.59 | ) | | | (12.11 | ) | | | (5.54 | ) | | | 48.32 | | | | (18.12 | ) | | | 469,174 | | | | 1.88 | | | | 1.88 | | | | (1.01 | ) | | | 12 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 38.83 | | | | (0.29 | ) | | | (1.30 | ) | | | (1.59 | ) | | | – | | | | 37.24 | | | | (4.10 | ) | | | 122,156 | | | | 1.37 | | | | 1.38 | | | | (0.67 | ) | | | 29 | |
Year ended 10/31/22 | | | 74.88 | | | | (0.45 | ) | | | (31.67 | ) | | | (32.12 | ) | | | (3.93 | ) | | | 38.83 | | | | (45.08 | ) | | | 139,891 | | | | 1.37 | | | | 1.37 | | | | (0.86 | ) | | | 9 | |
Year ended 10/31/21 | | | 65.02 | | | | (0.73 | ) | | | 17.59 | | | | 16.86 | | | | (7.00 | ) | | | 74.88 | | | | 26.49 | | | | 274,251 | | | | 1.30 | | | | 1.30 | | | | (0.97 | ) | | | 7 | |
Year ended 10/31/20 | | | 55.25 | | | | (0.58 | ) | | | 14.12 | | | | 13.54 | | | | (3.77 | ) | | | 65.02 | | | | 25.53 | | | | 233,141 | | | | 1.36 | | | | 1.36 | | | | (1.00 | ) | | | 12 | |
One month ended 10/31/19 | | | 53.58 | | | | (0.05 | ) | | | 1.72 | | | | 1.67 | | | | – | | | | 55.25 | | | | 3.12 | | | | 221,803 | | | | 1.34 | (f) | | | 1.34 | (f) | | | (1.15 | )(f) | | | 3 | |
Year ended 09/30/19 | | | 72.06 | | | | (0.28 | ) | | | (12.66 | ) | | | (12.94 | ) | | | (5.54 | ) | | | 53.58 | | | | (17.71 | ) | | | 218,747 | | | | 1.37 | | | | 1.37 | | | | (0.51 | ) | | | 12 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 42.73 | | | | (0.08 | ) | | | (1.46 | ) | | | (1.54 | ) | | | – | | | | 41.19 | | | | (3.60 | ) | | | 557,786 | | | | 0.87 | | | | 0.88 | | | | (0.17 | ) | | | 29 | |
Year ended 10/31/22 | | | 81.60 | | | | (0.21 | ) | | | (34.73 | ) | | | (34.94 | ) | | | (3.93 | ) | | | 42.73 | | | | (44.81 | ) | | | 892,146 | | | | 0.87 | | | | 0.87 | | | | (0.36 | ) | | | 9 | |
Year ended 10/31/21 | | | 70.00 | | | | (0.38 | ) | | | 18.98 | | | | 18.60 | | | | (7.00 | ) | | | 81.60 | | | | 27.13 | | | | 2,419,916 | | | | 0.80 | | | | 0.80 | | | | (0.47 | ) | | | 7 | |
Year ended 10/31/20 | | | 58.93 | | | | (0.31 | ) | | | 15.15 | | | | 14.84 | | | | (3.77 | ) | | | 70.00 | | | | 26.18 | | | | 1,940,275 | | | | 0.86 | | | | 0.86 | | | | (0.50 | ) | | | 12 | |
One month ended 10/31/19 | | | 57.13 | | | | (0.03 | ) | | | 1.83 | | | | 1.80 | | | | – | | | | 58.93 | | | | 3.15 | | | | 2,113,652 | | | | 0.84 | (f) | | | 0.84 | (f) | | | (0.65 | )(f) | | | 3 | |
Year ended 09/30/19 | | | 76.02 | | | | – | | | | (13.35 | ) | | | (13.35 | ) | | | (5.54 | ) | | | 57.13 | | | | (17.29 | ) | | | 2,120,749 | | | | 0.87 | | | | 0.87 | | | | (0.01 | ) | | | 12 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 42.08 | | | | (0.05 | ) | | | (1.44 | ) | | | (1.49 | ) | | | – | | | | 40.59 | | | | (3.54 | ) | | | 35 | | | | 0.81 | | | | 0.82 | | | | (0.11 | ) | | | 29 | |
Year ended 10/31/22 | | | 80.36 | | | | (0.16 | ) | | | (34.19 | ) | | | (34.35 | ) | | | (3.93 | ) | | | 42.08 | | | | (44.77 | ) | | | 625 | | | | 0.80 | | | | 0.80 | | | | (0.29 | ) | | | 9 | |
Year ended 10/31/21 | | | 68.95 | | | | (0.28 | ) | | | 18.69 | | | | 18.41 | | | | (7.00 | ) | | | 80.36 | | | | 27.28 | | | | 1,089 | | | | 0.68 | | | | 0.68 | | | | (0.35 | ) | | | 7 | |
Year ended 10/31/20 | | | 58.01 | | | | (0.21 | ) | | | 14.92 | | | | 14.71 | | | | (3.77 | ) | | | 68.95 | | | | 26.38 | | | | 12 | | | | 0.70 | | | | 0.70 | | | | (0.34 | ) | | | 12 | |
One month ended 10/31/19 | | | 56.23 | | | | (0.02 | ) | | | 1.80 | | | | 1.78 | | | | – | | | | 58.01 | | | | 3.16 | | | | 10 | | | | 0.68 | (f) | | | 0.68 | (f) | | | (0.50 | )(f) | | | 3 | |
Period ended 09/30/19(g) | | | 58.48 | | | | 0.03 | | | | (2.28 | ) | | | (2.25 | ) | | | – | | | | 56.23 | | | | (3.85 | ) | | | 10 | | | | 0.74 | (f) | | | 0.74 | (f) | | | 0.12 | (f) | | | 12 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 43.32 | | | | (0.02 | ) | | | (1.49 | ) | | | (1.51 | ) | | | – | | | | 41.81 | | | | (3.49 | ) | | | 832,308 | | | | 0.74 | | | | 0.75 | | | | (0.04 | ) | | | 29 | |
Year ended 10/31/22 | | | 82.55 | | | | (0.13 | ) | | | (35.17 | ) | | | (35.30 | ) | | | (3.93 | ) | | | 43.32 | | | | (44.73 | ) | | | 1,118,236 | | | | 0.73 | | | | 0.73 | | | | (0.22 | ) | | | 9 | |
Year ended 10/31/21 | | | 70.67 | | | | (0.30 | ) | | | 19.18 | | | | 18.88 | | | | (7.00 | ) | | | 82.55 | | | | 27.28 | | | | 2,117,391 | | | | 0.68 | | | | 0.68 | | | | (0.35 | ) | | | 7 | |
Year ended 10/31/20 | | | 59.37 | | | | (0.21 | ) | | | 15.28 | | | | 15.07 | | | | (3.77 | ) | | | 70.67 | | | | 26.39 | | | | 1,558,563 | | | | 0.70 | | | | 0.70 | | | | (0.34 | ) | | | 12 | |
One month ended 10/31/19 | | | 57.55 | | | | (0.02 | ) | | | 1.84 | | | | 1.82 | | | | – | | | | 59.37 | | | | 3.16 | | | | 1,288,373 | | | | 0.69 | (f) | | | 0.69 | (f) | | | (0.50 | )(f) | | | 3 | |
Year ended 09/30/19 | | | 76.41 | | | | 0.09 | | | | (13.41 | ) | | | (13.32 | ) | | | (5.54 | ) | | | 57.55 | | | | (17.16 | ) | | | 1,272,938 | | | | 0.71 | | | | 0.71 | | | | 0.15 | | | | 12 | |
(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) | Does not include estimated acquired fund fees from underlying funds of 0.00% for the one month ended October 31, 2019 and the year ended September 30, 2019. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b- 1 fees of 0.24% for the years ended October 31, 2023, 2022, 2021 and 2020, respectively. |
(g) | Commencement date after the close of business on May 24, 2019. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
14 | | Invesco Global Opportunities Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco Global Opportunities Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is to seek 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
| | |
15 | | Invesco Global Opportunities 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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund did not enter into any closing agreements.
G. | 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 based on relative net assets of Class R5 and Class R6. 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. |
H. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
J. | 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 the 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 |
| | |
16 | | Invesco Global Opportunities Fund |
| 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 exchange of the two currencies on the settlement date, 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).
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 for hedging 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 the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 | | | 0.800% | |
|
| |
Next $250 million | | | 0.770% | |
|
| |
Next $500 million | | | 0.750% | |
|
| |
Next $1 billion | | | 0.690% | |
|
| |
Next $1.5 billion | | | 0.670% | |
|
| |
Next $2.5 billion | | | 0.650% | |
|
| |
Next $4 billion | | | 0.630% | |
|
| |
Over $10 billion | | | 0.610% | |
|
| |
* | The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser. |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.68%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.
Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 2.25%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $213,535.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the annual rate of 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. The fees are accrued daily and paid monthly. Of the Plans 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
| | |
17 | | Invesco Global Opportunities Fund |
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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $223,163 in front-end sales commissions from the sale of Class A shares and $3,950 and $7,266 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
For the year ended October 31, 2023, the Fund incurred $65,335 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. 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 Adviser’s 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 October 31, 2023. 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 | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | |
|
| |
Australia | | $ | – | | | $ | 25,594,208 | | | | $– | | | $ | 25,594,208 | |
|
| |
Belgium | | | 8,678,906 | | | | – | | | | 5 | | | | 8,678,911 | |
|
| |
Brazil | | | 17,661,422 | | | | – | | | | – | | | | 17,661,422 | |
|
| |
China | | | – | | | | 18,483,594 | | | | – | | | | 18,483,594 | |
|
| |
Denmark | | | – | | | | 64,713,761 | | | | – | | | | 64,713,761 | |
|
| |
France | | | – | | | | 47,832,856 | | | | – | | | | 47,832,856 | |
|
| |
Germany | | | – | | | | 95,711,933 | | | | – | | | | 95,711,933 | |
|
| |
Ireland | | | 13,882,225 | | | | – | | | | – | | | | 13,882,225 | |
|
| |
Italy | | | – | | | | 83,551,214 | | | | – | | | | 83,551,214 | |
|
| |
Japan | | | – | | | | 517,677,125 | | | | – | | | | 517,677,125 | |
|
| |
Norway | | | – | | | | 99,111,424 | | | | – | | | | 99,111,424 | |
|
| |
South Korea | | | – | | | | 15,390,846 | | | | – | | | | 15,390,846 | |
|
| |
Sweden | | | – | | | | 162,898,436 | | | | – | | | | 162,898,436 | |
|
| |
Switzerland | | | – | | | | 53,692,780 | | | | – | | | | 53,692,780 | |
|
| |
Taiwan | | | – | | | | 15,168,698 | | | | – | | | | 15,168,698 | |
|
| |
Thailand | | | – | | | | 18,077,432 | | | | – | | | | 18,077,432 | |
|
| |
United Kingdom | | | – | | | | 328,424,376 | | | | – | | | | 328,424,376 | |
|
| |
United States | | | 1,468,264,962 | | | | – | | | | – | | | | 1,468,264,962 | |
|
| |
Money Market Funds | | | 165,490,188 | | | | – | | | | – | | | | 165,490,188 | |
|
| |
Total Investments | | $ | 1,673,977,703 | | | $ | 1,546,328,683 | | | | $5 | | | $ | 3,220,306,391 | |
|
| |
NOTE 4–Derivative Investments
The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
The table below reflects the Fund’s exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of October 31, 2023.
| | |
18 | | Invesco Global Opportunities Fund |
Effect of Derivative Investments for the year ended October 31, 2023
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| | | | |
| | Location of Gain on Statement of Operations | |
| | Currency Risk | |
|
| |
Realized Gain: | | | | |
Forward foreign currency contracts | | | $5,481 | |
|
| |
The table below summarizes the average notional value of derivatives held during the period.
| | | | |
| | Forward Foreign Currency Contracts | |
|
| |
Average notional value | | | $4,183,398 | |
|
| |
NOTE 5–Security Transactions with Affiliated Funds
The Fund is permitted to purchase securities from or sell securities to certain other affiliated 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 that is or could be considered an “affiliated person” by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers is made in reliance on Rule 17a-7 of the 1940 Act and, to the extent applicable, related SEC staff positions. Each such transaction is effected at the security’s “current market price”, as provided for in these procedures and Rule 17a-7. Pursuant to these procedures, for the year ended October 31, 2023, the Fund engaged in securities purchases of $112,959,090 and securities sales of $31,999,324, which resulted in net realized gains of $17,039,671.
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $107,128.
NOTE 7–Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8–Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 9–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | |
| | 2023 | | | | | 2022 | |
|
| |
Long-term capital gain | | $– | | | | | | | $447,175,880 | |
|
| |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Net unrealized appreciation – investments | | $ | 319,817,975 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (300,180 | ) |
|
| |
Temporary book/tax differences | | | (391,046 | ) |
|
| |
Late-Year ordinary loss deferral | | | (7,694,357 | ) |
|
| |
Capital loss carryforward | | | (895,506,944 | ) |
|
| |
Shares of beneficial interest | | | 3,812,921,026 | |
|
| |
Total net assets | | $ | 3,228,846,474 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales, passive foreign investment companies and distributions.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
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19 | | Invesco Global Opportunities 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. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund has a capital loss carryforward as of October 31, 2023, as follows:
| | | | | | | | | | | | |
Capital Loss Carryforward* | |
Expiration | | Short-Term | | | Long-Term | | | Total | |
|
| |
Not subject to expiration | | $ | 34,166,250 | | | $ | 861,340,694 | | | $ | 895,506,944 | |
|
| |
* | Capital loss carryforward 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 Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $1,162,690,435 and $2,113,535,425, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $1,009,480,279 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (689,662,304 | ) |
|
| |
Net unrealized appreciation of investments | | | $ 319,817,975 | |
|
| |
Cost of investments for tax purposes is $2,900,488,416.
NOTE 11–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of net operating losses, on October 31, 2023, undistributed net investment income (loss) was increased by $9,935,672, undistributed net realized gain (loss) was decreased by $611,802 and shares of beneficial interest was decreased by $9,323,870. This reclassification had no effect on the net assets of the Fund.
NOTE 12–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 2,540,384 | | | $ | 118,002,087 | | | | 3,254,628 | | | $ | 185,584,018 | |
|
| |
Class C | | | 378,443 | | | | 14,168,397 | | | | 443,106 | | | | 19,998,680 | |
|
| |
Class R | | | 436,950 | | | | 18,904,725 | | | | 608,409 | | | | 31,896,957 | |
|
| |
Class Y | | | 2,789,887 | | | | 133,157,630 | | | | 5,028,780 | | | | 296,706,405 | |
|
| |
Class R5 | | | 1,279 | | | | 61,779 | | | | 4,580 | | | | 323,793 | |
|
| |
Class R6 | | | 4,167,234 | | | | 201,017,423 | | | | 7,776,012 | | | | 452,950,123 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | – | | | | – | | | | 2,569,622 | | | | 182,161,472 | |
|
| |
Class C | | | – | | | | – | | | | 402,014 | | | | 23,172,081 | |
|
| |
Class R | | | – | | | | – | | | | 214,377 | | | | 14,245,371 | |
|
| |
Class Y | | | – | | | | – | | | | 1,308,410 | | | | 95,265,309 | |
|
| |
Class R5 | | | – | | | | – | | | | 906 | | | | 64,942 | |
|
| |
Class R6 | | | – | | | | – | | | | 1,304,716 | | | | 96,170,583 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 288,485 | | | | 13,310,848 | | | | 449,469 | | | | 25,099,203 | |
|
| |
Class C | | | (358,454 | ) | | | (13,310,848 | ) | | | (553,670 | ) | | | (25,099,203 | ) |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (9,265,676 | ) | | | (427,738,910 | ) | | | (10,011,459 | ) | | | (557,754,513 | ) |
|
| |
Class C | | | (1,199,722 | ) | | | (44,590,142 | ) | | | (1,736,307 | ) | | | (78,505,546 | ) |
|
| |
Class R | | | (759,641 | ) | | | (33,041,674 | ) | | | (882,467 | ) | | | (45,620,849 | ) |
|
| |
Class Y | | | (10,127,065 | ) | | | (480,796,243 | ) | | | (15,114,185 | ) | | | (860,676,249 | ) |
|
| |
Class R5 | | | (15,279 | ) | | | (635,328 | ) | | | (4,193 | ) | | | (206,317 | ) |
|
| |
Class R6 | | | (10,074,414 | ) | | | (488,967,075 | ) | | | (8,916,516 | ) | | | (502,516,381 | ) |
|
| |
Net increase (decrease) in share activity | | | (21,197,589 | ) | | $ | (990,457,331 | ) | | | (13,853,768 | ) | | $ | (646,740,121 | ) |
|
| |
(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. |
| | |
20 | | Invesco Global Opportunities Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco Global Opportunities Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco Global Opportunities Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent, and broker; when replies were not received from the broker, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
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21 | | Invesco Global Opportunities Fund |
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $871.10 | | $5.23 | | $1,019.61 | | $5.65 | | 1.11% |
Class C | | 1,000.00 | | 867.50 | | 8.80 | | 1,015.78 | | 9.50 | | 1.87 |
Class R | | 1,000.00 | | 869.90 | | 6.46 | | 1,018.30 | | 6.97 | | 1.37 |
Class Y | | 1,000.00 | | 872.10 | | 4.11 | | 1,020.82 | | 4.43 | | 0.87 |
Class R5 | | 1,000.00 | | 872.40 | | 3.92 | | 1,021.02 | | 4.23 | | 0.83 |
Class R6 | | 1,000.00 | | 872.40 | | 3.49 | | 1,021.48 | | 3.77 | | 0.74 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
22 | | Invesco Global Opportunities Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Global Opportunities Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an
independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to
attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country World Index (Index). The Board noted that performance of Class A shares of the Fund was in the fifth quintile of its performance universe for the one, three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of
| | |
23 | | Invesco Global Opportunities Fund |
the Fund was below the performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board considered that the Fund’s exposure to certain sectors and names detracted from Fund performance. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the
performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and
| | |
24 | | Invesco Global Opportunities Fund |
the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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25 | | Invesco Global Opportunities Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | |
Federal and State Income Tax | | | | | | |
Qualified Dividend Income* | | | 0.00 | % | | | | |
Corporate Dividends Received Deduction* | | | 0.00 | % | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | |
Qualified Business Income* | | | 0.00 | % | | | | |
Business Interest Income* | | | 0.00 | % | | | | |
|
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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26 | | Invesco Global Opportunities Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
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T-1 | | Invesco Global Opportunities Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler - 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Board Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management - Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T-2 | | Invesco Global Opportunities Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver - Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort -1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco Global Opportunities Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco Global Opportunities Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco Global Opportunities Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
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Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
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T-6 | | Invesco Global Opportunities Fund |
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Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
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∎ Fund reports and prospectuses
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | O-GLOPP-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco EQV International Equity Fund
Nasdaq:
A: AIIEX ∎ C: AIECX ∎ R: AIERX ∎ Y: AIIYX ∎ R5: AIEVX ∎ R6: IGFRX
Management’s Discussion of Fund Performance
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Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco EQV International Equity Fund (the Fund), at net asset value (NAV), outperformed the MSCI All Country World ex USA Index, the Fund’s broad market benchmark. | |
Your Fund’s long-term performance appears later in this report. | |
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Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance. | |
Class A Shares | | | 12.52 | % |
Class C Shares | | | 11.63 | |
Class R Shares | | | 12.19 | |
Class Y Shares | | | 12.80 | |
Class R5 Shares | | | 12.92 | |
Class R6 Shares | | | 12.92 | |
MSCI All Country World ex USA Index▼ (Broad Market Index) | | | 12.07 | |
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Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within emerging markets, China’s equities were
weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
Regardless of the macroeconomic environment, we remain focused on our bottom-up investment approach of identifying attractive companies that fit our earnings, quality, and valuation (EQV) process.
The Invesco EQV International Equity Fund (Class A shares) outperformed the MSCI All Country World ex USA Index for the fiscal year.
Strong stock selection and an overweight in information technology (IT) was the largest contributor to relative performance. US semiconductor products manufacturer Broadcom was a key contributor to both absolute and relative results within the IT sector. The frenzy over generative AI during the fiscal year led to significant appreciation in the stock price. Fund holdings in the materials sector outperformed those of the benchmark index, adding to relative return. Irish building materials company CRH and multinational chemical company Linde were notable relative contributors within the materials sector. Stock selection in industrials also contributed to relative performance with RELX, a British global provider of information-based analytics and decision tools for professional and business customers, being a key relative contributor. On a geographic basis, the Fund’s US holdings were the largest contributors to relative results. Additionally, stock selection in Canada and Denmark, an underweight in Canada and an overweight in Denmark added to relative performance as well.
Conversely, stock selection in the financials sector was the largest detractor from relative return. Within financials, India-based HDFC Bank was a notable relative detractor. The bank recently finalized a merger with its former parent company. Surprises in the merger accounting, with slightly lower-than-expected margins and equity, caused a selloff. However, we believe the bank’s financial performance and outlook remain favorable with no change to strong long-term fundamentals, including earnings power. Stock selection in consumer discretionary also detracted from relative performance with Canadian global auto parts manufacturer Magna International being a key detractor. Fund holdings in the health care sector underperformed those of the benchmark index, detracting from relative results. An underweight in the health care sector also had a negative effect on relative return. Japanese optics and reprography manufacturer Olympus was a notable relative detractor within health care during the fiscal year. Geographically, stock selection in Japan, Italy and Brazil, as well as an overweight in Brazil, were among the largest detractors from relative performance.
During the fiscal year, we continued to look for opportunities to improve the growth potential and quality of the Fund’s portfolio by adding companies based on our evaluation of the EQV characteristics for each company. We added several new holdings, including British consumer health company Haleon, Japanese cycling components manufacturer Shimano and Indian life insurance company SBI Life Insurance. We sold several holdings during the fiscal year, including Swiss computer peripherals and software manufacturer
Logitech International, Swedish forest and garden products and services company Husqvarna and Brazilian hospital operator
Rede D’Or Sao Luiz.
As always, we remain focused on a bottom-up investment approach of identifying attractive companies that fit our EQV-focused investment process. Our EQV investment approach focuses on earnings, demonstrated by sustainable earnings growth; quality, demonstrated by efficient capital allocation; and valuation, demonstrated by attractive prices. Our balanced EQV-focused approach aligns with our goal of delivering attractive risk-adjusted returns over the long term.
We thank you for your continued investment in Invesco EQV International Equity Fund.
| | |
2 | | Invesco EQV International Equity Fund |
Portfolio manager(s):
Brent Bates
Mark Jason
Richard Nield
Clas Olsson
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
| | |
3 | | Invesco EQV International Equity Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g454237dsp4.jpg)
1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
| | |
4 | | Invesco EQV International Equity Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (4/7/92) | | | 6.32 | % |
10 Years | | | 2.22 | |
5 Years | | | 3.09 | |
1 Year | | | 6.34 | |
| |
Class C Shares | | | | |
Inception (8/4/97) | | | 4.33 | % |
10 Years | | | 2.19 | |
5 Years | | | 3.49 | |
1 Year | | | 10.65 | |
| |
Class R Shares | | | | |
Inception (6/3/02) | | | 5.50 | % |
10 Years | | | 2.55 | |
5 Years | | | 4.01 | |
1 Year | | | 12.19 | |
| |
Class Y Shares | | | | |
Inception (10/3/08) | | | 5.30 | % |
10 Years | | | 3.06 | |
5 Years | | | 4.53 | |
1 Year | | | 12.80 | |
| |
Class R5 Shares | | | | |
Inception (3/15/02) | | | 6.21 | % |
10 Years | | | 3.15 | |
5 Years | | | 4.62 | |
1 Year | | | 12.92 | |
| |
Class R6 Shares | | | | |
Inception (9/24/12) | | | 4.52 | % |
10 Years | | | 3.23 | |
5 Years | | | 4.69 | |
1 Year | | | 12.92 | |
The performance data quoted represent past performance and cannot guarantee 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.
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.
| | |
5 | | Invesco EQV International Equity Fund |
Supplemental Information
Invesco EQV International Equity Fund’s investment objective is long-term growth of capital.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World ex USA® Index is an index considered representative of developed and emerging stock markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
| | |
6 | | Invesco EQV International Equity Fund |
Fund Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Industrials | | | | 21.02 | % |
| |
Consumer Staples | | | | 18.27 | |
| |
Information Technology | | | | 13.84 | |
| |
Financials | | | | 13.37 | |
| |
Consumer Discretionary | | | | 12.53 | |
| |
Health Care | | | | 7.79 | |
| |
Materials | | | | 6.60 | |
| |
Energy | | | | 3.41 | |
| |
Communication Services | | | | 1.26 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | | 1.91 | |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Wal-Mart de Mexico S.A.B. de C.V., Series V | | | | 3.08 | % |
| | |
2. | | Investor AB, Class B | | | | 2.80 | |
| | |
3. | | Broadcom, Inc. | | | | 2.72 | |
| | |
4. | | RELX PLC | | | | 2.57 | |
| | |
5. | | Novo Nordisk A/S, Class B | | | | 2.55 | |
| | |
6. | | ICON PLC | | | | 2.48 | |
| | |
7. | | Linde PLC | | | | 2.39 | |
| | |
8. | | Taiwan Semiconductor Manufacturing Co. Ltd. | | | | 2.31 | |
| | |
9. | | CGI, Inc., Class A | | | | 2.29 | |
| | |
10. | | HDFC Bank Ltd., ADR | | | | 2.26 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
| | |
7 | | Invesco EQV International Equity Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests-98.09% | |
Australia-1.90% | |
Aristocrat Leisure Ltd. | | | 910,651 | | | $ | 22,593,369 | |
|
| |
CSL Ltd. | | | 175,570 | | | | 25,994,181 | |
|
| |
| | | | | | | 48,587,550 | |
|
| |
|
Brazil-1.67% | |
B3 S.A. - Brasil, Bolsa, Balcao | | | 9,385,806 | | | | 20,663,946 | |
|
| |
MercadoLibre, Inc.(a) | | | 17,718 | | | | 21,983,431 | |
|
| |
| | | | | | | 42,647,377 | |
|
| |
|
Canada-4.47% | |
CGI, Inc., Class A(a) | | | 607,410 | | | | 58,640,743 | |
|
| |
Magna International, Inc. | | | 456,839 | | | | 21,953,309 | |
|
| |
RB Global, Inc. | | | 516,315 | | | | 33,788,056 | |
|
| |
| | | | | | | 114,382,108 | |
|
| |
|
China-7.35% | |
Airtac International Group | | | 1,238,000 | | | | 40,481,259 | |
|
| |
China Mengniu Dairy Co. Ltd.(a) | | | 10,424,000 | | | | 34,339,888 | |
|
| |
China Resources Beer Holdings Co. Ltd. | | | 6,438,000 | | | | 34,040,567 | |
|
| |
Wuliangye Yibin Co. Ltd., A Shares | | | 1,691,576 | | | | 36,096,012 | |
|
| |
Yum China Holdings, Inc. | | | 820,675 | | | | 43,134,678 | |
|
| |
| | | | | | | 188,092,404 | |
|
| |
|
Denmark-3.22% | |
Carlsberg A/S, Class B | | | 145,294 | | | | 17,336,560 | |
|
| |
Novo Nordisk A/S, Class B | | | 675,234 | | | | 65,116,407 | |
|
| |
| | | | | | | 82,452,967 | |
|
| |
|
France-12.08% | |
Air Liquide S.A. | | | 250,612 | | | | 42,951,954 | |
|
| |
Arkema S.A. | | | 260,133 | | | | 24,412,744 | |
|
| |
Capgemini SE | | | 161,593 | | | | 28,642,350 | |
|
| |
LVMH Moet Hennessy Louis Vuitton SE | | | 76,078 | | | | 54,446,567 | |
|
| |
Pernod Ricard S.A. | | | 180,325 | | | | 32,061,658 | |
|
| |
Publicis Groupe S.A. | | | 421,426 | | | | 32,175,561 | |
|
| |
Schneider Electric SE | | | 315,339 | | | | 48,491,182 | |
|
| |
TotalEnergies SE | | | 685,091 | | | | 45,882,907 | |
|
| |
| | | | | | | 309,064,923 | |
|
| |
|
Germany-1.28% | |
Deutsche Boerse AG | | | 200,115 | | | | 32,870,435 | |
|
| |
|
Hong Kong-3.32% | |
AIA Group Ltd. | | | 4,676,200 | | | | 40,725,917 | |
|
| |
Techtronic Industries Co. Ltd. | | | 4,865,500 | | | | 44,126,492 | |
|
| |
| | | | | | | 84,852,409 | |
|
| |
|
India-3.34% | |
HDFC Bank Ltd., ADR | | | 1,022,813 | | | | 57,840,075 | |
|
| |
SBI Life Insurance Co. Ltd.(b) | | | 1,683,742 | | | | 27,688,204 | |
|
| |
| | | | | | | 85,528,279 | |
|
| |
|
Ireland-2.12% | |
Flutter Entertainment PLC(a) | | | 203,807 | | | | 32,067,182 | |
|
| |
Kingspan Group PLC | | | 328,856 | | | | 22,113,561 | |
|
| |
| | | | | | | 54,180,743 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Italy-1.89% | |
FinecoBank Banca Fineco S.p.A. | | | 4,092,693 | | | $ | 48,314,308 | |
|
| |
|
Japan-11.67% | |
Asahi Group Holdings Ltd. | | | 1,482,600 | | | | 53,524,024 | |
|
| |
FANUC Corp.(c) | | | 1,789,060 | | | | 45,892,408 | |
|
| |
Hoya Corp. | | | 335,200 | | | | 32,245,076 | |
|
| |
Keyence Corp. | | | 34,100 | | | | 13,200,177 | |
|
| |
Komatsu Ltd. | | | 652,700 | | | | 15,133,848 | |
|
| |
Olympus Corp. | | | 933,400 | | | | 12,510,508 | |
|
| |
Shimano, Inc. | | | 203,600 | | | | 29,484,719 | |
|
| |
SMC Corp. | | | 41,700 | | | | 19,218,406 | |
|
| |
Sony Group Corp. | | | 503,100 | | | | 41,638,478 | |
|
| |
Tokyo Electron Ltd. | | | 264,900 | | | | 35,582,211 | |
|
| |
| | | | | | | 298,429,855 | |
|
| |
|
Mexico-3.08% | |
Wal-Mart de Mexico S.A.B. de C.V., Series V | | | 22,027,702 | | | | 78,842,288 | |
|
| |
|
Netherlands-7.15% | |
ASML Holding N.V. | | | 69,807 | | | | 41,993,064 | |
|
| |
Heineken N.V.(c) | | | 482,540 | | | | 43,356,049 | |
|
| |
Shell PLC | | | 1,291,155 | | | | 41,495,570 | |
|
| |
Wolters Kluwer N.V. | | | 436,449 | | | | 56,122,331 | |
|
| |
| | | | | | | 182,967,014 | |
|
| |
|
Singapore-0.65% | |
United Overseas Bank Ltd. | | | 838,366 | | | | 16,550,770 | |
|
| |
|
South Korea-1.85% | |
Samsung Electronics Co. Ltd. | | | 947,919 | | | | 47,268,622 | |
|
| |
|
Spain-1.15% | |
Amadeus IT Group S.A. | | | 513,265 | | | | 29,323,903 | |
|
| |
|
Sweden-5.22% | |
Investor AB, Class B(c) | | | 3,893,005 | | | | 71,568,065 | |
|
| |
Sandvik AB | | | 2,126,607 | | | | 36,180,111 | |
|
| |
Svenska Handelsbanken AB, Class A | | | 3,042,950 | | | | 25,905,513 | |
|
| |
| | | | | | | 133,653,689 | |
|
| |
|
Switzerland-3.66% | |
Cie Financiere Richemont S.A. | | | 201,303 | | | | 23,768,307 | |
|
| |
Kuehne + Nagel International AG, Class R | | | 53,995 | | | | 14,586,350 | |
|
| |
Nestle S.A. | | | 511,372 | | | | 55,168,802 | |
|
| |
| | | | | | | 93,523,459 | |
|
| |
|
Taiwan-2.31% | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 3,578,887 | | | | 58,964,390 | |
|
| |
|
United Kingdom-9.54% | |
Ashtead Group PLC | | | 691,867 | | | | 39,630,929 | |
|
| |
BAE Systems PLC | | | 2,107,933 | | | | 28,299,880 | |
|
| |
DCC PLC | | | 497,651 | | | | 27,634,192 | |
|
| |
Haleon PLC | | | 10,839,131 | | | | 43,383,163 | |
|
| |
Reckitt Benckiser Group PLC | | | 588,988 | | | | 39,485,521 | |
|
| |
RELX PLC | | | 1,877,568 | | | | 65,675,322 | |
|
| |
| | | | | | | 244,109,007 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco EQV International Equity Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United States-9.17% | |
Broadcom, Inc. | | | 82,738 | | | $ | 69,613,271 | |
|
| |
CRH PLC | | | 755,562 | | | | 40,475,456 | |
|
| |
ICON PLC(a)(c) | | | 260,275 | | | | 63,496,689 | |
|
| |
Linde PLC | | | 159,534 | | | | 60,967,514 | |
|
| |
| | | | | | | 234,552,930 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $2,027,215,472) | | | | 2,509,159,430 | |
|
| |
|
Money Market Funds-1.44% | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e) | | | 12,896,297 | | | | 12,896,297 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e) | | | 9,174,865 | | | | 9,177,617 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e) | | | 14,738,625 | | | | 14,738,625 | |
|
| |
Total Money Market Funds (Cost $36,811,024) | | | | 36,812,539 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES (excluding Investments purchased with cash collateral from securities on loan)-99.53% (Cost $2,064,026,496) | | | | 2,545,971,969 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Investments Purchased with Cash Collateral from Securities on Loan | |
Money Market Funds-3.67% | |
Invesco Private Government Fund, 5.32%(d)(e)(f) | | | 26,296,305 | | | $ | 26,296,305 | |
|
| |
Invesco Private Prime Fund, 5.53%(d)(e)(f) | | | 67,620,824 | | | | 67,627,586 | |
|
| |
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $93,923,635) | | | | 93,923,891 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES-103.20% (Cost $2,157,950,131) | | | | 2,639,895,860 | |
|
| |
OTHER ASSETS LESS LIABILITIES-(3.20)% | | | | (81,829,451 | ) |
|
| |
NET ASSETS-100.00% | | | $ | 2,558,066,409 | |
|
| |
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(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 value of this security at October 31, 2023 represented 1.08% of the Fund’s Net Assets. |
(c) | All or a portion of this security was out on loan at October 31, 2023. |
(d) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | Realized Gain | | | Value October 31, 2023 | | | Dividend Income | |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | $ | 8,293,455 | | | $ | 177,619,151 | | | $ | (173,016,309 | ) | | $ - | | $ | - | | | $ | 12,896,297 | | | | $ 777,123 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 5,779,253 | | | | 126,358,529 | | | | (122,961,974 | ) | | (1,126) | | | 2,935 | | | | 9,177,617 | | | | 562,807 | |
Invesco Treasury Portfolio, Institutional Class | | | 9,478,235 | | | | 202,993,315 | | | | (197,732,925 | ) | | - | | | - | | | | 14,738,625 | | | | 887,002 | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Private Government Fund | | | 22,662,648 | | | | 285,533,498 | | | | (281,899,841 | ) | | - | | | - | | | | 26,296,305 | | | | 505,436* | |
Invesco Private Prime Fund | | | 58,261,438 | | | | 571,709,746 | | | | (562,341,860 | ) | | (2,746) | | | 1,008 | | | | 67,627,586 | | | | 1,301,637* | |
Total | | $ | 104,475,029 | | | $ | 1,364,214,239 | | | $ | (1,337,952,909 | ) | | $ (3,872) | | $ | 3,943 | | | $ | 130,736,430 | | | | $ 4,034,005 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco EQV International Equity Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $2,027,215,472)* | | $ | 2,509,159,430 | |
|
| |
Investments in affiliated money market funds, at value (Cost $130,734,659) | | | 130,736,430 | |
|
| |
Foreign currencies, at value (Cost $1,354,954) | | | 1,348,217 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 5,057,573 | |
|
| |
Fund shares sold | | | 640,819 | |
|
| |
Dividends | | | 9,632,064 | |
|
| |
Foreign withholding tax claims | | | 1,432,797 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 605,359 | |
|
| |
Other assets | | | 66,674 | |
|
| |
Total assets | | | 2,658,679,363 | |
|
| |
| |
Liabilities: | | | | |
| |
Payable for: | | | | |
Fund shares reacquired | | | 3,150,341 | |
|
| |
Amount due custodian | | | 2,000 | |
|
| |
Accrued foreign taxes | | | 254,884 | |
|
| |
Collateral upon return of securities loaned | | | 93,923,635 | |
|
| |
Accrued fees to affiliates | | | 868,027 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 3,783 | |
|
| |
Accrued other operating expenses | | | 89,748 | |
|
| |
IRS closing agreement fees for foreign withholding tax claims | | | 1,610,028 | |
|
| |
Trustee deferred compensation and retirement plans | | | 710,508 | |
|
| |
Total liabilities | | | 100,612,954 | |
|
| |
Net assets applicable to shares outstanding | | $ | 2,558,066,409 | |
|
| |
| |
Net assets consist of: | | | | |
| |
Shares of beneficial interest | | $ | 2,100,314,198 | |
|
| |
Distributable earnings | | | 457,752,211 | |
|
| |
| | $ | 2,558,066,409 | |
|
| |
| | | | |
Net Assets: | | | | |
| |
Class A | | $ | 992,448,592 | |
|
| |
Class C | | $ | 19,287,313 | |
|
| |
Class R | | $ | 51,541,353 | |
|
| |
Class Y | | $ | 344,434,877 | |
|
| |
Class R5 | | $ | 103,658,153 | |
|
| |
Class R6 | | $ | 1,046,696,121 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
| |
Class A | | | 48,993,604 | |
|
| |
Class C | | | 1,131,316 | |
|
| |
Class R | | | 2,609,806 | |
|
| |
Class Y | | | 16,897,519 | |
|
| |
Class R5 | | | 4,949,654 | |
|
| |
Class R6 | | | 50,173,138 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 20.26 | |
|
| |
Maximum offering price per share (Net asset value of $20.26 ÷ 94.50%) | | $ | 21.44 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 17.05 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 19.75 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 20.38 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 20.94 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 20.86 | |
|
| |
* | At October 31, 2023, securities with an aggregate value of $89,946,729 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco EQV International Equity Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Dividends (net of foreign withholding taxes of $3,336,627) | | $ | 41,791,479 | |
|
| |
| |
Dividends from affiliated money market funds (includes net securities lending income of $200,635) | | | 2,427,567 | |
|
| |
| |
Foreign withholding tax claims | | | 1,432,797 | |
|
| |
Less: IRS closing agreement fees for foreign withholding tax claims | | | (957,028 | ) |
|
| |
Total investment income | | | 44,694,815 | |
|
| |
| |
Expenses: | | | | |
| |
Advisory fees | | | 18,906,541 | |
|
| |
Administrative services fees | | | 285,644 | |
|
| |
Custodian fees | | | 132,868 | |
|
| |
Distribution fees: | | | | |
Class A | | | 2,450,622 | |
|
| |
Class C | | | 167,835 | |
|
| |
Class R | | | 194,141 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 2,613,023 | |
|
| |
Transfer agent fees – R5 | | | 99,915 | |
|
| |
Transfer agent fees – R6 | | | 220,081 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 32,291 | |
|
| |
Registration and filing fees | | | 153,595 | |
|
| |
Reports to shareholders | | | 284,528 | |
|
| |
Professional services fees | | | 145,679 | |
|
| |
Other | | | 79,260 | |
|
| |
Total expenses | | | 25,766,023 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (80,010 | ) |
|
| |
Net expenses | | | 25,686,013 | |
|
| |
Net investment income | | | 19,008,802 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
| |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities | | | 18,404,757 | |
|
| |
Affiliated investment securities | | | 3,943 | |
|
| |
Foreign currencies | | | (549,033 | ) |
|
| |
| | | 17,859,667 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities (net of foreign taxes of $254,884) | | | 114,173,354 | |
|
| |
Affiliated investment securities | | | (3,872 | ) |
|
| |
Foreign currencies | | | 202,608 | |
|
| |
| | | 114,372,090 | |
|
| |
Net realized and unrealized gain | | | 132,231,757 | |
|
| |
Net increase in net assets resulting from operations | | $ | 151,240,559 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco EQV International Equity Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
| | |
Net investment income | | $ | 19,008,802 | | | $ | 23,162,683 | |
|
| |
Net realized gain | | | 17,859,667 | | | | 273,331,953 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | 114,372,090 | | | | (965,346,024 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 151,240,559 | | | | (668,851,388 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
| | |
Class A | | | (98,094,559 | ) | | | (269,566,679 | ) |
|
| |
Class C | | | (1,912,258 | ) | | | (5,944,677 | ) |
|
| |
Class R | | | (3,534,697 | ) | | | (9,009,500 | ) |
|
| |
Class Y | | | (36,124,026 | ) | | | (147,915,684 | ) |
|
| |
Class R5 | | | (11,669,366 | ) | | | (36,378,164 | ) |
|
| |
Class R6 | | | (60,952,005 | ) | | | (160,121,795 | ) |
|
| |
Total distributions from distributable earnings | | | (212,286,911 | ) | | | (628,936,499 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
| | |
Class A | | | 129,098,707 | | | | 103,125,726 | |
|
| |
Class C | | | 5,494,619 | | | | (1,143,848 | ) |
|
| |
Class R | | | 23,890,337 | | | | 5,380,358 | |
|
| |
Class Y | | | (8,718,276 | ) | | | (103,788,271 | ) |
|
| |
Class R5 | | | (725,360 | ) | | | (217,864,583 | ) |
|
| |
Class R6 | | | 655,972,473 | | | | (10,760,493 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | 805,012,500 | | | | (225,051,111 | ) |
|
| |
Net increase (decrease) in net assets | | | 743,966,148 | | | | (1,522,838,998 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
| | |
Beginning of year | | | 1,814,100,261 | | | | 3,336,939,259 | |
|
| |
End of year | | $ | 2,558,066,409 | | | $ | 1,814,100,261 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco EQV International Equity Fund |
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 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $20.15 | | | | $ 0.14 | | | | $ 2.32 | | | | $ 2.46 | | | | $ - | | | | $(2.35 | ) | | | $(2.35 | ) | | | $20.26 | | | | 12.52 | % | | | $ 992,449 | | | | 1.34 | % | | | 1.34 | % | | | 0.67 | % | | | 32 | % |
Year ended 10/31/22 | | | 33.82 | | | | 0.19 | | | | (6.92 | ) | | | (6.73 | ) | | | (0.55 | ) | | | (6.39 | ) | | | (6.94 | ) | | | 20.15 | | | | (24.90 | ) | | | 866,495 | | | | 1.35 | | | | 1.35 | | | | 0.80 | | | | 39 | |
Year ended 10/31/21 | | | 31.34 | | | | 0.05 | | | | 6.54 | | | | 6.59 | | | | (0.30 | ) | | | (3.81 | ) | | | (4.11 | ) | | | 33.82 | | | | 21.99 | | | | 1,338,896 | | | | 1.32 | | | | 1.32 | | | | 0.14 | | | | 25 | |
Year ended 10/31/20 | | | 34.10 | | | | 0.11 | | | | 0.62 | | | | 0.73 | | | | (0.65 | ) | | | (2.84 | ) | | | (3.49 | ) | | | 31.34 | | | | 1.97 | | | | 1,262,456 | | | | 1.35 | | | | 1.35 | | | | 0.36 | | | | 35 | |
Year ended 10/31/19 | | | 31.92 | | | | 0.38 | | | | 4.55 | | | | 4.93 | | | | (0.29 | ) | | | (2.46 | ) | | | (2.75 | ) | | | 34.10 | | | | 17.23 | | | | 1,534,830 | | | | 1.33 | | | | 1.33 | | | | 1.20 | | | | 22 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 17.42 | | | | (0.01 | ) | | | 1.99 | | | | 1.98 | | | | - | | | | (2.35 | ) | | | (2.35 | ) | | | 17.05 | | | | 11.63 | | | | 19,287 | | | | 2.09 | | | | 2.09 | | | | (0.08 | ) | | | 32 | |
Year ended 10/31/22 | | | 30.08 | | | | 0.01 | | | | (6.01 | ) | | | (6.00 | ) | | | (0.27 | ) | | | (6.39 | ) | | | (6.66 | ) | | | 17.42 | | | | (25.45 | ) | | | 14,712 | | | | 2.10 | | | | 2.10 | | | | 0.05 | | | | 39 | |
Year ended 10/31/21 | | | 28.22 | | | | (0.19 | ) | | | 5.88 | | | | 5.69 | | | | (0.02 | ) | | | (3.81 | ) | | | (3.83 | ) | | | 30.08 | | | | 21.09 | | | | 27,874 | | | | 2.07 | | | | 2.07 | | | | (0.61 | ) | | | 25 | |
Year ended 10/31/20 | | | 31.01 | | | | (0.11 | ) | | | 0.56 | | | | 0.45 | | | | (0.40 | ) | | | (2.84 | ) | | | (3.24 | ) | | | 28.22 | | | | 1.20 | | | | 36,108 | | | | 2.10 | | | | 2.10 | | | | (0.39 | ) | | | 35 | |
Year ended 10/31/19 | | | 29.20 | | | | 0.13 | | | | 4.16 | | | | 4.29 | | | | (0.02 | ) | | | (2.46 | ) | | | (2.48 | ) | | | 31.01 | | | | 16.37 | | | | 55,768 | | | | 2.08 | | | | 2.08 | | | | 0.45 | | | | 22 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 19.75 | | | | 0.09 | | | | 2.26 | | | | 2.35 | | | | - | | | | (2.35 | ) | | | (2.35 | ) | | | 19.75 | | | | 12.19 | | | | 51,541 | | | | 1.59 | | | | 1.59 | | | | 0.42 | | | | 32 | |
Year ended 10/31/22 | | | 33.25 | | | | 0.13 | | | | (6.79 | ) | | | (6.66 | ) | | | (0.45 | ) | | | (6.39 | ) | | | (6.84 | ) | | | 19.75 | | | | (25.06 | ) | | | 29,868 | | | | 1.60 | | | | 1.60 | | | | 0.55 | | | | 39 | |
Year ended 10/31/21 | | | 30.87 | | | | (0.04 | ) | | | 6.44 | | | | 6.40 | | | | (0.21 | ) | | | (3.81 | ) | | | (4.02 | ) | | | 33.25 | | | | 21.66 | | | | 44,016 | | | | 1.57 | | | | 1.57 | | | | (0.11 | ) | | | 25 | |
Year ended 10/31/20 | | | 33.64 | | | | 0.03 | | | | 0.61 | | | | 0.64 | | | | (0.57 | ) | | | (2.84 | ) | | | (3.41 | ) | | | 30.87 | | | | 1.71 | | | | 47,493 | | | | 1.60 | | | | 1.60 | | | | 0.11 | | | | 35 | |
Year ended 10/31/19 | | | 31.49 | | | | 0.30 | | | | 4.51 | | | | 4.81 | | | | (0.20 | ) | | | (2.46 | ) | | | (2.66 | ) | | | 33.64 | | | | 16.99 | | | | 62,045 | | | | 1.58 | | | | 1.58 | | | | 0.95 | | | | 22 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 20.24 | | | | 0.20 | | | | 2.31 | | | | 2.51 | | | | (0.02 | ) | | | (2.35 | ) | | | (2.37 | ) | | | 20.38 | | | | 12.74 | | | | 344,435 | | | | 1.09 | | | | 1.09 | | | | 0.92 | | | | 32 | |
Year ended 10/31/22 | | | 33.96 | | | | 0.26 | | | | (6.95 | ) | | | (6.69 | ) | | | (0.64 | ) | | | (6.39 | ) | | | (7.03 | ) | | | 20.24 | | | | (24.71 | ) | | | 350,174 | | | | 1.10 | | | | 1.10 | | | | 1.05 | | | | 39 | |
Year ended 10/31/21 | | | 31.46 | | | | 0.13 | | | | 6.56 | | | | 6.69 | | | | (0.38 | ) | | | (3.81 | ) | | | (4.19 | ) | | | 33.96 | | | | 22.30 | | | | 738,512 | | | | 1.07 | | | | 1.07 | | | | 0.39 | | | | 25 | |
Year ended 10/31/20 | | | 34.21 | | | | 0.19 | | | | 0.62 | | | | 0.81 | | | | (0.72 | ) | | | (2.84 | ) | | | (3.56 | ) | | | 31.46 | | | | 2.22 | | | | 751,518 | | | | 1.10 | | | | 1.10 | | | | 0.61 | | | | 35 | |
Year ended 10/31/19 | | | 32.05 | | | | 0.46 | | | | 4.55 | | | | 5.01 | | | | (0.39 | ) | | | (2.46 | ) | | | (2.85 | ) | | | 34.21 | | | | 17.51 | | | | 1,091,697 | | | | 1.08 | | | | 1.08 | | | | 1.45 | | | | 22 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 20.74 | | | | 0.23 | | | | 2.37 | | | | 2.60 | | | | (0.05 | ) | | | (2.35 | ) | | | (2.40 | ) | | | 20.94 | | | | 12.86 | | | | 103,658 | | | | 0.99 | | | | 0.99 | | | | 1.02 | | | | 32 | |
Year ended 10/31/22 | | | 34.62 | | | | 0.29 | | | | (7.11 | ) | | | (6.82 | ) | | | (0.67 | ) | | | (6.39 | ) | | | (7.06 | ) | | | 20.74 | | | | (24.63 | ) | | | 102,737 | | | | 1.02 | | | | 1.02 | | | | 1.13 | | | | 39 | |
Year ended 10/31/21 | | | 32.02 | | | | 0.16 | | | | 6.67 | | | | 6.83 | | | | (0.42 | ) | | | (3.81 | ) | | | (4.23 | ) | | | 34.62 | | | | 22.35 | | | | 392,893 | | | | 0.99 | | | | 0.99 | | | | 0.47 | | | | 25 | |
Year ended 10/31/20 | | | 34.76 | | | | 0.22 | | | | 0.63 | | | | 0.85 | | | | (0.75 | ) | | | (2.84 | ) | | | (3.59 | ) | | | 32.02 | | | | 2.32 | | | | 486,808 | | | | 1.00 | | | | 1.00 | | | | 0.71 | | | | 35 | |
Year ended 10/31/19 | | | 32.48 | | | | 0.50 | | | | 4.63 | | | | 5.13 | | | | (0.39 | ) | | | (2.46 | ) | | | (2.85 | ) | | | 34.76 | | | | 17.66 | | | | 735,592 | | | | 0.98 | | | | 0.98 | | | | 1.55 | | | | 22 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 20.68 | | | | 0.24 | | | | 2.36 | | | | 2.60 | | | | (0.07 | ) | | | (2.35 | ) | | | (2.42 | ) | | | 20.86 | | | | 12.92 | | | | 1,046,696 | | | | 0.93 | | | | 0.93 | | | | 1.08 | | | | 32 | |
Year ended 10/31/22 | | | 34.56 | | | | 0.30 | | | | (7.09 | ) | | | (6.79 | ) | | | (0.70 | ) | | | (6.39 | ) | | | (7.09 | ) | | | 20.68 | | | | (24.59 | ) | | | 450,115 | | | | 0.95 | | | | 0.95 | | | | 1.20 | | | | 39 | |
Year ended 10/31/21 | | | 31.97 | | | | 0.19 | | | | 6.66 | | | | 6.85 | | | | (0.45 | ) | | | (3.81 | ) | | | (4.26 | ) | | | 34.56 | | | | 22.48 | | | | 794,749 | | | | 0.91 | | | | 0.91 | | | | 0.55 | | | | 25 | |
Year ended 10/31/20 | | | 34.71 | | | | 0.25 | | | | 0.63 | | | | 0.88 | | | | (0.78 | ) | | | (2.84 | ) | | | (3.62 | ) | | | 31.97 | | | | 2.41 | | | | 914,873 | | | | 0.91 | | | | 0.91 | | | | 0.80 | | | | 35 | |
Year ended 10/31/19 | | | 32.49 | | | | 0.53 | | | | 4.61 | | | | 5.14 | | | | (0.46 | ) | | | (2.46 | ) | | | (2.92 | ) | | | 34.71 | | | | 17.74 | | | | 1,522,977 | | | | 0.90 | | | | 0.90 | | | | 1.63 | | | | 22 | |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year months ended October 31, 2023, the portfolio turnover calculation excludes the value of securities purchased of $679,923,194 in connection with the acquisition of Invesco International Equity Fund into the Fund. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
13 | | Invesco EQV International Equity Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1—Significant Accounting Policies
Invesco EQV International Equity Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
| | |
14 | | Invesco EQV International Equity 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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund received refunds in excess of the foreign tax paid during the year and has recorded the estimated liability as a reduction to income which is reflected as IRS closing agreement fees for foreign withholding tax claims on the Statement of Operations.
G. | 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 based on relative net assets of Class R5 and Class R6. 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. |
H. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
J. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower |
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15 | | Invesco EQV International Equity Fund |
| or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities. |
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, the Fund paid the Adviser $933 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.
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 the date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
L. | Forward Foreign Currency Contracts – The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical exchange of the two currencies on the settlement date, 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).
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 for hedging does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M. | Other Risks – Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information. |
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Effective July 31, 2023, under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 | | | 0.850% | |
|
| |
Next $250 million | | | 0.825% | |
|
| |
Next $500 million | | | 0.785% | |
|
| |
Next $1.5 billion | | | 0.760% | |
|
| |
Next $2.5 billion | | | 0.720% | |
|
| |
Over $5 billion | | | 0.690% | |
|
| |
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16 | | Invesco EQV International Equity Fund |
Prior to July 31, 2023, the Fund accrued daily and paid monthly 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 year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.85%.
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. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 July 31, 2023, the Adviser has contractually agreed, through at least February 28, 2025, 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 1.30%, 2.05%, 1.55%, 1.05%, 1.05% and 1.05%, respectively, of the Fund’s average daily net assets (the “expense limits”). Prior to July 31, 2023, the Adviser had 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 2.25%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on February 28, 2025. During its term, the fee waiver agreement cannot be terminated or amended to increase the expense limits or reduce the advisory fee waivers without approval of the Board of Trustees. The Adviser did not waive fees and/or reimburse expenses during the period under these expense limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $47,974.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $100,509 in front-end sales commissions from the sale of Class A shares and $4,082 and $982 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
For the year ended October 31, 2023, the Fund incurred $1,498 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. 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. |
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17 | | Invesco EQV International Equity Fund |
| | |
Level 3 - | | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Adviser’s 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 October 31, 2023. 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 | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | |
|
| |
Australia | | $ | – | | | $ | 48,587,550 | | | | $– | | | $ | 48,587,550 | |
|
| |
Brazil | | | 42,647,377 | | | | – | | | | – | | | | 42,647,377 | |
|
| |
Canada | | | 114,382,108 | | | | – | | | | – | | | | 114,382,108 | |
|
| |
China | | | 43,134,678 | | | | 144,957,726 | | | | – | | | | 188,092,404 | |
|
| |
Denmark | | | – | | | | 82,452,967 | | | | – | | | | 82,452,967 | |
|
| |
France | | | – | | | | 309,064,923 | | | | – | | | | 309,064,923 | |
|
| |
Germany | | | – | | | | 32,870,435 | | | | – | | | | 32,870,435 | |
|
| |
Hong Kong | | | – | | | | 84,852,409 | | | | – | | | | 84,852,409 | |
|
| |
India | | | 57,840,075 | | | | 27,688,204 | | | | – | | | | 85,528,279 | |
|
| |
Ireland | | | – | | | | 54,180,743 | | | | – | | | | 54,180,743 | |
|
| |
Italy | | | – | | | | 48,314,308 | | | | – | | | | 48,314,308 | |
|
| |
Japan | | | – | | | | 298,429,855 | | | | – | | | | 298,429,855 | |
|
| |
Mexico | | | 78,842,288 | | | | – | | | | – | | | | 78,842,288 | |
|
| |
Netherlands | | | – | | | | 182,967,014 | | | | – | | | | 182,967,014 | |
|
| |
Singapore | | | – | | | | 16,550,770 | | | | – | | | | 16,550,770 | |
|
| |
South Korea | | | – | | | | 47,268,622 | | | | – | | | | 47,268,622 | |
|
| |
Spain | | | – | | | | 29,323,903 | | | | – | | | | 29,323,903 | |
|
| |
Sweden | | | – | | | | 133,653,689 | | | | – | | | | 133,653,689 | |
|
| |
Switzerland | | | – | | | | 93,523,459 | | | | – | | | | 93,523,459 | |
|
| |
Taiwan | | | – | | | | 58,964,390 | | | | – | | | | 58,964,390 | |
|
| |
United Kingdom | | | – | | | | 244,109,007 | | | | – | | | | 244,109,007 | |
|
| |
United States | | | 234,552,930 | | | | – | | | | – | | | | 234,552,930 | |
|
| |
Money Market Funds | | | 36,812,539 | | | | 93,923,891 | | | | – | | | | 130,736,430 | |
|
| |
Total Investments | | $ | 608,211,995 | | | $ | 2,031,683,865 | | | | $– | | | $ | 2,639,895,860 | |
|
| |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $32,036.
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 SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | | | |
| | 2023 | | | | | | 2022 | |
|
| |
Ordinary income* | | $ | 2,291,926 | | | | | | | $ | 68,285,355 | |
|
| |
Long-term capital gain | | | 209,994,985 | | | | | | | | 560,651,144 | |
|
| |
Total distributions | | $ | 212,286,911 | | | | | | | $ | 628,936,499 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
| | |
18 | | Invesco EQV International Equity Fund |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 22,528,613 | |
|
| |
Undistributed long-term capital gain | | | 21,200,823 | |
|
| |
Net unrealized appreciation – investments | | | 414,935,649 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (343,096 | ) |
|
| |
Temporary book/tax differences | | | (569,778 | ) |
|
| |
Shares of beneficial interest | | | 2,100,314,198 | |
|
| |
Total net assets | | $ | 2,558,066,409 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales and passive foreign investment companies.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund does not have a capital loss carryforward as of October 31, 2023.
NOTE 8–Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $635,323,772 and $808,971,591, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $499,901,952 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (84,966,303 | ) |
|
| |
Net unrealized appreciation of investments | | | $414,935,649 | |
|
| |
Cost of investments for tax purposes is $2,224,960,211.
NOTE 9–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of , on October 31, 2023, undistributed net investment income was decreased by $492,195 and undistributed net realized gain (loss) was increased by $492,195. Further, as a result of tax deferrals acquired in the reorganization of into the Fund, undistributed net investment income was decreased by $2,377,109, undistributed net realized gain (loss) was decreased by $4,583,543 and shares of beneficial interest was increased by $6,960,652. These reclassifications had no effect on the net assets of the Fund.
NOTE 10–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 2,740,206 | | | $ | 58,557,362 | | | | 2,807,680 | | | $ | 67,617,432 | |
|
| |
Class C | | | 118,760 | | | | 2,145,590 | | | | 111,238 | | | | 2,438,626 | |
|
| |
Class R | | | 290,572 | | | | 6,079,236 | | | | 237,323 | | | | 5,662,217 | |
|
| |
Class Y | | | 2,677,180 | | | | 56,728,039 | | | | 3,988,472 | | | | 98,443,477 | |
|
| |
Class R5 | | | 753,941 | | | | 16,536,875 | | | | 666,022 | | | | 17,263,820 | |
|
| |
Class R6 | | | 7,875,597 | | | | 174,601,019 | | | | 4,567,576 | | | | 113,671,778 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | 4,635,096 | | | | 91,404,102 | | | | 9,377,469 | | | | 249,815,764 | |
|
| |
Class C | | | 108,492 | | | | 1,812,907 | | | | 240,218 | | | | 5,565,840 | |
|
| |
Class R | | | 183,420 | | | | 3,534,504 | | | | 344,332 | | | | 9,007,726 | |
|
| |
Class Y | | | 1,235,334 | | | | 24,459,610 | | | | 3,840,165 | | | | 102,494,007 | |
|
| |
Class R5 | | | 553,998 | | | | 11,262,780 | | | | 1,253,150 | | | | 34,248,586 | |
|
| |
Class R6 | | | 2,860,784 | | | | 57,902,265 | | | | 4,995,991 | | | | 136,090,803 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 162,304 | | | | 3,451,978 | | | | 168,338 | | | | 4,033,916 | |
|
| |
Class C | | | (191,925 | ) | | | (3,451,978 | ) | | | (193,643 | ) | | | (4,033,916 | ) |
|
| |
| | |
19 | | Invesco EQV International Equity Fund |
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
| | | | |
Issued in connection with acquisitions:(b) | | | | | | | | | | | | | | | | |
Class A | | | 6,532,262 | | | $ | 147,812,108 | | | | - | | | $ | - | |
|
| |
Class C | | | 443,936 | | | | 8,470,592 | | | | - | | | | - | |
|
| |
Class R | | | 1,032,539 | | | | 22,794,466 | | | | - | | | | - | |
|
| |
Class Y | | | 2,303,183 | | | | 52,409,731 | | | | - | | | | - | |
|
| |
Class R5 | | | 56,786 | | | | 1,327,353 | | | | - | | | | - | |
|
| |
Class R6 | | | 26,197,678 | | | | 609,992,929 | | | | - | | | | - | |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (8,073,414 | ) | | | (172,126,843 | ) | | | (8,944,538 | ) | | | (218,341,386 | ) |
|
| |
Class C | | | (192,511 | ) | | | (3,482,492 | ) | | | (240,013 | ) | | | (5,114,398 | ) |
|
| |
Class R | | | (409,321 | ) | | | (8,517,869 | ) | | | (392,744 | ) | | | (9,289,585 | ) |
|
| |
Class Y | | | (6,620,529 | ) | | | (142,315,656 | ) | | | (12,274,214 | ) | | | (304,725,755 | ) |
|
| |
Class R5 | | | (1,368,746 | ) | | | (29,852,368 | ) | | | (8,312,888 | ) | | | (269,376,989 | ) |
|
| |
Class R6 | | | (8,527,279 | ) | | | (186,523,740 | ) | | | (10,792,532 | ) | | | (260,523,074 | ) |
|
| |
Net increase (decrease) in share activity | | | 35,378,343 | | | $ | 805,012,500 | | | | (8,552,598 | ) | | $ | (225,051,111 | ) |
|
| |
(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. |
In addition, 18% of the outstanding shares of the Fund are owned by the Adviser or an affiliate of the Adviser.
(b) | After the close of business on July 28, 2023, the Fund acquired all the net assets of Invesco International Equity Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Board of Trustees of the Fund on March 17, 2023 and by the shareholders of the Target Fund on July 12, 2023. The reorganization was executed in order to reduce overlap and increase efficiencies in the Adviser’s product line. The acquisition was accomplished by a tax-free exchange of 36,566,384 shares of the Fund for 38,849,581 shares outstanding of the Target Fund as of the close of business on July 28, 2023. Shares of the Target Fund were exchanged for the like class of shares of the Fund, based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, July 28, 2023. The Target Fund’s net assets as of the close of business on July 28, 2023 of $842,807,179, including $99,747,081 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $2,129,529,183 and $2,972,336,362 immediately after the acquisition. |
The pro forma results of operations for the October 31, 2023 assuming the reorganization had been completed on November 1, 2022, the beginning of the annual reporting period are as follows:
| | | | |
Net investment income | | | $ 26,799,964 | |
|
| |
Net realized/unrealized gains | | | 308,877,934 | |
|
| |
Change in net assets resulting from operations | | | $335,677,898 | |
|
| |
As the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that has been included in the Fund’s Statement of Operations since July 31, 2023.
| | |
20 | | Invesco EQV International Equity Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco EQV International Equity Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco EQV International Equity Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the five years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and broker. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
| | |
21 | | Invesco EQV 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 May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $925.50 | | $6.31 | | $1,018.65 | | $6.61 | | 1.30% |
Class C | | 1,000.00 | | 921.60 | | 9.93 | | 1,014.87 | | 10.41 | | 2.05 |
Class R | | 1,000.00 | | 924.20 | | 7.52 | | 1,017.39 | | 7.88 | | 1.55 |
Class Y | | 1,000.00 | | 926.80 | | 5.10 | | 1,019.91 | | 5.35 | | 1.05 |
Class R5 | | 1,000.00 | | 927.00 | | 4.71 | | 1,020.32 | | 4.94 | | 0.97 |
Class R6 | | 1,000.00 | | 927.10 | | 4.37 | | 1,020.67 | | 4.58 | | 0.90 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
22 | | Invesco EQV International Equity Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco EQV International Equity Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the
Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc.
(Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis, and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the
| | |
23 | | Invesco EQV International Equity Fund |
officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country World ex-U.S.® Index (Index). The Board noted that performance of Class A shares of the Fund was in the second quintile of its performance universe for the one year period, the fifth quintile for the three year period, and the fourth quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was below the performance of the Index for the one and three year periods and above the performance of the Index for the five year period. The Board considered that the Fund’s underperformance can primarily be attributed to stock selection driven by the Fund’s earnings, quality and valuation investment style. Specifically, the Board considered that stock selection in certain sectors detracted from the Fund’s relative performance. The Board also considered that the Fund changed its benchmark in 2022 and that the Board had recently approved the reorganization of Invesco International Equity Fund into the Fund, which reorganization was anticipated to close on or around July 28, 2023, subject to shareholder approval. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The
Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was above the median contractual management fee rate of funds in its expense group. The Board noted that it had approved lowering the contractual advisory fee schedule of the Fund effective immediately prior to, and contingent upon, the closing of the reorganization of Invesco International Equity Fund into the Fund, which reorganization was anticipated to close on or around July 28, 2023, subject to shareholder approval. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers
pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and
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24 | | Invesco EQV International Equity Fund |
have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable
to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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25 | | Invesco EQV International Equity Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | | | | | |
Federal and State Income Tax | | | | | | | | | |
Long-Term Capital Gain Distributions | | | $209,994,985 | | | | | | | | | |
Qualified Dividend Income* | | | 100.00 | % | | | | | | | | |
Corporate Dividends Received Deduction* | | | 61.86 | % | | | | | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | | | | | |
Qualified Business Income* | | | 0.00 | % | | | | | | | | |
Business Interest Income* | | | 0.00 | % | | | | | | | | |
Foreign Taxes | | | $ 0.0118 | | | | per share | | | | | |
Foreign Source Income | | | $ 0.3493 | | | | per share | | | | | |
|
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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26 | | Invesco EQV International Equity Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
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T-1 | | Invesco EQV International Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler -1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management - Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T-2 | | Invesco EQV International Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | |
Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver - Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort - 1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco EQV International Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco EQV International Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | |
John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.;Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco EQV International Equity Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
| | | | | | |
Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
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T-6 | | Invesco EQV International Equity Fund |
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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g454237dsp36b.jpg)
| | | | |
SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | IGR-AR-1 |
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g606127dsp01.jpg)
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| |
Annual Report to Shareholders | | October 31, 2023 |
Invesco International Small-Mid Company Fund
Nasdaq:
A: OSMAX ∎ C: OSMCX ∎ R: OSMNX ∎ Y: OSMYX ∎ R5: INSLX ∎ R6: OSCIX
Management’s Discussion of Fund Performance
| | | | |
|
Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco International Small-Mid Company Fund (the Fund), at net asset value (NAV), underperformed the MSCI All Country World ex USA SMID Cap Index. | |
Your Fund’s long-term performance appears later in this report. | |
|
Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, 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 | | | -0.15 | % |
Class C Shares | | | -0.91 | |
Class R Shares | | | -0.43 | |
Class Y Shares | | | 0.10 | |
Class R5 Shares | | | 0.22 | |
Class R6 Shares | | | 0.18 | |
MSCI All Country World ex USA SMID Cap Index▼ | | | 9.40 | |
MSCI All Country World ex USA Small Cap Index▼ | | | 8.82 | |
|
Source(s): ▼RIMES Technologies Corp. | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within
emerging markets, China’s equities were weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
The Fund’s Class A shares returned -0.15% during the fiscal year ended October 31, 2023. Its benchmark, the MSCI All Country World ex USA SMID Cap Index, returned 9.40%.
The Fund employs a consistent investment process and philosophy. We are disciplined, long-term investors, focused on high-quality international small-and mid-cap companies that we believe can compound returns for shareholders over time. We focus on healthy and growing industries seeking businesses that we believe are built to last. We believe the Fund’s companies are often leaders in their niche, are structured to thrive in a wide range of economic environments, and we expect can deliver consistently high returns on capital.
The Fund mostly performed as we would expect a quality-growth compounder strategy to do in a volatile market largely driven by sentiment and the shorter-term investment horizon that tends to benefit value driven stocks. Through most of the fiscal year, uncertainty permeated the markets due to fears of inflation, higher interest rates, regional banking crisis in the US, and recessionary fears around the globe, among other issues. During the first half of the fiscal year, equity markets began adjusting to a world with higher interest rates and investors shifted their focus to earnings forecasts. This led to our long-term oriented strategy performing
in-line with its benchmark during that time. The Fund underperformed the benchmark during the second half of the fiscal year as investor attention migrated back to interest rates due to hawkish gestures by central bankers.
For the full fiscal year, the Fund underperformed the most in the health care, industrials, and communication services sectors due to stock selection. The Fund outperformed in real estate and utilities due to its underweight allocation to the sectors, and in information technology due to its overweight to the sector.
Top contributors to the Fund’s absolute performance during this fiscal year were Disco Corporation, SimCorp A/S and Alfa Laval AB.
Disco Corporation, a Japanese company, is a leading producer of the cutting and grinding machinery used in semiconductor manufacturing. With its strong global market share in the slicing, dicing and polishing of silicon wafers, Disco’s product suite is mission-critical to stack more components onto chips. Further, parts and service comprise half of Disco’s revenues, creating a reliable cash-flow stream. The share price has been supported by increased profitability as well as stepped-up demand for semiconductor applications serving miniaturization, internet-of-things, 5G and autonomous vehicles.
SimCorp A/S is a Danish company providing software and services to financial institutions around the world. In April 2023, it was announced that Deutsche Borse AG had entered into a binding agreement to purchase SimCorp for a 38% premium. The share price rose to the bid price. We exited our position during the fiscal year.
Alfa Laval BA is a Swedish company that engages in energy optimization, environmental protection, and food production. Shares of the company rose during the 12-month period due to strong demand and margins materializing within their energy efficiency business. We exited our position during the fiscal year.
Top detractors from the Fund’s absolute performance during this fiscal year were ChemoMetec A/S, Benefit One and Croda International.
ChemoMetec A/S is a Danish company that produces instruments for analyzing organic cells. The company announced lower than expected sales, due to the lower demand from its biotech customers. The share price reacted unfavorably.
Benefit One is a Japanese company providing outsourced benefit management services to corporate customers, including healthcare, fringe benefits, and payroll-deduction programs. Outsourcing such services is increasing in Japan, just as it is in most of the world, as companies strive to focus on their core competencies while retaining valuable employees. The share price has come under pressure this year as the company announced
| | |
2 | | Invesco International Small-Mid Company Fund |
lower guidance for 2024. We exited our position during the fiscal year.
Croda International is a UK-based specialty chemicals company. It produces ingredients essential to the functionality of its corporate customers’ products, including purveyors of personal care and pharmaceuticals. These essential ingredients tend to represent a small portion of their customers’ finished-product cost, supporting Croda’s pricing power. Croda’s shares declined primarily due to demand-related issues we view as temporal.
Thank you for your continued investment in Invesco International Small-Mid Company Fund.
Portfolio manager(s):
David Nadel
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
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3 | | Invesco International Small-Mid Company Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g606127g91d03.jpg)
1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
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4 | | Invesco International Small-Mid Company Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (11/17/97) | | | 10.05 | % |
10 Years | | | 4.92 | |
5 Years | | | -0.63 | |
1 Year | | | -5.63 | |
| |
Class C Shares | | | | |
Inception (11/17/97) | | | 10.02 | % |
10 Years | | | 4.88 | |
5 Years | | | -0.26 | |
1 Year | | | -1.90 | |
| |
Class R Shares | | | | |
Inception (3/1/01) | | | 10.36 | % |
10 Years | | | 5.25 | |
5 Years | | | 0.24 | |
1 Year | | | -0.43 | |
| |
Class Y Shares | | | | |
Inception (9/7/05) | | | 8.80 | % |
10 Years | | | 5.78 | |
5 Years | | | 0.74 | |
1 Year | | | 0.10 | |
| |
Class R5 Shares | | | | |
10 Years | | | 5.68 | % |
5 Years | | | 0.81 | |
1 Year | | | 0.22 | |
| |
Class R6 Shares | | | | |
Inception (12/29/11) | | | 9.78 | % |
10 Years | | | 5.94 | |
5 Years | | | 0.87 | |
1 Year | | | 0.18 | |
Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer International Small-Mid Company Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer International Small-Mid Company Fund. Note: The Fund was subsequently renamed the Invesco International Small-Mid Company Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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.
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5 | | Invesco International Small-Mid Company Fund |
Supplemental Information
Invesco International Small-Mid Company Fund’s investment objective is to seek capital appreciation.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World ex USA SMID Cap Index is designed to measure the equity market performance of small-and mid-cap developed and emerging markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The MSCI All Country World ex USA Small Cap Index represents the performance of small-cap stocks in developed and emerging markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
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6 | | Invesco International Small-Mid Company Fund |
Fund Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Industrials | | 34.43% |
| |
Information Technology | | 22.34 |
| |
Health Care | | 16.65 |
| |
Materials | | 5.34 |
| |
Financials | | 4.93 |
| |
Consumer Discretionary | | 4.06 |
| |
Communication Services | | 3.02 |
| |
Consumer Staples | | 2.77 |
| |
Money Market Funds Plus Other Assets Less Liabilities | | 6.46 |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Partners Group Holding AG | | 2.32% |
| | |
2. | | OBIC Co. Ltd. | | 2.03 |
| | |
3. | | Carl Zeiss Meditec AG, BR | | 2.02 |
| | |
4. | | Croda International PLC | | 1.93 |
| | |
5. | | Disco Corp. | | 1.50 |
| | |
6. | | DiaSorin S.p.A. | | 1.47 |
| | |
7. | | Nice Ltd., ADR | | 1.33 |
| | |
8. | | ICON PLC | | 1.32 |
| | |
9. | | VZ Holding AG | | 1.32 |
| | |
10. | | MEITEC Group Holdings, Inc. | | 1.30 |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
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7 | | Invesco International Small-Mid Company Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–93.54% | |
Australia–2.58% | | | | | | | | |
ALS Ltd. | | | 5,739,919 | | | $ | 39,410,414 | |
|
| |
Cochlear Ltd. | | | 272,565 | | | | 41,860,112 | |
|
| |
IPH Ltd. | | | 7,864,717 | | | | 34,313,629 | |
|
| |
| | | | | | | 115,584,155 | |
|
| |
| | |
Austria–0.49% | | | | | | | | |
Fabasoft AG | | | 1,170,093 | | | | 21,658,352 | |
|
| |
| | |
Brazil–2.62% | | | | | | | | |
Odontoprev S.A. | | | 14,843,640 | | | | 30,736,867 | |
|
| |
TOTVS S.A. | | | 7,919,437 | | | | 39,756,226 | |
|
| |
WEG S.A. | | | 7,131,759 | | | | 46,693,978 | |
|
| |
| | | | | | | 117,187,071 | |
|
| |
| | |
Canada–2.17% | | | | | | | | |
CCL Industries, Inc. | | | 1,131,230 | | | | 44,229,522 | |
|
| |
Descartes Systems Group, Inc. (The)(a) | | | 734,081 | | | | 53,057,104 | |
|
| |
| | | | | | | 97,286,626 | |
|
| |
Denmark–0.94% | | | | | | | | |
Chemometec A/S(b) | | | 1,014,152 | | | | 41,985,675 | |
|
| |
| | |
France–4.04% | | | | | | | | |
Alten S.A. | | | 264,736 | | | | 31,329,536 | |
|
| |
Interparfums S.A. | | | 751,959 | | | | 35,586,096 | |
|
| |
Lectra | | | 1,239,422 | | | | 31,471,185 | |
|
| |
Neurones | | | 921,048 | | | | 33,510,823 | |
|
| |
Thermador Groupe | | | 323,559 | | | | 23,027,829 | |
|
| |
Vetoquinol S.A. | | | 307,919 | | | | 25,969,978 | |
|
| |
| | | | | | | 180,895,447 | |
|
| |
| | |
Germany–9.28% | | | | | | | | |
Amadeus Fire AG(b) | | | 294,416 | | | | 33,951,718 | |
|
| |
Atoss Software AG | | | 145,348 | | | | 30,611,737 | |
|
| |
Carl Zeiss Meditec AG, BR | | | 1,042,063 | | | | 90,130,984 | |
|
| |
CTS Eventim AG & Co. KGaA | | | 701,589 | | | | 42,324,853 | |
|
| |
FUCHS SE, Preference Shares | | | 925,692 | | | | 37,536,633 | |
|
| |
Knorr-Bremse AG | | | 630,306 | | | | 35,024,609 | |
|
| |
Nemetschek SE | | | 517,128 | | | | 38,529,127 | |
|
| |
New Work SE(b) | | | 351,225 | | | | 25,133,830 | |
|
| |
Sartorius AG, Preference Shares | | | 194,885 | | | | 48,723,055 | |
|
| |
STRATEC SE(b) | | | 724,491 | | | | 33,432,059 | |
|
| |
| | | | | | | 415,398,605 | |
|
| |
| | |
Iceland–1.16% | | | | | | | | |
Marel HF(c) | | | 12,048,752 | | | | 32,818,108 | |
|
| |
Ossur HF(a) | | | 5,274,026 | | | | 19,211,741 | |
|
| |
| | | | | | | 52,029,849 | |
|
| |
| | |
India–2.98% | | | | | | | | |
AIA Engineering Ltd. | | | 508,996 | | | | 21,517,966 | |
|
| |
Britannia Industries Ltd. | | | 690,100 | | | | 36,685,313 | |
|
| |
Coforge Ltd. | | | 786,622 | | | | 47,133,553 | |
|
| |
Triveni Turbine Ltd.(a) | | | 6,476,606 | | | | 27,952,360 | |
|
| |
| | | | | | | 133,289,192 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Indonesia–0.66% | | | | | | | | |
PT Selamat Sempurna Tbk | | | 216,454,500 | | | $ | 29,627,894 | |
|
| |
| | |
Israel–1.33% | | | | | | | | |
Nice Ltd., ADR(a) | | | 384,950 | | | | 59,417,033 | |
|
| |
| | |
Italy–4.97% | | | | | | | | |
Antares Vision S.p.A.(a)(b) | | | 1,995,091 | | | | 5,593,730 | |
|
| |
DiaSorin S.p.A. | | | 732,277 | | | | 65,671,931 | |
|
| |
Interpump Group S.p.A. | | | 967,172 | | | | 40,370,698 | |
|
| |
Recordati Industria Chimica e Farmaceutica S.p.A. | | | 959,011 | | | | 44,351,587 | |
|
| |
Technoprobe S.p.A.(a) | | | 4,055,901 | | | | 29,552,879 | |
|
| |
Tinexta S.p.A. | | | 2,132,011 | | | | 36,674,715 | |
|
| |
| | | | | | | 222,215,540 | |
|
| |
| | |
Japan–21.01% | | | | | | | | |
Ariake Japan Co. Ltd. | | | 1,631,500 | | | | 51,500,978 | |
|
| |
As One Corp. | | | 994,826 | | | | 31,712,408 | |
|
| |
Azbil Corp. | | | 1,712,800 | | | | 50,628,442 | |
|
| |
Daifuku Co. Ltd. | | | 2,545,400 | | | | 42,643,165 | |
|
| |
Disco Corp. | | | 380,800 | | | | 67,028,186 | |
|
| |
Fukui Computer Holdings, Inc.(b) | | | 1,626,800 | | | | 27,877,335 | |
|
| |
Funai Soken Holdings, Inc. | | | 1,175,400 | | | | 19,293,269 | |
|
| |
Japan Elevator Service Holdings Co. Ltd. | | | 3,370,600 | | | | 44,277,058 | |
|
| |
JCU Corp. | | | 223,400 | | | | 4,846,365 | |
|
| |
Medikit Co. Ltd. | | | 422,900 | | | | 7,476,335 | |
|
| |
MEITEC Group Holdings, Inc. | | | 3,294,658 | | | | 58,056,770 | |
|
| |
MISUMI Group, Inc. | | | 2,042,000 | | | | 30,604,510 | |
|
| |
MonotaRO Co. Ltd. | | | 2,809,320 | | | | 22,529,360 | |
|
| |
NSD Co. Ltd. | | | 2,075,694 | | | | 35,865,573 | |
|
| |
OBIC Business Consultants Co. Ltd. | | | 1,201,200 | | | | 51,646,795 | |
|
| |
OBIC Co. Ltd. | | | 613,300 | | | | 90,966,791 | |
|
| |
SCSK Corp. | | | 2,484,000 | | | | 42,529,604 | |
|
| |
Seria Co. Ltd. | | | 1,802,300 | | | | 25,088,303 | |
|
| |
Shimano, Inc. | | | 244,400 | | | | 35,393,249 | |
|
| |
SHO-BOND Holdings Co. Ltd. | | | 1,096,800 | | | | 43,148,890 | |
|
| |
SMS Co. Ltd. | | | 853,500 | | | | 13,571,270 | |
|
| |
Sysmex Corp. | | | 885,000 | | | | 43,053,687 | |
|
| |
TechnoPro Holdings, Inc. | | | 2,007,600 | | | | 39,491,052 | |
|
| |
TKC Corp. | | | 1,337,518 | | | | 31,197,047 | |
|
| |
USS Co. Ltd. | | | 1,526,848 | | | | 26,677,061 | |
|
| |
Zuken, Inc. | | | 132,100 | | | | 3,297,526 | |
|
| |
| | | | | | | 940,401,029 | |
|
| |
| | |
Jersey–0.75% | | | | | | | | |
JTC PLC(c) | | | 4,319,626 | | | | 33,573,965 | |
|
| |
| | |
Netherlands–0.91% | | | | | | | | |
IMCD N.V. | | | 337,645 | | | | 40,717,061 | |
|
| |
| | |
New Zealand–0.36% | | | | | | | | |
Fisher & Paykel Healthcare Corp. Ltd. | | | 1,310,766 | | | | 15,906,775 | |
|
| |
| | |
Norway–0.35% | | | | | | | | |
Medistim ASA | | | 910,000 | | | | 15,771,792 | |
|
| |
| | |
South Africa–0.53% | | | | | | | | |
Cashbuild Ltd.(b) | | | 1,342,656 | | | | 11,085,117 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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8 | | Invesco International Small-Mid Company Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
South Africa–(continued) | | | | | | | | |
Hudaco Industries Ltd. | | | 1,532,712 | | | $ | 12,692,593 | |
|
| |
| | | | | | | 23,777,710 | |
|
| |
South Korea–0.34% | | | | | | | | |
NICE Information Service Co. Ltd. | | | 2,341,837 | | | | 15,265,882 | |
|
| |
Sweden–9.25% | | | | | | | | |
AddTech AB, Class B | | | 1,374,749 | | | | 20,172,091 | |
|
| |
Biotage AB | | | 3,685,349 | | | | 37,599,698 | |
|
| |
Bravida Holding AB(c) | | | 3,579,576 | | | | 22,373,198 | |
|
| |
Epiroc AB, Class A | | | 2,626,716 | | | | 43,247,887 | |
|
| |
Fortnox AB | | | 8,540,406 | | | | 33,894,571 | |
|
| |
Hexpol AB | | | 3,620,556 | | | | 32,212,316 | |
|
| |
Karnov Group AB(a)(b) | | | 7,391,888 | | | | 32,538,602 | |
|
| |
Lifco AB, Class B | | | 1,653,219 | | | | 30,222,031 | |
|
| |
Lime Technologies AB | | | 403,633 | | | | 10,341,916 | |
|
| |
Loomis AB | | | 1,233,103 | | | | 32,122,244 | |
|
| |
MIPS AB(c)(d) | | | 1,045,582 | | | | 25,914,630 | |
|
| |
Mycronic AB | | | 1,399,833 | | | | 30,615,504 | |
|
| |
Sdiptech AB, Class B(a)(b) | | | 2,220,401 | | | | 43,769,679 | |
|
| |
SmartCraft ASA(a) | | | 10,011,921 | | | | 19,090,940 | |
|
| |
| | | | | | | 414,115,307 | |
|
| |
| | |
Switzerland–9.73% | | | | | | | | |
Belimo Holding AG | | | 112,771 | | | | 47,282,306 | |
|
| |
Bossard Holding AG, Class A | | | 114,783 | | | | 23,635,052 | |
|
| |
Forbo Holding AG | | | 26,098 | | | | 28,813,007 | |
|
| |
Interroll Holding AG, Class R | | | 10,794 | | | | 28,409,753 | |
|
| |
Kardex Holding AG | | | 213,351 | | | | 41,221,865 | |
|
| |
LEM Holding S.A. | | | 23,673 | | | | 47,948,533 | |
|
| |
Partners Group Holding AG | | | 98,127 | | | | 103,954,403 | |
|
| |
Tecan Group AG, Class R(a) | | | 133,131 | | | | 38,146,010 | |
|
| |
VAT Group AG(c) | | | 47,616 | | | | 16,833,505 | |
|
| |
VZ Holding AG | | | 601,516 | | | | 59,002,052 | |
|
| |
| | | | | | | 435,246,486 | |
|
| |
| | |
Taiwan–0.63% | | | | | | | | |
Advantech Co. Ltd. | | | 2,752,726 | | | | 28,190,426 | |
|
| |
| | |
United Kingdom–13.93% | | | | | | | | |
Alpha Financial Markets Consulting PLC(b) | | | 6,973,773 | | | | 32,146,813 | |
|
| |
Bunzl PLC | | | 1,234,028 | | | | 44,089,517 | |
|
| |
Croda International PLC | | | 1,620,764 | | | | 86,369,060 | |
|
| |
Diploma PLC | | | 1,153,420 | | | | 40,011,242 | |
|
| |
Greggs PLC | | | 957,212 | | | | 27,615,117 | |
|
| |
Halma PLC | | | 1,976,025 | | | | 44,457,871 | |
|
| |
|
Investment Abbreviations: |
|
ADR – American Depositary Receipt |
BR – Bearer Shares |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United Kingdom–(continued) | |
Hill & Smith PLC | | | 1,667,395 | | | $ | 33,434,834 | |
|
| |
Howden Joinery Group PLC | | | 4,577,518 | | | | 35,517,867 | |
|
| |
IMI PLC | | | 2,429,307 | | | | 43,426,743 | |
|
| |
Intertek Group PLC | | | 515,625 | | | | 24,067,292 | |
|
| |
Rathbones Group PLC | | | 1,316,084 | | | | 23,989,466 | |
|
| |
Restore PLC(b) | | | 11,526,111 | | | | 27,015,721 | |
|
| |
Rightmove PLC | | | 6,026,001 | | | | 34,876,217 | |
|
| |
Rotork PLC | | | 9,147,324 | | | | 32,733,380 | |
|
| |
Spirax-Sarco Engineering PLC | | | 550,825 | | | | 54,953,366 | |
|
| |
Weir Group PLC (The) | | | 1,850,479 | | | | 38,541,341 | |
|
| |
| | | | | | | 623,245,847 | |
|
| |
| | |
United States–2.53% | | | | | | | | |
Bruker Corp. | | | 953,100 | | | | 54,326,700 | |
|
| |
ICON PLC(a) | | | 242,012 | | | | 59,041,248 | |
|
| |
| | | | | | | 113,367,948 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $3,680,400,569) | | | | 4,186,155,667 | |
|
| |
|
Money Market Funds–11.58% | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(b)(e) | | | 181,470,889 | | | | 181,470,889 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(b)(e) | | | 129,585,142 | | | | 129,624,018 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(b)(e) | | | 207,395,301 | | | | 207,395,301 | |
|
| |
Total Money Market Funds (Cost $518,483,421) | | | | 518,490,208 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES (excluding Investments purchased with cash collateral from securities on loan)-105.12% (Cost $4,198,883,990) | | | | | | | 4,704,645,875 | |
|
| |
|
Investments Purchased with Cash Collateral from Securities on Loan | |
Money Market Funds–0.05% | |
Invesco Private Government Fund, 5.32%(b)(e)(f) | | | 576,736 | | | | 576,736 | |
|
| |
Invesco Private Prime Fund, 5.53%(b)(e)(f) | | | 1,483,222 | | | | 1,483,371 | |
|
| |
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $2,060,003) | | | | 2,060,107 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–105.17% (Cost $4,200,943,993) | | | | 4,706,705,982 | |
|
| |
OTHER ASSETS LESS LIABILITIES–(5.17)% | | | | (231,539,400 | ) |
|
| |
NET ASSETS–100.00% | | | $ | 4,475,166,582 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco International Small-Mid Company Fund |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | | Realized Gain (Loss) | | | Value October 31, 2023 | | | Dividend Income | |
| | | | | | | | | | | | |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | | | | | $ | 6,447,173 | | | | | | | $ | 473,721,505 | | | $ | (298,697,789 | ) | | | $ - | | | $ | - | | | | | | | $ | 181,470,889 | | | | | | | | | | | | $ 1,070,648 | |
| | | | | | | | | | | | |
Invesco Liquid Assets Portfolio, Institutional Class | | | | | | | 4,604,909 | | | | | | | | 338,372,504 | | | | (213,355,531 | ) | | | 6,390 | | | | (4,254 | ) | | | | | | | 129,624,018 | | | | | | | | | | | | 792,836 | |
| | | | | | | | | | | | |
Invesco Treasury Portfolio, Institutional Class | | | | | | | 7,368,198 | | | | | | | | 541,396,005 | | | | (341,368,902 | ) | | | - | | | | - | | | | | | | | 207,395,301 | | | | | | | | | | | | 1,277,852 | |
| | | | | | | | | | | | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Invesco Private Government Fund | | | | | | | - | | | | | | | | 40,991,957 | | | | (40,415,221 | ) | | | - | | | | - | | | | | | | | 576,736 | | | | | | | | | | | | 86,105 | * |
| | | | | | | | | | | | |
Invesco Private Prime Fund | | | | | | | - | | | | | | | | 101,820,159 | | | | (100,338,888 | ) | | | 104 | | | | 1,996 | | | | | | | | 1,483,371 | | | | | | | | | | | | 229,537 | * |
| | | | | | | | | | | | |
Investments in Other Affiliates: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Alpha Financial Markets Consulting PLC | | | | | | | 25,993,604 | | | | | | | | 8,331,729 | | | | (2,965,321 | ) | | | 1,457,939 | | | | (671,138 | ) | | | | | | | 32,146,813 | | | | | | | | | | | | 1,325,996 | |
| | | | | | | | | | | | |
Amadeus Fire AG | | | | | | | 30,113,154 | | | | | | | | 3,385,911 | | | | (4,249,789 | ) | | | 4,685,845 | | | | 16,597 | | | | | | | | 33,951,718 | | | | | | | | | | | | 1,098,706 | |
| | | | | | | | | | | | |
Antares Vision S.p.A. | | | | | | | 16,508,773 | | | | | | | | 4,341,202 | | | | (3,276,975 | ) | | | (7,964,403 | ) | | | (4,014,867 | ) | | | | | | | 5,593,730 | | | | | | | | | | | | - | |
| | | | | | | | | | | | |
Ariake Japan Co. Ltd.** | | | | | | | 66,191,196 | | | | | | | | 2,166,208 | | | | (12,062,509 | ) | | | 514,498 | | | | (5,308,415 | ) | | | | | | | 51,500,978 | | | | | | | | | | | | 1,083,803 | |
| | | | | | | | | | | | |
Cashbuild Ltd.*** | | | | | | | - | | | | | | | | 12,321,952 | | | | - | | | | (1,236,835 | ) | | | - | | | | | | | | 11,085,117 | | | | | | | | | | | | 225,437 | |
| | | | | | | | | | | | |
Chemometec A/S*** | | | | | | | 50,157,097 | | | | | | | | 30,215,661 | | | | - | | | | (38,387,083 | ) | | | - | | | | | | | | 41,985,675 | | | | | | | | | | | | 544,086 | |
| | | | | | | | | | | | |
Fukui Computer Holdings, Inc. | | | | | | | 31,715,825 | | | | | | | | 8,614,331 | | | | (2,415,874 | ) | | | (7,602,426 | ) | | | (2,434,521 | ) | | | | | | | 27,877,335 | | | | | | | | | | | | 658,577 | |
| | | | | | | | | | | | |
Johnson Service Group PLC | | | | | | | 37,689,191 | | | | | | | | - | | | | (49,005,025 | ) | | | 13,554,447 | | | | (2,238,613 | ) | | | | | | | - | | | | | | | | | | | | 232,147 | |
| | | | | | | | | | | | |
Karnov Group AB | | | | | | | 34,774,863 | | | | | | | | 11,571,067 | | | | (6,462,786 | ) | | | (4,091,177 | ) | | | (3,253,365 | ) | | | | | | | 32,538,602 | | | | | | | | | | | | - | |
| | | | | | | | | | | | |
Lime Technologies AB** | | | | | | | 13,931,719 | | | | | | | | 1,722,709 | | | | (11,080,574 | ) | | | 11,254,132 | | | | (5,486,070 | ) | | | | | | | 10,341,916 | | | | | | | | | | | | 194,889 | |
| | | | | | | | | | | | |
New Work SE*** | | | | | | | 31,108,966 | | | | | | | | 12,795,144 | | | | - | | | | (18,770,280 | ) | | | - | | | | | | | | 25,133,830 | | | | | | | | | | | | 1,717,183 | |
| | | | | | | | | | | | |
NICE Information Service Co. Ltd.** | | | | | | | 21,106,756 | | | | | | | | 20,684,128 | | | | (17,108,742 | ) | | | 6,520,047 | | | | (15,936,307 | ) | | | | | | | 15,265,882 | | | | | | | | | | | | 721,274 | |
| | | | | | | | | | | | |
Restore PLC | | | | | | | 45,141,202 | | | | | | | | 8,325,727 | | | | (8,992,608 | ) | | | (9,537,770 | ) | | | (7,920,830 | ) | | | | | | | 27,015,721 | | | | | | | | | | | | 939,777 | |
| | | | | | | | | | | | |
Sdiptech AB, Class B | | | | | | | 45,943,824 | | | | | | | | 5,856,494 | | | | (10,451,469 | ) | | | (2,220,746 | ) | | | 4,641,576 | | | | | | | | 43,769,679 | | | | | | | | | | | | - | |
| | | | | | | | | | | | |
STRATEC SE*** | | | | | | | 34,637,151 | | | | | | | | 21,200,335 | | | | (4,854,640 | ) | | | (15,213,766 | ) | | | (2,337,021 | ) | | | | | | | 33,432,059 | | | | | | | | | | | | 423,948 | |
| | | | | | | | | | | | |
Total | | | | | | $ | 503,433,601 | | | | | | | $ | 1,647,834,728 | | | $ | (1,127,102,643 | ) | | | $(67,031,084 | ) | | $ | (44,945,232 | ) | | | | | | $ | 912,189,370 | | | | | | | | | | | | $12,622,801 | |
* | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
** | As of October 31, 2023, this security was not considered as an affiliate of the Fund. |
*** | As of October 31, 2022, this security was not considered as an affiliate of the Fund. |
(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 October 31, 2023 was $131,513,406, which represented 2.94% of the Fund’s Net Assets. |
(d) | All or a portion of this security was out on loan at October 31, 2023. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
(f) | 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 1K. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco International Small-Mid Company Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $3,286,301,974)* | | $ | 3,871,625,388 | |
|
| |
Investments in affiliates, at value (Cost $914,642,019) | | | 835,080,594 | |
|
| |
Cash | | | 3,000,000 | |
|
| |
Foreign currencies, at value (Cost $8,789,011) | | | 8,794,198 | |
|
| |
Receivable for: | | | | |
Fund shares sold | | | 13,817,619 | |
|
| |
Dividends | | | 23,480,639 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 216,033 | |
|
| |
Other assets | | | 63,212 | |
|
| |
Total assets | | | 4,756,077,683 | |
|
| |
| |
Liabilities: | | | | |
Payable for: | | | | |
Investments purchased | | | 267,155,857 | |
|
| |
Fund shares reacquired | | | 5,132,741 | |
|
| |
Accrued foreign taxes | | | 4,121,968 | |
|
| |
Collateral upon return of securities loaned | | | 2,060,003 | |
|
| |
Accrued fees to affiliates | | | 1,194,089 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 56,205 | |
|
| |
Accrued other operating expenses | | | 974,205 | |
|
| |
Trustee deferred compensation and retirement plans | | | 216,033 | |
|
| |
Total liabilities | | | 280,911,101 | |
|
| |
Net assets applicable to shares outstanding | | $ | 4,475,166,582 | |
|
| |
| |
Net assets consist of: | | | | |
| |
Shares of beneficial interest | | $ | 3,922,873,506 | |
|
| |
Distributable earnings | | | 552,293,076 | |
|
| |
| | $ | 4,475,166,582 | |
|
| |
| | | | |
Net Assets: | | | | |
| |
Class A | | $ | 676,005,499 | |
|
| |
Class C | | $ | 21,483,067 | |
|
| |
Class R | | $ | 56,783,548 | |
|
| |
Class Y | | $ | 1,554,426,868 | |
|
| |
Class R5 | | $ | 459,457 | |
|
| |
Class R6 | | $ | 2,166,008,143 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
| |
Class A | | | 18,699,534 | |
|
| |
Class C | | | 697,199 | |
|
| |
Class R | | | 1,697,944 | |
|
| |
Class Y | | | 43,295,660 | |
|
| |
Class R5 | | | 12,592 | |
|
| |
Class R6 | | | 59,955,860 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 36.15 | |
|
| |
Maximum offering price per share (Net asset value of $36.15 ÷ 94.50%) | | $ | 38.25 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 30.81 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 33.44 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 35.90 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 36.49 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 36.13 | |
|
| |
* | At October 31, 2023, security with a value of $2,014,652 was on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco International Small-Mid Company Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Interest | | $ | 47,988 | |
|
| |
Dividends (net of foreign withholding taxes of $8,578,769) | | | 67,951,879 | |
|
| |
Dividends from affiliates (includes net securities lending income of $31,297) | | | 12,338,456 | |
|
| |
Foreign withholding tax claims | | | 1,037,376 | |
|
| |
Total investment income | | | 81,375,699 | |
|
| |
| |
Expenses: | | | | |
| |
Advisory fees | | | 43,445,638 | |
|
| |
Administrative services fees | | | 677,387 | |
|
| |
Custodian fees | | | 433,530 | |
|
| |
Distribution fees: | | | | |
Class A | | | 1,985,701 | |
|
| |
Class C | | | 356,880 | |
|
| |
Class R | | | 341,112 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 4,243,232 | |
|
| |
Transfer agent fees – R5 | | | 152 | |
|
| |
Transfer agent fees – R6 | | | 562,568 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 69,929 | |
|
| |
Registration and filing fees | | | 154,373 | |
|
| |
Reports to shareholders | | | 358,508 | |
|
| |
Professional services fees | | | 111,805 | |
|
| |
Other | | | 104,988 | |
|
| |
Total expenses | | | 52,845,803 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (97,566 | ) |
|
| |
Net expenses | | | 52,748,237 | |
|
| |
Net investment income | | | 28,627,462 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
| |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities (net of foreign taxes of $2,082,792) (includes net gains (losses) from securities sold to affiliates of $(65,086,012)) | | | 181,099,313 | |
|
| |
Affiliated investment securities | | | (44,945,232 | ) |
|
| |
Foreign currencies | | | (1,606,922 | ) |
|
| |
Forward foreign currency contracts | | | 1,870 | |
|
| |
| | | 134,549,029 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities (net of foreign taxes of $1,036,707) | | | 3,628,844 | |
|
| |
Affiliated investment securities | | | (67,031,084 | ) |
|
| |
Foreign currencies | | | 2,062,326 | |
|
| |
| | | (61,339,914 | ) |
|
| |
Net realized and unrealized gain | | | 73,209,115 | |
|
| |
Net increase in net assets resulting from operations | | $ | 101,836,577 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco International Small-Mid Company Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
Net investment income | | $ | 28,627,462 | | | $ | 20,966,262 | |
|
| |
Net realized gain | | | 134,549,029 | | | | 49,517,470 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | (61,339,914 | ) | | | (3,150,796,863 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 101,836,577 | | | | (3,080,313,131 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
Class A | | | (2,304,691 | ) | | | (128,634,056 | ) |
|
| |
Class C | | | (138,622 | ) | | | (11,532,447 | ) |
|
| |
Class R | | | (203,404 | ) | | | (10,131,133 | ) |
|
| |
Class Y | | | (10,547,704 | ) | | | (374,453,286 | ) |
|
| |
Class R5 | | | (2,703 | ) | | | (34,765 | ) |
|
| |
Class R6 | | | (13,599,761 | ) | | | (296,558,579 | ) |
|
| |
Total distributions from distributable earnings | | | (26,796,885 | ) | | | (821,344,266 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
Class A | | | (120,572,365 | ) | | | (21,103,345 | ) |
|
| |
Class C | | | (22,188,558 | ) | | | (28,026,470 | ) |
|
| |
Class R | | | (6,764,006 | ) | | | 5,279,589 | |
|
| |
Class Y | | | (419,382,995 | ) | | | (335,933,581 | ) |
|
| |
Class R5 | | | 89,342 | | | | 85,430 | |
|
| |
Class R6 | | | 286,814,004 | | | | 33,384,828 | |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (282,004,578 | ) | | | (346,313,549 | ) |
|
| |
Net increase (decrease) in net assets | | | (206,964,886 | ) | | | (4,247,970,946 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
Beginning of year | | | 4,682,131,468 | | | | 8,930,102,414 | |
|
| |
End of year | | $ | 4,475,166,582 | | | $ | 4,682,131,468 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
13 | | Invesco International Small-Mid Company Fund |
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(c) | | Ratio of net investment income (loss) to average net assets | | Portfolio turnover (d) |
Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | $36.30 | | | | | $ 0.15 | | | | $ | (0.19 | )(e) | | | $ | (0.04 | ) | | | | $ - | | | | $ | (0.11 | ) | | | $ | (0.11 | ) | | | | $36.15 | | | | | (0.15 | )%(f) | | | | $ 676,005 | | | | | 1.35 | %(f) | | | | 1.35 | %(f) | | | | 0.37 | %(f) | | | | 26 | % |
Year ended 10/31/22 | | | | 63.38 | | | | | 0.04 | | | | | (21.41 | ) | | | | (21.37 | ) | | | | (0.02 | ) | | | | (5.69 | ) | | | | (5.71 | ) | | | | 36.30 | | | | | (36.72 | )(f) | | | | 787,042 | | | | | 1.33 | (f) | | | | 1.33 | (f) | | | | 0.10 | (f) | | | | 20 | |
Year ended 10/31/21 | | | | 51.69 | | | | | 0.02 | | | | | 16.17 | | | | | 16.19 | | | | | - | | | | | (4.50 | ) | | | | (4.50 | ) | | | | 63.38 | | | | | 33.13 | (f) | | | | 1,439,340 | | | | | 1.31 | (f) | | | | 1.31 | (f) | | | | 0.04 | (f) | | | | 24 | |
Year ended 10/31/20 | | | | 48.20 | | | | | (0.10 | ) | | | | 5.95 | | | | | 5.85 | | | | | (0.18 | ) | | | | (2.18 | ) | | | | (2.36 | ) | | | | 51.69 | | | | | 12.53 | (f) | | | | 1,199,225 | | | | | 1.34 | (f) | | | | 1.34 | (f) | | | | (0.22 | )(f) | | | | 73 | |
Two months ended 10/31/19 | | | | 46.25 | | | | | (0.03 | ) | | | | 1.98 | | | | | 1.95 | | | | | - | | | | | - | | | | | - | | | | | 48.20 | | | | | 4.22 | | | | | 1,417,657 | | | | | 1.31 | (g) | | | | 1.31 | (g) | | | | (0.37 | )(g) | | | | 0 | (h) |
Year ended 08/31/19 | | | | 54.54 | | | | | (0.03 | ) | | | | (3.81 | ) | | | | (3.84 | ) | | | | (0.22 | ) | | | | (4.23 | ) | | | | (4.45 | ) | | | | 46.25 | | | | | (6.21 | ) | | | | 1,394,542 | | | | | 1.36 | | | | | 1.36 | | | | | (0.06 | ) | | | | 28 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 31.19 | | | | | (0.13 | ) | | | | (0.14 | )(e) | | | | (0.27 | ) | | | | - | | | | | (0.11 | ) | | | | (0.11 | ) | | | | 30.81 | | | | | (0.91 | ) | | | | 21,483 | | | | | 2.11 | | | | | 2.11 | | | | | (0.39 | ) | | | | 26 | |
Year ended 10/31/22 | | | | 55.66 | | | | | (0.27 | ) | | | | (18.51 | ) | | | | (18.78 | ) | | | | - | | | | | (5.69 | ) | | | | (5.69 | ) | | | | 31.19 | | | | | (37.20 | ) | | | | 41,813 | | | | | 2.09 | | | | | 2.09 | | | | | (0.66 | ) | | | | 20 | |
Year ended 10/31/21 | | | | 46.22 | | | | | (0.37 | ) | | | | 14.31 | | | | | 13.94 | | | | | - | | | | | (4.50 | ) | | | | (4.50 | ) | | | | 55.66 | | | | | 32.10 | | | | | 117,303 | | | | | 2.07 | | | | | 2.07 | | | | | (0.72 | ) | | | | 24 | |
Year ended 10/31/20 | | | | 43.62 | | | | | (0.41 | ) | | | | 5.34 | | | | | 4.93 | | | | | (0.15 | ) | | | | (2.18 | ) | | | | (2.33 | ) | | | | 46.22 | | | | | 11.70 | | | | | 135,265 | | | | | 2.10 | | | | | 2.10 | | | | | (0.98 | ) | | | | 73 | |
Two months ended 10/31/19 | | | | 41.91 | | | | | (0.08 | ) | | | | 1.79 | | | | | 1.71 | | | | | - | | | | | - | | | | | - | | | | | 43.62 | | | | | 4.08 | | | | | 177,238 | | | | | 2.07 | (g) | | | | 2.07 | (g) | | | | (1.13 | )(g) | | | | 0 | (h) |
Year ended 08/31/19 | | | | 50.01 | | | | | (0.35 | ) | | | | (3.52 | ) | | | | (3.87 | ) | | | | - | | | | | (4.23 | ) | | | | (4.23 | ) | | | | 41.91 | | | | | (6.91 | ) | | | | 179,992 | | | | | 2.12 | | | | | 2.12 | | | | | (0.82 | ) | | | | 28 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 33.68 | | | | | 0.04 | | | | | (0.17 | )(e) | | | | (0.13 | ) | | | | - | | | | | (0.11 | ) | | | | (0.11 | ) | | | | 33.44 | | | | | (0.43 | ) | | | | 56,784 | | | | | 1.61 | | | | | 1.61 | | | | | 0.11 | | | | | 26 | |
Year ended 10/31/22 | | | | 59.34 | | | | | (0.07 | ) | | | | (19.90 | ) | | | | (19.97 | ) | | | | - | | | | | (5.69 | ) | | | | (5.69 | ) | | | | 33.68 | | | | | (36.87 | ) | | | | 63,205 | | | | | 1.59 | | | | | 1.59 | | | | | (0.16 | ) | | | | 20 | |
Year ended 10/31/21 | | | | 48.78 | | | | | (0.12 | ) | | | | 15.18 | | | | | 15.06 | | | | | - | | | | | (4.50 | ) | | | | (4.50 | ) | | | | 59.34 | | | | | 32.76 | | | | | 106,435 | | | | | 1.57 | | | | | 1.57 | | | | | (0.22 | ) | | | | 24 | |
Year ended 10/31/20 | | | | 45.70 | | | | | (0.21 | ) | | | | 5.63 | | | | | 5.42 | | | | | (0.16 | ) | | | | (2.18 | ) | | | | (2.34 | ) | | | | 48.78 | | | | | 12.26 | | | | | 88,420 | | | | | 1.60 | | | | | 1.60 | | | | | (0.48 | ) | | | | 73 | |
Two months ended 10/31/19 | | | | 43.88 | | | | | (0.05 | ) | | | | 1.87 | | | | | 1.82 | | | | | - | | | | | - | | | | | - | | | | | 45.70 | | | | | 4.15 | | | | | 95,501 | | | | | 1.57 | (g) | | | | 1.57 | (g) | | | | (0.63 | )(g) | | | | 0 | (h) |
Year ended 08/31/19 | | | | 52.05 | | | | | (0.14 | ) | | | | (3.65 | ) | | | | (3.79 | ) | | | | (0.15 | ) | | | | (4.23 | ) | | | | (4.38 | ) | | | | 43.88 | | | | | (6.44 | ) | | | | 94,864 | | | | | 1.61 | | | | | 1.61 | | | | | (0.31 | ) | | | | 28 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 36.06 | | | | | 0.25 | | | | | (0.20 | )(e) | | | | 0.05 | | | | | (0.10 | ) | | | | (0.11 | ) | | | | (0.21 | ) | | | | 35.90 | | | | | 0.07 | | | | | 1,554,427 | | | | | 1.11 | | | | | 1.11 | | | | | 0.61 | | | | | 26 | |
Year ended 10/31/22 | | | | 63.00 | | | | | 0.15 | | | | | (21.23 | ) | | | | (21.08 | ) | | | | (0.17 | ) | | | | (5.69 | ) | | | | (5.86 | ) | | | | 36.06 | | | | | (36.55 | ) | | | | 1,943,233 | | | | | 1.09 | | | | | 1.09 | | | | | 0.34 | | | | | 20 | |
Year ended 10/31/21 | | | | 51.29 | | | | | 0.16 | | | | | 16.05 | | | | | 16.21 | | | | | - | | | | | (4.50 | ) | | | | (4.50 | ) | | | | 63.00 | | | | | 33.45 | | | | | 4,039,299 | | | | | 1.07 | | | | | 1.07 | | | | | 0.28 | | | | | 24 | |
Year ended 10/31/20 | | | | 47.75 | | | | | 0.02 | | | | | 5.90 | | | | | 5.92 | | | | | (0.20 | ) | | | | (2.18 | ) | | | | (2.38 | ) | | | | 51.29 | | | | | 12.81 | | | | | 3,240,701 | | | | | 1.10 | | | | | 1.10 | | | | | 0.02 | | | | | 73 | |
Two months ended 10/31/19 | | | | 45.80 | | | | | (0.01 | ) | | | | 1.96 | | | | | 1.95 | | | | | - | | | | | - | | | | | - | | | | | 47.75 | | | | | 4.26 | | | | | 4,085,890 | | | | | 1.07 | (g) | | | | 1.07 | (g) | | | | (0.13 | )(g) | | | | 0 | (h) |
Year ended 08/31/19 | | | | 54.15 | | | | | 0.08 | | | | | (3.80 | ) | | | | (3.72 | ) | | | | (0.40 | ) | | | | (4.23 | ) | | | | (4.63 | ) | | | | 45.80 | | | | | (5.98 | ) | | | | 3,986,316 | | | | | 1.12 | | | | | 1.12 | | | | | 0.18 | | | | | 28 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 36.64 | | | | | 0.30 | | | | | (0.19 | )(e) | | | | 0.11 | | | | | (0.15 | ) | | | | (0.11 | ) | | | | (0.26 | ) | | | | 36.49 | | | | | 0.22 | | | | | 459 | | | | | 0.99 | | | | | 0.99 | | | | | 0.73 | | | | | 26 | |
Year ended 10/31/22 | | | | 63.92 | | | | | 0.19 | | | | | (21.57 | ) | | | | (21.38 | ) | | | | (0.21 | ) | | | | (5.69 | ) | | | | (5.90 | ) | | | | 36.64 | | | | | (36.51 | ) | | | | 379 | | | | | 1.00 | | | | | 1.00 | | | | | 0.43 | | | | | 20 | |
Year ended 10/31/21 | | | | 51.94 | | | | | 0.20 | | | | | 16.28 | | | | | 16.48 | | | | | - | | | | | (4.50 | ) | | | | (4.50 | ) | | | | 63.92 | | | | | 33.55 | | | | | 512 | | | | | 1.00 | | | | | 1.00 | | | | | 0.35 | | | | | 24 | |
Year ended 10/31/20 | | | | 48.26 | | | | | 0.07 | | | | | 5.99 | | | | | 6.06 | | | | | (0.20 | ) | | | | (2.18 | ) | | | | (2.38 | ) | | | | 51.94 | | | | | 12.99 | | | | | 191 | | | | | 0.99 | | | | | 0.99 | | | | | 0.13 | | | | | 73 | |
Two months ended 10/31/19 | | | | 46.29 | | | | | (0.01 | ) | | | | 1.98 | | | | | 1.97 | | | | | - | | | | | - | | | | | - | | | | | 48.26 | | | | | 4.26 | | | | | 20 | | | | | 1.01 | (g) | | | | 1.01 | (g) | | | | (0.07 | )(g) | | | | 0 | (h) |
Period ended 08/31/19(i) | | | | 46.97 | | | | | 0.04 | | | | | (0.72 | ) | | | | (0.68 | ) | | | | - | | | | | - | | | | | - | | | | | 46.29 | | | | | (1.45 | ) | | | | 19 | | | | | 1.01 | (g) | | | | 1.01 | (g) | | | | 0.29 | (g) | | | | 28 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 36.30 | | | | | 0.30 | | | | | (0.19 | )(e) | | | | 0.11 | | | | | (0.17 | ) | | | | (0.11 | ) | | | | (0.28 | ) | | | | 36.13 | | | | | 0.21 | | | | | 2,166,008 | | | | | 0.99 | | | | | 0.99 | | | | | 0.73 | | | | | 26 | |
Year ended 10/31/22 | | | | 63.39 | | | | | 0.21 | | | | | (21.37 | ) | | | | (21.16 | ) | | | | (0.24 | ) | | | | (5.69 | ) | | | | (5.93 | ) | | | | 36.30 | | | | | (36.48 | ) | | | | 1,846,459 | | | | | 0.97 | | | | | 0.97 | | | | | 0.46 | | | | | 20 | |
Year ended 10/31/21 | | | | 51.52 | | | | | 0.23 | | | | | 16.14 | | | | | 16.37 | | | | | - | | | | | (4.50 | ) | | | | (4.50 | ) | | | | 63.39 | | | | | 33.62 | | | | | 3,227,212 | | | | | 0.95 | | | | | 0.95 | | | | | 0.40 | | | | | 24 | |
Year ended 10/31/20 | | | | 47.90 | | | | | 0.08 | | | | | 5.93 | | | | | 6.01 | | | | | (0.21 | ) | | | | (2.18 | ) | | | | (2.39 | ) | | | | 51.52 | | | | | 12.97 | | | | | 2,532,327 | | | | | 0.95 | | | | | 0.95 | | | | | 0.17 | | | | | 73 | |
Two months ended 10/31/19 | | | | 45.94 | | | | | (0.00 | )(j) | | | | 1.96 | | | | | 1.96 | | | | | - | | | | | - | | | | | - | | | | | 47.90 | | | | | 4.27 | | | | | 2,759,984 | | | | | 0.94 | (g) | | | | 0.94 | (g) | | | | 0.00 | (g)(h) | | | | 0 | (h) |
Year ended 08/31/19 | | | | 54.32 | | | | | 0.16 | | | | | (3.82 | ) | | | | (3.66 | ) | | | | (0.49 | ) | | | | (4.23 | ) | | | | (4.72 | ) | | | | 45.94 | | | | | (5.82 | ) | | | | 2,692,561 | | | | | 0.96 | | | | | 0.96 | | | | | 0.34 | | | | | 28 | |
(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) | Does not include estimated acquired fund fees from underlying funds of 0.00% and 0.01% for the two months ended October 31, 2019 and the year ended August 31, 2019, respectively. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Net realized and unrealized gain (loss) on investments per share may not correlate with the Fund’s net realized and unrealized gain (loss) due to timing of shareholder transactions in relation to the fluctuating market values of the Fund’s investments. |
(f) | The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.24% for the years ended October 31, 2023, 2022, 2021 and 2020, respectively. |
(h) | Amount represents less than 0.005%. |
(i) | Commencement date after the close of business on May 24, 2019. |
(j) | Amount represents less than $(0.005) per share. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
14 | | Invesco International Small-Mid Company Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco International Small-Mid Company Fund, (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is to seek 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
Effective as of the open of business June 28, 2022, the Fund reopened to all investors.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.
| | |
15 | | Invesco International Small-Mid Company Fund |
Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund did not enter into any closing agreements.
G. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund did not enter into any closing agreements.
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 based on relative net assets of Class R5 and Class R6. 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 |
| | |
16 | | Invesco International Small-Mid Company Fund |
| 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. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities. |
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, fees paid to the Adviser were less than $500. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliates on the Statement of Operations.
L. | 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 the 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.
M. | 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 exchange of the two currencies on the settlement date, 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).
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 for hedging 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.
N. | Other Risks – Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information. |
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17 | | Invesco International Small-Mid Company Fund |
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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* |
Up to $500 million | | 1.000% |
Next $500 million | | 0.950% |
Next $4 billion | | 0.920% |
Next $5 billion | | 0.900% |
Next $10 billion | | 0.880% |
Over $20 billion | | 0.870% |
* | The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser. |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.92%.
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. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.
Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 2.25%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $70,087.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the annual rate of 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $33,472 in front-end sales commissions from the sale of Class A shares and $2,447 and $448 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
For the year ended October 31, 2023, the Fund incurred $15,688 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. 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. |
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18 | | Invesco International Small-Mid Company Fund |
| | |
Level 3 - | | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Adviser’s 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 October 31, 2023. 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 | |
|
| |
Investments in Securities | | | | | | | | | | | | | | |
|
| |
Australia | | $ | – | | | $ | 115,584,155 | | | $– | | $ | 115,584,155 | |
|
| |
Austria | | | – | | | | 21,658,352 | | | – | | | 21,658,352 | |
|
| |
Brazil | | | 117,187,071 | | | | – | | | – | | | 117,187,071 | |
|
| |
Canada | | | 97,286,626 | | | | – | | | – | | | 97,286,626 | |
|
| |
Denmark | | | – | | | | 41,985,675 | | | – | | | 41,985,675 | |
|
| |
France | | | – | | | | 180,895,447 | | | – | | | 180,895,447 | |
|
| |
Germany | | | – | | | | 415,398,605 | | | – | | | 415,398,605 | |
|
| |
Iceland | | | – | | | | 52,029,849 | | | – | | | 52,029,849 | |
|
| |
India | | | – | | | | 133,289,192 | | | – | | | 133,289,192 | |
|
| |
Indonesia | | | – | | | | 29,627,894 | | | – | | | 29,627,894 | |
|
| |
Israel | | | 59,417,033 | | | | – | | | – | | | 59,417,033 | |
|
| |
Italy | | | – | | | | 222,215,540 | | | – | | | 222,215,540 | |
|
| |
Japan | | | – | | | | 940,401,029 | | | – | | | 940,401,029 | |
|
| |
Jersey | | | – | | | | 33,573,965 | | | – | | | 33,573,965 | |
|
| |
Netherlands | | | – | | | | 40,717,061 | | | – | | | 40,717,061 | |
|
| |
New Zealand | | | – | | | | 15,906,775 | | | – | | | 15,906,775 | |
|
| |
Norway | | | – | | | | 15,771,792 | | | – | | | 15,771,792 | |
|
| |
South Africa | | | – | | | | 23,777,710 | | | – | | | 23,777,710 | |
|
| |
South Korea | | | – | | | | 15,265,882 | | | – | | | 15,265,882 | |
|
| |
Sweden | | | – | | | | 414,115,307 | | | – | | | 414,115,307 | |
|
| |
Switzerland | | | – | | | | 435,246,486 | | | – | | | 435,246,486 | |
|
| |
Taiwan | | | – | | | | 28,190,426 | | | – | | | 28,190,426 | |
|
| |
United Kingdom | | | – | | | | 623,245,847 | | | – | | | 623,245,847 | |
|
| |
United States | | | 113,367,948 | | | | – | | | – | | | 113,367,948 | |
|
| |
Money Market Funds | | | 518,490,208 | | | | 2,060,107 | | | – | | | 520,550,315 | |
|
| |
Total Investments | | $ | 905,748,886 | | | $ | 3,800,957,096 | | | $– | | $ | 4,706,705,982 | |
|
| |
NOTE 4–Derivative Investments
The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
Effect of Derivative Investments for the year ended October 31, 2023
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| | | | |
| | Location of Gain on Statement of Operations | |
| | Currency Risk | |
|
| |
Realized Gain: | | | | |
Forward foreign currency contracts | | | $1,870 | |
|
| |
The table below summarizes the average notional value of derivatives held during the period.
| | |
| | Forward Foreign Currency Contracts |
|
|
Average notional value | | $1,154,943 |
|
|
NOTE 5–Security Transactions with Affiliated Funds
The Fund is permitted to purchase securities from or sell securities to certain other affiliated 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 that is or could be considered an “affiliated person” by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common
| | |
19 | | Invesco International Small-Mid Company Fund |
officers is made in reliance on Rule 17a-7 of the 1940 Act and, to the extent applicable, related SEC staff positions. Each such transaction is effected at the security’s “current market price”, as provided for in these procedures and Rule 17a-7. Pursuant to these procedures, for the year ended October 31, 2023, the Fund engaged in securities sales of $112,959,089, which resulted in net realized gains (losses) of $(65,086,012).
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $27,479.
NOTE 7–Trustees’ and Officers’ Fees and Benefits
Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees’ and Officers’ Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8–Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 9–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | |
| | 2023 | | 2022 | |
|
| |
Ordinary income* | | $13,278,778 | | $ | 113,739,597 | |
|
| |
Long-term capital gain | | 13,518,107 | | | 707,604,669 | |
|
| |
Total distributions | | $26,796,885 | | $ | 821,344,266 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 56,714,247 | |
|
| |
Undistributed long-term capital gain | | | 77,498,280 | |
|
| |
Net unrealized appreciation – investments | | | 418,032,346 | |
|
| |
Net unrealized appreciation – foreign currencies | | | 304,388 | |
|
| |
Temporary book/tax differences | | | (256,185 | ) |
|
| |
Shares of beneficial interest | | | 3,922,873,506 | |
|
| |
Total net assets | | $ | 4,475,166,582 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales and passive foreign investment companies.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund does not have a capital loss carryforward as of October 31, 2023.
NOTE 10–Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $1,211,082,197 and $1,755,857,819, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $784,821,539 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (366,789,193 | ) |
|
| |
Net unrealized appreciation of investments | | | $418,032,346 | |
|
| |
Cost of investments for tax purposes is $4,288,673,636.
| | |
20 | | Invesco International Small-Mid Company Fund |
NOTE 11–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of passive foreign investment companies and equalization, on October 31, 2023, undistributed net investment income was increased by $6,792,402, undistributed net realized gain was decreased by $41,344,403 and shares of beneficial interest was increased by $34,552,001. This reclassification had no effect on the net assets of the Fund.
NOTE 12–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 1,292,729 | | | $ | 52,996,977 | | | | 1,827,230 | | | $ | 82,188,095 | |
|
| |
Class C | | | 59,476 | | | | 2,085,847 | | | | 70,288 | | | | 2,619,285 | |
|
| |
Class R | | | 134,471 | | | | 5,077,997 | | | | 175,017 | | | | 7,297,886 | |
|
| |
Class Y | | | 7,692,768 | | | | 310,458,307 | | | | 11,529,970 | | | | 521,840,152 | |
|
| |
Class R5 | | | 2,516 | | | | 101,108 | | | | 6,285 | | | | 288,152 | |
|
| |
Class R6 | | | 23,055,678 | | | | 852,592,805 | | | | 10,123,742 | | | | 443,784,590 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | 50,623 | | | | 2,064,418 | | | | 2,117,805 | | | | 115,293,297 | |
|
| |
Class C | | | 3,680 | | | | 128,774 | | | | 219,526 | | | | 10,339,660 | |
|
| |
Class R | | | 5,355 | | | | 202,472 | | | | 198,990 | | | | 10,072,877 | |
|
| |
Class Y | | | 191,994 | | | | 7,758,460 | | | | 5,895,843 | | | | 318,139,690 | |
|
| |
Class R5 | | | 65 | | | | 2,648 | | | | 612 | | | | 33,510 | |
|
| |
Class R6 | | | 315,333 | | | | 12,808,815 | | | | 5,185,947 | | | | 281,389,504 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 391,204 | | | | 15,795,698 | | | | 579,028 | | | | 26,222,003 | |
|
| |
Class C | | | (457,337 | ) | | | (15,795,698 | ) | | | (670,455 | ) | | | (26,222,003 | ) |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (4,714,793 | ) | | | (191,429,458 | ) | | | (5,554,416 | ) | | | (244,806,740 | ) |
|
| |
Class C | | | (249,081 | ) | | | (8,607,481 | ) | | | (386,227 | ) | | | (14,763,412 | ) |
|
| |
Class R | | | (318,646 | ) | | | (12,044,475 | ) | | | (290,742 | ) | | | (12,091,174 | ) |
|
| |
Class Y | | | (18,484,806 | ) | | | (737,599,762 | ) | | | (27,645,551 | ) | | | (1,175,913,423 | ) |
|
| |
Class R5 | | | (342 | ) | | | (14,414 | ) | | | (4,559 | ) | | | (236,232 | ) |
|
| |
Class R6 | | | (14,284,972 | ) | | | (578,587,616 | ) | | | (15,353,062 | ) | | | (691,789,266 | ) |
|
| |
Net increase (decrease) in share activity | | | (5,314,085 | ) | | $ | (282,004,578 | ) | | | (11,974,729 | ) | | $ | (346,313,549 | ) |
|
| |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 46% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
In addition, 13% of the outstanding shares of the Fund are owned by the Adviser or an affiliate of the Adviser.
| | |
21 | | Invesco International Small-Mid Company Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco International Small-Mid Company Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco International Small-Mid Company Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
| | |
22 | | Invesco International Small-Mid Company 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 May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $845.20 | | $6.28 | | $1,018.40 | | $ 6.87 | | 1.35% |
Class C | | 1,000.00 | | 842.00 | | 9.80 | | 1,014.57 | | 10.71 | | 2.11 |
Class R | | 1,000.00 | | 844.20 | | 7.48 | | 1,017.09 | | 8.19 | | 1.61 |
Class Y | | 1,000.00 | | 846.30 | | 5.17 | | 1,019.61 | | 5.65 | | 1.11 |
Class R5 | | 1,000.00 | | 846.80 | | 4.61 | | 1,020.21 | | 5.04 | | 0.99 |
Class R6 | | 1,000.00 | | 846.70 | | 4.61 | | 1,020.21 | | 5.04 | | 0.99 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
23 | | Invesco International Small-Mid Company Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco International Small-Mid Company Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an
independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to
attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI ACWI ex USA Small Mid Cap Index (Index). The Board noted that performance of Class A shares of the Fund was in the fourth quintile of its performance universe for the one year period, the third quintile for the three year period and the first quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the
| | |
24 | | Invesco International Small-Mid Company Fund |
worst performing funds). The Board noted that performance of Class A shares of the Fund was below the performance of the Index for the one and three year periods and above the performance of the Index for the five year period. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was above the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the
performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and
| | |
25 | | Invesco International Small-Mid Company Fund |
the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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26 | | Invesco International Small-Mid Company Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | | | | | |
Federal and State Income Tax | | | | | | | | | |
Long-Term Capital Gain Distributions | | | $48,070,107 | | | | | | | | | |
Qualified Dividend Income* | | | 100.00 | % | | | | | | | | |
Corporate Dividends Received Deduction* | | | 0.00 | % | | | | | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | | | | | |
Qualified Business Income* | | | 0.00 | % | | | | | | | | |
Business Interest Income* | | | 0.00 | % | | | | | | | | |
Foreign Taxes | | | $ 0.0599 | | | | per share | | | | | |
Foreign Source Income | | | $ 0.6878 | | | | per share | | | | | |
| * | The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. |
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27 | | Invesco International Small-Mid Company Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
| | |
T-1 | | Invesco International Small-Mid Company Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler - 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management – Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T-2 | | Invesco International Small-Mid Company Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | |
Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver – Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort -1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco International Small-Mid Company Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold -1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco International Small-Mid Company Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes -1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco International Small-Mid Company Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
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Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
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T-6 | | Invesco International Small-Mid Company Fund |
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Go paperless with eDelivery
Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
With eDelivery, you can elect to have any or all of the following materials delivered straight to your inbox to download, save and print from your own computer:
∎ Fund reports and prospectuses
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∎ Tax forms
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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | O-ISMC-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco MSCI World SRI Index Fund
Nasdaq:
A: VSQAX ∎ C: VSQCX ∎ R: VSQRX ∎ Y: VSQYX ∎ R5: VSQFX ∎ R6: VSQSX
Management’s Discussion of Fund Performance
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Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco MSCI World SRI Index Fund (the Fund), at net asset value (NAV), outperformed the MSCI World SRI Index, the Fund’s broad market benchmark. | |
Your Fund’s long-term performance appears later in this report. | |
|
Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, 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 | | | 13.99 | % |
Class C Shares | | | 13.14 | |
Class R Shares | | | 13.69 | |
Class Y Shares | | | 14.28 | |
Class R5 Shares | | | 14.28 | |
Class R6 Shares | | | 14.28 | |
MSCI World SRI Index▼ (Broad Market Index) | | | 13.62 | |
Custom Invesco MSCI World SRI Index∎ (Style-Specific Index) | | | 13.62 | |
Lipper Global Multi-Cap Core Funds Index◆ (Peer Group Index) | | | 8.11 | |
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Source(s): ▼RIMES Technologies Corp.; ∎Invesco, RIMES Technologies Corp.; ◆Lipper Inc. | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed
emerging market equities. Within emerging markets, China’s equities were weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
The Fund invests passively and seeks to track the performance (before fees and expenses) of the MSCI World SRI Index (the “Index”). Consequently, the Fund’s country, sector and security weights will closely mirror those of the Index. The Index is a free float-adjusted market capitalization weighted index that is designed to represent the performance of companies that have high Environmental, Social and Governance (ESG) ratings relative to their sector peers, as determined by MSCI Inc. (MSCI), the index provider of the Index. Companies must meet a minimum ESG Rating and ESG Controversy Score, as determined by MSCI, to be eligible for inclusion in the Index. The Index methodology is further described in the Fund’s prospectus.
For the fiscal year ended October 31, 2023, information technology was the main driver of performance within the Fund, while financials and industrials contributed more modestly. However, consumer discretionary, communication services, and utilities were all slightly negative for the fiscal year. From a country perspective, the US had the most significant positive impact due to its large weight, almost 68% of the portfolio. This gain was followed by contributions from Denmark and the Netherlands, but to a lesser extent.
In terms of securities, Microsoft, NVIDIA and Novo Nordisk were the top contributors
to the Fund’s returns. Microsoft and NVIDIA benefited strongly from the increased and widespread use of artificial intelligence, while Novo Nordisk experienced breakout performance in their diabetes and weight loss drugs. On the other hand, Tesla, Walt Disney and Elevance Health were the largest detractors for the fiscal year. Tesla suffered due to slowing demand within the EV industry as well as the higher interest rates making it harder for consumers to purchase cars. Disney also struggled as the company saw lower attendance at its major theme parks and significant losses for its streaming platform. Elevance Health declined as the health care industry, as a whole, is facing higher costs and lower margins. We sold our position in NVIDIA during the fiscal year.
Please note that the Fund’s strategy is principally implemented through equity investments, but the Fund also may use derivative instruments, including MSCI World Index futures contracts, to gain broad exposure to the equity market. Derivatives can be a cost-effective alternative to direct security investments. However, derivatives may amplify traditional investment risks through the creation of leverage and may be less liquid than traditional securities.
Thank you for your investment in Invesco MSCI World SRI Index Fund.
Portfolio manager(s):
Su-Jin Fabian
Nils Huter
Robert Nakouzi
Daniel Tsai
Ahmadreza Vafaeimehr
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
| | |
2 | | Invesco MSCI World SRI Index Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 7/1/16
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g598204dsp003.jpg)
1 Source: RIMES Technologies Corp.
2 Source: Invesco, RIMES Technologies Corp.
3 Source: Lipper Inc.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
| | |
3 | | Invesco MSCI World SRI Index Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (7/1/16) | | | 5.85 | % |
5 Years | | | 4.69 | |
1 Year | | | 7.69 | |
| |
Class C Shares | | | | |
Inception (7/1/16) | | | 5.86 | % |
5 Years | | | 5.07 | |
1 Year | | | 12.14 | |
| |
Class R Shares | | | | |
Inception (7/1/16) | | | 6.39 | % |
5 Years | | | 5.61 | |
1 Year | | | 13.69 | |
| |
Class Y Shares | | | | |
Inception (7/1/16) | | | 6.93 | % |
5 Years | | | 6.15 | |
1 Year | | | 14.28 | |
| |
Class R5 Shares | | | | |
Inception (7/1/16) | | | 6.93 | % |
5 Years | | | 6.15 | |
1 Year | | | 14.28 | |
| |
Class R6 Shares | | | | |
Inception (7/1/16) | | | 6.93 | % |
5 Years | | | 6.15 | |
1 Year | | | 14.28 | |
Prior to June 29, 2020, the Fund was not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund prior to June 29, 2020 may have deviated significantly from the performance of the index(es).
The performance data quoted represent past performance and cannot guarantee 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.
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.
| | |
4 | | Invesco MSCI World SRI Index Fund |
Supplemental Information
Invesco MSCI World SRI Index Fund’s investment objective is long-term growth of capital.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI World SRI Index is an unmanaged index comprised of developed countries’ large- and mid-cap stocks with high ESG ratings as determined by MSCI ESG Research. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Custom Invesco MSCI World SRI Index is composed of the MSCI World Index through June 30, 2020, and the MSCI World SRI Index thereafter. Both indexes are computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Lipper Global Multi-Cap Core Funds Index is an unmanaged index considered representative of global multi-cap core funds tracked by Lipper. |
∎ | A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not. |
|
|
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 |
| | |
5 | | Invesco MSCI World SRI Index Fund |
Fund Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Information Technology | | | | 25.67 | % |
| |
Financials | | | | 14.92 | |
| |
Consumer Discretionary | | | | 12.07 | |
| |
Health Care | | | | 11.92 | |
| |
Industrials | | | | 10.52 | |
| |
Consumer Staples | | | | 7.24 | |
| |
Materials | | | | 4.60 | |
| |
Communication Services | | | | 3.94 | |
| |
Utilities | | | | 2.23 | |
| |
Other Sectors, Each Less than 2% of Net Assets | | | | 3.96 | |
| |
Money Market Funds Plus Other Assets Less Liabilities | | | | 2.93 | |
Top 10 Equity Holdings*
| | | | | | |
| | | | % of total net assets |
| | |
1. | | Microsoft Corp. | | | 16.80 | % |
| | |
2. | | Tesla, Inc. | | | 4.06 | |
| | |
3. | | Novo Nordisk A/S, Class B | | | 2.26 | |
| | |
4. | | Home Depot, Inc. (The) | | | 2.05 | |
| | |
5. | | Adobe, Inc. | | | 1.75 | |
| | |
6. | | ASML Holding N.V. | | | 1.75 | |
| | |
7. | | Coca-Cola Co. (The) | | | 1.68 | |
| | |
8. | | PepsiCo, Inc. | | | 1.63 | |
| | |
9. | | Linde PLC | | | 1.36 | |
| | |
10. | | Walt Disney Co. (The) | | | 1.08 | |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
| | |
6 | | Invesco MSCI World SRI Index Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests–97.07% | |
Australia–1.27% | |
Ampol Ltd. | | | 249 | | | $ | 5,086 | |
|
| |
APA Group | | | 849 | | | | 4,460 | |
|
| |
ASX Ltd. | | | 141 | | | | 5,045 | |
|
| |
Brambles Ltd. | | | 1,106 | | | | 9,274 | |
|
| |
Cochlear Ltd. | | | 46 | | | | 7,065 | |
|
| |
Coles Group Ltd. | | | 954 | | | | 9,258 | |
|
| |
Computershare Ltd. | | | 448 | | | | 7,070 | |
|
| |
Dexus | | | 805 | | | | 3,345 | |
|
| |
GPT Group (The) | | | 1,406 | | | | 3,263 | |
|
| |
IGO Ltd. | | | 582 | | | | 3,557 | |
|
| |
James Hardie Industries PLC, CDI(a) | | | 312 | | | | 7,758 | |
|
| |
Lendlease Corp. Ltd. | | | 952 | | | | 3,794 | |
|
| |
Mineral Resources Ltd. | | | 120 | | | | 4,452 | |
|
| |
Mirvac Group | | | 2,727 | | | | 3,190 | |
|
| |
Northern Star Resources Ltd. | | | 832 | | | | 6,159 | |
|
| |
Pilbara Minerals Ltd. | | | 1,913 | | | | 4,522 | |
|
| |
QBE Insurance Group Ltd. | | | 1,022 | | | | 10,161 | |
|
| |
Scentre Group | | | 3,464 | | | | 5,409 | |
|
| |
Sonic Healthcare Ltd. | | | 284 | | | | 5,208 | |
|
| |
Stockland | | | 1,744 | | | | 3,958 | |
|
| |
Suncorp Group Ltd. | | | 627 | | | | 5,347 | |
|
| |
Transurban Group | | | 2,053 | | | | 15,498 | |
|
| |
| | | | | | | 132,879 | |
|
| |
|
Austria–0.10% | |
Mondi PLC | | | 307 | | | | 4,959 | |
|
| |
Verbund AG | | | 64 | | | | 5,556 | |
|
| |
| | | | | | | 10,515 | |
|
| |
|
Belgium–0.13% | |
KBC Group N.V. | | | 189 | | | | 10,404 | |
|
| |
Umicore S.A. | | | 141 | | | | 3,353 | |
|
| |
| | | | | | | 13,757 | |
|
| |
|
Canada–3.56% | |
Agnico Eagle Mines Ltd. | | | 324 | | | | 15,196 | |
|
| |
Algonquin Power & Utilities Corp. | | | 614 | | | | 3,090 | |
|
| |
Bank of Nova Scotia (The) | | | 893 | | | | 36,158 | |
|
| |
Canadian National Railway Co. | | | 447 | | | | 47,296 | |
|
| |
Canadian Tire Corp. Ltd., Class A | | | 47 | | | | 4,533 | |
|
| |
Dollarama, Inc. | | | 185 | | | | 12,634 | |
|
| |
Fortis, Inc. | | | 321 | | | | 12,745 | |
|
| |
Gildan Activewear, Inc. | | | 175 | | | | 4,971 | |
|
| |
Intact Financial Corp. | | | 119 | | | | 16,720 | |
|
| |
Metro, Inc. | | | 148 | | | | 7,518 | |
|
| |
National Bank of Canada | | | 259 | | | | 16,103 | |
|
| |
Nutrien Ltd. | | | 385 | | | | 20,678 | |
|
| |
Open Text Corp. | | | 177 | | | | 5,910 | |
|
| |
Parkland Corp. | | | 170 | | | | 5,145 | |
|
| |
Pembina Pipeline Corp. | | | 377 | | | | 11,603 | |
|
| |
RB Global, Inc. | | | 103 | | | | 6,740 | |
|
| |
Saputo, Inc. | | | 204 | | | | 4,119 | |
|
| |
Shopify, Inc., Class A(a) | | | 915 | | | | 43,211 | |
|
| |
Sun Life Financial, Inc. | | | 398 | | | | 18,179 | |
|
| |
TELUS Corp. | | | 276 | | | | 4,450 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Canada–(continued) | |
Toronto-Dominion Bank (The) | | | 1,351 | | | $ | 75,463 | |
|
| |
| | | | | | | 372,462 | |
|
| |
|
China–0.69% | |
BOC Hong Kong (Holdings) Ltd. | | | 2,500 | | | | 6,617 | |
|
| |
NXP Semiconductors N.V. | | | 187 | | | | 32,245 | |
|
| |
Prosus N.V.(a) | | | 1,211 | | | | 33,919 | |
|
| |
| | | | | | | 72,781 | |
|
| |
|
Denmark–2.97% | |
Coloplast A/S, Class B | | | 85 | | | | 8,863 | |
|
| |
DSV A/S | | | 133 | | | | 19,790 | |
|
| |
Genmab A/S(a) | | | 50 | | | | 14,163 | |
|
| |
Novo Nordisk A/S, Class B | | | 2,454 | | | | 236,652 | |
|
| |
Orsted A/S(b) | | | 141 | | | | 6,832 | |
|
| |
Pandora A/S | | | 85 | | | | 9,628 | |
|
| |
Vestas Wind Systems A/S(a) | | | 725 | | | | 15,670 | |
|
| |
| | | | | | | 311,598 | |
|
| |
|
Finland–0.53% | |
Elisa OYJ | | | 86 | | | | 3,650 | |
|
| |
Kesko OYJ, Class B | | | 186 | | | | 3,154 | |
|
| |
Metso OYJ | | | 479 | | | | 4,236 | |
|
| |
Neste OYJ | | | 307 | | | | 10,306 | |
|
| |
Nokia OYJ | | | 3,868 | | | | 12,907 | |
|
| |
Stora Enso OYJ, Class R | | | 271 | | | | 3,265 | |
|
| |
UPM-Kymmene OYJ | | | 347 | | | | 11,674 | |
|
| |
Wartsila OYJ Abp | | | 507 | | | | 6,037 | |
|
| |
| | | | | | | 55,229 | |
|
| |
|
France–2.84% | |
AXA S.A. | | | 1,445 | | | | 42,885 | |
|
| |
Cie Generale des Etablissements Michelin S.C.A. | | | 496 | | | | 14,724 | |
|
| |
Credit Agricole S.A. | | | 762 | | | | 9,210 | |
|
| |
Danone S.A. | | | 503 | | | | 29,962 | |
|
| |
Dassault Systemes SE | | | 485 | | | | 20,005 | |
|
| |
Hermes International S.C.A. | | | 21 | | | | 39,382 | |
|
| |
L’Oreal S.A. | | | 182 | | | | 76,340 | |
|
| |
Schneider Electric SE | | | 408 | | | | 62,740 | |
|
| |
Valeo SE | | | 190 | | | | 2,508 | |
|
| |
| | | | | | | 297,756 | |
|
| |
|
Germany–1.55% | |
adidas AG | | | 121 | | | | 21,402 | |
|
| |
Deutsche Boerse AG | | | 141 | | | | 23,160 | |
|
| |
Deutsche Post AG | | | 722 | | | | 28,062 | |
|
| |
GEA Group AG | | | 124 | | | | 4,228 | |
|
| |
Henkel AG & Co. KGaA, Preference Shares | | | 171 | | | | 12,316 | |
|
| |
Merck KGaA | | | 87 | | | | 13,094 | |
|
| |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen, Class R | | | 102 | | | | 40,844 | |
|
| |
Puma SE | | | 71 | | | | 4,000 | |
|
| |
Vonovia SE | | | 515 | | | | 11,823 | |
|
| |
Zalando SE(a)(b) | | | 153 | | | | 3,561 | |
|
�� | |
| | | | | | | 162,490 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
7 | | Invesco MSCI World SRI Index Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Hong Kong–0.85% | |
AIA Group Ltd. | | | 9,000 | | | $ | 78,383 | |
|
| |
Hang Seng Bank Ltd. | | | 600 | | | | 6,871 | |
|
| |
MTR Corp. Ltd. | | | 1,000 | | | | 3,737 | |
|
| |
| | | | | | | 88,991 | |
|
| |
|
Ireland–0.08% | |
Kerry Group PLC, Class A | | | 110 | | | | 8,522 | |
|
| |
|
Italy–0.40% | |
Amplifon S.p.A. | | | 119 | | | | 3,368 | |
|
| |
Assicurazioni Generali S.p.A. | | | 682 | | | | 13,563 | |
|
| |
FinecoBank Banca Fineco S.p.A. | | | 393 | | | | 4,639 | |
|
| |
Mediobanca Banca di Credito Finanziario S.p.A. | | | 460 | | | | 5,488 | |
|
| |
Moncler S.p.A. | | | 141 | | | | 7,334 | |
|
| |
Terna S.p.A. | | | 929 | | | | 7,116 | |
|
| |
| | | | | | | 41,508 | |
|
| |
|
Japan–6.11% | |
Advantest Corp. | | | 400 | | | | 10,337 | |
|
| |
AEON Co. Ltd. | | | 500 | | | | 10,520 | |
|
| |
Ajinomoto Co., Inc. | | | 400 | | | | 14,634 | |
|
| |
Asahi Kasei Corp. | | | 900 | | | | 5,526 | |
|
| |
Astellas Pharma, Inc. | | | 1,400 | | | | 17,662 | |
|
| |
Bridgestone Corp. | | | 300 | | | | 11,320 | |
|
| |
Daikin Industries Ltd. | | | 200 | | | | 28,802 | |
|
| |
Daiwa Securities Group, Inc. | | | 1,100 | | | | 6,359 | |
|
| |
FANUC Corp. | | | 700 | | | | 17,956 | |
|
| |
Fuji Electric Co. Ltd. | | | 100 | | | | 3,807 | |
|
| |
Fujitsu Ltd. | | | 100 | | | | 12,946 | |
|
| |
Hankyu Hanshin Holdings, Inc. | | | 200 | | | | 6,283 | |
|
| |
Hitachi Ltd. | | | 700 | | | | 44,482 | |
|
| |
Hoya Corp. | | | 200 | | | | 19,239 | |
|
| |
IBIDEN Co. Ltd. | | | 100 | | | | 4,259 | |
|
| |
KDDI Corp. | | | 1,200 | | | | 35,798 | |
|
| |
Kikkoman Corp. | | | 100 | | | | 5,693 | |
|
| |
Kubota Corp. | | | 600 | | | | 7,985 | |
|
| |
LY Corp. | | | 1,900 | | | | 4,813 | |
|
| |
MatsukiyoCocokara & Co. | | | 300 | | | | 5,262 | |
|
| |
Mitsubishi Chemical Group Corp. | | | 800 | | | | 4,526 | |
|
| |
NEC Corp. | | | 200 | | | | 9,640 | |
|
| |
Nitto Denko Corp. | | | 100 | | | | 6,484 | |
|
| |
Nomura Research Institute Ltd. | | | 300 | | | | 7,922 | |
|
| |
Omron Corp. | | | 100 | | | | 3,593 | |
|
| |
Ono Pharmaceutical Co. Ltd. | | | 300 | | | | 5,179 | |
|
| |
Oriental Land Co. Ltd. | | | 800 | | | | 25,911 | |
|
| |
ORIX Corp. | | | 900 | | | | 16,348 | |
|
| |
Renesas Electronics Corp.(a) | | | 900 | | | | 11,831 | |
|
| |
SECOM Co. Ltd. | | | 100 | | | | 6,954 | |
|
| |
Seiko Epson Corp. | | | 300 | | | | 4,165 | |
|
| |
SG Holdings Co. Ltd. | | | 400 | | | | 5,664 | |
|
| |
SoftBank Corp. | | | 2,000 | | | | 22,585 | |
|
| |
Sompo Holdings, Inc. | | | 200 | | | | 8,646 | |
|
| |
Sony Group Corp. | | | 900 | | | | 74,487 | |
|
| |
Sumitomo Chemical Co. Ltd. | | | 1,400 | | | | 3,551 | |
|
| |
Sumitomo Metal Mining Co. Ltd. | | | 200 | | | | 5,633 | |
|
| |
Sumitomo Mitsui Financial Group, Inc. | | | 900 | | | | 43,211 | |
|
| |
Sysmex Corp. | | | 100 | | | | 4,865 | |
|
| |
T&D Holdings, Inc. | | | 400 | | | | 7,100 | |
|
| |
TDK Corp. | | | 300 | | | | 11,265 | |
|
| |
TIS, Inc. | | | 200 | | | | 4,290 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Japan–(continued) | |
Tobu Railway Co. Ltd. | | | 200 | | | $ | 4,809 | |
|
| |
Tokio Marine Holdings, Inc. | | | 1,400 | | | | 31,205 | |
|
| |
Toray Industries, Inc. | | | 900 | | | | 4,402 | |
|
| |
Unicharm Corp. | | | 300 | | | | 10,169 | |
|
| |
Yamaha Corp. | | | 200 | | | | 5,331 | |
|
| |
Yamaha Motor Co. Ltd. | | | 200 | | | | 4,877 | |
|
| |
Yamato Holdings Co. Ltd. | | | 300 | | | | 5,004 | |
|
| |
Yaskawa Electric Corp. | | | 200 | | | | 6,558 | |
|
| |
| | | | | | | 639,888 | |
|
| |
|
Netherlands–2.35% | |
Akzo Nobel N.V. | | | 144 | | | | 9,671 | |
|
| |
ASML Holding N.V. | | | 304 | | | | 182,874 | |
|
| |
DSM B.V. | | | 125 | | | | 12,356 | |
|
| |
Universal Music Group N.V. | | | 581 | | | | 14,167 | |
|
| |
Wolters Kluwer N.V. | | | 213 | | | | 27,390 | |
|
| |
| | | | | | | 246,458 | |
|
| |
|
New Zealand–0.04% | |
Meridian Energy Ltd. | | | 1,313 | | | | 3,704 | |
|
| |
|
Norway–0.22% | |
DNB Bank ASA | | | 692 | | | | 12,478 | |
|
| |
Orkla ASA | | | 740 | | | | 5,107 | |
|
| |
Telenor ASA | | | 492 | | | | 5,030 | |
|
| |
| | | | | | | 22,615 | |
|
| |
|
Singapore–0.27% | |
CapitaLand Integrated Commercial Trust | | | 4,600 | | | | 5,930 | |
|
| |
CapitaLand Investment Ltd. | | | 1,700 | | | | 3,661 | |
|
| |
STMicroelectronics N.V. | | | 500 | | | | 19,159 | |
|
| |
| | | | | | | 28,750 | |
|
| |
|
Spain–0.28% | |
ACS Actividades de Construccion y Servicios S.A. | | | 155 | | | | 5,606 | |
|
| |
Amadeus IT Group S.A. | | | 325 | | | | 18,568 | |
|
| |
Redeia Corp. S.A. | | | 322 | | | | 5,023 | |
|
| |
| | | | | | | 29,197 | |
|
| |
|
Sweden–0.39% | |
Beijer Ref AB | | | 361 | | | | 3,442 | |
|
| |
Boliden AB(a) | | | 242 | | | | 6,239 | |
|
| |
Essity AB, Class B | | | 400 | | | | 9,127 | |
|
| |
Svenska Cellulosa AB S.C.A., Class B | | | 423 | | | | 5,820 | |
|
| |
Svenska Handelsbanken AB, Class A | | | 968 | | | | 8,241 | |
|
| |
Tele2 AB, Class B | | | 579 | | | | 4,118 | |
|
| |
Telia Co. AB | | | 1,832 | | | | 3,875 | |
|
| |
| | | | | | | 40,862 | |
|
| |
|
Switzerland–1.57% | |
DSM-Firmenich AG | | | 80 | | | | 7,270 | |
|
| |
Givaudan S.A. | | | 7 | | | | 23,241 | |
|
| |
Julius Baer Group Ltd. | | | 139 | | | | 8,232 | |
|
| |
Kuehne + Nagel International AG, Class R | | | 37 | | | | 9,995 | |
|
| |
Logitech International S.A., Class R | | | 121 | | | | 9,497 | |
|
| |
Lonza Group AG | | | 53 | | | | 18,585 | |
|
| |
SGS S.A. | | | 100 | | | | 8,159 | |
|
| |
SIG Group AG(a) | | | 210 | | | | 4,637 | |
|
| |
Sonova Holding AG | | | 38 | | | | 9,005 | |
|
| |
Temenos AG | | | 62 | | | | 4,464 | |
|
| |
VAT Group AG(b) | | | 18 | | | | 6,363 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco MSCI World SRI Index Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Switzerland–(continued) | |
Zurich Insurance Group AG | | | 116 | | | $ | 54,962 | |
|
| |
| | | | | | | 164,410 | |
|
| |
|
United Kingdom–3.19% | |
3i Group PLC | | | 663 | | | | 15,660 | |
|
| |
abrdn PLC | | | 2,846 | | | | 5,437 | |
|
| |
Admiral Group PLC | | | 182 | | | | 5,424 | |
|
| |
Auto Trader Group PLC(b) | | | 690 | | | | 5,232 | |
|
| |
Barratt Developments PLC | | | 695 | | | | 3,510 | |
|
| |
Berkeley Group Holdings PLC (The) | | | 72 | | | | 3,549 | |
|
| |
BT Group PLC | | | 5,446 | | | | 7,496 | |
|
| |
Burberry Group PLC | | | 280 | | | | 5,769 | |
|
| |
CNH Industrial N.V. | | | 767 | | | | 8,506 | |
|
| |
Croda International PLC | | | 84 | | | | 4,476 | |
|
| |
DCC PLC | | | 66 | | | | 3,665 | |
|
| |
Informa PLC | | | 982 | | | | 8,529 | |
|
| |
InterContinental Hotels Group PLC | | | 122 | | | | 8,646 | |
|
| |
Intertek Group PLC | | | 89 | | | | 4,154 | |
|
| |
J Sainsbury PLC | | | 1,618 | | | | 5,063 | |
|
| |
Johnson Matthey PLC | | | 161 | | | | 2,926 | |
|
| |
Kingfisher PLC | | | 1,562 | | | | 4,002 | |
|
| |
Legal & General Group PLC | | | 4,006 | | | | 10,326 | |
|
| |
Liberty Global PLC, Class C(a) | | | 296 | | | | 5,020 | |
|
| |
National Grid PLC | | | 2,557 | | | | 30,388 | |
|
| |
Pearson PLC | | | 540 | | | | 6,255 | |
|
| |
RELX PLC | | | 1,431 | | | | 50,055 | |
|
| |
Sage Group PLC (The) | | | 718 | | | | 8,487 | |
|
| |
Schroders PLC | | | 658 | | | | 2,959 | |
|
| |
Segro PLC | | | 825 | | | | 7,190 | |
|
| |
SSE PLC | | | 794 | | | | 15,810 | |
|
| |
St. James’s Place PLC | | | 391 | | | | 3,055 | |
|
| |
Unilever PLC | | | 1,954 | | | | 92,581 | |
|
| |
| | | | | | | 334,170 | |
|
| |
|
United States–67.68% | |
Adobe, Inc.(a) | | | 344 | | | | 183,029 | |
|
| |
AECOM | | | 68 | | | | 5,205 | |
|
| |
Agilent Technologies, Inc. | | | 229 | | | | 23,672 | |
|
| |
Allegion PLC | | | 65 | | | | 6,393 | |
|
| |
Ally Financial, Inc. | | | 283 | | | | 6,846 | |
|
| |
American Express Co. | | | 483 | | | | 70,532 | |
|
| |
American Water Works Co., Inc. | | | 133 | | | | 15,647 | |
|
| |
Ameriprise Financial, Inc. | | | 91 | | | | 28,626 | |
|
| |
Amgen, Inc. | | | 397 | | | | 101,513 | |
|
| |
Annaly Capital Management, Inc. | | | 329 | | | | 5,136 | |
|
| |
Aptiv PLC(a) | | | 201 | | | | 17,527 | |
|
| |
Atmos Energy Corp. | | | 97 | | | | 10,443 | |
|
| |
Autodesk, Inc.(a) | | | 152 | | | | 30,040 | |
|
| |
Automatic Data Processing, Inc. | | | 316 | | | | 68,958 | |
|
| |
Avantor, Inc.(a) | | | 445 | | | | 7,756 | |
|
| |
Avery Dennison Corp. | | | 50 | | | | 8,704 | |
|
| |
Axon Enterprise, Inc.(a) | | | 47 | | | | 9,611 | |
|
| |
Baker Hughes Co., Class A | | | 708 | | | | 24,369 | |
|
| |
Ball Corp. | | | 187 | | | | 9,004 | |
|
| |
Bank of New York Mellon Corp. (The) | | | 602 | | | | 25,585 | |
|
| |
Becton, Dickinson and Co. | | | 227 | | | | 57,381 | |
|
| |
Best Buy Co., Inc. | | | 174 | | | | 11,627 | |
|
| |
Biogen, Inc.(a) | | | 111 | | | | 26,367 | |
|
| |
BlackRock, Inc. | | | 114 | | | | 69,800 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United States–(continued) | |
Booking Holdings, Inc.(a) | | | 28 | | | $ | 78,108 | |
|
| |
Broadridge Financial Solutions, Inc. | | | 79 | | | | 13,481 | |
|
| |
Builders FirstSource, Inc.(a) | | | 97 | | | | 10,526 | |
|
| |
Bunge Ltd. | | | 100 | | | | 10,598 | |
|
| |
C.H. Robinson Worldwide, Inc. | | | 102 | | | | 8,347 | |
|
| |
Carrier Global Corp. | | | 579 | | | | 27,595 | |
|
| |
CBRE Group, Inc., Class A(a) | | | 246 | | | | 17,058 | |
|
| |
Centene Corp.(a) | | | 429 | | | | 29,592 | |
|
| |
Ceridian HCM Holding, Inc.(a) | | | 96 | | | | 6,145 | |
|
| |
Cheniere Energy, Inc. | | | 165 | | | | 27,459 | |
|
| |
Church & Dwight Co., Inc. | | | 164 | | | | 14,914 | |
|
| |
Cigna Group (The) | | | 231 | | | | 71,425 | |
|
| |
Clorox Co. (The) | | | 90 | | | | 10,593 | |
|
| |
CME Group, Inc., Class A | | | 279 | | | | 59,555 | |
|
| |
CMS Energy Corp. | | | 190 | | | | 10,325 | |
|
| |
Coca-Cola Co. (The) | | | 3,109 | | | | 175,627 | |
|
| |
Conagra Brands, Inc. | | | 300 | | | | 8,208 | |
|
| |
Consolidated Edison, Inc. | | | 250 | | | | 21,948 | |
|
| |
Cooper Cos., Inc. (The) | | | 33 | | | | 10,288 | |
|
| |
CRH PLC | | | 534 | | | | 28,827 | |
|
| |
Crown Castle, Inc. | | | 312 | | | | 29,010 | |
|
| |
Cummins, Inc. | | | 109 | | | | 23,577 | |
|
| |
Danaher Corp. | | | 533 | | | | 102,347 | |
|
| |
Darling Ingredients, Inc.(a) | | | 105 | | | | 4,650 | |
|
| |
DaVita, Inc.(a) | | | 71 | | | | 5,483 | |
|
| |
Deckers Outdoor Corp.(a) | | | 17 | | | | 10,150 | |
|
| |
Dover Corp. | | | 68 | | | | 8,837 | |
|
| |
Ecolab, Inc. | | | 191 | | | | 32,038 | |
|
| |
Edwards Lifesciences Corp.(a) | | | 468 | | | | 29,821 | |
|
| |
Electronic Arts, Inc. | | | 223 | | | | 27,605 | |
|
| |
Elevance Health, Inc. | | | 177 | | | | 79,666 | |
|
| |
Essential Utilities, Inc. | | | 109 | | | | 3,647 | |
|
| |
Eversource Energy | | | 245 | | | | 13,179 | |
|
| |
Exelon Corp. | | | 707 | | | | 27,531 | |
|
| |
Expeditors International of Washington, Inc. | | | 125 | | | | 13,656 | |
|
| |
FactSet Research Systems, Inc. | | | 28 | | | | 12,093 | |
|
| |
Fastenal Co. | | | 422 | | | | 24,619 | |
|
| |
Ferguson PLC | | | 143 | | | | 21,479 | |
|
| |
Fidelity National Information Services, Inc. | | | 418 | | | | 20,528 | |
|
| |
Fiserv, Inc.(a) | | | 462 | | | | 52,552 | |
|
| |
Fortive Corp. | | | 220 | | | | 14,362 | |
|
| |
Fortune Brands Innovations, Inc. | | | 97 | | | | 5,413 | |
|
| |
Fox Corp., Class A | | | 278 | | | | 8,448 | |
|
| |
Franklin Resources, Inc. | | | 216 | | | | 4,923 | |
|
| |
General Mills, Inc. | | | 449 | | | | 29,293 | |
|
| |
Gilead Sciences, Inc. | | | 943 | | | | 74,063 | |
|
| |
Graco, Inc. | | | 86 | | | | 6,394 | |
|
| |
Halliburton Co. | | | 659 | | | | 25,925 | |
|
| |
Hartford Financial Services Group, Inc. (The) | | | 183 | | | | 13,441 | |
Hasbro, Inc. | | | 95 | | | | 4,289 | |
|
| |
HCA Healthcare, Inc. | | | 154 | | | | 34,826 | |
|
| |
Henry Schein, Inc.(a) | | | 98 | | | | 6,368 | |
|
| |
Hilton Worldwide Holdings, Inc. | | | 215 | | | | 32,579 | |
|
| |
Hologic, Inc.(a) | | | 185 | | | | 12,241 | |
|
| |
Home Depot, Inc. (The) | | | 754 | | | | 214,656 | |
|
| |
Huntington Bancshares, Inc. | | | 789 | | | | 7,614 | |
|
| |
IDEX Corp. | | | 55 | | | | 10,528 | |
|
| |
IDEXX Laboratories, Inc.(a) | | | 63 | | | | 25,167 | |
|
| |
Illinois Tool Works, Inc. | | | 237 | | | | 53,116 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco MSCI World SRI Index Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United States–(continued) | |
Illumina, Inc.(a) | | | 114 | | | $ | 12,474 | |
|
| |
Ingersoll Rand, Inc. | | | 264 | | | | 16,020 | |
|
| |
Insulet Corp.(a) | | | 51 | | | | 6,761 | |
|
| |
International Flavors & Fragrances, Inc. | | | 191 | | | | 13,055 | |
|
| |
International Paper Co. | | | 195 | | | | 6,577 | |
|
| |
Interpublic Group of Cos., Inc. (The) | | | 296 | | | | 8,406 | |
|
| |
Intuit, Inc. | | | 215 | | | | 106,414 | |
|
| |
Iron Mountain, Inc. | | | 196 | | | | 11,578 | |
|
| |
J.B. Hunt Transport Services, Inc. | | | 39 | | | | 6,703 | |
|
| |
JM Smucker Co. (The) | | | 65 | | | | 7,400 | |
|
| |
Johnson Controls International PLC | | | 530 | | | | 25,981 | |
|
| |
Kellanova | | | 184 | | | | 9,286 | |
|
| |
Knight-Swift Transportation Holdings, Inc. | | | 96 | | | | 4,693 | |
|
| |
Laboratory Corp. of America Holdings | | | 48 | | | | 9,587 | |
|
| |
Lam Research Corp. | | | 102 | | | | 59,998 | |
|
| |
Lamb Weston Holdings, Inc. | | | 96 | | | | 8,621 | |
|
| |
Lear Corp. | | | 42 | | | | 5,450 | |
|
| |
Lennox International, Inc. | | | 20 | | | | 7,411 | |
|
| |
Linde PLC | | | 373 | | | | 142,546 | |
|
| |
LKQ Corp. | | | 217 | | | | 9,531 | |
|
| |
Lowe’s Cos., Inc. | | | 453 | | | | 86,328 | |
|
| |
MarketAxess Holdings, Inc. | | | 18 | | | | 3,848 | |
|
| |
Marsh & McLennan Cos., Inc. | | | 380 | | | | 72,067 | |
|
| |
Mettler-Toledo International, Inc.(a) | | | 18 | | | | 17,734 | |
|
| |
Microsoft Corp. | | | 5,204 | | | | 1,759,524 | |
|
| |
Molina Healthcare, Inc.(a) | | | 39 | | | | 12,985 | |
|
| |
Moody’s Corp. | | | 127 | | | | 39,116 | |
|
| |
Nasdaq, Inc. | | | 200 | | | | 9,920 | |
|
| |
Newmont Corp. | | | 558 | | | | 20,908 | |
|
| |
Newmont Corp., CDI(a) | | | 232 | | | | 8,890 | |
|
| |
Northern Trust Corp. | | | 147 | | | | 9,689 | |
|
| |
Old Dominion Freight Line, Inc. | | | 70 | | | | 26,366 | |
|
| |
ONEOK, Inc. | | | 329 | | | | 21,451 | |
|
| |
Owens Corning | | | 83 | | | | 9,410 | |
|
| |
Paylocity Holding Corp.(a) | | | 31 | | | | 5,561 | |
|
| |
Pentair PLC | | | 122 | | | | 7,091 | |
|
| |
PepsiCo, Inc. | | | 1,042 | | | | 170,138 | |
|
| |
Phillips 66 | | | 327 | | | | 37,301 | |
|
| |
PNC Financial Services Group, Inc. (The) | | | 298 | | | | 34,112 | |
|
| |
Pool Corp. | | | 31 | | | | 9,789 | |
|
| |
PPG Industries, Inc. | | | 183 | | | | 22,467 | |
|
| |
Progressive Corp. (The) | | | 441 | | | | 69,718 | |
|
| |
Prologis, Inc. | | | 695 | | | | 70,021 | |
|
| |
Prudential Financial, Inc. | | | 295 | | | | 26,975 | |
|
| |
Quanta Services, Inc. | | | 100 | | | | 16,712 | |
|
| |
Quest Diagnostics, Inc. | | | 94 | | | | 12,229 | |
|
| |
Regions Financial Corp. | | | 721 | | | | 10,476 | |
|
| |
Repligen Corp.(a) | | | 36 | | | | 4,844 | |
|
| |
Rivian Automotive, Inc., Class A(a) | | | 305 | | | | 4,947 | |
|
| |
Robert Half, Inc. | | | 82 | | | | 6,131 | |
|
| |
Rockwell Automation, Inc. | | | 85 | | | | 22,339 | |
|
| |
S&P Global, Inc. | | | 250 | | | | 87,327 | |
|
| |
Sempra | | | 494 | | | | 34,595 | |
|
| |
State Street Corp. | | | 266 | | | | 17,192 | |
|
| |
STERIS PLC | | | 59 | | | | 12,389 | |
|
| |
Swiss Re AG | | | 217 | | | | 23,693 | |
|
| |
Investment Abbreviations:
CDI - CREST Depository Interest
| | | | | | | | |
| | Shares | | | Value | |
|
| |
United States–(continued) | |
Synchrony Financial | | | 269 | | | | $ 7,545 | |
|
| |
T. Rowe Price Group, Inc. | | | 177 | | | | 16,019 | |
|
| |
Take-Two Interactive Software, Inc.(a) | | | 106 | | | | 14,178 | |
|
| |
Tesla, Inc.(a)(c) | | | 2,117 | | | | 425,178 | |
|
| |
Texas Instruments, Inc. | | | 698 | | | | 99,123 | |
|
| |
Toro Co. (The) | | | 54 | | | | 4,365 | |
|
| |
Tractor Supply Co. | | | 83 | | | | 15,982 | |
|
| |
Trane Technologies PLC | | | 178 | | | | 33,875 | |
|
| |
Travelers Cos., Inc. (The) | | | 178 | | | | 29,804 | |
|
| |
Truist Financial Corp. | | | 992 | | | | 28,133 | |
|
| |
U.S. Bancorp | | | 1,084 | | | | 34,558 | |
|
| |
United Rentals, Inc. | | | 48 | | | | 19,501 | |
|
| |
Vail Resorts, Inc. | | | 30 | | | | 6,368 | |
|
| |
Valero Energy Corp. | | | 290 | | | | 36,830 | |
|
| |
Veralto Corp.(a) | | | 177 | | | | 12,213 | |
|
| |
Verizon Communications, Inc. | | | 3,172 | | | | 111,432 | |
|
| |
VF Corp. | | | 247 | | | | 3,638 | |
|
| |
W.W. Grainger, Inc. | | | 33 | | | | 24,084 | |
|
| |
Walt Disney Co. (The)(a) | | | 1,387 | | | | 113,165 | |
|
| |
Waters Corp.(a) | | | 45 | | | | 10,734 | |
|
| |
Welltower, Inc. | | | 354 | | | | 29,598 | |
|
| |
West Pharmaceutical Services, Inc. | | | 51 | | | | 16,233 | |
|
| |
WK Kellogg Co.(a) | | | 46 | | | | 461 | |
|
| |
Workday, Inc., Class A(a) | | | 147 | | | | 31,121 | |
|
| |
Xylem, Inc. | | | 163 | | | | 15,247 | |
|
| |
Zimmer Biomet Holdings, Inc. | | | 142 | | | | 14,826 | |
|
| |
Zoetis, Inc. | | | 361 | | | | 56,677 | |
|
| |
ZoomInfo Technologies, Inc., Class A(a) | | | 306 | | | | 3,966 | |
|
| |
| | | | | | | 7,088,133 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $8,832,912) | | | | 10,166,675 | |
|
| |
|
Money Market Funds–2.76% | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e) | | | 101,258 | | | | 101,258 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e) | | | 72,044 | | | | 72,065 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e) | | | 115,723 | | | | 115,723 | |
|
| |
Total Money Market Funds (Cost $289,031) | | | | 289,046 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES (excluding Investments purchased with cash collateral from securities on loan)-99.83% (Cost $9,121,943) | | | | 10,455,721 | |
|
| |
|
Investments Purchased with Cash Collateral from Securities on Loan | |
Money Market Funds–4.03% | |
Invesco Private Government Fund, 5.32%(d)(e)(f) | | | 118,188 | | | | 118,188 | |
|
| |
Invesco Private Prime Fund, 5.53%(d)(e)(f) | | | 303,963 | | | | 303,993 | |
|
| |
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $422,155) | | | | 422,181 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–103.86% (Cost $9,544,098) | | | | 10,877,902 | |
|
| |
OTHER ASSETS LESS LIABILITIES–(3.86)% | | | | (404,471 | ) |
|
| |
NET ASSETS–100.00% | | | | | | | $10,473,431 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco MSCI World SRI Index Fund |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(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 October 31, 2023 was $21,988, which represented less than 1% of the Fund’s Net Assets. |
(c) | All or a portion of this security was out on loan at October 31, 2023. |
(d) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation | | | Realized Gain | | | Value October 31, 2023 | | | Dividend Income | |
| | | | | | | |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | | $18,553 | | | $ | 498,334 | | | | $ (415,629 | ) | | | $ - | | | | $ - | | | | $101,258 | | | | $ 3,624 | |
| | | | | | | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 12,978 | | | | 355,952 | | | | (296,878 | ) | | | 11 | | | | 2 | | | | 72,065 | | | | 2,593 | |
| | | | | | | |
Invesco Treasury Portfolio, Institutional Class | | | 21,204 | | | | 569,524 | | | | (475,005 | ) | | | - | | | | - | | | | 115,723 | | | | 4,055 | |
| | | | | | | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Invesco Private Government Fund | | | 2,157 | | | | 1,178,559 | | | | (1,062,528 | ) | | | - | | | | - | | | | 118,188 | | | | 1,942* | |
| | | | | | | |
Invesco Private Prime Fund | | | 4,918 | | | | 3,012,990 | | | | (2,713,966 | ) | | | 26 | | | | 25 | | | | 303,993 | | | | 4,105* | |
| | | | | | | |
Total | | | $59,810 | | | $ | 5,615,359 | | | $ | (4,964,006 | ) | | | $37 | | | | $27 | | | | $711,227 | | | | $16,319 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J. |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Open Futures Contracts(a) |
Long Futures Contracts | | Number of Contracts | | Expiration Month | | Notional Value | | Value | | Unrealized Appreciation (Depreciation) |
Equity Risk | | | | | | | | | | | | | | | | | | | | | | | | | |
MSCI World Index | | | | 3 | | | | | December-2023 | | | | | $259,440 | | | | | $(18,213) | | | | | $(18,213) | |
(a) | Futures contracts collateralized by $17,566 cash held with Merrill Lynch International, the futures commission merchant. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco MSCI World SRI Index Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
| |
Investments in unaffiliated securities, at value (Cost $8,832,912)* | | $ | 10,166,675 | |
|
| |
Investments in affiliated money market funds, at value (Cost $711,186) | | | 711,227 | |
|
| |
Other investments: | | | | |
Variation margin receivable – futures contracts | | | 1,313 | |
|
| |
Deposits with brokers: | | | | |
Cash collateral – exchange-traded futures contracts | | | 17,566 | |
|
| |
Foreign currencies, at value (Cost $2,162) | | | 2,159 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 8,794 | |
|
| |
Fund shares sold | | | 3,682 | |
|
| |
Dividends | | | 25,422 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 16,699 | |
|
| |
Other assets | | | 43,314 | |
|
| |
Total assets | | | 10,996,851 | |
|
| |
| |
Liabilities: | | | | |
| |
Payable for: | | | | |
Investments purchased | | | 8,792 | |
|
| |
Collateral upon return of securities loaned | | | 422,155 | |
|
| |
Accrued fees to affiliates | | | 27,075 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 391 | |
|
| |
Accrued other operating expenses | | | 48,308 | |
|
| |
Trustee deferred compensation and retirement plans | | | 16,699 | |
|
| |
Total liabilities | | | 523,420 | |
|
| |
Net assets applicable to shares outstanding | | $ | 10,473,431 | |
|
| |
| |
Net assets consist of: | | | | |
| |
Shares of beneficial interest | | $ | 8,805,308 | |
|
| |
Distributable earnings | | | 1,668,123 | |
|
| |
| | $ | 10,473,431 | |
|
| |
| | | | |
Net Assets: | | | | |
| |
Class A | | $ | 1,088,313 | |
|
| |
Class C | | $ | 166,318 | |
|
| |
Class R | | $ | 583,413 | |
|
| |
Class Y | | $ | 901,927 | |
|
| |
Class R5 | | $ | 14,503 | |
|
| |
Class R6 | | $ | 7,718,957 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
| |
Class A | | | 75,629 | |
|
| |
Class C | | | 11,752 | |
|
| |
Class R | | | 40,791 | |
|
| |
Class Y | | | 62,249 | |
|
| |
Class R5 | | | 1,001 | |
|
| |
Class R6 | | | 532,721 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 14.39 | |
|
| |
Maximum offering price per share (Net asset value of $14.39 ÷ 94.50%) | | $ | 15.23 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 14.15 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 14.30 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 14.49 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 14.49 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 14.49 | |
|
| |
* | At October 31, 2023, security with a value of $420,760 was on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco MSCI World SRI Index Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
| |
Interest | | $ | 330 | |
|
| |
| |
Dividends (net of foreign withholding taxes of $13,889) | | | 193,828 | |
|
| |
| |
Dividends from affiliated money market funds (includes net securities lending income of $176) | | | 10,448 | |
|
| |
Foreign withholding tax claims | | | 2,215 | |
|
| |
Total investment income | | | 206,821 | |
|
| |
| |
Expenses: | | | | |
| |
Advisory fees | | | 14,415 | |
|
| |
Administrative services fees | | | 1,444 | |
|
| |
Custodian fees | | | 3,285 | |
|
| |
Distribution fees: | | | | |
Class A | | | 2,602 | |
|
| |
Class C | | | 1,665 | |
|
| |
Class R | | | 2,806 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 4,179 | |
|
| |
Transfer agent fees – R5 | | | 4 | |
|
| |
Transfer agent fees – R6 | | | 2,298 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 15,763 | |
|
| |
Registration and filing fees | | | 76,270 | |
|
| |
Licensing fees | | | 4,119 | |
|
| |
Reports to shareholders | | | 10,006 | |
|
| |
Professional services fees | | | 68,836 | |
|
| |
Other | | | 17,122 | |
|
| |
Total expenses | | | 224,814 | |
|
| |
Less: Fees waived, expenses reimbursed and/or expense offset arrangement(s) | | | (198,344 | ) |
|
| |
Net expenses | | | 26,470 | |
|
| |
Net investment income | | | 180,351 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
| |
Net realized gain from: | | | | |
Unaffiliated investment securities | | | 566,835 | |
|
| |
Affiliated investment securities | | | 27 | |
|
| |
Foreign currencies | | | 168 | |
|
| |
Futures contracts | | | 9,429 | |
|
| |
| | | 576,459 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities | | | 535,792 | |
|
| |
Affiliated investment securities | | | 37 | |
|
| |
Foreign currencies | | | 488 | |
|
| |
Futures contracts | | | (18,213 | ) |
|
| |
| | | 518,104 | |
|
| |
Net realized and unrealized gain | | | 1,094,563 | |
|
| |
Net increase in net assets resulting from operations | | $ | 1,274,914 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
13 | | Invesco MSCI World SRI Index Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
| | |
Net investment income | | $ | 180,351 | | | $ | 159,042 | |
|
| |
Net realized gain | | | 576,459 | | | | 31,159 | |
|
| |
Change in net unrealized appreciation (depreciation) | | | 518,104 | | | | (2,972,234 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 1,274,914 | | | | (2,782,033 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
| | |
Class A | | | (14,447 | ) | | | (15,688 | ) |
|
| |
Class C | | | (1,137 | ) | | | (1,138 | ) |
|
| |
Class R | | | (6,202 | ) | | | (5,699 | ) |
|
| |
Class Y | | | (17,893 | ) | | | (12,972 | ) |
|
| |
Class R5 | | | (240 | ) | | | (238 | ) |
|
| |
Class R6 | | | (122,100 | ) | | | (132,393 | ) |
|
| |
Total distributions from distributable earnings | | | (162,019 | ) | | | (168,128 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
| | |
Class A | | | 64,630 | | | | (117,617 | ) |
|
| |
Class C | | | 123 | | | | (12,071 | ) |
|
| |
Class R | | | 60,759 | | | | 27,204 | |
|
| |
Class Y | | | 1,100 | | | | 281,902 | |
|
| |
Class R6 | | | 312,101 | | | | (1,115,150 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | 438,713 | | | | (935,732 | ) |
|
| |
Net increase (decrease) in net assets | | | 1,551,608 | | | | (3,885,893 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
| | |
Beginning of year | | | 8,921,823 | | | | 12,807,716 | |
|
| |
End of year | | $ | 10,473,431 | | | $ | 8,921,823 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
14 | | Invesco MSCI World SRI Index Fund |
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 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | $12.82 | | | | | $0.23 | | | | | $ 1.54 | | | | | $ 1.77 | | | | | $(0.20 | ) | | | | $ – | | | | | $(0.20 | ) | | | | $14.39 | | | | | 13.99 | % | | | | $1,088 | | | | | 0.44 | % | | | | 2.45 | % | | | | 1.57 | % | | | | 23 | % |
Year ended 10/31/22 | | | | 16.76 | | | | | 0.19 | | | | | (3.93 | ) | | | | (3.74 | ) | | | | (0.20 | ) | | | | – | | | | | (0.20 | ) | | | | 12.82 | | | | | (22.58 | ) | | | | 914 | | | | | 0.44 | | | | | 2.15 | | | | | 1.28 | | | | | 13 | |
Year ended 10/31/21 | | | | 11.78 | | | | | 0.19 | | | | | 4.98 | | | | | 5.17 | | | | | (0.19 | ) | | | | – | | | | | (0.19 | ) | | | | 16.76 | | | | | 44.35 | | | | | 1,337 | | | | | 0.44 | | | | | 3.31 | | | | | 1.28 | | | | | 19 | |
Year ended 10/31/20 | | | | 11.86 | | | | | 0.17 | | | | | (0.06 | ) | | | | 0.11 | | | | | (0.19 | ) | | | | – | | | | | (0.19 | ) | | | | 11.78 | | | | | 0.89 | | | | | 922 | | | | | 0.70 | | | | | 3.03 | | | | | 1.48 | | | | | 118 | |
Year ended 10/31/19 | | | | 11.76 | | | | | 0.17 | | | | | 0.21 | | | | | 0.38 | | | | | (0.18 | ) | | | | (0.10 | ) | | | | (0.28 | ) | | | | 11.86 | | | | | 3.48 | | | | | 1,483 | | | | | 0.85 | | | | | 3.58 | | | | | 1.51 | | | | | 116 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 12.60 | | | | | 0.12 | | | | | 1.53 | | | | | 1.65 | | | | | (0.10 | ) | | | | – | | | | | (0.10 | ) | | | | 14.15 | | | | | 13.14 | | | | | 166 | | | | | 1.19 | | | | | 3.20 | | | | | 0.82 | | | | | 23 | |
Year ended 10/31/22 | | | | 16.49 | | | | | 0.08 | | | | | (3.88 | ) | | | | (3.80 | ) | | | | (0.09 | ) | | | | – | | | | | (0.09 | ) | | | | 12.60 | | | | | (23.16 | ) | | | | 148 | | | | | 1.19 | | | | | 2.90 | | | | | 0.53 | | | | | 13 | |
Year ended 10/31/21 | | | | 11.67 | | | | | 0.08 | | | | | 4.92 | | | | | 5.00 | | | | | (0.18 | ) | | | | – | | | | | (0.18 | ) | | | | 16.49 | | | | | 43.21 | | | | | 207 | | | | | 1.19 | | | | | 4.06 | | | | | 0.53 | | | | | 19 | |
Year ended 10/31/20 | | | | 11.75 | | | | | 0.08 | | | | | (0.05 | ) | | | | 0.03 | | | | | (0.11 | ) | | | | – | | | | | (0.11 | ) | | | | 11.67 | | | | | 0.21 | | | | | 158 | | | | | 1.45 | | | | | 3.78 | | | | | 0.73 | | | | | 118 | |
Year ended 10/31/19 | | | | 11.63 | | | | | 0.09 | | | | | 0.20 | | | | | 0.29 | | | | | (0.07 | ) | | | | (0.10 | ) | | | | (0.17 | ) | | | | 11.75 | | | | | 2.66 | | | | | 243 | | | | | 1.60 | | | | | 4.33 | | | | | 0.76 | | | | | 116 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 12.74 | | | | | 0.19 | | | | | 1.54 | | | | | 1.73 | | | | | (0.17 | ) | | | | – | | | | | (0.17 | ) | | | | 14.30 | | | | | 13.69 | | | | | 583 | | | | | 0.69 | | | | | 2.70 | | | | | 1.32 | | | | | 23 | |
Year ended 10/31/22 | | | | 16.66 | | | | | 0.15 | | | | | (3.90 | ) | | | | (3.75 | ) | | | | (0.17 | ) | | | | – | | | | | (0.17 | ) | | | | 12.74 | | | | | (22.76 | ) | | | | 464 | | | | | 0.69 | | | | | 2.40 | | | | | 1.03 | | | | | 13 | |
Year ended 10/31/21 | | | | 11.74 | | | | | 0.15 | | | | | 4.96 | | | | | 5.11 | | | | | (0.19 | ) | | | | – | | | | | (0.19 | ) | | | | 16.66 | | | | | 43.93 | | | | | 571 | | | | | 0.69 | | | | | 3.56 | | | | | 1.03 | | | | | 19 | |
Year ended 10/31/20 | | | | 11.81 | | | | | 0.15 | | | | | (0.06 | ) | | | | 0.09 | | | | | (0.16 | ) | | | | – | | | | | (0.16 | ) | | | | 11.74 | | | | | 0.74 | | | | | 325 | | | | | 0.95 | | | | | 3.28 | | | | | 1.23 | | | | | 118 | |
Year ended 10/31/19 | | | | 11.71 | | | | | 0.15 | | | | | 0.20 | | | | | 0.35 | | | | | (0.15 | ) | | | | (0.10 | ) | | | | (0.25 | ) | | | | 11.81 | | | | | 3.17 | | | | | 35 | | | | | 1.10 | | | | | 3.83 | | | | | 1.26 | | | | | 116 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 12.91 | | | | | 0.26 | | | | | 1.56 | | | | | 1.82 | | | | | (0.24 | ) | | | | – | | | | | (0.24 | ) | | | | 14.49 | | | | | 14.28 | | | | | 902 | | | | | 0.19 | | | | | 2.20 | | | | | 1.82 | | | | | 23 | |
Year ended 10/31/22 | | | | 16.87 | | | | | 0.22 | | | | | (3.94 | ) | | | | (3.72 | ) | | | | (0.24 | ) | | | | – | | | | | (0.24 | ) | | | | 12.91 | | | | | (22.37 | ) | | | | 793 | | | | | 0.19 | | | | | 1.90 | | | | | 1.53 | | | | | 13 | |
Year ended 10/31/21 | | | | 11.83 | | | | | 0.23 | | | | | 5.01 | | | | | 5.24 | | | | | (0.20 | ) | | | | – | | | | | (0.20 | ) | | | | 16.87 | | | | | 44.73 | | | | | 793 | | | | | 0.19 | | | | | 3.06 | | | | | 1.53 | | | | | 19 | |
Year ended 10/31/20 | | | | 11.91 | | | | | 0.20 | | | | | (0.06 | ) | | | | 0.14 | | | | | (0.22 | ) | | | | – | | | | | (0.22 | ) | | | | 11.83 | | | | | 1.11 | | | | | 485 | | | | | 0.45 | | | | | 2.78 | | | | | 1.73 | | | | | 118 | |
Year ended 10/31/19 | | | | 11.80 | | | | | 0.20 | | | | | 0.22 | | | | | 0.42 | | | | | (0.21 | ) | | | | (0.10 | ) | | | | (0.31 | ) | | | | 11.91 | | | | | 3.80 | | | | | 522 | | | | | 0.60 | | | | | 3.33 | | | | | 1.76 | | | | | 116 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 12.91 | | | | | 0.26 | | | | | 1.56 | | | | | 1.82 | | | | | (0.24 | ) | | | | – | | | | | (0.24 | ) | | | | 14.49 | | | | | 14.28 | | | | | 15 | | | | | 0.19 | | | | | 2.08 | | | | | 1.82 | | | | | 23 | |
Year ended 10/31/22 | | | | 16.87 | | | | | 0.23 | | | | | (3.95 | ) | | | | (3.72 | ) | | | | (0.24 | ) | | | | – | | | | | (0.24 | ) | | | | 12.91 | | | | | (22.37 | ) | | | | 13 | | | | | 0.19 | | | | | 1.78 | | | | | 1.53 | | | | | 13 | |
Year ended 10/31/21 | | | | 11.83 | | | | | 0.22 | | | | | 5.02 | | | | | 5.24 | | | | | (0.20 | ) | | | | – | | | | | (0.20 | ) | | | | 16.87 | | | | | 44.73 | | | | | 17 | | | | | 0.19 | | | | | 2.86 | | | | | 1.53 | | | | | 19 | |
Year ended 10/31/20 | | | | 11.90 | | | | | 0.20 | | | | | (0.05 | ) | | | | 0.15 | | | | | (0.22 | ) | | | | – | | | | | (0.22 | ) | | | | 11.83 | | | | | 1.20 | | | | | 22 | | | | | 0.45 | | | | | 2.56 | | | | | 1.73 | | | | | 118 | |
Year ended 10/31/19 | | | | 11.80 | | | | | 0.20 | | | | | 0.21 | | | | | 0.41 | | | | | (0.21 | ) | | | | (0.10 | ) | | | | (0.31 | ) | | | | 11.90 | | | | | 3.71 | | | | | 21 | | | | | 0.60 | | | | | 2.95 | | | | | 1.76 | | | | | 116 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | | 12.91 | | | | | 0.26 | | | | | 1.56 | | | | | 1.82 | | | | | (0.24 | ) | | | | – | | | | | (0.24 | ) | | | | 14.49 | | | | | 14.28 | | | | | 7,719 | | | | | 0.19 | | | | | 2.08 | | | | | 1.82 | | | | | 23 | |
Year ended 10/31/22 | | | | 16.87 | | | | | 0.23 | | | | | (3.95 | ) | | | | (3.72 | ) | | | | (0.24 | ) | | | | – | | | | | (0.24 | ) | | | | 12.91 | | | | | (22.37 | ) | | | | 6,590 | | | | | 0.19 | | | | | 1.80 | | | | | 1.53 | | | | | 13 | |
Year ended 10/31/21 | | | | 11.83 | | | | | 0.22 | | | | | 5.02 | | | | | 5.24 | | | | | (0.20 | ) | | | | – | | | | | (0.20 | ) | | | | 16.87 | | | | | 44.73 | | | | | 9,884 | | | | | 0.19 | | | | | 2.79 | | | | | 1.53 | | | | | 19 | |
Year ended 10/31/20 | | | | 11.90 | | | | | 0.20 | | | | | (0.05 | ) | | | | 0.15 | | | | | (0.22 | ) | | | | – | | | | | (0.22 | ) | | | | 11.83 | | | | | 1.20 | | | | | 6,342 | | | | | 0.45 | | | | | 2.51 | | | | | 1.73 | | | | | 118 | |
Year ended 10/31/19 | | | | 11.80 | | | | | 0.20 | | | | | 0.21 | | | | | 0.41 | | | | | (0.21 | ) | | | | (0.10 | ) | | | | (0.31 | ) | | | | 11.90 | | | | | 3.71 | | | | | 6,379 | | | | | 0.60 | | | | | 2.91 | | | | | 1.76 | | | | | 116 | |
(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. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
15 | | Invesco MSCI World SRI Index Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1–Significant Accounting Policies
Invesco MSCI World SRI Index Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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16 | | Invesco MSCI World SRI Index 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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund did not enter into any closing agreements.
G. | 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 based on relative net assets of Class R5 and Class R6. 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. |
H. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications - Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
J. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. Upon the failure of the borrower |
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17 | | Invesco MSCI World SRI Index Fund |
| 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities. |
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, fees paid to the Adviser were less than $500. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.
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 the date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
L. | Forward Foreign Currency Contracts – The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical exchange of the two currencies on the settlement date, 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).
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 for hedging does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M. | 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 instrument or asset. 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. |
N. | Leverage Risk – Leverage exists when the 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. | Other Risks - The Fund intends to be diversified in approximately the same proportion as the MSCI World SRI Index (the “Underlying Index”) is diversified. The Fund may be “non-diversified,” as defined in the 1940 Act, solely as a result of a change in relative market capitalization or index weighting of one or more constituents of the Underlying Index. To the extent the Fund becomes non-diversified, the Fund may invest a greater portion of its assets in the obligations or securities of a small number of issuers or any single issuer than a diversified fund can. In such circumstances, a change in the value of one or a few issuers’ securities will therefore affect the value of the Fund more than if it was a diversified fund. |
Because MSCI Inc. (“MSCI”), the index provider of the Underlying Index, uses Environmental, Social and Governance (“ESG”) factors to exclude, select and assign weights to certain stocks of companies included in the Underlying Index for non-financial reasons, the Fund may forego some market opportunities available to funds that do not use these factors. Consequently, the Fund may underperform other funds that do not use ESG factors. Further, there is a risk that information used by MSCI to evaluate the ESG factors may not be readily available, complete or accurate, which could negatively impact MSCI’s ability to apply its ESG standards when compiling the Underlying Index, which may negatively impact the Fund’s performance. MSCI’s assessment of a company, based on the company’s level of involvement in a particular industry or other ESG factors, may differ from that of other funds, the Adviser or an investor. As a result, the companies deemed eligible by MSCI for inclusion in the Underlying Index may not reflect the beliefs and values of any particular investor and may not be deemed to exhibit positive or favorable ESG characteristics if different metrics were used to evaluate them. Not every investment or issuer held by the Fund may be evaluated for ESG considerations.
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18 | | Invesco MSCI World SRI Index Fund |
NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| | | | | | |
Average Daily Net Assets | | Rate | |
|
| |
First $2 billion | | | 0.140% | |
|
| |
Over $2 billion | | | 0.120% | |
|
| |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.14%.
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. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 28, 2025, 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 0.44%, 1.19%, 0.69%, 0.19%, 0.19%, and 0.19%, respectively, of the Fund’s average daily net assets (the “expense limits”). In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on February 28, 2025. During its term, the fee waiver agreement cannot be terminated or amended to increase the expense limits or reduce the advisory fee waiver without approval of the Board of Trustees.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $14,415, reimbursed fund level expenses of $177,280 and reimbursed class level expenses of $1,584, $254, $851, $1,490, $4 and $2,298 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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
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. 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 Adviser’s 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 October 31, 2023. 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.
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19 | | Invesco MSCI World SRI Index Fund |
| | | | | | | | | | | | | | |
| | Level 1 | | | Level 2 | | | Level 3 | | Total | |
|
| |
Investments in Securities | | | | | | | | | | | | | | |
|
| |
Australia | | $ | – | | | $ | 132,879 | | | $– | | $ | 132,879 | |
|
| |
Austria | | | – | | | | 10,515 | | | – | | | 10,515 | |
|
| |
Belgium | | | – | | | | 13,757 | | | – | | | 13,757 | |
|
| |
Canada | | | 372,462 | | | | – | | | – | | | 372,462 | |
|
| |
China | | | 32,245 | | | | 40,536 | | | – | | | 72,781 | |
|
| |
Denmark | | | – | | | | 311,598 | | | – | | | 311,598 | |
|
| |
Finland | | | – | | | | 55,229 | | | – | | | 55,229 | |
|
| |
France | | | – | | | | 297,756 | | | – | | | 297,756 | |
|
| |
Germany | | | – | | | | 162,490 | | | – | | | 162,490 | |
|
| |
Hong Kong | | | – | | | | 88,991 | | | – | | | 88,991 | |
|
| |
Ireland | | | – | | | | 8,522 | | | – | | | 8,522 | |
|
| |
Italy | | | – | | | | 41,508 | | | – | | | 41,508 | |
|
| |
Japan | | | – | | | | 639,888 | | | – | | | 639,888 | |
|
| |
Netherlands | | | – | | | | 246,458 | | | – | | | 246,458 | |
|
| |
New Zealand | | | – | | | | 3,704 | | | – | | | 3,704 | |
|
| |
Norway | | | – | | | | 22,615 | | | – | | | 22,615 | |
|
| |
Singapore | | | – | | | | 28,750 | | | – | | | 28,750 | |
|
| |
Spain | | | – | | | | 29,197 | | | – | | | 29,197 | |
|
| |
Sweden | | | – | | | | 40,862 | | | – | | | 40,862 | |
|
| |
Switzerland | | | – | | | | 164,410 | | | – | | | 164,410 | |
|
| |
United Kingdom | | | 5,020 | | | | 329,150 | | | – | | | 334,170 | |
|
| |
United States | | | 7,035,613 | | | | 52,520 | | | – | | | 7,088,133 | |
|
| |
Money Market Funds | | | 289,046 | | | | 422,181 | | | – | | | 711,227 | |
|
| |
Total Investments in Securities | | | 7,734,386 | | | | 3,143,516 | | | – | | | 10,877,902 | |
|
| |
| | | | |
Other Investments - Liabilities* | | | | | | | | | | | | | | |
|
| |
Futures Contracts | | | (18,213 | ) | | | – | | | – | | | (18,213 | ) |
|
| |
Total Investments | | $ | 7,716,173 | | | $ | 3,143,516 | | | $– | | $ | 10,859,689 | |
|
| |
* | Unrealized appreciation (depreciation). |
NOTE 4–Derivative Investments
The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
Effect of Derivative Investments for the year ended October 31, 2023
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 | |
| | Equity Risk | |
|
| |
Realized Gain: | | | | |
Futures contracts | | | $ 9,429 | |
|
| |
Change in Net Unrealized Appreciation (Depreciation): | | | | |
Futures contracts | | | (18,213) | |
|
| |
Total | | | $ (8,784) | |
|
| |
The table below summarizes the average notional value of derivatives held during the period.
| | | | |
| | Futures Contracts | |
|
| |
Average notional value | | $ | 178,240 | |
|
| |
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $168.
| | |
20 | | Invesco MSCI World SRI Index Fund |
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
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Ordinary income* | | $ | 162,019 | | | $ | 168,128 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 150,310 | |
|
| |
Undistributed long-term capital gain | | | 199,508 | |
|
| |
Net unrealized appreciation – investments | | | 1,332,689 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (577 | ) |
|
| |
Temporary book/tax differences | | | (13,807 | ) |
|
| |
Shares of beneficial interest | | | 8,805,308 | |
|
| |
Total net assets | | $ | 10,473,431 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to derivative instruments.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund does not have a capital loss carryforward as of October 31, 2023.
NOTE 9–Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $2,429,908 and $2,288,647, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $2,140,992 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (808,303 | ) |
|
| |
Net unrealized appreciation of investments | | | $1,332,689 | |
|
| |
Cost of investments for tax purposes is $9,527,000.
NOTE 10–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of foreign currency transactions, on October 31, 2023, undistributed net investment income was increased by $170 and undistributed net realized gain was decreased by $170. This reclassification had no effect on the net assets or the distributable earnings of the Fund.
| | |
21 | | Invesco MSCI World SRI Index Fund |
NOTE 11–Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
Class A | | | 10,979 | | | | $ 159,700 | | | | 6,805 | | | $ | 100,540 | |
|
| |
Class C | | | 109 | | | | 1,547 | | | | 375 | | | | 5,979 | |
|
| |
Class R | | | 4,216 | | | | 59,393 | | | | 4,118 | | | | 58,856 | |
|
| |
Class Y | | | 13,799 | | | | 187,795 | | | | 34,662 | | | | 547,036 | |
|
| |
Class R6 | | | 67,712 | | | | 1,001,420 | | | | 73,419 | | | | 1,111,388 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | 1,076 | | | | 14,124 | | | | 914 | | | | 15,047 | |
|
| |
Class C | | | 80 | | | | 1,040 | | | | 64 | | | | 1,047 | |
|
| |
Class R | | | 462 | | | | 6,034 | | | | 338 | | | | 5,534 | |
|
| |
Class Y | | | 1,170 | | | | 15,434 | | | | 568 | | | | 9,384 | |
|
| |
Class R6 | | | 9,244 | | | | 121,929 | | | | 7,148 | | | | 118,154 | |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (7,732 | ) | | | (109,194 | ) | | | (16,198 | ) | | | (233,204 | ) |
|
| |
Class C | | | (179 | ) | | | (2,464 | ) | | | (1,226 | ) | | | (19,097 | ) |
|
| |
Class R | | | (319 | ) | | | (4,668 | ) | | | (2,273 | ) | | | (37,186 | ) |
|
| |
Class Y | | | (14,196 | ) | | | (202,129 | ) | | | (20,769 | ) | | | (274,518 | ) |
|
| |
Class R6 | | | (54,781 | ) | | | (811,248 | ) | | | (156,031 | ) | | | (2,344,692 | ) |
|
| |
Net increase (decrease) in share activity | | | 31,640 | | | | $ 438,713 | | | | (68,086 | ) | | $ | (935,732 | ) |
|
| |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 78% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| | |
22 | | Invesco MSCI World SRI Index Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco MSCI World SRI Index Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco MSCI World SRI Index Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the five years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent, and brokers. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
| | |
23 | | Invesco MSCI World SRI Index Fund |
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2 | | Annualized Expense Ratio |
Class A | | $1,000.00 | | $989.70 | | $2.21 | | $1,022.99 | | $2.24 | | 0.44% |
Class C | | 1,000.00 | | 986.10 | | 5.96 | | 1,019.21 | | 6.06 | | 1.19 |
Class R | | 1,000.00 | | 988.30 | | 3.46 | | 1,021.73 | | 3.52 | | 0.69 |
Class Y | | 1,000.00 | | 991.10 | | 0.95 | | 1,024.25 | | 0.97 | | 0.19 |
Class R5 | | 1,000.00 | | 991.10 | | 0.95 | | 1,024.25 | | 0.97 | | 0.19 |
Class R6 | | 1,000.00 | | 991.10 | | 0.95 | | 1,024.25 | | 0.97 | | 0.19 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. |
| | |
24 | | Invesco MSCI World SRI Index Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco MSCI World SRI Index Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior
Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a
description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement as well as the sub-advisory contracts for the Fund, as Invesco Asset Management Deutschland GmbH currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the Custom Invesco MSCI World SRI Index (Index). The Board noted that performance of Class A shares of the Fund was in the fourth quintile of its performance universe for the one and three year periods and the fifth quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was reasonably comparable to the performance of the
| | |
25 | | Invesco MSCI World SRI Index Fund |
Index for the one year period and below the performance of the Index for the three and five year periods. The Board noted that the Fund seeks to track the investment results of the Index, and that the Fund’s performance will typically lag the Index due to the fees associated with the Fund. The Board considered that the Fund is passively managed and discussed reasons for differences in the Fund’s performance versus its peers. The Board acknowledged limitations regarding the Broadridge data, in particular that differences may exist between a Fund’s investment objective, principal investment strategies and/or investment restrictions and those of the funds in its performance universe, and specifically that the Fund’s peer group includes funds that are actively managed or may track a different index than the Fund. The Board considered that the Fund’s growth tilt, consistent with the Index it seeks to track, detracted from performance relative to its peer group in 2022. The Board further considered that the Fund had changed its name, investment strategy and index in 2020 in connection with the Fund’s repositioning as an index-based fund, and that performance results prior to such date reflected that of the Fund’s former actively managed strategy. As a result, the Board did not consider performance of the Fund prior to such date to be particularly relevant. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the Fund’s contractual management fee schedule was reduced at certain breakpoint levels effective in 2020 in connection with its repositioning as an index-based fund. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components. The Board noted that there were only two funds (including the Fund) in the expense group.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board noted that Invesco Advisers and the Affiliated Sub-Advisers do not manage other similarly managed mutual funds or client accounts.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that Invesco Advisers retains overall responsibility for, and provides services to, sub-advised Invesco Funds, including oversight of the Affiliated Sub-Advisers as well as the additional services described herein other than day-to-day portfolio management.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund may benefit from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their
obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities
| | |
26 | | Invesco MSCI World SRI Index Fund |
Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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27 | | Invesco MSCI World SRI Index Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | |
Federal and State Income Tax | | | | | |
Qualified Dividend Income* | | | 100.00 | % |
Corporate Dividends Received Deduction* | | | 58.05 | % |
U.S. Treasury Obligations* | | | 0.00 | % |
Qualified Business Income* | | | 0.00 | % |
Business Interest Income* | | | 0.00 | % |
| * | The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. |
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28 | | Invesco MSCI World SRI Index Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 – 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
| | |
T-1 | | Invesco MSCI World SRI Index Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown – 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
Cynthia Hostetler –1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
Eli Jones – 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
Elizabeth Krentzman – 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management - Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
Anthony J. LaCava, Jr. – 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
Prema Mathai-Davis – 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T-2 | | Invesco MSCI World SRI Index Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
Joel W. Motley – 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
Teresa M. Ressel – 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
Robert C. Troccoli – 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver – Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
Daniel S. Vandivort –1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco MSCI World SRI Index Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
Glenn Brightman – 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
Andrew R. Schlossberg – 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco MSCI World SRI Index Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
John M. Zerr – 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.;Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
Stephanie C. Butcher – 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
Crissie M. Wisdom – 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
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T-5 | | Invesco MSCI World SRI Index Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
Todd F. Kuehl – 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
James Bordewick, Jr. – 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
| | | | | | |
Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
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T-6 | | Invesco MSCI World SRI Index Fund |
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Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | GLRE-AR-1 |
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Annual Report to Shareholders | | October 31, 2023 |
Invesco Oppenheimer International Growth Fund
Nasdaq:
A: OIGAX ∎ C: OIGCX ∎ R: OIGNX ∎ Y: OIGYX ∎ R5: INGFX ∎ R6: OIGIX
Management’s Discussion of Fund Performance
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Performance summary | |
For the fiscal year ended October 31, 2023, Class A shares of Invesco Oppenheimer International Growth Fund (the Fund), at net asset value (NAV), underperformed the MSCI All Country World ex USA Index. | |
Your Fund’s long-term performance appears later in this report. | |
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Fund vs. Indexes | |
Total returns, 10/31/22 to 10/31/23, 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 | | | 7.90 | % |
Class C Shares | | | 7.10 | |
Class R Shares | | | 7.63 | |
Class Y Shares | | | 8.15 | |
Class R5 Shares | | | 8.38 | |
Class R6 Shares | | | 8.33 | |
MSCI All Country World ex USA Index▼ | | | 12.07 | |
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Source(s): ▼RIMES Technologies Corp. | | | | |
Market conditions and your Fund
Global equity markets posted gains in November 2022, after better inflation data sparked a rally. However, investor sentiment worsened in December after central banks signaled continued interest rate hikes into 2023, as inflation remained above target levels. International stocks outperformed US stocks in the fourth quarter of 2022, led by results in the UK and the rest of Europe. Emerging market equities also posted gains for the fourth quarter of 2022, driven by China, which eased its zero-COVID-19 policy and started to reopen.
For the first half of 2023, global equity markets continued to deliver gains amid continued interest rate increases, volatility and a banking crisis. The largest shock came in March 2023 as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, along with the subsequent UBS takeover of Credit Suisse, led to a selloff in US and European financial stocks. Optimism about AI (Artificial Intelligence) boosted technology stocks during the second quarter of 2023. Emerging market equities also posted gains for the first half of 2023, but within the region, China’s equities declined due to weaker-than-expected economic data, real estate developer debt issues and geopolitical concerns.
The global equity rally in the first half of 2023 came to an end in the third quarter as global equity markets declined. Concerns about a slowing global economy and interest rates staying “higher for longer” hampered stock returns. During the quarter, value stocks outperformed growth stocks. Energy was the best performing sector, ending the quarter in positive territory, boosted by rising oil prices as Russia and the Organization of Petroleum Exporting Countries (OPEC) cut supplies. Developed global equities underperformed emerging market equities. Within emerging markets, China’s equities were
weighed down by concerns in the real estate sector, but positive performance in the United Arab Emirates, Turkey and India offset those results.
Global equity markets continued their decline in October 2023, but growth stocks managed to outperform value stocks. Despite higher rates and increased market volatility, both developed market equities and emerging market equities finished the fiscal year ended October 31, 2023, in positive territory.
We are long-term, thematic growth investors. We identify structural growth trends in the global economy and seek to invest in companies that can monetize them sustainably for many years. We buy these companies when they are trading at attractive valuations and hold them in the portfolio for a long period of time to benefit from the compounding of the returns they produce. This is a discipline that we have been following since the Fund’s inception in 1996.
With this approach, we invest most of the Fund’s assets in companies that we believe have significant pricing power within the consumer, industrial, health care and information technology (IT) sectors. We invest little within the commoditized, price-taking industries found in the utilities, materials, energy, and financials sectors. Geographically, most companies in which the Fund invests are domiciled in developed markets, however the Fund’s revenue exposure is evenly spread across the globe.
It was a difficult fiscal year for the Fund’s relative performance, as performance in international equities continued to be led by value stocks, a challenging environment for our growth-oriented strategy. Class A shares returned 7.90%, underperforming the MSCI All Country World ex USA Index’s (the “Index”) return of 12.07%.
Relative to the Index, the Fund performed the strongest in the consumer staples sector due to stock selection, though an overweight to the sector did offset the strong selection
effect a bit. The Fund also outperformed in the consumer discretionary sector, mainly due to our overweight position. The Fund underperformed the Index the most in the IT, industrials, and health care sectors. Relative results in IT and industrials were mainly driven by stock selection, while underperformance in health care was due to both stock selection and our usual overweight positioning.
The three largest contributors to the Fund’s absolute performance for the fiscal year were Novo Nordisk, Hermes International and Next plc.
Novo Nordisk, a Danish company, is the world’s leading maker of diabetes care products and insulin. The incidence of diabetes is increasing with the aging of the world’s population and with the adoption of western diets in emerging markets. In addition, last year Novo Nordisk introduced weight loss drug Wegovy, for which demand has been high. More recently, clinical trial results for Wegovy’s reduction of coronary disease risk have exceeded expectations and the share price has reacted favorably. It remains the largest position in the Fund as of the end of the fiscal year.
Hermes International, the French-based luxury goods producer, is at the apex of the market in terms of price and brand, in our opinion. Hermes has built a reservoir of demand by creating scarcity, limiting their volume while raising pricing, year after year. We continue to view Hermes’ prospects favorably.
Next plc is a UK company that has been successfully converting itself to an omnichannel retailer. Next plc’s online sales have been growing, and it has also benefited from the cost savings associated with reducing its physical store footprint. After profit taking during 2022, the share price has been reacting favorably this year to a series of above forecast earnings announcements and guidance upgrades.
The three largest detractors to the Fund’s absolute performance for the fiscal year were EPAM Systems, ResMed and Sartorius Stedim Biotech.
EPAM Systems offers IT services ranging from consulting to engineering and implementation. Share price performance for many tech outsourcing and consulting companies has been weak the first half of 2023. Share prices have reacted unfavorably to both investor fears of a slowdown and softer corporate spending.
ResMed originated as an Australian company with the production of air flow generators and masks that are used to fight sleep apnea. It’s a condition that becomes more prevalent with age, obesity and pollution, all trends that are unfortunately on a strong upward trajectory though most of the world. The market is concentrated: ResMed and its close competitor Philips are estimated to share 80% of it. Share prices for both companies have reacted negatively to euphoria over
| | |
2 | | Invesco Oppenheimer International Growth Fund |
the potential impact of weight-loss drugs, on speculation that lower obesity rates will lower the incidence of sleep apnea. In fact, aging is the higher correlating causal factor. We continue to view the outlook for ResMed favorably.
Sartorius Stedim Biotech is a French company that provides clients with equipment and software to produce biologic drugs and conduct research. Furthermore, it earns much of its revenue from the disposable supplies used in equipment and so has an attractive “razor/ razor blade” business model. Sartorius’ sales have slowed after an above-trend period. In our opinion, Sartorius’ clients ordered more than they needed to avoid potential shortages, and they are now working off that inventory.
We believe that we’re approaching the end of the first phase of equity market adjustment to higher rates, which is the valuation adjustment phase. We believe the next two phases, as higher capital costs begin to affect corporate earnings and creditworthiness, will play out more slowly for two reasons. First, corporate debt does not all mature in a single year. Debt service costs will rise as corporations roll through their maturities, refinancing at new, higher rates.
Second, it has been 15 years since capital has had a cost. An entire generation of investors has never seen this environment. It will take them time to learn to navigate it.
We have argued for some time that the new regime we are entering, in which capital has an appreciable cost, will separate good from bad capital allocation. We believe it will support active equity investing as it becomes increasingly important to own companies that provide a positive return on their invested capital and to avoid those that destroy value over time. In addition, we believe this environment will favor entrenched incumbents, of the sort we own in our portfolio, as the cheap capital that funded the era of exciting but unprofitable disruptors is no longer available. We continue to judge our current and potential portfolio companies based on their capital return track record and our opinion of their future potential. We focus on their ability to profitably monetize structural growth trends over the coming five to 10 years.
Thank you for your continued investment alongside us in Invesco Oppenheimer International Growth Fund.
Portfolio manager(s):
Robert Dunphy
George Evans
The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc.
makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Fund and, if applicable, index disclosures later in this report.
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3 | | Invesco Oppenheimer International Growth Fund |
Your Fund’s Long-Term Performance
Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 10/31/13
![LOGO](https://capedge.com/proxy/N-CSR/0001193125-24-001042/g608486dsp4.jpg)
1 Source: RIMES Technologies Corp.
Past performance cannot guarantee future results.
The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management
fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees;
performance of a market index does not. Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.
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4 | | Invesco Oppenheimer International Growth Fund |
| | | | |
|
Average Annual Total Returns | |
As of 10/31/23, including maximum applicable sales charges | |
| |
Class A Shares | | | | |
Inception (3/25/96) | | | 6.41 | % |
10 Years | | | 1.70 | |
5 Years | | | 2.52 | |
1 Year | | | 1.98 | |
| |
Class C Shares | | | | |
Inception (3/25/96) | | | 6.39 | % |
10 Years | | | 1.66 | |
5 Years | | | 2.90 | |
1 Year | | | 6.10 | |
| |
Class R Shares | | | | |
Inception (3/1/01) | | | 4.28 | % |
10 Years | | | 2.02 | |
5 Years | | | 3.42 | |
1 Year | | | 7.63 | |
| |
Class Y Shares | | | | |
Inception (9/7/05) | | | 5.31 | % |
10 Years | | | 2.52 | |
5 Years | | | 3.93 | |
1 Year | | | 8.15 | |
| |
Class R5 Shares | | | | |
10 Years | | | 2.45 | % |
5 Years | | | 4.03 | |
1 Year | | | 8.38 | |
| |
Class R6 Shares | | | | |
Inception (3/29/12) | | | 4.78 | % |
10 Years | | | 2.70 | |
5 Years | | | 4.10 | |
1 Year | | | 8.33 | |
Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer International Growth Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer International Growth Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.
Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares.
The performance data quoted represent past performance and cannot guarantee 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.
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.
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5 | | Invesco Oppenheimer International Growth Fund |
Supplemental Information
Invesco Oppenheimer International Growth Fund’s investment objective is to seek capital appreciation.
∎ | Unless otherwise stated, information presented in this report is as of October 31, 2023, and is based on total net assets. |
∎ | Unless otherwise noted, all data is provided by Invesco. |
∎ | To access your Fund’s reports/prospectus, visit invesco.com/fundreports. |
About indexes used in this report
∎ | The MSCI All Country World ex USA® Index is an index considered representative of developed and emerging stock markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for non-resident investors. |
∎ | The Fund is not managed to track the performance of any particular index, including the 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. |
|
|
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 |
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6 | | Invesco Oppenheimer International Growth Fund |
Fund Information
Portfolio Composition
| | | | | |
By sector | | % of total net assets |
| |
Consumer Discretionary | | 22.45% |
| |
Industrials | | 21.09 |
| |
Health Care | | 14.93 |
| |
Information Technology | | 12.64 |
| |
Consumer Staples | | 9.58 |
| |
Financials | | 6.42 |
| |
Communication Services | | 5.06 |
| |
Energy | | 3.29 |
| |
Materials | | 2.25 |
| |
Money Market Funds Plus Other Assets Less Liabilities | | 2.29 |
Top 10 Equity Holdings*
| | | | | | | |
| | | | % of total net assets |
| | |
1. | | Novo Nordisk A/S, Class B | | 5.22% |
| | |
2. | | LVMH Moet Hennessy Louis Vuitton SE | | 3.43 |
| | |
3. | | Reliance Industries Ltd. | | 3.29 |
| | |
4. | | London Stock Exchange Group PLC | | 3.01 |
| | |
5. | | Dollarama, Inc. | | 2.97 |
| | |
6. | | Compass Group PLC | | 2.93 |
| | |
7. | | ASML Holding N.V. | | 2.79 |
| | |
8. | | Epiroc AB, Class A | | 2.76 |
| | |
9. | | Alimentation Couche-Tard, Inc. | | 2.60 |
| | |
10. | | Flutter Entertainment PLC | | 2.51 |
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* | Excluding money market fund holdings, if any. |
Data presented here are as of October 31, 2023.
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7 | | Invesco Oppenheimer International Growth Fund |
Schedule of Investments
October 31, 2023
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Common Stocks & Other Equity Interests-97.71% | |
Australia-2.79% | |
CSL Ltd. | | | 606,589 | | | $ | 89,809,103 | |
|
| |
James Hardie Industries PLC, CDI(a) | | | 3,755,824 | | | | 93,393,885 | |
|
| |
| | | | | | | 183,202,988 | |
|
| |
|
Canada-5.57% | |
Alimentation Couche-Tard, Inc. | | | 3,126,407 | | | | 170,191,069 | |
|
| |
Dollarama, Inc. | | | 2,856,496 | | | | 195,067,727 | |
|
| |
| | | | | | | 365,258,796 | |
|
| |
|
Denmark-5.22% | |
Novo Nordisk A/S, Class B | | | 3,551,868 | | | | 342,525,530 | |
|
| |
|
France-15.72% | |
Airbus SE | | | 662,113 | | | | 88,562,913 | |
|
| |
Capgemini SE | | | 397,058 | | | | 70,378,508 | |
|
| |
Dassault Systemes SE | | | 1,415,244 | | | | 58,374,118 | |
|
| |
Edenred SE | | | 1,992,312 | | | | 106,381,161 | |
|
| |
EssilorLuxottica S.A. | | | 434,074 | | | | 78,503,763 | |
|
| |
Hermes International S.C.A. | | | 86,223 | | | | 161,695,429 | |
|
| |
L’Oreal S.A. | | | 282,626 | | | | 118,548,126 | |
|
| |
LVMH Moet Hennessy Louis Vuitton SE | | | 314,235 | | | | 224,887,840 | |
|
| |
Sartorius Stedim Biotech | | | 355,925 | | | | 66,918,287 | |
|
| |
Schneider Electric SE | | | 370,810 | | | | 57,021,222 | |
|
| |
| | | | | | | 1,031,271,367 | |
|
| |
|
Germany-5.20% | |
AIXTRON SE | | | 2,603,477 | | | | 72,949,162 | |
|
| |
CTS Eventim AG & Co. KGaA | | | 1,267,048 | | | | 76,437,374 | |
|
| |
HelloFresh SE(a) | | | 1,516,564 | | | | 32,932,835 | |
|
| |
SAP SE | | | 287,397 | | | | 38,511,150 | |
|
| |
Siemens AG | | | 440,699 | | | | 58,274,326 | |
|
| |
Siemens Healthineers AG(b) | | | 1,268,585 | | | | 62,081,803 | |
|
| |
| | | | | | | 341,186,650 | |
|
| |
|
India-4.76% | |
Dr Lal PathLabs Ltd.(b) | | | 2,409,162 | | | | 70,047,929 | |
|
| |
ICICI Bank Ltd. | | | 2,375,741 | | | | 26,125,181 | |
|
| |
Reliance Industries Ltd. | | | 7,825,441 | | | | 215,836,169 | |
|
| |
| | | | | | | 312,009,279 | |
|
| |
|
Ireland-2.51% | |
Flutter Entertainment PLC(a) | | | 1,044,401 | | | | 164,327,018 | |
|
| |
|
Italy-2.05% | |
Davide Campari-Milano N.V. | | | 12,130,157 | | | | 134,136,916 | |
|
| |
|
Japan-7.64% | |
Benefit One, Inc.(c) | | | 2,134,000 | | | | 15,299,128 | |
|
| |
Daikin Industries Ltd. | | | 792,600 | | | | 114,144,300 | |
|
| |
Hitachi Ltd. | | | 1,333,400 | | | | 84,732,587 | |
|
| |
Hoya Corp. | | | 698,410 | | | | 67,184,616 | |
|
| |
Keyence Corp. | | | 312,384 | | | | 120,924,456 | |
|
| |
Kobe Bussan Co. Ltd. | | | 2,935,400 | | | | 72,781,271 | |
|
| |
Nihon M&A Center Holdings, Inc. | | | 5,684,700 | | | | 25,942,135 | |
|
| |
| | | | | | | 501,008,493 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Netherlands-6.25% | |
Aalberts N.V. | | | 1,470,700 | | | $ | 46,030,106 | |
|
| |
Adyen N.V.(a)(b) | | | 49,120 | | | | 33,205,204 | |
|
| |
ASM International N.V. | | | 142,683 | | | | 59,011,057 | |
|
| |
ASML Holding N.V. | | | 304,550 | | | | 183,204,944 | |
|
| |
Universal Music Group N.V. | | | 3,641,912 | | | | 88,802,843 | |
|
| |
| | | | | | | 410,254,154 | |
|
| |
|
New Zealand-0.64% | |
Xero Ltd.(a) | | | 613,710 | | | | 42,030,085 | |
|
| |
|
Spain-2.11% | |
Amadeus IT Group S.A. | | | 2,424,280 | | | | 138,504,186 | |
|
| |
|
Sweden-5.45% | |
Atlas Copco AB, Class A | | | 10,811,278 | | | | 139,874,761 | |
|
| |
Beijer Ref AB(c) | | | 3,866,549 | | | | 36,869,382 | |
|
| |
Epiroc AB, Class A(c) | | | 10,978,159 | | | | 180,751,245 | |
|
| |
| | | | | | | 357,495,388 | |
|
| |
|
Switzerland-2.68% | |
Barry Callebaut AG | | | 17,904 | | | | 27,155,171 | |
|
| |
Lonza Group AG | | | 74,908 | | | | 26,267,537 | |
|
| |
Sika AG | | | 228,755 | | | | 54,610,128 | |
|
| |
VAT Group AG(b) | | | 192,391 | | | | 68,015,264 | |
|
| |
| | | | | | | 176,048,100 | |
|
| |
|
Taiwan-1.12% | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 4,473,000 | | | | 73,695,458 | |
|
| |
|
United Kingdom-21.55% | |
Ashtead Group PLC | | | 1,732,399 | | | | 99,233,787 | |
|
| |
Auto Trader Group PLC(b) | | | 12,274,206 | | | | 93,069,038 | |
|
| |
Britvic PLC | | | 5,152,878 | | | | 52,486,033 | |
|
| |
Compass Group PLC | | | 7,619,222 | | | | 192,252,952 | |
|
| |
ConvaTec Group PLC(b)(c) | | | 21,481,377 | | | | 53,453,666 | |
|
| |
JD Sports Fashion PLC | | | 83,781,283 | | | | 129,965,107 | |
|
| |
Legal & General Group PLC | | | 22,378,929 | | | | 57,683,867 | |
|
| |
London Stock Exchange Group PLC | | | 1,962,660 | | | | 197,395,708 | |
|
| |
Next PLC | | | 1,812,186 | | | | 152,042,626 | |
|
| |
Ocado Group PLC(a) | | | 3,497,308 | | | | 19,931,685 | |
|
| |
Rentokil Initial PLC | | | 22,216,135 | | | | 113,454,121 | |
|
| |
Rightmove PLC | | | 12,852,054 | | | | 74,382,832 | |
|
| |
RS GROUP PLC | | | 7,735,754 | | | | 64,026,360 | |
|
| |
Trainline PLC(a)(b)(d) | | | 36,064,567 | | | | 114,276,680 | |
|
| |
| | | | | | | 1,413,654,462 | |
|
| |
|
United States-6.45% | |
EPAM Systems, Inc.(a) | | | 509,561 | | | | 110,865,187 | |
|
| |
Experian PLC | | | 1,692,963 | | | | 51,499,510 | |
|
| |
Ferguson PLC | | | 927,759 | | | | 139,372,343 | |
|
| |
ResMed, Inc. | | | 860,440 | | | | 121,511,337 | |
|
| |
| | | | | | | 423,248,377 | |
|
| |
Total Common Stocks & Other Equity Interests (Cost $4,256,431,205) | | | | 6,409,857,247 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
8 | | Invesco Oppenheimer International Growth Fund |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Money Market Funds–1.95% | |
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e) | | | 44,666,205 | | | $ | 44,666,205 | |
|
| |
Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e) | | | 31,935,889 | | | | 31,945,470 | |
|
| |
Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e) | | | 51,047,092 | | | | 51,047,092 | |
|
| |
Total Money Market Funds (Cost $127,656,657) | | | | 127,658,767 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES (excluding Investments purchased with cash collateral from securities on loan)–99.66% (Cost $4,384,087,862) | | | | | | | 6,537,516,014 | |
|
| |
| | | | | | | | |
| | Shares | | | Value | |
|
| |
Investments Purchased with Cash Collateral from Securities on Loan | |
Money Market Funds–2.01% | |
Invesco Private Government Fund, 5.32%(d)(e)(f) | | | 36,986,941 | | | $ | 36,986,941 | |
|
| |
Invesco Private Prime Fund, 5.53%(d)(e)(f) | | | 95,126,605 | | | | 95,136,118 | |
|
| |
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $132,123,059) | | | | 132,123,059 | |
|
| |
TOTAL INVESTMENTS IN SECURITIES–101.67% (Cost $4,516,210,921) | | | | 6,669,639,073 | |
|
| |
OTHER ASSETS LESS LIABILITIES–(1.67)% | | | | (109,301,241 | ) |
|
| |
NET ASSETS–100.00% | | | | | | $ | 6,560,337,832 | |
|
| |
Investment Abbreviations:
CDI – CREST Depository Interest
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(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 October 31, 2023 was $494,149,584, which represented 7.53% of the Fund’s Net Assets. |
(c) | All or a portion of this security was out on loan at October 31, 2023. |
(d) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended October 31, 2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Value October 31, 2022 | | | Purchases at Cost | | | Proceeds from Sales | | | Change in Unrealized Appreciation (Depreciation) | | | Realized Gain (Loss) | | | Value October 31, 2023 | | | Dividend Income | |
Investments in Affiliated Money Market Funds: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Government & Agency Portfolio, Institutional Class | | $ | 36,332,395 | | | $ | 582,391,087 | | | $ | (574,057,277 | ) | | $ | - | | | $ | - | | | $ | 44,666,205 | | | $ | 1,066,334 | |
Invesco Liquid Assets Portfolio, Institutional Class | | | 26,768,821 | | | | 415,993,633 | | | | (410,818,364 | ) | | | (471) | | | | 1,851 | | | | 31,945,470 | | | | 809,699 | |
Invesco Treasury Portfolio, Institutional Class | | | 41,522,738 | | | | 665,589,814 | | | | (656,065,460 | ) | | | - | | | | - | | | | 51,047,092 | | | | 1,218,595 | |
Investments Purchased with Cash Collateral from Securities on Loan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Invesco Private Government Fund | | | 14,928,153 | | | | 292,172,982 | | | | (270,114,194 | ) | | | - | | | | - | | | | 36,986,941 | | | | 771,334* | |
Invesco Private Prime Fund | | | 38,336,216 | | | | 620,443,101 | | | | (563,661,871 | ) | | | 3,482 | | | | 15,190 | | | | 95,136,118 | | | | 2,083,408* | |
Investments in Other Affiliates: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trainline PLC | | | 120,287,911 | | | | 22,360,797 | | | | (9,018,760 | ) | | | (10,589,938) | | | | (8,763,330) | | | | 114,276,680 | | | | - | |
Total | | $ | 278,176,234 | | | $ | 2,598,951,414 | | | $ | (2,483,735,926 | ) | | $ | (10,586,927) | | | $ | (8,746,289) | | | $ | 374,058,506 | | | $ | 5,949,370 | |
| * | Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any. |
(e) | The rate shown is the 7-day SEC standardized yield as of October 31, 2023. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
9 | | Invesco Oppenheimer International Growth Fund |
Statement of Assets and Liabilities
October 31, 2023
| | | | |
Assets: | | | | |
Investments in unaffiliated securities, at value (Cost $4,097,094,902)* | | $ | 6,295,580,567 | |
|
| |
Investments in affiliates, at value (Cost $419,116,019) | | | 374,058,506 | |
|
| |
Cash | | | 20,000,000 | |
|
| |
Foreign currencies, at value (Cost $4,418,840) | | | 4,421,832 | |
|
| |
Receivable for: | | | | |
Investments sold | | | 1,731,584 | |
|
| |
Fund shares sold | | | 2,951,495 | |
|
| |
Dividends | | | 18,707,556 | |
|
| |
Foreign withholding tax claims | | | 3,330,819 | |
|
| |
Investment for trustee deferred compensation and retirement plans | | | 541,085 | |
|
| |
Other assets | | | 62,695 | |
|
| |
Total assets | | | 6,721,386,139 | |
|
| |
| |
Liabilities: | | | | |
Payable for: | | | | |
Fund shares reacquired | | | 10,384,907 | |
|
| |
Accrued foreign taxes | | | 3,195,686 | |
|
| |
Collateral upon return of securities loaned | | | 132,123,059 | |
|
| |
Accrued fees to affiliates | | | 1,954,655 | |
|
| |
Accrued trustees’ and officers’ fees and benefits | | | 67,105 | |
|
| |
Accrued other operating expenses | | | 321,810 | |
|
| |
IRS closing agreement fees for foreign withholding tax claims | | | 12,460,000 | |
|
| |
Trustee deferred compensation and retirement plans | | | 541,085 | |
|
| |
Total liabilities | | | 161,048,307 | |
|
| |
Net assets applicable to shares outstanding | | $ | 6,560,337,832 | |
|
| |
| |
Net assets consist of: | | | | |
Shares of beneficial interest | | $ | 3,637,577,911 | |
|
| |
Distributable earnings | | | 2,922,759,921 | |
|
| |
| | $ | 6,560,337,832 | |
|
| |
| | | | |
Net Assets: | | | | |
| |
Class A | | $ | 932,028,587 | |
|
| |
Class C | | $ | 46,143,113 | |
|
| |
Class R | | $ | 195,098,878 | |
|
| |
Class Y | | $ | 2,320,877,331 | |
|
| |
Class R5 | | $ | 2,244,979 | |
|
| |
Class R6 | | $ | 3,063,944,944 | |
|
| |
|
Shares outstanding, no par value, with an unlimited number of shares authorized: | |
| |
Class A | | | 27,852,273 | |
|
| |
Class C | | | 1,522,881 | |
|
| |
Class R | | | 6,036,656 | |
|
| |
Class Y | | | 69,624,634 | |
|
| |
Class R5 | | | 66,724 | |
|
| |
Class R6 | | | 91,932,852 | |
|
| |
Class A: | | | | |
Net asset value per share | | $ | 33.46 | |
|
| |
Maximum offering price per share (Net asset value of $33.46 ÷ 94.50%) | | $ | 35.41 | |
|
| |
Class C: | | | | |
Net asset value and offering price per share | | $ | 30.30 | |
|
| |
Class R: | | | | |
Net asset value and offering price per share | | $ | 32.32 | |
|
| |
Class Y: | | | | |
Net asset value and offering price per share | | $ | 33.33 | |
|
| |
Class R5: | | | | |
Net asset value and offering price per share | | $ | 33.65 | |
|
| |
Class R6: | | | | |
Net asset value and offering price per share | | $ | 33.33 | |
|
| |
* | At October 31, 2023, securities with an aggregate value of $120,802,190 were on loan to brokers. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
10 | | Invesco Oppenheimer International Growth Fund |
Statement of Operations
For the year ended October 31, 2023
| | | | |
Investment income: | | | | |
Dividends (net of foreign withholding taxes of $6,158,408) | | $ | 92,969,172 | |
|
| |
Dividends from affiliates (includes net securities lending income of $144,252) | | | 3,238,880 | |
|
| |
Foreign withholding tax claims | | | 3,330,819 | |
|
| |
Total investment income | | | 99,538,871 | |
|
| |
| |
Expenses: | | | | |
Advisory fees | | | 49,777,186 | |
|
| |
Administrative services fees | | | 1,070,459 | |
|
| |
Custodian fees | | | 411,961 | |
|
| |
Distribution fees: | | | | |
Class A | | | 2,621,712 | |
|
| |
Class C | | | 610,841 | |
|
| |
Class R | | | 1,112,483 | |
|
| |
Transfer agent fees – A, C, R and Y | | | 6,427,828 | |
|
| |
Transfer agent fees – R5 | | | 691 | |
|
| |
Transfer agent fees – R6 | | | 1,065,418 | |
|
| |
Trustees’ and officers’ fees and benefits | | | 88,115 | |
|
| |
Registration and filing fees | | | 188,343 | |
|
| |
Reports to shareholders | | | 436,570 | |
|
| |
Professional services fees | | | 224,339 | |
|
| |
Other | | | 149,421 | |
|
| |
Total expenses | | | 64,185,367 | |
|
| |
Less: Fees waived and/or expense offset arrangement(s) | | | (123,379 | ) |
|
| |
Net expenses | | | 64,061,988 | |
|
| |
Net investment income | | | 35,476,883 | |
|
| |
| |
Realized and unrealized gain (loss) from: | | | | |
Net realized gain (loss) from: | | | | |
Unaffiliated investment securities (net of foreign taxes of $98,712) | | | 1,004,422,030 | |
|
| |
Affiliated investment securities | | | (8,746,289 | ) |
|
| |
Foreign currencies | | | 5,621,647 | |
|
| |
Forward foreign currency contracts | | | 109 | |
|
| |
| | | 1,001,297,497 | |
|
| |
Change in net unrealized appreciation (depreciation) of: | | | | |
Unaffiliated investment securities (net of foreign taxes of $1,218,654) | | | (368,170,525 | ) |
|
| |
Affiliated investment securities | | | (10,586,927 | ) |
|
| |
Foreign currencies | | | 1,713,665 | |
|
| |
| | | (377,043,787 | ) |
|
| |
Net realized and unrealized gain | | | 624,253,710 | |
|
| |
Net increase in net assets resulting from operations | | $ | 659,730,593 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
11 | | Invesco Oppenheimer International Growth Fund |
Statement of Changes in Net Assets
For the years ended October 31, 2023 and 2022
| | | | | | | | |
| | 2023 | | | 2022 | |
|
| |
Operations: | | | | | | | | |
| | |
Net investment income | | $ | 35,476,883 | | | $ | 24,911,692 | |
|
| |
Net realized gain (loss) | | | 1,001,297,497 | | | | (135,403,025 | ) |
|
| |
Change in net unrealized appreciation (depreciation) | | | (377,043,787 | ) | | | (3,882,446,312 | ) |
|
| |
Net increase (decrease) in net assets resulting from operations | | | 659,730,593 | | | | (3,992,937,645 | ) |
|
| |
| | |
Distributions to shareholders from distributable earnings: | | | | | | | | |
| | |
Class A | | | – | | | | (195,067,177 | ) |
|
| |
Class C | | | – | | | | (18,357,534 | ) |
|
| |
Class R | | | – | | | | (36,871,946 | ) |
|
| |
Class Y | | | (1,080,639 | ) | | | (599,954,915 | ) |
|
| |
Class R5 | | | (3,123 | ) | | | (5,380,848 | ) |
|
| |
Class R6 | | | (8,818,376 | ) | | | (692,317,508 | ) |
|
| |
Total distributions from distributable earnings | | | (9,902,138 | ) | | | (1,547,949,928 | ) |
|
| |
| | |
Share transactions–net: | | | | | | | | |
| | |
Class A | | | (170,333,402 | ) | | | 61,475,290 | |
|
| |
Class C | | | (25,007,632 | ) | | | (23,631,020 | ) |
|
| |
Class R | | | (25,733,958 | ) | | | 29,407,953 | |
|
| |
Class Y | | | (483,896,081 | ) | | | (290,254,095 | ) |
|
| |
Class R5 | | | 119,845 | | | | (21,964,741 | ) |
|
| |
Class R6 | | | (528,383,816 | ) | | | (91,205,230 | ) |
|
| |
Net increase (decrease) in net assets resulting from share transactions | | | (1,233,235,044 | ) | | | (336,171,843 | ) |
|
| |
Net increase (decrease) in net assets | | | (583,406,589 | ) | | | (5,877,059,416 | ) |
|
| |
| | |
Net assets: | | | | | | | | |
| | |
Beginning of year | | | 7,143,744,421 | | | | 13,020,803,837 | |
|
| |
End of year | | $ | 6,560,337,832 | | | $ | 7,143,744,421 | |
|
| |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| | |
12 | | Invesco Oppenheimer International Growth Fund |
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(c) | | Ratio of net investment income (loss) to average net assets | | Portfolio turnover (d) |
Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | $31.02 | | | | $ 0.08 | | | | $ 2.36 | | | | $ 2.44 | | | | $ – | | | | $ – | | | | $ – | | | | $33.46 | | | | 7.87 | %(e) | | | $932,029 | | | | 1.10 | %(e) | | | 1.10 | %(e) | | | 0.23 | %(e) | | | 13 | % |
Year ended 10/31/22 | | | 52.65 | | | | 0.00 | | | | (15.44 | ) | | | (15.44 | ) | | | (0.05 | ) | | | (6.14 | ) | | | (6.19 | ) | | | 31.02 | | | | (32.80 | ) | | | 1,014,906 | | | | 1.08 | | | | 1.08 | | | | 0.01 | | | | 9 | |
Year ended 10/31/21 | | | 45.87 | | | | 0.01 | | | | 13.72 | | | | 13.73 | | | | – | | | | (6.95 | ) | | | (6.95 | ) | | | 52.65 | | | | 32.14 | | | | 1,680,415 | | | | 1.10 | | | | 1.10 | | | | 0.00 | | | | 18 | |
Year ended 10/31/20 | | | 41.74 | | | | (0.02 | ) | | | 4.53 | | | | 4.51 | | | | (0.38 | ) | | | – | | | | (0.38 | ) | | | 45.87 | | | | 10.84 | | | | 1,472,093 | | | | 1.10 | | | | 1.13 | | | | (0.06 | ) | | | 22 | |
Eleven months ended 10/31/19 | | | 37.08 | | | | 0.33 | | | | 4.71 | | | | 5.04 | | | | (0.38 | ) | | | – | | | | (0.38 | ) | | | 41.74 | | | | 13.75 | | | | 1,746,483 | | | | 1.10 | (f) | | | 1.10 | (f) | | | 0.93 | (f) | | | 10 | |
Year ended 11/30/18 | | | 43.71 | | | | 0.34 | | | | (6.71 | ) | | | (6.37 | ) | | | (0.26 | ) | | | – | | | | (0.26 | ) | | | 37.08 | | | | (14.66 | ) | | | 2,146,246 | | | | 1.11 | | | | 1.11 | | | | 0.79 | | | | 18 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 28.30 | | | | (0.17 | ) | | | 2.17 | | | | 2.00 | | | | – | | | | – | | | | – | | | | 30.30 | | | | 7.07 | | | | 46,143 | | | | 1.86 | | | | 1.86 | | | | (0.53 | ) | | | 13 | |
Year ended 10/31/22 | | | 48.88 | | | | (0.26 | ) | | | (14.18 | ) | | | (14.44 | ) | | | – | | | | (6.14 | ) | | | (6.14 | ) | | | 28.30 | | | | (33.31 | ) | | | 65,001 | | | | 1.83 | | | | 1.83 | | | | (0.74 | ) | | | 9 | |
Year ended 10/31/21 | | | 43.30 | | | | (0.35 | ) | | | 12.88 | | | | 12.53 | | | | – | | | | (6.95 | ) | | | (6.95 | ) | | | 48.88 | | | | 31.15 | | | | 150,110 | | | | 1.85 | | | | 1.85 | | | | (0.75 | ) | | | 18 | |
Year ended 10/31/20 | | | 39.42 | | | | (0.33 | ) | | | 4.28 | | | | 3.95 | | | | (0.07 | ) | | | – | | | | (0.07 | ) | | | 43.30 | | | | 10.02 | | | | 184,361 | | | | 1.85 | | | | 1.88 | | | | (0.81 | ) | | | 22 | |
Eleven months ended 10/31/19 | | | 34.97 | | | | 0.06 | | | | 4.46 | | | | 4.52 | | | | (0.07 | ) | | | – | | | | (0.07 | ) | | | 39.42 | | | | 12.95 | | | | 241,807 | | | | 1.85 | (f) | | | 1.85 | (f) | | | 0.18 | (f) | | | 10 | |
Year ended 11/30/18 | | | 41.29 | | | | 0.02 | | | | (6.34 | ) | | | (6.32 | ) | | | – | | | | – | | | | – | | | | 34.97 | | | | (15.31 | ) | | | 345,228 | | | | 1.86 | | | | 1.86 | | | | 0.04 | | | | 18 | |
Class R | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 30.04 | | | | (0.01 | ) | | | 2.29 | | | | 2.28 | | | | – | | | | – | | | | – | | | | 32.32 | | | | 7.59 | | | | 195,099 | | | | 1.36 | | | | 1.36 | | | | (0.03 | ) | | | 13 | |
Year ended 10/31/22 | | | 51.26 | | | | (0.09 | ) | | | (14.99 | ) | | | (15.08 | ) | | | – | | | | (6.14 | ) | | | (6.14 | ) | | | 30.04 | | | | (32.97 | ) | | | 203,428 | | | | 1.33 | | | | 1.33 | | | | (0.24 | ) | | | 9 | |
Year ended 10/31/21 | | | 44.92 | | | | (0.12 | ) | | | 13.41 | | | | 13.29 | | | | – | | | | (6.95 | ) | | | (6.95 | ) | | | 51.26 | | | | 31.80 | | | | 311,920 | | | | 1.35 | | | | 1.35 | | | | (0.25 | ) | | | 18 | |
Year ended 10/31/20 | | | 40.88 | | | | (0.13 | ) | | | 4.44 | | | | 4.31 | | | | (0.27 | ) | | | – | | | | (0.27 | ) | | | 44.92 | | | | 10.58 | | | | 263,106 | | | | 1.35 | | | | 1.38 | | | | (0.31 | ) | | | 22 | |
Eleven months ended 10/31/19 | | | 36.32 | | | | 0.24 | | | | 4.61 | | | | 4.85 | | | | (0.29 | ) | | | – | | | | (0.29 | ) | | | 40.88 | | | | 13.47 | | | | 313,081 | | | | 1.35 | (f) | | | 1.35 | (f) | | | 0.68 | (f) | | | 10 | |
Year ended 11/30/18 | | | 42.86 | | | | 0.23 | | | | (6.58 | ) | | | (6.35 | ) | | | (0.19 | ) | | | – | | | | (0.19 | ) | | | 36.32 | | | | (14.88 | ) | | | 377,926 | | | | 1.36 | | | | 1.36 | | | | 0.54 | | | | 18 | |
Class Y | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 30.84 | | | | 0.17 | | | | 2.33 | | | | 2.50 | | | | (0.01 | ) | | | – | | | | (0.01 | ) | | | 33.33 | | | | 8.12 | | | | 2,320,877 | | | | 0.86 | | | | 0.86 | | | | 0.47 | | | | 13 | |
Year ended 10/31/22 | | | 52.41 | | | | 0.10 | | | | (15.35 | ) | | | (15.25 | ) | | | (0.18 | ) | | | (6.14 | ) | | | (6.32 | ) | | | 30.84 | | | | (32.64 | ) | | | 2,575,369 | | | | 0.83 | | | | 0.83 | | | | 0.26 | | | | 9 | |
Year ended 10/31/21 | | | 45.63 | | | | 0.13 | | | | 13.65 | | | | 13.78 | | | | (0.05 | ) | | | (6.95 | ) | | | (7.00 | ) | | | 52.41 | | | | 32.46 | | | | 5,009,610 | | | | 0.85 | | | | 0.85 | | | | 0.25 | | | | 18 | |
Year ended 10/31/20 | | | 41.51 | | | | 0.08 | | | | 4.52 | | | | 4.60 | | | | (0.48 | ) | | | – | | | | (0.48 | ) | | | 45.63 | | | | 11.13 | | | | 4,132,110 | | | | 0.85 | | | | 0.88 | | | | 0.19 | | | | 22 | |
Eleven months ended 10/31/19 | | | 36.92 | | | | 0.42 | | | | 4.67 | | | | 5.09 | | | | (0.50 | ) | | | – | | | | (0.50 | ) | | | 41.51 | | | | 14.01 | | | | 5,993,234 | | | | 0.85 | (f) | | | 0.85 | (f) | | | 1.18 | (f) | | | 10 | |
Year ended 11/30/18 | | | 43.55 | | | | 0.44 | | | | (6.69 | ) | | | (6.25 | ) | | | (0.38 | ) | | | – | | | | (0.38 | ) | | | 36.92 | | | | (14.47 | ) | | | 9,329,538 | | | | 0.86 | | | | 0.86 | | | | 1.04 | | | | 18 | |
Class R5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 31.11 | | | | 0.23 | | | | 2.36 | | | | 2.59 | | | | (0.05 | ) | | | – | | | | (0.05 | ) | | | 33.65 | | | | 8.31 | | | | 2,245 | | | | 0.69 | | | | 0.69 | | | | 0.64 | | | | 13 | |
Year ended 10/31/22 | | | 52.84 | | | | 0.12 | | | | (15.46 | ) | | | (15.34 | ) | | | (0.25 | ) | | | (6.14 | ) | | | (6.39 | ) | | | 31.11 | | | | (32.58 | ) | | | 1,974 | | | | 0.76 | | | | 0.76 | | | | 0.33 | | | | 9 | |
Year ended 10/31/21 | | | 45.97 | | | | 0.20 | | | | 13.76 | | | | 13.96 | | | | (0.14 | ) | | | (6.95 | ) | | | (7.09 | ) | | | 52.84 | | | | 32.66 | | | | 44,233 | | | | 0.72 | | | | 0.72 | | | | 0.38 | | | | 18 | |
Year ended 10/31/20 | | | 41.80 | | | | 0.15 | | | | 4.55 | | | | 4.70 | | | | (0.53 | ) | | | – | | | | (0.53 | ) | | | 45.97 | | | | 11.29 | | | | 12 | | | | 0.69 | | | | 0.69 | | | | 0.35 | | | | 22 | |
Period ended 10/31/19(g) | | | 38.79 | | | | 0.23 | | | | 2.78 | | | | 3.01 | | | | – | | | | – | | | | – | | | | 41.80 | | | | 7.76 | | | | 11 | | | | 0.74 | (f) | | | 0.74 | (f) | | | 1.29 | (f) | | | 10 | |
Class R6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended 10/31/23 | | | 30.85 | | | | 0.22 | | | | 2.34 | | | | 2.56 | | | | (0.08 | ) | | | – | | | | (0.08 | ) | | | 33.33 | | | | 8.30 | | | | 3,063,945 | | | | 0.73 | | | | 0.73 | | | | 0.60 | | | | 13 | |
Year ended 10/31/22 | | | 52.44 | | | | 0.15 | | | | (15.34 | ) | | | (15.19 | ) | | | (0.26 | ) | | | (6.14 | ) | | | (6.40 | ) | | | 30.85 | | | | (32.55 | ) | | | 3,283,066 | | | | 0.69 | | | | 0.69 | | | | 0.40 | | | | 9 | |
Year ended 10/31/21 | | | 45.67 | | | | 0.20 | | | | 13.66 | | | | 13.86 | | | | (0.14 | ) | | | (6.95 | ) | | | (7.09 | ) | | | 52.44 | | | | 32.66 | | | | 5,824,515 | | | | 0.70 | | | | 0.70 | | | | 0.40 | | | | 18 | |
Year ended 10/31/20 | | | 41.55 | | | | 0.15 | | | | 4.52 | | | | 4.67 | | | | (0.55 | ) | | | – | | | | (0.55 | ) | | | 45.67 | | | | 11.29 | | | | 5,473,919 | | | | 0.69 | | | | 0.69 | | | | 0.35 | | | | 22 | |
Eleven months ended 10/31/19 | | | 36.98 | | | | 0.48 | | | | 4.67 | | | | 5.15 | | | | (0.58 | ) | | | – | | | | (0.58 | ) | | | 41.55 | | | | 14.18 | | | | 7,389,864 | | | | 0.69 | (f) | | | 0.69 | (f) | | | 1.34 | (f) | | | 10 | |
Year ended 11/30/18 | | | 43.62 | | | | 0.51 | | | | (6.69 | ) | | | (6.18 | ) | | | (0.46 | ) | | | – | | | | (0.46 | ) | | | 36.98 | | | | (14.32 | ) | | | 8,682,910 | | | | 0.69 | | | | 0.69 | | | | 1.20 | | | | 18 | |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Does not include indirect expenses from affiliated fund fees and expenses of 0.00% for the eleven months ended October 31, 2019 and the year ended November 30, 2018, respectively. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.24% for the year ended October 31, 2023. |
(g) | Commencement date after the close of business on May 24, 2019. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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13 | | Invesco Oppenheimer International Growth Fund |
Notes to Financial Statements
October 31, 2023
NOTE 1—Significant Accounting Policies
Invesco Oppenheimer International Growth Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.
The Fund’s investment objective is to seek 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 Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund 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 market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
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14 | | Invesco Oppenheimer International Growth 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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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. | Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all. |
As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the year ended October 31, 2023, the Fund did not enter into any closing agreements.
G. | 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 based on relative net assets of Class R5 and Class R6. 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. |
H. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications – Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
J. | 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. Upon the failure of the borrower |
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15 | | Invesco Oppenheimer International Growth Fund |
| 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities. |
The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the year ended October 31, 2023, the Fund paid the Adviser $809 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliates on the Statement of Operations.
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 the date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
L. | Forward Foreign Currency Contracts – The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical exchange of the two currencies on the settlement date, 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).
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 for hedging does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M. | Other Risks - Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly 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 | | | 0.800% | |
|
| |
Next $250 million | | | 0.770% | |
|
| |
Next $500 million | | | 0.750% | |
|
| |
Next $1 billion | | | 0.690% | |
|
| |
Next $3 billion | | | 0.670% | |
|
| |
Next $5 billion | | | 0.650% | |
|
| |
Next $10 billion | | | 0.630% | |
|
| |
Next $10 billion | | | 0.610% | |
|
| |
Over $30 billion | | | 0.590% | |
|
| |
* | The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser. |
For the year ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.66%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate
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16 | | Invesco Oppenheimer International Growth Fund |
sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.
Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 2.25%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.
Further, the Adviser has contractually agreed, through at least June 30, 2025, 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 year ended October 31, 2023, the Adviser waived advisory fees of $76,807.
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 year ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.
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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the year ended October 31, 2023, 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 Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the annual rate of 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. The fees are accrued daily and paid monthly. Of the Plans 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 year ended October 31, 2023, 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 year ended October 31, 2023, IDI advised the Fund that IDI retained $67,075 in front-end sales commissions from the sale of Class A shares and $1,178 and $497 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.
For the year ended October 31, 2023, the Fund incurred $591 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. 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 Adviser’s 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 October 31, 2023. 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.
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17 | | Invesco Oppenheimer International Growth Fund |
| | | | | | | | | | | | | | | | |
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
|
| |
Investments in Securities | | | | | | | | | | | | | | | | |
|
| |
Australia | | $ | – | | | $ | 183,202,988 | | | | $– | | | $ | 183,202,988 | |
|
| |
Canada | | | 365,258,796 | | | | – | | | | – | | | | 365,258,796 | |
|
| |
Denmark | | | – | | | | 342,525,530 | | | | – | | | | 342,525,530 | |
|
| |
France | | | – | | | | 1,031,271,367 | | | | – | | | | 1,031,271,367 | |
|
| |
Germany | | | – | | | | 341,186,650 | | | | – | | | | 341,186,650 | |
|
| |
India | | | – | | | | 312,009,279 | | | | – | | | | 312,009,279 | |
|
| |
Ireland | | | – | | | | 164,327,018 | | | | – | | | | 164,327,018 | |
|
| |
Italy | | | – | | | | 134,136,916 | | | | – | | | | 134,136,916 | |
|
| |
Japan | | | – | | | | 501,008,493 | | | | – | | | | 501,008,493 | |
|
| |
Netherlands | | | – | | | | 410,254,154 | | | | – | | | | 410,254,154 | |
|
| |
New Zealand | | | – | | | | 42,030,085 | | | | – | | | | 42,030,085 | |
|
| |
Spain | | | – | | | | 138,504,186 | | | | – | | | | 138,504,186 | |
|
| |
Sweden | | | – | | | | 357,495,388 | | | | – | | | | 357,495,388 | |
|
| |
Switzerland | | | – | | | | 176,048,100 | | | | – | | | | 176,048,100 | |
|
| |
Taiwan | | | – | | | | 73,695,458 | | | | – | | | | 73,695,458 | |
|
| |
United Kingdom | | | – | | | | 1,413,654,462 | | | | – | | | | 1,413,654,462 | |
|
| |
United States | | | 232,376,524 | | | | 190,871,853 | | | | – | | | | 423,248,377 | |
|
| |
Money Market Funds | | | 127,658,767 | | | | 132,123,059 | | | | – | | | | 259,781,826 | |
|
| |
Total Investments | | $ | 725,294,087 | | | $ | 5,944,344,986 | | | | $– | | | $ | 6,669,639,073 | |
|
| |
NOTE 4—Derivative Investments
The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
Effect of Derivative Investments for the year ended October 31, 2023
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
| | | | |
| | Location of Gain on Statement of Operations | |
| | Currency Risk | |
|
| |
Realized Gain: | | | | |
Forward foreign currency contracts | | | $109 | |
|
| |
The table below summarizes the average notional value of derivatives held during the period.
| | |
| | Forward Foreign Currency Contracts |
|
|
Average notional value | | $1,229,896 |
|
|
NOTE 5—Security Transactions with Affiliated Funds
The Fund is permitted to purchase securities from or sell securities to certain other affiliated 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 that is or could be considered an “affiliated person” by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers is made in reliance on Rule 17a-7 of the 1940 Act and, to the extent applicable, related SEC staff positions. Each such transaction is effected at the security’s “current market price”, as provided for in these procedures and Rule 17a-7. Pursuant to these procedures, for the year ended October 31, 2023, the Fund engaged in securities purchases of $30,423,272.
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 year ended October 31, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $46,572.
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
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18 | | Invesco Oppenheimer International Growth Fund |
such plan. Trustees’ and Officers’ Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 9—Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended October 31, 2023 and 2022:
| | | | | | | | | | | | |
| | 2023 | | | | | | 2022 | |
|
| |
Ordinary income* | | $ | 9,902,138 | | | | | | | $ | 122,942,959 | |
|
| |
Long-term capital gain | | | – | | | | | | | | 1,425,006,969 | |
|
| |
Total distributions | | $ | 9,902,138 | | | | | | | $ | 1,547,949,928 | |
|
| |
* | Includes short-term capital gain distributions, if any. |
Tax Components of Net Assets at Period-End:
| | | | |
| | 2023 | |
|
| |
Undistributed ordinary income | | $ | 66,122,022 | |
|
| |
Undistributed long-term capital gain | | | 731,382,895 | |
|
| |
Net unrealized appreciation – investments | | | 2,126,094,629 | |
|
| |
Net unrealized appreciation (depreciation) – foreign currencies | | | (325,101 | ) |
|
| |
Temporary book/tax differences | | | (514,524 | ) |
|
| |
Shares of beneficial interest | | | 3,637,577,911 | |
|
| |
Total net assets | | $ | 6,560,337,832 | |
|
| |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales and distributions.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund does not have a capital loss carryforward as of October 31, 2023.
NOTE 10—Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the year ended October 31, 2023 was $970,773,267 and $2,218,689,136, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis | |
Aggregate unrealized appreciation of investments | | | $2,564,787,280 | |
|
| |
Aggregate unrealized (depreciation) of investments | | | (438,692,651 | ) |
|
| |
Net unrealized appreciation of investments | | | $2,126,094,629 | |
|
| |
Cost of investments for tax purposes is $4,543,544,444.
NOTE 11—Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of equalization and distributions, on October 31, 2023, undistributed net investment income was increased by $30,814,397, undistributed net realized gain was decreased by $136,409,397 and shares of beneficial interest was increased by $105,595,000. This reclassification had no effect on the net assets of the Fund.
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19 | | Invesco Oppenheimer International Growth Fund |
NOTE 12—Share Information
| | | | | | | | | | | | | | | | |
| | Summary of Share Activity | |
|
| |
| | |
| | Year ended | | | Year ended | |
| | October 31, 2023(a) | | | October 31, 2022 | |
| | Shares | | | Amount | | | Shares | | | Amount | |
|
| |
Sold: | | | | | | | | | | | | | | | | |
| | | | |
Class A | | | 3,639,376 | | | $ | 131,855,873 | | | | 5,405,885 | | | $ | 202,956,745 | |
|
| |
Class C | | | 173,293 | | | | 5,704,853 | | | | 153,626 | | | | 5,337,043 | |
|
| |
Class R | | | 636,276 | | | | 22,320,444 | | | | 964,878 | | | | 34,927,354 | |
|
| |
Class Y | | | 13,473,446 | | | | 473,843,141 | | | | 22,787,843 | | | | 848,544,314 | |
|
| |
Class R5 | | | 7,023 | | | | 252,055 | | | | 210,747 | | | | 7,934,807 | |
|
| |
Class R6 | | | 17,456,480 | | | | 603,566,975 | | | | 23,922,628 | | | | 856,148,483 | |
|
| |
| | | | |
Issued as reinvestment of dividends: | | | | | | | | | | | | | | | | |
Class A | | | - | | | | - | | | | 3,967,563 | | | | 174,691,830 | |
|
| |
Class C | | | - | | | | - | | | | 417,051 | | | | 16,865,527 | |
|
| |
Class R | | | - | | | | - | | | | 861,731 | | | | 36,821,772 | |
|
| |
Class Y | | | 22,895 | | | | 802,234 | | | | 10,649,974 | | | | 465,084,384 | |
|
| |
Class R5 | | | 88 | | | | 3,111 | | | | 122,171 | | | | 5,379,201 | |
|
| |
Class R6 | | | 221,364 | | | | 7,747,765 | | | | 13,677,773 | | | | 596,897,993 | |
|
| |
| | | | |
Automatic conversion of Class C shares to Class A shares: | | | | | | | | | | | | | | | | |
Class A | | | 407,202 | | | | 14,617,292 | | | | 603,876 | | | | 22,422,046 | |
|
| |
Class C | | | (447,987 | ) | | | (14,617,292 | ) | | | (658,909 | ) | | | (22,422,046 | ) |
|
| |
| | | | |
Reacquired: | | | | | | | | | | | | | | | | |
Class A | | | (8,911,962 | ) | | | (316,806,567 | ) | | | (9,175,150 | ) | | | (338,595,331 | ) |
|
| |
Class C | | | (499,196 | ) | | | (16,095,193 | ) | | | (685,717 | ) | | | (23,411,544 | ) |
|
| |
Class R | | | (1,372,459 | ) | | | (48,054,402 | ) | | | (1,139,181 | ) | | | (42,341,173 | ) |
|
| |
Class Y | | | (27,387,044 | ) | | | (958,541,456 | ) | | | (45,515,945 | ) | | | (1,603,882,793 | ) |
|
| |
Class R5 | | | (3,865 | ) | | | (135,321 | ) | | | (1,106,594 | ) | | | (35,278,749 | ) |
|
| |
Class R6 | | | (32,158,716 | ) | | | (1,139,698,556 | ) | | | (42,253,712 | ) | | | (1,544,251,706 | ) |
|
| |
Net increase (decrease) in share activity | | | (34,743,786 | ) | | $ | (1,233,235,044 | ) | | | (16,789,462 | ) | | $ | (336,171,843 | ) |
|
| |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 43% 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, 7% of the outstanding shares of the Fund are owned by the Adviser or an affiliate of the Adviser.
| | |
20 | | Invesco Oppenheimer International Growth Fund |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of AIM International Mutual Funds (Invesco International Mutual Funds) and Shareholders of Invesco Oppenheimer International Growth Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco Oppenheimer International Growth Fund (one of the funds constituting AIM International Mutual Funds (Invesco International Mutual Funds), referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
|
|
Financial Highlights |
|
For each of the four years in the period ended October 31, 2023 and the eleven months ended October 31, 2019 for Class A, Class C, Class R, Class Y and Class R6.For each of the four years in the period ended October 31, 2023 and the eleven months ended October 31, 2019 for Class A, Class C, Class R, Class Y and Class R6. |
For each of the four years in the period ended October 31, 2023 and the period May 24, 2019 (commencement of operations) through October 31, 2019 for Class R5. |
The financial statements of Oppenheimer International Growth Fund (subsequently renamed Invesco Oppenheimer International Growth Fund) as of and for the year ended November 30, 2018 and the financial highlights for the year then ended (not presented herein, other than the financial highlights) were audited by other auditors whose report dated January 22, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and broker. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2023
We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
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21 | | Invesco Oppenheimer International Growth Fund |
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2023 through October 31, 2023.
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) | | |
| | Beginning Account Value (05/01/23) | | Ending Account Value (10/31/23)1 | | Expenses Paid During Period2,3 | | Ending Account Value (10/31/23) | | Expenses Paid During Period2,4 | | Annualized Expense Ratio2 |
Class A | | $1,000.00 | | $882.60 | | $5.27 | | $1,019.61 | | $5.65 | | 1.11% |
Class C | | 1,000.00 | | 879.30 | | 8.86 | | 1,015.78 | | 9.50 | | 1.87 |
Class R | | 1,000.00 | | 881.60 | | 6.50 | | 1,018.30 | | 6.97 | | 1.37 |
Class Y | | 1,000.00 | | 883.60 | | 4.13 | | 1,020.82 | | 4.43 | | 0.87 |
Class R5 | | 1,000.00 | | 885.10 | | 2.85 | | 1,022.18 | | 3.06 | | 0.60 |
Class R6 | | 1,000.00 | | 884.50 | | 3.47 | | 1,021.53 | | 3.72 | | 0.73 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, 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 184/365 to reflect the most recent fiscal half year. The annualized expense ratio for Class R5 shares has been restated due to a change in estimate. Had this change occur at the beginning of the most recent fiscal half year, the annualized expense ratio for Class R5 shares would have been 0.80%. |
3 | The actual expenses paid, restated as if the change discussed above had been in effect throughout the entire most recent fiscal half year, are $3.80 for Class R5 shares. |
4 | The hypothetical expenses paid, restated as if the change discussed above had been in effect throughout the entire most recent fiscal half year, are $4.08 for Class R5 shares. |
| | |
22 | | Invesco Oppenheimer International Growth Fund |
Approval of Investment Advisory and Sub-Advisory Contracts
At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM International Mutual Funds (Invesco International Mutual Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Oppenheimer International Growth Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with 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. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.
The Board’s Evaluation Process
The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.
As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an
independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.
The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.
Factors and Conclusions and Summary of Independent Written Fee Evaluation
A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis, and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to
attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.
The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.
B. | Fund Investment Performance |
The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.
The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI All Country World ex-U.S.® Index (Index). The Board noted that performance of Class A shares of the Fund was in the fourth quintile of its performance universe for the one and five year periods and the third quintile for the three year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The
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23 | | Invesco Oppenheimer International Growth Fund |
Board noted that performance of Class A shares of the Fund was below the performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.
C. | Advisory and Sub-Advisory Fees and Fund Expenses |
The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.
The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.
The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.
The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.
D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.
E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.
F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the
performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.
The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.
The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.
The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and
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24 | | Invesco Oppenheimer International Growth Fund |
the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.
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25 | | Invesco Oppenheimer International Growth Fund |
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended October 31, 2023:
| | | | | | | | |
Federal and State Income Tax | | | | | | |
Long-Term Capital Gain Distributions | | $ | 105,595,000 | | | | | |
Qualified Dividend Income* | | | 100.00 | % | | | | |
Corporate Dividends Received Deduction* | | | 6.10 | % | | | | |
U.S. Treasury Obligations* | | | 0.00 | % | | | | |
Qualified Business Income* | | | 0.00 | % | | | | |
Business Interest Income* | | | 0.00 | % | | | | |
Foreign Taxes | | $ | 0.0303 | per share | | | | |
Foreign Source Income | | $ | 0.6140 | per share | | | | |
|
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year. | |
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26 | | Invesco Oppenheimer International Growth Fund |
Trustees and Officers
The address of each trustee and officer is AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”), 11 Greenway Plaza, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Interested Trustee | | | | | | | | |
Martin L. Flanagan1 – 1960 Trustee and Vice Chair | | 2007 | | Chairman Emeritus, Invesco Ltd.; Trustee and Vice Chair, The Invesco Funds; and Member of Executive Board, SMU Cox School of Business Formerly: Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Vice Chair, Investment Company Institute; Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) | | 169 | | None |
1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser. |
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T-1 | | Invesco Oppenheimer International Growth Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees | | | | | | | | |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) | | 2019 | | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds | | 169 | | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit) |
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Cynthia Hostetler - 1962 Trustee | | 2017 | | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP | | 169 | | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization) |
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Eli Jones - 1961 Trustee | | 2016 | | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank | | 169 | | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas |
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Elizabeth Krentzman - 1959 Trustee | | 2019 | | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management – Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds | | 169 | | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee |
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Anthony J. LaCava, Jr. - 1956 Trustee | | 2019 | | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP | | 169 | | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP |
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Prema Mathai-Davis - 1950 Trustee | | 1998 | | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute | | 169 | | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit) |
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T-2 | | Invesco Oppenheimer International Growth Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Independent Trustees–(continued) | | | | | | |
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Joel W. Motley - 1952 Trustee | | 2019 | | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) | | 169 | | Member of Board of Trust for Mutual Understanding (non-profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non-profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism) |
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Teresa M. Ressel - 1962 Trustee | | 2017 | | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury | | 169 | | None |
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Robert C. Troccoli - 1949 Trustee | | 2016 | | Retired Formerly: Adjunct Professor, University of Denver - Daniels College of Business; and Managing Partner, KPMG LLP | | 169 | | None |
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Daniel S. Vandivort - 1954 Trustee | | 2019 | | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. | | 169 | | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America |
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T-3 | | Invesco Oppenheimer International Growth Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers | | | | | | | | |
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Glenn Brightman - 1972 President and Principal Executive Officer | | 2023 | | Chief Operating Officer, Americas, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds. Formerly: Global Head of Finance, Invesco Ltd; Executive Vice President and Chief Financial Officer, Nuveen | | N/A | | N/A |
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Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary | | 2023 | | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc., Invesco Advisers, Inc., Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds | | N/A | | N/A |
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Andrew R. Schlossberg - 1974 Senior Vice President | | 2019 | | Chief Executive Officer, President and Executive Director, Invesco Ltd.; Senior Vice President, Invesco Group Services, Inc.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds and Trustee, Invesco Foundation, Inc. Formerly: Head of the Americas and Senior Managing Director, Invesco Ltd.; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC | | N/A | | N/A |
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T-4 | | Invesco Oppenheimer International Growth Fund |
Trustees and Officers–(continued)
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Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
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John M. Zerr - 1962 Senior Vice President | | 2006 | | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.;Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) | | N/A | | N/A |
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Tony Wong - 1973 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Director, Chairman, Chief Executive Officer and President, Invesco Advisers, Inc.; Director and Chairman, Invesco Private Capital, Inc., INVESCO Private Capital Investments, Inc. and INVESCO Realty, Inc.; Director, Invesco Senior Secured Management, Inc.; President, Invesco Managed Accounts, LLC and SNW Asset Management Corporation; and Senior Vice President, The Invesco Funds Formerly: Assistant Vice President, The Invesco Funds; and Vice President, Invesco Advisers, Inc. | | N/A | | N/A |
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Stephanie C. Butcher - 1971 Senior Vice President | | 2023 | | Senior Managing Director, Invesco Ltd.; Senior Vice President, The Invesco Funds; Director and Chief Executive Officer, Invesco Asset Management Limited | | N/A | | N/A |
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Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Senior Vice President | | 2020 | | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Senior Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Vice President, The Invesco Funds; Senior Vice President and Treasurer, Fidelity Investments | | N/A | | N/A |
| | | | |
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer | | 2013 | | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. | | N/A | | N/A |
| | |
T-5 | | Invesco Oppenheimer International Growth Fund |
Trustees and Officers–(continued)
| | | | | | | | |
Name, Year of Birth and Position(s) Held with the Trust | | Trustee and/or Officer Since | | Principal Occupation(s) During Past 5 Years | | Number of Funds in Fund Complex Overseen by Trustee | | Other Directorship(s) Held by Trustee During Past 5 Years |
Officers–(continued) | | | | | | | | |
| | | | |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President | | 2020 | | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) | | N/A | | N/A |
| | | | |
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer | | 2022 | | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett | | N/A | | N/A |
The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s Statement of Additional Information for information on the Fund’s sub-advisers.
| | | | | | |
Office of the Fund | | Investment Adviser | | Distributor | | Auditors |
11 Greenway Plaza | | Invesco Advisers, Inc. | | Invesco Distributors, Inc. | | PricewaterhouseCoopers LLP |
Houston, TX 77046-1173 | | 1331 Spring Street, NW, Suite 2500 | | 11 Greenway Plaza | | 1000 Louisiana Street, Suite 5800 |
| | Atlanta, GA 30309 | | Houston, TX 77046-1173 | | Houston, TX 77002-5021 |
| | | |
Counsel to the Fund | | Counsel to the Independent Trustees | | Transfer Agent | | Custodian |
Stradley Ronon Stevens & Young, LLP | | Sidley Austin LLP | | Invesco Investment Services, Inc. | | State Street Bank and Trust Company |
2005 Market Street, Suite 2600 | | 787 Seventh Avenue | | 11 Greenway Plaza | | 225 Franklin Street |
Philadelphia, PA 19103-7018 | | New York, NY 10019 | | Houston, TX 77046-1173 | | Boston, MA 02110-2801 |
| | |
T-6 | | Invesco Oppenheimer International Growth Fund |
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Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This information is also available on the SEC website, sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.
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| | | | |
SEC file number(s): 811-06463 and 033-44611 | | Invesco Distributors, Inc. | | O-IGR-AR-1 |
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. |
The Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial experts are Cynthia Hostetler, Anthony J. LaCava, Jr., and Robert C. Troccoli. Cynthia Hostetler, Anthony J. LaCava, Jr., and Robert C. Troccoli are “independent” within the meaning of that term as used in Form N-CSR.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
(a) to (d)
Fees Billed by PwC Related to the Registrant
PricewaterhouseCoopers LLP (“PwC”), the Registrant’s independent registered public accounting firm, billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as shown in the following table. The Audit Committee pre-approved all audit and non-audit services provided to the Registrant.
| | | | | | | | |
| | | |
| | | | Fees Billed for Services Rendered to the Registrant for fiscal year end 2023 | | Fees Billed for Services Rendered to the Registrant for fiscal year end 2022 | |
| | | | | | | | |
Audit Fees | | | | $ 381,364 | | | $ 494,135 | |
Audit-Related Fees(1) | | | | $ 11,000 | | | $ 11,000 | |
Tax Fees(2) | | | | $ 505,760 | | | $ 340,765 | |
All Other Fees | | | | $ 0 | | | $ 0 | |
Total Fees | | | | $ 898,124 | | | $ 845,900 | |
| (1) | Audit-Related Fees for the fiscal years ended 2023 and 2022 includes fees billed for reviewing regulatory filings. |
| (2) | Tax Fees for the fiscal years ended 2023 and 2022 includes fees billed for preparation of U.S. Tax Returns and Taxable Income calculations, including excise tax and year-to-date estimates for various book-to-tax differences. |
Fees Billed by PwC Related to Invesco and Affiliates
PwC billed Invesco Advisers, Inc. (“Invesco”), the Registrant’s investment adviser, and any entity controlling, controlled by or under common control with Invesco that provides ongoing services to the Registrant (“Affiliates”) aggregate fees for pre-approved non-audit services rendered to Invesco and Affiliates for the last two fiscal years as shown in the following table. The Audit Committee pre-approved all non-audit services provided to Invesco and Affiliates that were required to be pre-approved.
| | | | | | | | | | |
| | | | | | | | Fees Billed for Non- Audit Services Rendered to Invesco and Invesco Affiliates for fiscal year end 2023 That Were Required to be Pre-Approved by the Registrant’s Audit Committee | | Fees Billed for Non-Audit Services Rendered to Invesco and Invesco Affiliates for fiscal year end 2022 That Were Required to be Pre-Approved by the Registrant’s Audit Committee |
Audit-Related Fees(1) | | | | | | | | $ 1,067,000 | | $ 760,000 |
Tax Fees | | | | | | | | $ 0 | | $ 0 |
All Other Fees | | | | | | | | $ 0 | | $ 0 |
Total Fees | | | | | | | | $ 1,067,000 | | $ 760,000 |
(1) Audit-Related Fees for the fiscal years ended 2023 and 2022 include fees billed related to reviewing controls at a service organization.
(e)(1)
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees
of the Invesco Funds (the “Funds”)
Last Amended March 29, 2017
| I. | Statement of Principles |
The Audit Committees (the “Audit Committee”) of the Boards of Trustees of the Funds (the “Board”) have adopted these policies and procedures (the “Procedures”) with respect to the pre-approval of audit and non-audit services to be provided by the Funds’ independent auditor (the “Auditor”) to the Funds, and to the Funds’ investment adviser(s) and any entity controlling, controlled by, or under common control with the investment adviser(s) that provides ongoing services to the Funds (collectively, “Service Affiliates”).
Under Section 202 of the Sarbanes-Oxley Act of 2002, all audit and non-audit services provided to the Funds by the Auditor must be preapproved by the Audit Committee. Rule 2-01 of Regulation S-X requires that the Audit Committee also pre-approve a Service Affiliate’s engagement of the Auditor for non-audit services if the engagement relates directly to the operations and financial reporting of the Funds (a “Service Affiliate’s Covered Engagement”).
These Procedures set forth the procedures and the conditions pursuant to which the Audit Committee may pre-approve audit and non-audit services for the Funds and a Service Affiliate’s Covered Engagement pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and other organizations and regulatory bodies applicable to the Funds (“Applicable Rules”).1 They address both general pre-approvals without consideration of specific case-by-case services (“general pre-approvals”) and pre-approvals on a case-by-case basis (“specific pre-approvals”). Any services requiring pre-approval that are not within the scope of general pre-approvals hereunder are subject to specific pre-approval. These Procedures also address the delegation by the Audit Committee of pre-approval authority to the Audit Committee Chair or Vice Chair.
| II. | Pre-Approval of Fund Audit Services |
The annual Fund audit services engagement, including terms and fees, is subject to specific pre-approval by the Audit Committee. Audit services include the annual financial statement audit and other procedures required to be performed by an independent auditor to be able to form an opinion on the Funds’ financial statements. The Audit Committee will receive, review and consider sufficient information concerning a proposed Fund audit engagement to make a reasonable evaluation of the Auditor’s qualifications and independence. The Audit Committee will oversee the Fund audit services engagement as necessary, including approving any changes in terms, audit scope, conditions and fees.
In addition to approving the Fund audit services engagement at least annually and specifically approving any changes, the Audit Committee may generally or specifically pre-approve engagements for other audit services, which are those services that only an independent auditor reasonably can provide. Other audit services may include services associated with SEC registration statements, periodic reports and other documents filed with the SEC.
| III. | General and Specific Pre-Approval of Non-Audit Fund Services |
The Audit Committee will consider, at least annually, the list of General Pre-Approved Non-Audit Services which list may be terminated or modified at any time by the Audit Committee. To inform the Audit Committee’s review and approval of General Pre-Approved Non-Audit Services, the Funds’ Treasurer (or his or her designee) and Auditor shall provide such information regarding independence or other matters as the Audit Committee may request.
Any services or fee ranges that are not within the scope of General Pre-Approved Non-Audit Services have not received general pre-approval and require specific pre-approval. Each request for specific pre-approval by the Audit Committee for services to be provided by the Auditor to the Funds must be submitted to the Audit Committee by the Funds’ Treasurer (or his or her designee) and must include detailed information about the services to be provided, the fees or fee ranges to be charged, and other relevant information sufficient to allow the Audit Committee to consider whether to pre-approve such engagement, including evaluating whether the provision of such services will impair the independence of the Auditor and is otherwise consistent with Applicable Rules.
| IV. | Non-Audit Service Types |
The Audit Committee may provide either general or specific pre-approval of audit-related, tax or other services, each as described in more detail below.
1 Applicable Rules include, for example, New York Stock Exchange (“NYSE”) rules applicable to closed-end funds managed by Invesco and listed on NYSE.
“Audit-related services” are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements or that are traditionally performed by an independent auditor. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; services related to mergers, acquisitions or dispositions; compliance with ratings agency requirements and interfund lending activities; and assistance with internal control reporting requirements.
“Tax services” include, but are not limited to, the review and signing of the Funds’ federal tax returns, the review of required distributions by the Funds and consultations regarding tax matters such as the tax treatment of new investments or the impact of new regulations. The Audit Committee will not approve proposed services of the Auditor which the Audit Committee believes are to be provided in connection with a service or transaction initially recommended by the Auditor, the sole business purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee will consult with the Funds’ Treasurer (or his or her designee) and may consult with outside counsel or advisers as necessary to ensure the consistency of tax services rendered by the Auditor with the foregoing policy. The Auditor shall not represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims.
Each request to provide tax services under either the general or specific pre-approval of the Audit Committee will include a description from the Auditor in writing of (i) the scope of the service, the fee structure for the engagement, and any side letter or other amendment to the engagement letter, or any other agreement (whether oral, written, or otherwise) between the Auditor and the Funds, relating to the service; and (ii) any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor (or an affiliate of the Auditor) and any person (other than the Funds or Service Affiliates receiving the services) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will also discuss with the Audit Committee the potential effects of the services on the independence of the Auditor, and document the substance of its discussion with the Audit Committee.
The Audit Committee may pre-approve other non-audit services so long as the Audit Committee believes that the service will not impair the independence of the Auditor. Appendix I includes a list of services that the Auditor is prohibited from performing by the SEC rules. Appendix I also includes a list of services that would impair the Auditor’s independence unless the Audit Committee reasonably concludes that the results of the services will not be subject to audit procedures during an audit of the Funds’ financial statements.
| V. | Pre-Approval of Service Affiliate’s Covered Engagements |
Rule 2-01 of Regulation S-X requires that the Audit Committee pre-approve a Service Affiliate’s engagement of the Auditor for non-audit services if the engagement relates directly to the operations and financial reporting of the Funds, defined above as a “Service Affiliate’s Covered Engagement”.
The Audit Committee may provide either general or specific pre-approval of any Service Affiliate’s Covered Engagement, including for audit-related, tax or other services, as described above, if the Audit
Committee believes that the provision of the services to a Service Affiliate will not impair the independence of the Auditor with respect to the Funds. Any Service Affiliate’s Covered Engagements that are not within the scope of General Pre-Approved Non-Audit Services have not received general pre-approval and require specific pre-approval.
Each request for specific pre-approval by the Audit Committee of a Service Affiliate’s Covered Engagement must be submitted to the Audit Committee by the Funds’ Treasurer (or his or her designee) and must include detailed information about the services to be provided, the fees or fee ranges to be charged, a description of the current status of the pre-approval process involving other audit committees in the Invesco investment company complex (as defined in Rule 2-201 of Regulation S-X) with respect to the proposed engagement, and other relevant information sufficient to allow the Audit Committee to consider whether the provision of such services will impair the independence of the Auditor from the Funds. Additionally, the Funds’ Treasurer (or his or her designee) and the Auditor will provide the Audit Committee with a statement that the proposed engagement requires pre-approval by the Audit Committee, the proposed engagement, in their view, will not impair the independence of the Auditor and is consistent with Applicable Rules, and the description of the proposed engagement provided to the Audit Committee is consistent with that presented to or approved by the Invesco audit committee.
Information about all Service Affiliate engagements of the Auditor for non-audit services, whether or not subject to pre-approval by the Audit Committee, shall be provided to the Audit Committee at least quarterly, to allow the Audit Committee to consider whether the provision of such services is compatible with maintaining the Auditor’s independence from the Funds. The Funds’ Treasurer and Auditor shall provide the Audit Committee with sufficiently detailed information about the scope of services provided and the fees for such services, to ensure that the Audit Committee can adequately consider whether the provision of such services is compatible with maintaining the Auditor’s independence from the Fund
| VI. | Pre-Approved Fee Levels or Established Amounts |
Pre-approved fee levels or ranges for audit and non-audit services to be provided by the Auditor to the Funds, and for a Service Affiliate’s Covered Engagement, under general pre-approval or specific pre-approval will be set periodically by the Audit Committee. Any proposed fees exceeding 110% of the maximum pre-approved fee levels or ranges for such services or engagements will be promptly presented to the Audit Committee and will require specific pre-approval by the Audit Committee before payment of any additional fees is made.
The Audit Committee hereby delegates, subject to the dollar limitations set forth below, specific authority to its Chair, or in his or her absence, Vice Chair, to pre-approve audit and non-audit services proposed to be provided by the Auditor to the Funds and/or a Service Affiliate’s Covered Engagement, between Audit Committee meetings. Such delegation does not preclude the Chair or Vice Chair from declining, on a case by case basis, to exercise his or her delegated authority and instead convening the Audit Committee to consider and pre-approve any proposed services or engagements.
Notwithstanding the foregoing, the Audit Committee must pre-approve: (a) any non-audit services to be provided to the Funds for which the fees are estimated to exceed $500,000; (b) any Service Affiliate’s Covered Engagement for which the fees are estimated to exceed $500,000; or (c) any cost increase to any previously approved service or engagement that exceeds the greater of $250,000 or 50% of the previously approved fees up to a maximum increase of $500,000.
| VIII. | Compliance with Procedures |
Notwithstanding anything herein to the contrary, failure to pre-approve any services or engagements that are not required to be pre-approved pursuant to the de minimis exception provided for in Rule 2-01(c)(7)(i)(C) of Regulation S-X shall not constitute a violation of these Procedures. The Audit Committee has designated the Funds’ Treasurer to ensure services and engagements are pre-approved in compliance with these Procedures. The Funds’ Treasurer will immediately report to the Chair of the Audit Committee, or the Vice Chair in his or her absence, any breach of these Procedures that comes to the attention of the Funds’ Treasurer or any services or engagements that are not required to be pre-approved pursuant to the de minimis exception provided for in Rule 2-01(c)(7)(i)(C) of Regulation S-X.
On at least an annual basis, the Auditor will provide the Audit Committee with a summary of all non-audit services provided to any entity in the investment company complex (as defined in section 2-01(f)(14) of Regulation S-X, including the Funds and Service Affiliates) that were not pre-approved, including the nature of services provided and the associated fees.
| IX. | Amendments to Procedures |
All material amendments to these Procedures must be approved in advance by the Audit Committee. Non-material amendments to these Procedures may be made by the Legal and Compliance Departments and will be reported to the Audit Committee at the next regularly scheduled meeting of the Audit Committee.
Appendix I
Non-Audit Services That May Impair the Auditor’s Independence
The Auditor is not independent if, at any point during the audit and professional engagement, the Auditor provides the following non-audit services:
| ● | | Broker-dealer, investment adviser, or investment banking services ; |
| ● | | Expert services unrelated to the audit; |
| ● | | Any service or product provided for a contingent fee or a commission; |
| ● | | Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance; |
| ● | | Tax services for persons in financial reporting oversight roles at the Fund; and |
| ● | | Any other service that the Public Company Oversight Board determines by regulation is impermissible. |
An Auditor is not independent if, at any point during the audit and professional engagement, the Auditor provides the following non-audit services unless it is reasonable to conclude that the results of the services will not be subject to audit procedures during an audit of the Funds’ financial statements:
| ● | | Bookkeeping or other services related to the accounting records or financial statements of the audit client; |
| ● | | Financial information systems design and implementation; |
| ● | | Appraisal or valuation services, fairness opinions, or contribution-in-kind reports; |
| ● | | Actuarial services; and |
| ● | | Internal audit outsourcing services. |
(e)(2) There were no amounts that were pre-approved by the Audit Committee pursuant to the de minimus exception under Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) In addition to the amounts shown in the tables above, PwC billed Invesco and Invesco Affiliates aggregate fees of $6,507,000 for the fiscal year ended October 31, 2023 and $6,370,000 for the fiscal year ended October 31, 2022. In total, PwC billed the Registrant, Invesco and Invesco Affiliates aggregate non-audit fees of $8,079,760 for the fiscal year ended October 31, 2023 and $7,470,765 for the fiscal year ended October 31, 2022.
PwC provided audit services to the Investment Company complex of approximately $33 million.
(h) The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco and Invesco Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining PwC’s independence.
(i) Not applicable
(j) 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 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 December 14, 2023, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of December 14, 2023, 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 period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM International Mutual Funds (Invesco International Mutual Funds)
| | | | |
| | By: | | /s/ Glenn Brightman |
| | | | Glenn Brightman |
| | | | Principal Executive Officer |
| | |
| | Date: | | January 3, 2024 |
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/ Glenn Brightman |
| | | | Glenn Brightman |
| | | | Principal Executive Officer |
| | |
| | Date: | | January 3, 2024 |
| | |
| | By: | | /s/ Adrien Deberghes |
| | | | Adrien Deberghes |
| | | | Principal Financial Officer |
| | |
| | Date: | | January 3, 2024 |